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Experts react to house prices rising by +1.3% in January – Halifax HPI

by | Feb 7, 2024

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Following the latest Halifax HPI update that showed average house prices rose by +1.3% in January, industry experts have given their thoughts.

Tom Brown, Managing Director, Real Estate at Ingenious, said: “The UK property sector continues to demonstrate its resilience and popularity in the face of high inflation and higher borrowing rates. Nationally, there remains a significant shortage of housing inventory across most locations and price points. Consequently, any slow-down in sales volumes from homeowners is likely to be offset by increased demand from renters and investors. 

“However, it’s essential to note that the situation is not uniform throughout the country and across all price ranges. When analysing opportunities, it is key to understand the underlying subsectors and regional dynamics. Taking too broad a view of the market can be misleading. For instance, the institutional housing sector has experienced fewer disruptions compared to the residential sector due to its long-term investment horizon, rental growth and substantial capital inflows.

“2024 brings a new and exciting set of challenges and opportunities for growth and progression in what we do. We are looking forward to continuing to work with borrowers and investors and delivering for them. The dynamic landscape of the markets that we serve, and the wider economy requires us to evolve to stay relevant in addressing diverse challenges including the climate crisis, and changes in the way we are all living. 2024 will see Ingenious broaden the reach of our widely embraced development lending product. This expansion aims to offer extended terms for stabilisation to specialised developers within the rental sectors. Additionally, special lending terms will be introduced for developers with a specific focus on minimising embedded carbon in their construction practices.”

Director of Benham and Reeves, Marc von Grundherr, commented: “The general view is that 2024 will be a far more fruitful year for the UK property market and we’re already seeing early signs of this, with a fourth consecutive monthly increase in house prices and a sharp increase in both new sales listings and the number of buyers submitting offers. 

“It really is all systems go at the moment and as market activity continues to build, property values will continue to ripen.”

CEO of Yopa, Verona Frankish, commented: “Not only have we seen positive market movement with respect to the monthly rate of house price growth in recent months, but we’re now starting to see an improvement with respect to the annual picture and it’s this measure of health that suggests the market is firmly on the up. 

“Looking ahead, it’s likely that not only has the property market bottomed out with respect to the decline in house prices seen last year, but it’s also likely that interest rates have now peaked. 

“This combination of factors will enthuse both buyer and sellers in equal measure and as the year progresses, we expect further momentum to build.”

Nathan Emerson CEO at Propertymark comments: “It is positive to see that house prices have gone up gradually, especially as borrowing costs are being affected by higher interest rates on mortgage affordability. Before 2023 ended, the Bank of England’s decision to maintain interest rates should be providing further confidence to buyers looking to make their next or first home move in 2024. We would now hope that the the Bank of England gradually starts slashing interest rates in order to further to stimulate growth in the housing market.” 

CEO of Open Property Group, Jason Harris-Cohen, commented: “The current economic picture is unsettled at best, but despite this, the property market has continued to show signs of positive growth with not only a fourth consecutive monthly increase in house prices, but the highest annual rate of growth seen in a year.

“Last week’s decision to hold interest rates for a fourth consecutive time will only bring further stability as the nation’s homebuyers continue to act with greater confidence. 

“While they may still be treading with a degree of caution, it’s very much a matter of if, not when, interest rates are cut this year. When they are, we expect this will open the floodgates to some extent and as buyer demand increases, house prices will continue to strengthen.”

Ruth Beeton, Co-Founder of Home Sale Pack, says: “Despite interest rates remaining at their highest since 2008, mortgage approvals and mortgage approved house prices are on the up and this uplift in market activity is being largely driven by those looking to remortgage while rates have settled. 

“Bank of England data shows that mortgage approvals attributed to remortgagers have increased by 15% per month on average since they started to climb in October of last year, more than any other buyer segment.

“Of course, with both the cost of borrowing and house prices remaining far higher than historical levels, the nation’s first-time buyers continue to struggle with their aspirations of homeownership.

“That said, there have been whispers that the Government could be looking to supercharge first-time buyer demand yet again, which would help rebalance the market and help to further stimulate house price growth over the year ahead.”

Daniel Austin, CEO and co-founder at ASK Partners, said: “Today’s data shows that the property sector is beginning to show signs of recovery. With a decline in inflation YoY and the peaking of interest rates, the overall outlook has considerably improved. Rent values have seen sustained growth, positioning real estate as reasonably valued in comparison to gilts and presenting growth potential. In the realm of commercial real estate, factors like physical condition, location, and age significantly influence a property’s value. Well-maintained properties boasting modern amenities tend to command higher prices, while neglected ones may struggle to attract tenants or investors. In the current market, the emphasis has shifted towards the importance of location and quality over the yield on debt or cost. We anticipate opportunistic acquisitions of prime properties in prime locations.

“A survey conducted by the Royal Institute of Chartered Surveyors (RICS) uncovered that non-traditional market segments, such as aged care facilities, student housing, data centres and life sciences real estate are yielding the most robust returns. Although the lead-up to the general election may pose some uncertainty, a subsequent boost in productivity and a decrease in interest rates are expected. The hope is that any new government can address local planning issues to stimulate construction and guide the economy out of the downturn.

“As a debt provider, at ASK our focus will be on supporting the best sites in prime locations with well-capitalised sponsors who understand their product. Following this strategy, we aim to bolster developers’ initiatives by adopting a flexible underwriting approach, thereby continuing to offer opportunities for the growing number of private individuals opting to invest in property debt.”

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