Nationwide July HPI: “Property market has once again defied economic gravity” – reaction from agents and brokers

by | Aug 2, 2022

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Following the Nationwide July House Price Index published this morning, agents and brokers have reacted:

Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco: “The property market has once again defied economic gravity, with the lack of supply and the robust jobs market without doubt the key drivers. Looking forward, the resilience of the jobs market will be key. If the recession many are predicting sees unemployment rise sharply, the property market will invariably take a hit. Even then, though, the impact on prices will be limited due to to the abject lack of supply and homes being built. The lack of supply is the property market’s joker, which it always plays when the game moves against it. Even though annual price growth is still in double digits, this is unlikely to continue for much longer as the age of dirt cheap money is well and truly over and the cost of living crisis saps confidence from the market.”

Ross Boyd, founder of the always-on mortgage comparison platform,“It’s no surprise landlords have got their tails up as they know rents are likely to rise even further as people struggle to buy and also see property as a long-term hedge against inflation. As for the continued strength of the market, with inflation heading for double digits and rates rising, potentially sharply again this week, we’re in economic crisis mode and the property market will not escape unscathed. Many are predicting a 0.5% rate hike this week as the Bank of England attempts to control inflation and that will further temper demand, thereby cooling the rate of price growth. We expect the property market to continue to cool throughout 2022 and in 2023. For people who are currently locked into some of the lowest mortgage rates ever, the rate shock when they remortgage will be extreme. The pending remortgage crunch will significantly add to the cost of living crisis and put further pressure on household finances.”

James Miles, director of Exeter-based broker, The Mortgage Quarter: “Prices are increasing in large part because landlords and investors see rising rental prices and growth potential in the holiday let sector. More broadly, I would expect to see house prices stabilise but not reduce due to the lack of supply. We’re still seeing applications perform strongly despite the holiday season now amongst us. The biggest challenge is the gulf in the difference between buyers’ incomes to property values and the multiples of income lenders use not being sufficient. There’s also a huge unknown as to what living costs will be on such things as energy bills and rising interest rates.”


Mark Robinson, Managing Director of Southampton-based Albion Forest Mortgages“With supply so limited, I am expecting house prices to continue to rise over the next 12 months, albeit far more gradually than in previous years. We’re still seeing a decent level of mortgage offers so people are certainly still buying. The bottom line is that, even amid the cost of living crisis and with a potential recession looming, people will always need to move for a variety of reasons, and it’s still usually cheaper to buy own that to rent. Deposits, as ever, are key, so it’s no surprise that the Bank of Mum and Dad is currently working overtime.”

Edward Checkley, managing director of London-based property finance specialists, Advias: This continued strength in the market is unsurprising given that the shortfall in property stock remains a constant problem. Though rising interest rates are tempering buyers’ enthusiasm, in historic terms borrowing costs still present reasonable value. Looking forward to 2023, if inflation stays high and interest rates continue to rise, property values may see a correction to compensate for additional finance costs. We may see short-term corrections in regional locations, where buyers fought over idyllic property and areas during the pandemic. A compensating factor for the market in general may be the relatively weak pound and the international appeal of London, which may entice foreign property investment into the capital.”

Jamie Lennox, director at Norwich-based mortgage broker, Dimora Mortgages“Although July continued to see strong demand for mortgages, activity levels are definitely starting to tail off. When speaking to local agents, they are seeing fewer listings come to the market, which could be due to the cost of living crisis or the fact we are now heading into the holiday season. A recession doesn’t automatically mean house prices collapse. However, a lot will depend on mortgage lenders still being willing to lend in potentially challenging economic conditions. If they stay as they are, I feel the market will stabilise. If lenders become more restrictive, we could see prices drop. Ultimately it’s a flip of a coin on what can happen from here.”


Lewis Shaw, founder of Mansfield-based Shaw Financial Services: “July was notably quieter although that’s to be expected with schools breaking up and families taking holidays. August will be the same, which allows for a brief respite before the market kicks off again in September. As a result, prices will stop rising, and with the Bank of England almost certainly raising the base rate by another 0.5% on Thursday, it’s sure to dampen demand for new borrowing. However, we won’t see any house price crash because we have such a chronic shortage of housing stock and bank liquidity is still good. Of course, things can change if we dip into a recession which is pretty much nailed on if the Bank of England continues to hike rates. However, unless we see unemployment shoot up, the housing market will continue to be resilient.”

Graham Cox, founder of the Bristol-based broker, “The Bank of England base rate could be around 3% by the year-end.  Mortgage rates, if that happens, will be around 5%. This will be catastrophic for anyone coming off a fixed rate and needing to remortgage. For years, ultra-low rates have masked the economic reality of an over-indebted nation and a Ponzi housing market. I believe prices are about to fall, and quickly, possibly by 5%-10% over the next 12 months.”

Rhys Schofield, managing director at Belper-based Peak Mortgages and Protection: “A well known fact to those in the industry is that when the weather is good, no one is bothered about buying houses. That being said, July was another very busy month and I would expect to see yet another rise in house prices. Some sectors of society love to talk up the prospect of a crash but the reality is still that demand is fierce, transactions still way up on pre-pandemic levels and the alternative to buying is rentals where there is even more pronounced shortage of stock and rent rises are dwarfing what’s happening with purchase prices.”


Rob Peters, director of Altrincham-based Simple Fast Mortgage: “With inflation at a four-decade high and a cost of living crisis in full flow, the chances of a recession in the UK look quite high. But this does not mean the property market will crash. In fact, a crash is fairly unlikely. Instead, house price growth looks set to stabilise. The rampaging house price growth of recent years just cannot be sustained. Yet at the same time there remains a high demand for homes. Buyers in a weaker financial position will be replaced by those in a stronger position, and the show will go on. The Great Recession of 2008-2009 was linked to a US sub-prime mortgage crisis and poor regulation regarding the stability of the banking sector. This just isn’t the case today.”

Sabrina Hall of Lichfield-based Kind Financial Services: “The market is still strong but it’s looking like we are seeing an end to the craziness of one property getting 20 to 30 views and resulting in a bidding war. Despite the cost of living crisis and the restrictions on affordability I’m still seeing a lot of demand from house buyers and it doesn’t seem to have put buyers off up till now so this will help to keep the mortgage market from crashing. I expect by the end of the year we will be on our way to seeing some correction of the boom that happened during Covid.”

Andrew Simmonds, director at Bristol-based Parker’s Estate Agents“We are seeing more stock enter the marketplace than we have experienced in the past 12 months, but buyers are now contracting back into their shells a little. The rest of 2022 will be interesting. I certainly do not see the same growth as previous years, perhaps fairly static values and certainly not prices falling, at least yet.”


Nicky Stevenson, Managing Director of national estate agent group Fine & Country: “Annual house price growth accelerated unexpectedly in July even as storm clouds gathered across the broader economy. Increased borrowing costs and shrinking consumer purchasing power have yet to take the heat out of the market, and demand continues to be fuelled by existing homebuyers looking to trade-up. Buyers and sellers alike will now be watching closely this week to see if the Bank of England makes good on its threat to hike its base rate to 1.75%  — the biggest increase for more than a quarter of a century. Cheap debt is fast disappearing and against this backdrop, many expect a period of more subdued house price growth later in the year.”

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