Halifax April HPI: “The house price boom will soon be over”, say experts

by | May 6, 2022

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The Halifax April HPI published this morning reveals a tenth consecutive monthly rise, with house prices up 1.1% in April. But what do mortgage brokers and estate agents make of the news? Check out the commentary below: 

Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco: “The tenth consecutive monthly rise recorded by the Halifax may well be the last. Even though prices rose sharply again in April, the house price boom will soon be over. The Stamp Duty holiday, record low interest rates and the race for space triggered an unprecedented surge in demand and activity, pushing prices ever higher, but we’re now entering the business end of the pandemic. Sky-high inflation, rising interest rates and a potential recession ahead will hit demand while lenders are becoming ever more cautious, which will restrict what people can borrow. This will almost certainly see the rate of price growth slow during 2022 and into next year. Few can deny that there is now a massive economic storm blowing in. Only the drastic lack of supply can prevent prices from falling.”

Ross Boyd, founder of the always-on mortgage comparison platform, Dashly.com: “April may well have been the property market’s last fandango. With inflation tipped to hit 10% and interest rates rising, this rate of price growth simply cannot continue. With bills soaring across the board, people are increasingly battening down the hatches and that will hit bricks and mortar. The lack of stock will prevent prices falling sharply but prices are likely to cool during the second half of the year. The popularity of larger, family homes, reflects the ongoing race for space, and this trend could continue for some time yet.” 

Charles Yuille, managing director of Bath-based independent mortgage broker, Willow Brook Mortgages: “The surreal growth in the property market during the past two years, highlighted once again in April, is about to be hit by very real economic forces. As the cost of living crisis accelerates and interest rates rise to curb the highest inflation we’ve seen in decades, the rate of price growth can only start to cool. The level of price growth we have seen during the pandemic simply cannot continue and will almost certainly drop off during 2022. However, the phenomenal lack of supply will ensure prices stabilise rather than collapse.”

Jamie Thompson of Manchester-based Jamie Thompson Mortgages: “On this evidence, all is well in the property market, but with the economy deteriorating before our eyes there could be carnage ahead. Mortgage lenders are tightening up affordability requirements, which will reduce the supply of money available for people to buy houses. If people can’t borrow as much, property prices can only come down.”

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, but the past few weeks have seen an increase in new instructions and buyers seem to have become more active again. That is likely to explain the strong growth in April. As the weather improves, so does the property market by and large. There is still limited stock and that is hampering transaction levels. 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.”

Lewis Shaw, founder of Mansfield-based Shaw Financial Services: “April may have been another barnstorming month, but the wheels could come off the property market spectacularly during the second half of the 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. But there is a very real risk of recession ahead.”

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. April may be the last month of the extraordinary growth over the past two years.  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.”

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.”

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