Property experts on ONS House Price data: “lack of stock is borderline cruel”

Photo by Jonathan Ybema on Unsplash.

In this blog for IFA Magazine, 10 property experts share their views on the ONS December HPI published this morning.

Ian Hewett, founder of The Bearded Mortgage Broker: “Over the past year I’ve watched endless borrowers scrimp and save to achieve the magical 5% deposit required to buy a shoe box, only to then see the prices of property being driven higher and higher. The lack of stock is borderline cruel, the competition to buy intense and prices have shot upwards due to the Stamp Duty holiday and the ongoing ‘race for space’. The look of anguish and annoyance as first-time buyers realise they don’t have enough of a deposit to reach their dream of owning a home is hard to bear. To top it all off, interest rates are now rising and the cost of living is having a real impact on lenders’ affordability criteria. The hope for first-time buyers is that the market stabilises, or even drops, as the base rate goes up and more properties come back onto the market. The market is incredibly tough at the moment for first-time buyers and is driving many into an existential despair.”

Jonathan Burridge, founding adviser at hybrid mortgage adviser, We Are Money: “With the property market, the simple rules of supply and demand rule supreme and that’s reflected in the December data. At the moment supply is low and demand strong, and this is supporting prices despite the cost of living crisis highlighted by the latest inflation data. The post-Brexit bumpy road for property forecast by many was delayed due to the Stamp Duty holiday introduced during the pandemic. We are likely to see some regional adjustments during 2022, as there are a lot of headwinds facing the economy at present. London house prices are starting to recover from the Covid dip, but other areas may not do so well.”

Luke Loveridge, CEO at Bristol-based property specialist, Propflo: “Given the hellish increase in the cost of living, prices are likely to come off the boil in 2022. However, I expect we will start to see prices increase more rapidly for highly energy-efficient homes. A growing numbers of lenders will lend larger sums against these homes as they help increase affordability for buyers.”

Dominik Lipnicki, director of Your Mortgage Decisions“The housing market saw double digit increases in 2021, including a strong finish to the year. Despite inflation being at a 30-year high, it is likely that we will see further house price rises in 2022, albeit they are likely to be more modest. Demand is strong and supply simply too weak.”

Ross Boyd, founder of the always-on mortgage comparison platform, Dashly.com“Houses prices continued their inexorable march in December but affordability is set to be the defining narrative of 2022. High prices, coupled with rising interest rates and the soaring cost of living, mean lenders are looking at people’s finances in forensic detail. 2022 is likely to see milder growth than 2021 but the chronic shortage of stock will support prices.”

Andrew Montlake, Managing Director of the UK-wide mortgage broker, Coreco: “It’s no surprise that the market rose even further in December, as demand was exceptionally strong and supply critically low. However, we expect the market to start to cool throughout 2022 as the cost of living crisis and rising interest rates makes buyers and lenders alike more conservative. But average property values are unlikely to fall too much as mortgage rates are still phenomenally competitive and supply levels are obscenely low. People are also keener than ever to leave the rental market, where prices are often painfully high.”

Graham Cox, founder of the Bristol-based Self-Employed Mortgage Hub: “With everything more expensive right now, including mortgages, common sense would dictate that house prices can only go one way, namely south. But this government seems hell bent on propping up the housing market at all costs. After help to buy and the stamp duty holiday, it’s surely only a matter of time before Rishi announces his next hare-brained scheme. Failing that, we expect prices to fall in 2022.”

Imran Hussain, director at Nottingham-based Harmony Financial Services: “The property market in December was as buoyant as ever and showed no signs of slowing, with first-time buyers the major driver. As long as supply shows no sign of keeping up with demand, prices are likely to remain solid. But the impact of inflation is really now starting to bite and that could see prices finally come off the boil in 2022 and the beginning of a more moderate growth climate.”

Rob Peters, director of Altrincham-based Simple Fast Mortgage: ”What goes up must come down. But so far the housing market has defied the laws of economic gravity due to demand and political intervention. The question everyone is asking is, will house prices drop, when, and by how much? During December and January we saw normal seasonal changes in house buying activity, but nothing that indicated a more meaningful shift in the relentless demand for homes. And it’s difficult to see this changing in the short-term, given the current backdrop of poor supply of stock.”

Rhys Schofield, Managing Director at Peak Mortgages and Protection: “Supply shows no sign of keeping up with demand and that just means prices will continue to rise for the foreseeable future. We even have some would-be buyers on our books who have offered full asking price on over five houses and not been successful in getting any of those offers accepted. Without real action to boost supply, prices will continue to rise. And if anyone thinks purchase prices have gone bonkers, rental prices are going up even faster.”

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