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13 mortgage brokers and estate agents share their thoughts on the Nationwide April HPI

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Following on from the Nationwide April HPI published this morning,:

Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco: “House price growth is still in double digits but so is the number of factors that are starting to weigh on the property market. The slowing in growth we saw in April is likely to continue throughout 2022.

“We are now seeing some real signs of a storm blowing in. Inflation and the cost of living crisis, together with the continuing war in Ukraine, are making buyers more cautious and are creating a nervousness among lenders that may see them cut their cloth accordingly in the second half of this year.

“That said, though interest rates are rising, they are still historically low and that will maintain a degree of demand.

“The race for space is also still unfolding, albeit at a lower pace than a year ago. The rate of price growth is likely to continue to fall during 2022 but the drastic lack of supply could prevent prices from falling.”

Charles Yuille, managing director of Bath-based independent mortgage broker, Willow Brook Mortgages: “The property market is the ultimate economic lawbreaker, but even it will fall into line as the cost of living crisis accelerates and interest rates rise. April looks like the first sign of that happening.

“It’s not so much surprising that house prices have remained buoyant in the current climate but absurd. The level of price growth we have seen during the pandemic simply cannot continue and will almost certainly drop off more during 2022.

“However, the sheer lack of supply will ensure prices stabilise rather than go off a cliff.”

Dominik Lipnicki, director of Your Mortgage Decisions: “A slowdown in the rate of price growth was always on the cards given the huge spike in the cost of living and higher mortgage rates. Buyers and lenders are looking at affordability and for further possible rises in mortgage interest rates throughout the next 12 months.

“We are already seeing many borrowers coming off their fixed rate and having to pay much more to fix again. The lack of stock will help support prices, even if the rate of growth continues to slow.”

Graham Cox, founder of the Bristol-based broker, SelfEmployedMortgageHub.com: “Demand is still very strong. One client told us how a property they were interested in had over 50 enquiries this week. However, the cost of living crisis is already making it tougher for people to get a mortgage. Some lenders are trying to compensate by allowing greater borrowing multiples or easing certain criteria.

“What would really help buyers, of course, is lower prices. Many people who speak to us are in two minds whether they should buy now or hold off until later in the year.

“For buyers, it’s a toss-up between probably lower interest rates now versus potentially lower prices later in the year. If I was a betting man, my money would be on house prices falling.”

Andrew Simmonds, director at Bristol-based Parker’s Estate Agents“It’s been a slow start overall to 2022, with transactions limited by the sheer lack of stock and people staying indoors during the winter months. However, the past few weeks have seen an increase in new instructions and buyers seem to have become more active again.

“As the weather improves, so does the property market by and large. There is still limited stock and that is hampering transaction levels. As ever, properties for sale at the right value sell very quickly. Despite the worrying global backdrop and inflation, coupled with a slowing economy domestically, I am not seeing as much nervousness as some would make you think.

“I believe the next quarter will show a strong transactional market as the spring and early summer are often a key time to buy and sell homes, and over the longer term I see the next twelve months being very active.”

Rob Peters, director of Altrincham-based Simple Fast Mortgage: “We are yet to see the real impact of inflation, the increased cost of living and tighter lender affordability criteria on the property market as there is always a lag, but April may be the first glimpse.

“Though all the signs suggest house prices could be under serious pressure, the property market is unlikely to simply topple over. The laws of supply and demand will continue to prevail. Strong purchasers with good deposits and higher earnings will become buyer favourites.”

Joshua Gerstler, chartered financial planner at Borehamwood-based The Orchard Practice: “We are still seeing strong demand for mortgages from buyers, however they are struggling to find properties.

“The property cupboard has never been as bare. The cost of living crisis and rising interest rates have caused lenders to get stricter with their lending and it’s not impossible that prices, now slowing finally, will start to fall.”

Ashley Thomas, director of London-based mortgage broker, Magni Finance: “We have seen a number of clients recently being outbid with properties having offers in excess of asking price. However, house prices will be tested in the months ahead as the cost of living crisis and rising interest rates bite.”

Rhys Schofield, managing director at Belper-based Peak Mortgages and Protection: “Though the rate of price growth has slowed, It’s still frantic out there. One thing we certainly are seeing a bit more of, though, is extra demand for energy-efficient homes as utility bills become a real concern for consumers and landlords have to consider changes in legislation for rental stock to be energy efficient.

“I think we’re seeing the start of homeowners simply not being able to bury their heads in the sand over Britain’s draughty housing stock.”

Scott Taylor-Barr of Shropshire-based broker, Carl Summers Financial Services“The major concern in the market at present is affordability and whether that will impact house prices later in the year.

“With the increases in National Insurance and energy prices, plus increases in food costs and other essentials all feeding into the official data sets that most lenders use in their affordability models, we are expecting a reduction in the size of mortgage people will be able to secure for a given income over the coming months.

“While no one is expecting this to be a stake through the heart of the housing market, many are forecasting a slowing of the rampaging growth that we have almost become used to.”

Marcus Wright, MD of Bolton Business Finance“We are still seeing fairly strong demand in the housing market, and prices are being supported by a lack of available housing. This is also reflected in the rental sector, with rents increasing in nearly all areas.

“One thing we have noticed is a much greater demand for 5-year fixed rates, to protect property owners against expected further rises in the base rate. As we have seen in April, I think the rate of house price growth will slow down this year but we are unlikely to see prices fall as supply is so weak.”

Rob Gill, founder of London-based Altura Mortgage Finance: “Having seen double-digit growth during a global pandemic, the UK property market has proved resilient enough to flourish during the biggest crisis the country has seen since WWII.

“Whilst the cost of living crisis will have a significant impact on many, it’s a brave person who’d bet against property prices somehow holding up. Logic and the property market don’t go hand in hand.”

Lewis Shaw, founder of Mansfield-based Shaw Financial Services: “While the property market is still fairly busy, or as busy as it can be given the lack of stock, I can’t help but feel a deep sense of foreboding about the economy as a whole. You just sense that 2022 could be the year the wheels really come off, and if it doesn’t happen this year, then it will next year.

“Will house prices fall? Probably not, mainly due to the lack of supply. Are mortgage lenders starting to show signs of tightening their belts and taking a more cautious approach? Yes. That will temper transaction levels in the months ahead. A lot will depend on the strength of the jobs market and how it holds up under the countless headwinds it faces.”

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