Halifax’s latest HPI data released this morning shows that house prices are continuing to trend upwards. Following this IFA Magazine has asked industry experts for their thoughts.
Holly Tomlinson, financial planner at Quilter: “The Halifax House Price Index for October reveals that UK house prices have risen by 0.2% month-on-month, bringing the annual change to 3.9%. This represents record levels just beating the previous high set towards the end of the pandemic’s race for space. Despite the increase, this latest data shows how budget uncertainty eased the year-on-year price growth, which had been 4.6% in September, as buyers and sellers braced for potential changes that could derail their plans.
“Following the budget, the government’s new 5% stamp duty surcharge on second homes marks a bold move to curb demand from buy-to-let investors and second-home buyers. The policy aims to make primary homeownership more accessible, especially in popular areas where house prices have surged due to demand for rental and holiday properties. However, with buy-to-let investors potentially being priced out, rental supply may tighten further, especially in already-competitive urban areas, adding fuel to the rental price surge.
“First-time buyers also face a narrowing window of opportunity due to changes announced last week. The government confirmed the current stamp duty threshold of £425,000 will drop back to £300,000 in March 2025. This looming deadline could spur a rush to buy, adding to market activity in the months ahead as potential homeowners look to beat the cut-off. Yet, with mortgage rates still elevated, affordability remains a challenge for many would-be buyers.
“Today’s Bank of England base rate decision adds yet another layer of interest for the housing market. While any changes will affect mortgage rates, particularly for those on variable and tracker deals, much of the anticipated base rate reductions have already been priced into fixed-rate products, so major rate shifts are unlikely right away. However, for borrowers on short-term deals or those nearing the end of their fixed-rate periods, today’s announcement could still shape refinancing options. Similarly, a decreasing base-rate plays a huge part in increasing buyer confidence. However, that said, borrowers just yesterday had to face a flurry of lenders pulling five-year fixed rate deals which may have been in response to the US election news or in anticipation of the Bank of England interest decision.
“With so many moving parts in today’s housing market, from policy shifts to evolving mortgage rates, now is an essential time for homebuyers and investors alike to look to get mortgage advice to ensure they are getting the best possible deal for their circumstances.”
Nathan Emerson, CEO of Propertymark comments: “Following the recent Budget there is potential the housing market may see an increased momentum across the winter months, as buyers potentially look to make their move ahead of proposed Stamp Duty increases from 1 April 2025. Increases will impact buyers across England and Northern Ireland, with some seeing Stamp Duty costs typically increase by around £2,500. However, it remains important to view the wider picture and that continued house price growth, even in the short to medium term, will help offset such tax expenditures for the highest percentage of those looking to purchase after the threshold change date.”
Iain McKenzie, CEO of The Guild of Property Professionals, comments: “Another rise in house prices shows that the market is proving resilient and stable despite lingering affordability concerns.
“We are now seeing record-busting house prices again, with the average cost of a property surpassing the levels recorded in June 2022. But unlike the post-pandemic market, conditions for buyers and sellers are not the same. Our members are reporting healthy levels of housing supply, meaning that although prices are reaching a new peak, they are still being kept in check and not forcing people to shelve dreams of homeownership.
“Some lenders are already prioritising new business with competitive rates. We may see offers retreat from the market in the coming weeks as lenders adjust their rates upwards following the Autumn Budget. Interest rates are expected to slowly creep down to around 4% in the next year, with the next decision taking place this afternoon.
“The OBR is forecasting that inflation rates will hold steady and hover around the Bank of England’s 2% target for the next five years, but political and economic turbulence can always put a bump in the road. If we do see interest rates drop today or at the end of the year, we can expect this to have a profound effect on demand, with better mortgage deals being offered to potential buyers.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country: “October’s rise in house prices fuels optimism for a strong finish to 2024 in the property market.
“Despite recent uncertainties caused by the Budget, the housing market has held strong, bolstered by encouraging economic indicators. Investors still anticipate an interest rate cut at today’s Bank of England meeting — which could provide further momentum. Experts also predict that inflation will hover near the government’s 2% target until 2029.
“The full impact of the Autumn Budget on long-term interest rates may take time to unfold, but a rate cut in November would likely boost consumer confidence. In the meantime, market activity has continued to gain traction, with mortgage approvals rising for the fourth consecutive month in September to reach their highest levels since August 2022.
“We are currently in a buyer’s market, with housing supply at its highest point since 2014 and a 12% increase in available properties year-on-year. This expanded inventory, alongside affordability concerns, means sellers must stay competitive, as offers generally fall below asking prices.
“Following last week’s Autumn Budget, the market outlook remains broadly optimistic, despite adjustments like the increased stamp duty surcharge on second homes and buy-to-let properties, which rose from 3% to 5%. However, the government’s £5 billion commitment to housing development underscores a long-term vision for a healthier market, likely supporting steady growth as we move forward.”
