After the Land Registry February house price index was published this morning, several estate agents and mortgage brokers have provided their thoughts:
Jamie Alexander, director at Southampton-based Alexander Southwell Mortgage Services:
“Average house prices continue to edge down on an annual and monthly basis. The property market is under real pressure and the stubborn inflation we have, remaining in double digits again on Wednesday, certainly won’t help. Another rate rise by the Bank of England is now more likely and this will affect both sentiment and mortgage rates, which drive the property market.”
Kundan Bhaduri, director of London-based property developer and portfolio landlord, The Kushman Group:
“These are testing times for the UK property market. All the economic uncertainty we have, and higher interest rates, have left many people hesitant to make big purchases such as a house. That reduction in demand then contributes to falling prices. The latest inflation data staying in double digits will further undermine confidence among prospective buyers and means another rate rise is now a nailed-on certainty. Of course, prices coming down also represents an opportunity for well financed professional property investors, as they can buy at a discount.”
Jamie Minors, managing director at Norwich-based estate agents, Minors & Brady:
“Though average annual prices continued to nudge down, in our experience demand is getting stronger by the day. The pendulum had swung from a sellers’ market to a buyers’ market, but now we are seeing a far more even relationship across all price levels. We had anticipated a drop in prices of around 5%-6% for 2023, however this correction in pricing has now settled down due to mortgage rates steadily reducing and buyer confidence returning due to the less pessimistic economic forecast.”
Lewis Shaw, founder of Mansfield-based Shaw Financial Services:
“House prices are gradually decreasing, but not in every part of the country, so any attempt to make predictions is for the birds. The bigger issue here is that many housing indices don’t take account of inflation, so whilst the data says the average home price stands at X, it’s unlikely this will factor in the double-digit inflation we’re currently blighted by. So does this make it a buyer’s or a seller’s market? At this point in time, neither. Yes, there is movement in asking prices because mortgage rates are still far higher than anyone has seen for a decade after the mini-budget. However, the bigger worry is stagnant wages. If you look at the cause of price falls, mortgage rates are one thing, but falling real wages due to inflation tearing through our economy is a far better predictor of falling prices than almost any other metric. If you want to know where your house price is going, look at average wages, not mortgage rates.”
Ross McMillan, owner at Glasgow-based Blue Fish Mortgage Solutions:
“Within the traditional property hotspots, demand is unwaveringly high, with supply nowhere near meeting this. Prices in the most sought-after areas are now showing signs of even greater increases than before. In competitive situations in these areas, after a brief hiatus in this practice towards the end of last year, I am regularly now hearing of 10%-20% above survey valuation almost becoming the norm again. Beyond these hotspots, the picture is certainly less clear with instances of offers accepted around or even below survey valuation more commonplace but overall confidence in the property market remains strong with buyer appetite seemingly unrelenting. Personally, I think nationwide house price growth will be minimal across the year, if not flat, but on an individual and localised basis there will be noticeable variations. There are significant discrepancies in how local areas are performing.”
Luke Thompson of King’s Lynn-based PAB Wealth Management: “Conditions are considerably more positive in the property market than had been expected at the start of the year. At the minute, it’s a buyer’s market, with buyers able to get a fairly sizeable discount on the asking price for properties in my area. However, demand has remained fairly strong and people have definitely become more used to higher interest rates. Buy-to-let continues to be a problem area, with a number of my landlord customers looking to sell their properties at the minute due to higher interest rates and thus the reduced returns they are achieving. I think for the remainder of the year house prices will remain fairly flat. I feel that the south east and London may outperform other areas of the country and may see slightly higher house price growth.”
Austyn Johnson, founder at Colchester-based Mortgages for Actors: “Swap rates have stabilised nicely and lenders are getting competitive again. This is a good indicator of confidence in their side of the market. Although some areas of the country have seen property values drop, others have stayed the same. We remain busy, which suggests many other brokers and estate agents are, too.”
