House prices are predicted to fall in the coming months, and experts have said higher wages could 'soften' these decreases
Mortgage borrowers can typically be lent an amount that equates to 4 to 4.5 times their salary, and if incomes are increasing, then the amount that people can borrow also increases.that some of his clients were taking on a little bit more borrowing because of wage increases.
“We have had some clients come back and say ‘we’ve had a bit extra, we can borrow slightly more’, but they are also being a little pragmatic and saying they need that extra money for food, bills and other things.” He said increasing wages might give the fall in house prices a softer landing but that it would not “turnaround” falls completely because higher borrowing costs were curtailing the amount people were wanting to borrow, even if they were technically allowed to do so.
Other housing experts have said that wage increases may just mean that house prices fall over a longer period, but still reach a similar base level to as expected.: “Stronger than expected wage growth is a mixed blessing. Great for employees, bad for inflation. I don’t expect it to impact the eventual size of falls, but it might impact the pace of average price falls, making them fall slightly more slowly.
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