A Bolton estate agent has predicted a crash in the housing market due to rising inflation.

Harrisons Estate Agent in Bolton says the rising inflation could reach almost nine per cent by late spring, and with Bolton wages only increasing by three or four percent, household income will fall.

This could lead to a drop in house prices as UK household incomes have been the most consistent indicator of growth or drop in house prices.

Matthew Fish at Harrisons said: “With less money in people's pockets, people's inclination to spend the money they do have could also be curtailed.

“People's savings are at an all-time high, yet many will decide to sit on the cash, instead of spending it, especially as consumer confidence has dropped to minus 26 on the GfK index.

“All this can only mean there is going to be a house price crash.”

In Bolton, Harrisons say there will be an impending fall in real disposable income of 2.5pc but is still lower than 2008 where it was 5.8pc.

People were spending only 17.7pc of their household income on mortgages in 2021, which compared with 17.3pc in 2015 is not a huge increase.

This means that wages in Bolton are not sufficient for people to afford to spend more of their income on a mortgage.

Coupled with higher petrol prices and the staggering increase of household bills, it seems almost impossible for people in Bolton to buy a house.

Matthew said: “Increasing energy prices, rising inflation, an increase of sanctions, and a probable drop in consumer confidence and spending in the aftermath of the conflict will knock the post-pandemic recovery globally, which will lead to a recession around the world, including the UK.”

The average value of a property in Bolton today is £167,489.

Matthew said: “House prices in Bolton dropped by 17.4per cent  in the Global Financial Crisis, the biggest drop in house prices over 16 months ever recorded in the UK.

 “Meaning if Bolton's house prices dropped by the same percentage in the next 16 months, an average home locally would only be worth £138,346.”

To assure potential homeowners, Matthew advises that the people losing out will be those who moved house in September 2019 if they sold after the price crash.

But many people do not move house after two years of living in one they just bought.

Matthew said: I do believe with all that's happening in the world we might see a rebalancing of the Bolton property market later in 2022.”

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