Halifax Nov House Price Index: reaction from estate agents and brokers

by | Dec 7, 2022

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Following the Halifax November house price index announcement that highlighted that the UK housing market is continuing to slow, a selection of estate agents and brokers have commented.

Chris Goodwin, partner at Leicester-based Hortons Estate Agents: “Prices are coming down but we’re ignoring the overly negative predictions about house values. After all, if house prices fall 5%, all that means is your home is worth roughly what is was in January. If house prices fall 10%, all that means is your home is worth roughly what it was last summer. Conclusion: your home is still worth much more than it was three years ago, before the pandemic. We need some perspective around the property market and less hype. There is still a phenomenal lack of supply and that will support prices.”

Oliver Fish, director of London-based luxury estate agency, Oliver James“Amid all the uncertainty, buyers are currently sitting on their hands and adopting a wait and see approach. It’s understandable given the turmoil since the mini-Budget and another interest rate decision due this month. This caution among buyers is forcing sellers, at least those who want to move quickly, to reduce their asking prices in order to secure a sale. We predict property prices will fall in the region of 2%-3% in Central London over the next 12 months but then expect them to start climbing up again once people have adapted to the higher cost of borrowing. That will take some time after mortgage rates have been so low for so long. Even with the cost of living crisis and the new higher cost of borrowing, there isn’t enough property per buyer ratio so prices can only go one way once things settle, and that’s up.”

Steven Morris, director at Bristol-based independent mortgage broker, Advantage Financial Solutions: “Prices are heading down due to inflation and rising interest rates and this trend will almost certainly continue throughout 2023. However, I would be surprised if average values dropped by more than 15% given that inflation is forecast to normalise by 2024. A fall in prices greater than 15% within a period of 12 months seems historically unfathomable. Currently, many would-be buyers are waiting until 2023 for a bargain. December, and to a lesser extent November, have always been the month for cheeky offers, as there are fewer buyers ahead of the Christmas break. That’s nothing unique to 2022. However the cliff edge of purchase activity and the burgeoning wave of landlords now looking to sell in the face of a barren outlook for buy-to-let, means more ‘cheeky offers’ are making a home run than in previous years. Buyers, for now at least, hold all the cards.”

 

Joe Garner, managing director at London-based property developer, NewPlace“Transactions are falling through the floor and whilst there will be bargains for buyers as some vendors are forced to sell at lower prices. The reality is no one knows how far house prices can fall. A 25% drop would simply erase the inflated gains of the past few years, whereas anything higher than that would see transactions seize up like an old Austin Allegro engine. If unemployment rises and the cost of living crisis continues, the Government will have to step in and prevent mass repossessions, possibly even providing guarantee-backed subsidised mortgages via the banks in the same way they did bounce back loans.”

Matthew Jackson, director of Salisbury-based mortgage broker, Mint FS“If unemployment gets out of control then we will see a major crash in house prices, and not the modest 10% predicted by most economists but probably closer to 25%-30%. So there is a big prize to smoothing out the inflation curve and making the cost of living crisis as bearable as possible. Our economy is pinned on a stable and buoyant property market, so although a crash may be good news for first-time buyers, it is bad news for the country as a whole. My own view is that the natural lull in November and December will be replaced with renewed activity in the market and a semblance of calm from lenders in terms of pricing. We’re already starting to see that now that the the shock of the mini-Budget has started to dissipate. This will see buyers and sellers return to the market, albeit not in the volumes of previous years but enough to drive growth in the market and keep prices fairly static.”

Gary Boakes, director of Salisbury-based mortgage broker, Verve Financial“In my conversations with local estate agents, sellers still feel as it’s 2021 and buyers feel that house prices have dropped 20% overnight, so there is a massive disconnect and some crazy offers being put forward. However, sellers have to realise the market has changed rapidly and they are no longer in a position to be demanding offers above asking price. Many buyers have put their plans on hold for the time being and with further base rate rises expected this month and next year, the market is going to be challenging until we have some stability surrounding inflation, the base rate and lender pricing. The Covid boom has gone and the 10%+ extra people paid over the past 18 months is very likely to be eroded next year, leaving many people in negative equity. I have recently had a client who offered £21,000 over asking price and, due to a long sale and having to replace their mortgage offer to a higher rate (costing £30,000 in interest over the next five years), they have now reduced their offer to £15,000 under the asking price.”

 

Lewis Shaw, founder of Teesside-based mortgage broker, Riverside Mortgages“The property market has flipped to a buyer’s market faster than the Tory party can replace PMs. Many buyers will find it a hard pill to swallow when it comes to reducing their asking prices if they want to sell. Thankfully this time of year is naturally quiet, and with the World Cup and Christmas upon us, we’re all hoping that the New Year sees an uptick in activity. There will be plenty of first-time buyers rubbing their hands with glee at the thought of grabbing a bargain next year. With mortgage rates dropping and the Bank of England making sounds that the base rate isn’t going to rise much further, it would make sense if 10% came off house prices, taking them back to where they were a year ago.”

Riz Malik, director of Southend-on-Sea-based R3 Mortgages“The great British public is uncertain about the future. This can be evidenced by the distinct lack of Christmas lights around most neighbourhoods in December compared to previous years. Buyers are still buying but they want properties at January sales prices. Sellers are in the weakest position that they have been for years. It’s now down to estate agents to have some tough conversations to keep the market moving.”

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