Following the release of the Halifax HPI data that showed house prices falling again in September, industry experts have shared their thoughts with IFA Magazine.
Iain McKenzie, CEO of The Guild of Property Professionals, comments: “It comes as no surprise that house prices have fallen slightly during the usual summer slowdown, especially in light of the ongoing squeeze on household bills.
“While the recent unexpected decision by the Bank of England to maintain the base rate at 5.25% will be a relief for mortgage-dependent buyers, this rate is still significantly higher than last year. This has led many potential buyers to adjust their expectations and hold firm during price negotiations with sellers.
“Despite a slight dip in average house prices in September, affordability remains a concern, especially for first-time buyers who must consider the impact of higher monthly loan repayments.
“On the flip side of the coin, this gives more room for manoeuvre for cash buyers. While most people are exercising caution about potential overpayments, those with the financial means are in a favourable position, often securing deals below the asking price.
“The pause in base rate hikes, along with competitive mortgage rate reductions from various lenders, are indicators that the market is stabilising.
“Despite the financial challenges facing households, there remains robust demand for high-quality housing. Buyers have become accepting of the higher-rate environment, and sentiment is expected to improve further if interest rates hold steady.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, said “Squeezed buyer affordability is lowering house prices although they still remain much higher than pre-pandemic levels.
“The property market is offering a much stronger supply of homes than it did during 2021, when we saw frantic buying activity, and this is giving buyers much more choice and headroom to haggle — though it is also playing a part in pushing down prices during negotiations with sellers.
“However, the unexpected pause in base rate rises may result in a spike in demand which could balance this out over the coming months.
“We are seeing the usual uptick of autumn activity, but with the average time taken to finalise a sale close to 20 weeks, time is ticking for those wanting to move in by Christmas.
“The good news for sellers is that buyers looking to move are highly motivated, although those relying on mortgages are very conscious of their budgets and are being careful not to overstretch themselves.”
Tom Brown, Managing Director, Real Estate at Ingenious, said: “Despite recent property data indicating a small correction in UK house pricing is underway the 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.
“With rates forecast to be at or nearing their peak, we maintain a cautiously optimistic outlook and anticipate relative stability in the near future. At Ingenious, we leverage our market expertise to offer flexible, cost-effective financing solutions to our clients. We source residential opportunities from across the UK solely based on their individual merit, ensuring the best possible outcomes for our clients.”
Jonathan Hopper, CEO of Garrington Property Finders, comments: “Britain’s property price correction is far from over, but there are signs it is easing.
“The Halifax’s data marks the second time this week that a house price index has reported that monthly price falls are slowing.
“More and more sellers have accepted the reality that the market has shifted fundamentally since this time last year. The Halifax’s data shows that prices have fallen 4.7% in that time, and that the average home sold now is fetching £14,000 less than it would have when prices peaked last August.
“While many sellers are now being more realistic in setting their asking price, we’re still regularly seeing homes go for tens of thousands under asking as proceedable buyers press home their advantage.
“The big question now is how the easing of mortgage rate escalation might feed through into both prices and the number of sales. While no-one is expecting mortgages to get significantly cheaper any time soon, fixed rate deals have come down from their recent highs and there’s a growing hope that the peak is past.
“Cash buyers remain in the strongest position, but affordability is slowly improving for mortgage-reliant buyers too as prices continue to fall.
“With wage growth still strong, improving affordability should pep up demand over coming months, even if every buyer will continue to need to factor in price risk and higher borrowing costs into what they’re prepared to pay.”
