The price of keeping a roof over our head is escalating. Should we be worried?

This week we don’t have to talk about yet another budget. Hooray! What we should talk about is houses. Here are the big topics, I think. Please do email me at sarah.davidson@metro.co.uk if you have others.

House prices

Everyone’s favourite topic of conversation – the price of property. So what’s next? Here’s what Samuel Tombs, chief UK economist at Pantheon Macroeconomics, has to say: ‘House prices will fall by eight per cent over the next year… but mortgage rates won’t remain this high forever.’

On balance, Mr Tombs is a very reliable and sensible person when it comes to figuring this stuff out. In short, he’s usually right.

But let’s also remember that eight per cent is an AVERAGE. Yes, some properties will see prices drop even further, but others won’t be nearly so severely affected.

Bearing that in mind, here’s some quick reality checks.

Reality check 1: Last week, the Office for National Statistics’s latest figures showed that the annual house price RATE of growth in September had dropped. Actual house prices, however, had gone up by almost 10 per cent, year on year.

Reality check 2: House prices are at a record high. I repeat: over the past year they’ve gone up by almost 10 per cent. So even if your house goes down in value by eight per cent, it’ll still be worth more than it was this time in 2021.

Reality check 3: What actually matters to most homeowners is whether you can afford the mortgage. Focus on that. Which brings me neatly to:

Remortgage shock

OK, this is a real thing. The rise in mortgage rates has been very steep and very quick. There’s no straightforward answer if you are seriously worried about how to afford your repayments when your deal ends, but here are two things you could do:

• If you’re worried, talk to an independent mortgage broker asap. If you don’t have one – go and meet a few and choose someone you like. They aren’t all geezers – I promise.

It’s renters who’ll Feel the squeeze

Renters are the great unspoken victims of the cost of living crisis. We all recognise the perceived unfairness of having to shell out thousands of pounds to a landlord while others spend that self-same sum (or less) paying off their mortgage.

But the issues have become even starker because extremely expensive rents make saving for a deposit even harder. Flexibility may be the primary pro-renting argument – after the initial agreement you can move whenever you want; it is also the worst.

Now renters are faced with a really quite frightening prospect. Even the most benign and conscientious landlords (and we all know not everyone is blessed with one of those) are seeing their mortgage costs rise, just as homeowners are. Where they are agreeing new tenancies, rents are noticeably higher.

Where tenants are in situ but landlords suddenly find themselves making a loss having been forced to remortgage, renters could find themselves in a horrifying position. If your landlord gives you notice – perhaps they’re selling up or they offer you the option to pay 10 per cent more rent or else leave – you have rights. These are:

• You don’t need to accept their demands without question. Talk to them. If they can’t afford to compromise on the rent, ask them to speak to their lender to ask for forbearance. It’s unlikely the bank will refuse.
• Even if you’re issued with an eviction notice, speak to Shelter, Citizens Advice or another service to find out what your rights are. You have many and you’re not going to be out on the street in days.

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