Why UK house prices could plunge by 20% after the latest interest rate hike

Property market has defied gravity for years but analysts say rising mortgage rates will mirror the 1980s price crash

Britain’s estate agents normally radiate optimism but they will be watching anxiously at noon next Thursday when the Bank of England is expected to announce the latest blow to a rapidly weakening property market.

Crunch time has arrived for a sector that for years has appeared to defy gravity. Threadneedle Street’s monetary policy committee (MPC) is poised to raise official borrowing costs for a 10th meeting in a row, with mortgage approvals already running 30% below their pre-pandemic levels and house prices down by 4.3% from last August’s peak, according to the Halifax bank.