This is with Hamish McRae, a subscriber-only newsletter from The i Paper. If you’d like to get this direct to your inbox, every single week, you can sign up here.

The housing market is going through a tough time – or at least in much of the country it is, and in some places it is really gummed up, with it taking two months or more to sell a home. The property website Zoopla reports that the average is 42 days, so for many it is much worse.

As a result, a growing number of people feel trapped in their homes. It seemed a sensible, responsible idea to get on “the housing ladder”. Now they are stuck on the bottom rung.

So, what’s happening, why and what should people do about it?

The facts are pretty clear. Overall prices are steady, with the latest official index from the ONS out yesterday showing them up 0.1 per cent in June, and up 2 per cent on the year. But that bumps together losses in London (down 2.5 per cent on the year), a stable market in the South East, and gains of 4 per cent or more in the North East and North West. Scotland and Northern Ireland are well up too. That dovetails with the evidence on how long it takes to sell, with homes in parts of Scotland and Northern England turning over fastest, and those in Westminster in central London taking longest. Overall turnover is running at around two-thirds the level of 2022.

That may not sound too bad, and viewed overall it isn’t a disaster. But you have to remember that ONS data is based on sales that have been completed, so they give a rear-view mirror perspective of what is happening. The very latest indications from Rightmove suggest that this month things have slipped further, and now prices are expected to either be stable or fall by 2 per cent in 2026 as a whole. And for some types of property the market is weak indeed. Inner London flats are now worth less than they were in 2020.

Why has the outlook weakened? There are a host of different factors and it’s hard to separate them and figure out which are the most important. Overhanging everything is the general economic uncertainty. The weak job market shows vacancies at the lowest level for five years. There’s the prospect of higher taxes in the autumn Budget. There’s the overhang of the increases in stamp duty last year. Mortgage rates have pushed back up, and given the increases in Government bond yields (gilts) in the past few days, look set to climb further. This week, the Government sold 10-year gilts at 5.155 per cent, the highest level since 2007.

There are two further elements. One is the fact that the London market is particularly weak, which gives a negative signal to the country as a whole. What has typically happened in the past is that London moves first. It recovers more quickly from a general property downturn, but it also starts to weaken more swiftly. Over the past decade it has significantly underperformed the rest of Britain, with prices in Outer London up only 10 per cent since 2016 and prices in Inner London actually down. By contrast, homes in Manchester are up 70 per cent. It can take a long time for the knock-on impact of the London market to affect prices elsewhere, but that may start to happen now.

The other factor is that it always takes a while for people to realise that the housing market has weakened and if they want to sell they need to cut the asking price, even if that means taking a loss. There hasn’t been a serious fall in house prices since 2008, so the temptation is to hold off selling at loss and hope things will turn up. But there are always a few forced sellers, which starts to depress overall selling prices, and when this happens other homes come onto the market as people realise that prices won’t come up soon and they had better take any offer, even a bad one.

So, what should anyone who feels they are trapped actually do?

Everyone’s circumstances are different, and as noted above the market in the different parts of the country is very different. So, it’s impossible to give more than the most general advice. But I think it is unlikely that there will be a housing boom in the next two or three years, and we have to accept that in London and the South East things may be weak for a while yet. So, anyone who really needs to sell should probably take the best offer available rather than wait.

If you are buying, go for what you really like, because you may find it will take a while before you can show a profit and you may have to sit on a loss for a year or two.

Ultimately, however, for most people it is probably worth owning property rather than renting. It is a form of forced saving in that you are acquiring an asset that will eventually be worth more, at least in money terms, than you paid for it. For even if you do pay too much, general inflation will save you in the end.

Need to know

I am intrigued by the rise in bond yields. There is a huge under-reported story happening in the markets and one that has deeply troubling consequences.

Bonds rarely attract as much attention as equities, and for good reason. It’s much harder to say something interesting about gilt yields than it is about the share price of Apple or some other famous enterprise. Shares jump all over the place, whereas the price of bonds only creeps upwards or downwards.

And, there is an inevitable confusion. Bonds are usually discussed in terms of yields. That’s the interest they return at any particular price, rather than their current market value. But if you think about it, yields move inversely to the price, because if the price falls anyone buying the bond gets a higher return on the money they put in. So, the fact that long-dated bond yields are now the highest for 19 years sounds all right. But it isn’t all right for would-be borrowers, or for anyone who bought bonds when yields were much lower. And this climb in bond yields has a profound impact on fixed-rate mortgages.

You can always take a risk and tie your rate to the Bank of England’s base rate but if you need certainty you should get a fix, and even a two-year fix is being pulled up by what is happening on the bond markets.

There are three main forces pushing bond yields up at the moment. One is fear of inflation. Why lend on a fixed rate of 5 per cent for 10 years ahead when inflation could be 5 per cent or more? Yes, the central banks say they are aiming for 2 per cent – but do you believe them?

Next, there is government borrowing. Nearly all governments in the developed world have debts of around or more than 100 per cent of GDP. They are nearly all running deficits of 3 per cent or more of GDP. How will they contain the long-term cost? Why should you trust them?

And third, there is huge demand for cash for investment in AI and the corporate sector is bidding alongside government for that cash. That too will push up bond yields.

So, the moral for anyone trying to get a mortgage in the UK right now is that while the rate may seem expensive, at least funds are available. Be aware that there is more danger over the next few years that rates will go even higher, and if they do come down, it won’t be by much.