Following the Halifax April house price index published this morning, financial industry experts have commented.
Chris Barry, director at Gloucester-based conveyancer, Thomas Legal: “As it often does, the Halifax house price index contrasts with that of the Nationwide, which showed a 0.5% increase in prices in April. Either way, sentiment on the ground is improving by the day. There seems to be an acceptance among buyers that mortgage rates won’t come down much further and that now is as good a time as any to buy. In addition, rents are increasing and in some scenarios mortgage payments are cheaper than rents. I don’t see a decline in registering buyers in May, even with the likely Bank of England rate rise this week. Property prices are holding up, banks have an appetite to lend and unemployment is still relatively low.”
Jamie Minors, managing director at Norwich-based estate agents, Minors & Brady: “Though the annual rate of house price growth is near flat, at 0.1%, the market is not. With mortgage rates having steadily reduced during 2023 to date and consumer confidence returning after the disastrous mini-Budget, we are seeing strong levels of demand matching good levels of supply. Unemployment is still very low, so as long as mortgage rates don’t suddenly rise and people keep their jobs, buyers will continue to purchase, resulting in prices holding without further big reductions and a rally upwards in 2024. As ever, the property market is proving more resilient than many thought.”
Kim McGinley, director at Lee-on-the-Solent-based Vibe Specialist Finance: “Prices may have dipped slightly but we appear to be witnessing a correction rather than a crash. After the mini-Budget, confidence in the property market fell sharply but in the first four months of 2023, sentiment steadily improved as mortgage rates came down and the economic outlook felt less bleak. The significant increase in mortgage approvals for house purchase in March reflects the improved sentiment on the ground and the fact that people have accepted the new rate environment and are getting on with their lives. Even another increase in the bank base rate this week may not slow the recovery we’re seeing in mortgage activity and the broader property market.”
Kevin Dunn, mortgage and protection adviser at Leicester-based financial planner and mortgage broker, Furnley House: “Prices may have fallen slightly in April, according to the Halifax, but last month we saw mortgage approvals bounce back sharply despite base rate increases and stubbornly high inflation. The reason for this is that buyers have now adjusted to the higher interest rate world and there is also a lot more confidence in the economy. This will likely continue despite the prospect of another rate rise this week. The property market is proving more resilient than many thought.”
Riz Malik, director of Southend-on-Sea-based independent mortgage broker, R3 Mortgages: “Numerous lenders have recently adjusted their affordability calculations to account for elevated interest rates, subsequently impacting the potential borrowing amounts. This will continue to dampen property prices for the time being at least. However, with Skipton returning with a 100% loan-to-value mortgage, this could stimulate the lower rungs of the property ladder, potentially creating a ripple effect that extends upward. Pairing this development with a timely stamp duty holiday may provide the market with the necessary buoyancy to see us through until the end of the year when we could potentially witness a reversal in interest rate hikes. The property market eagerly awaits a boost to break free from this seemingly perpetual cycle reminiscent of Groundhog Day.”
Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco: “The sudden demise of the property market has been predicted time and time again, and the doom-mongers are set to be confounded once again this year. Whilst the pace of growth has already dramatically slowed, which is to be welcomed, prices have not fallen, and will not, by some of the sensational levels predicted. After the shambolic administration of Truss, the markets have calmed and we are starting to see people return as they anchor themselves to the new norm of mortgage rates, react against ever-increasing rental costs, and look to buy in a somewhat softer market. The supply of property is still scarce, especially in high-demand areas, where prices are starting to edge up once more. With rumours abounding that the Government may well return to demand-side assistance with a new type of Help to Buy Scheme or similar, prices could be set for a recovery in the latter half of the year and certainly before a General Election.”
John Choong, equity and markets research analyst at InvestingReviews.co.uk: “Despite weakness over the past year, the housing market may have bottomed out for several reasons. Crucially, mortgage approvals, which serve as a forward-looking indicator for future house prices, are starting to rebound from their bottom in January. To complement this, the RICS survey also seems to be moving in the same direction, along with GfK consumer confidence data. More importantly, mortgage rates are continuing to drop from their highs last Autumn. And despite the likelihood of another rate hike this week, I don’t imagine this will have a drastic impact on mortgage rates moving forward, given that cuts are already expected later this year/early next. Instead, it will be the central bank’s outlook for future hikes that the market will pay most attention to, as any hawkish statements could put some downward pressure on a potential rebound in property prices in the near term.”
Kundan Bhaduri, director of London-based property developer and portfolio landlord, The Kushman Group: “The property market is powered by confidence and confidence is returning by the day. If inflation finally enters single digits and starts to come down in the months ahead, this trend looks set to continue. The sharp house price falls many have been predicting simply haven’t materialised, as mortgage rates have come down sharply since the fourth quarter of last year and supply is still low. What’s also helping is the fact that buyers and sellers are finally seeing eye-to-eye on pricing.”
Graham Cox, founder of the Bristol-based broker, SelfEmployedMortgageHub.com: “I can’t help but feel that the recent apparent rise in house prices seen by the Nationwide is a dead cat’s bounce. Whilst the economy hasn’t performed as badly as feared over the past few months, real wage growth is negative, the number of mortgage approvals are way down on this time last year, and interest rates are still rising. Oh and like a bad smell, inflation is refusing to go away. There’s always a chance Rishi Sunak will re-deploy Help to Buy again, or some other scheme to prop up house prices. Failing that, I think they’ll fall 15% over the next 12-18 months. Which really will help people to buy.”
Nick Harris, co-founder at Wokingham-based Quarters Residential Estate Agents: “Prices may have nudged down in April, according to the Halifax, but there’s more life in the property market than many think. While some discretionary buyers continue to sit tight, serious buyers remain very active. Sellers are being much more realistic on price, and are typically also buyers so they appreciate a more balanced property market. The property market armageddon some predicted is simply unlikely to materialise.”
Ross McMillan, owner at Glasgow-based Blue Fish Mortgage Solutions: “The Scottish housing market appears to be remaining stubbornly bullish with an appetite and thirst for residential properties at most levels of the market seemingly unquenchable. With Home Report Values arguably more accurately reflecting current market conditions and sellers’ expectations perhaps more reasonably managed, the amount that buyers are willing or needing to offer in excess of mortgage valuations does appear to be lessening, however. The ongoing and persistent attacks by the Scottish government on the private rental sector alongside diminishing yields have contributed to clear signs of a slow and steady exodus of non-professional landlords from the rental market with very little or no interest in buy-to-let portfolio expansion from professional investors. For first-time buyers in particular, this combination is not a negative trend but one that does appear to be fuelling strong activity in that sector and allowing more of this type of buyer to secure their first home.”
Ashley Thomas, director of London-based mortgage broker, Magni Finance: “We have seen a huge increase in enquiries over the past couple of months with more and more people looking to move ahead with purchases. March and April saw a growing number of prospective house buyers put the pedal to the floor. The property market seems to be much more positive as mortgage rates have continued to reduce over the past couple of months.”
