Why a fall isn’t certain and wouldn’t help first-time buyers much anyway.

The UK remains a nation of homeowners, with two-thirds of all dwellings belonging to the people who live in them. But as interest rates swiftly rise, there are fears that many of those households will soon find their mortgage payments unaffordable.

As one BBC interviewer told the new prime minister: “People were worried whether they could heat their homes. They’re now worried whether they can keep their homes.”

More expensive mortgages could certainly depress the housing market, with serious effects on the wider economy. This is why governments generally try to keep house prices rising, even as they attempt to restrict inflation elsewhere. But even under these more difficult economic conditions, it’s by no means certain that house prices will actually come down significantly.

A buoyant housing market can boost the overall economy, because homeowner confidence leads to increased spending. Homes are also an important way of securing loans for small business investment.

For more than a decade, until 2021, the Bank of England helped promote mortgage affordability with historically low interest rates. And while households took on more mortgage debt over this period, the cost of repaying that debt kept falling as a proportion of income.

As people took advantage of these low borrowing costs, a million more homes became owner-occupied between 2015 and 2020. Thousands more used cheap buy-to-let mortgages to acquire additional properties to supplement their work or pension income.

The sudden rise in costs of mortgage debt, in relation to borrowers’ income, now makes their situation unexpectedly precarious, even though interest rates are still much lower than they were before 2008.