Following the latest Halifax HPI data that showed the Average house price rose by +0.1% in April on a monthly basis, after a fall of -0.9% in March – a very different result to that of last week’s Nationwide HPI – industry experts have shared their thoughts with IFA Magazine.
Daniel Austin, CEO and co-founder at ASK Partners, said: “The property sector is in recovery mode. 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 RICS survey 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. With housing set to be a battleground point in this year’s election and as the sector moves to the top of the agenda for all parties, we hope to see a long-term plan for new homes, including social housing, however, we expect we will see more short term fixes. Stimulus will be welcome but can create unnecessary froth. For voters, a stamp duty holiday or reprieve may be a welcome sign. For developers, eased planning regulations for brownfield sites and conversions will be popular. However, the government will be faced with a challenge – striking a balance between trying to increase housing supply and therefore affordability by supporting developers and private landlords but appealing to voters who do not want to see greenfield development. The planning system remains hotly political and as a result, landlords and developers are unlikely to see much in their favour. As a debt provider, we hope to support the best sites in prime locations with well-capitalised sponsors who understand their product. Following this strategy, we aim to bolster developers’ initiatives with the flexible underwriting approach that is necessary for navigating current planning rules and market uncertainty. This will enable us to continue to offer opportunities for the growing number of private individuals opting to invest in property debt.”
Foxtons CEO, Guy Gittins, says: “Although UK homebuyers continue to wait patiently for interest rates to fall, this has not dampened the growing level of market confidence that has been building since the start of the year and, in fact, many buyers are already pressing ahead with their plans to purchase with hopes of mortgage rate reductions on the horizon.
“Since a hold on interest rates in September last year mortgage approvals have been climbing, there’s been an uplift in viewing activity and more offers are being made, and so it’s clear that both buyers and sellers are responding favourably to a greater degree of market stability.
“This bodes very well for the year ahead and we only expect conditions to improve further as spring turns to summer and these initial offers reach completion.”
Lomond CEO, Ed Phillips, commented: “Property market conditions have improved notably so far this year and while we’ve seen early signs of positive house price growth, it’s important to note that the landscape remains a difficult one, with buyers still facing a tough task with respect to affordability.
“With this in mind, it’s to be expected that the monthly rate of growth remains subdued, although the positive to take is that annually, property values are still climbing and the market has continued to stand firm.”
Director of Benham and Reeves, Marc von Grundherr, commented: “The property market is arguably a little out of shape following a sustained period of subdued activity as a result of higher mortgage rates. And so while we’ve seen a string of positive house price reports in recent months, we’re yet to see the pace lift with respect to monthly growth.
“But while the road ahead may be a challenging one, we remain in a far better place than we were this time last year and that sets a solid foundation for the market to now kick on and post a stronger performance in 2024.”
CEO of Open Property Group , Jason Harris-Cohen, commented: “Higher borrowing costs remain the key factor when it comes to current house price performance and while inflation may have eased, many buyers will have continued to struggle with their mortgage eligibility.
“This is ultimately restricting the price they can pay and that is being reflected within a somewhat muted housing market performance. So while sellers should have a renewed degree of confidence given the uplift in market activity seen in recent months, it’s important to maintain a pragmatic approach to pricing if you do want to sell your home quickly.”
CEO of Yopa, Verona Frankish, commented: “Yet further growth, both on a monthly and annual basis, should bring another boost to the market and strengthen the momentum that has been building so far this year.
“Just last week, the Bank of England reported that mortgage approvals have climbed for their sixth consecutive month in a row and, while the market may still be finding its feet, it’s only a matter of time before this increase in buyer demand starts to drive a far stronger level of house price growth.”
Nathan Emerson CEO at Propertymark comments: “Buyers and sellers are starting to accept the new reality of the housing market in the face of current interest rate levels, and it is encouraging to see that house prices are increasing, giving sellers the confidence they need to put their house onto the market during what will be a busy time for the housing market. Propertymark’s latest Housing Insight Report showed there was an 18 per cent increase in new properties coming to the market. Also, the number of mortgage approvals made to home buyers increased from 56,100 in January to 60,400 in February, according to recent Bank of England figures. Hopefully the UK Government takes the initiative and encourages growth in the housing market by meeting its own housing targets.”
Kate Steere, property expert at personal finance comparison site finder.com, says: “A lot of uncertainty still surrounds the UK housing market, but today’s figures, alongside the fact that mortgage approvals have been on the rise, shows that buyer demand could be strengthening.
The Bank of England is widely predicted to cut rates in the coming months, with half of experts believing rates will be cut at the Bank’s meeting on 20 June. As a result, buyers who have so far held off, are beginning to return to the market. However, affordability issues remain, with several big lenders increasing their rates over the last week. Therefore, it’s unlikely that we’ll see UK house prices sprint away in 2024, but there are encouraging signs of recovery. “
Karen Noye, mortgage expert at Quilter: “The slowdown in the housing market continues to have an impact on house prices, though this morning’s house price index from Halifax paints a marginally more positive picture than Nationwide’s equivalent. Halifax reported that house prices grew 0.1% in April following a 0.9% fall in March, while on an annual basis, prices grew by 1.1%.
“The differing views reported in the various house price indices show just how unpredictable the property market remains. Though Halifax reports an increase, the growth in house prices is hardly anything to write home about given we would typically expect sales to gain momentum in the spring, and for house prices to rise as a result. However, so far this year that has not been the case as monthly property transactions have been remarkably subdued.
“What’s more, mortgage rates have been gradually increasing, so we can expect transactions to remain dampened for some time yet. When combined with the ongoing cost of living pressures, many prospective buyers will struggle when it comes to affordability, particularly those first-time buyers who will also have found it much harder to save enough for a deposit.
“All eyes will be on the Bank of England as it gears up to announce its latest monetary policy decision later this week. Though it is not expected to declare a shift in stance until later in the year, things are beginning to look a little more positive and we could see a turning point for the property market as we approach the summer months. An interest rate cut would present a more favourable borrowing market and would likely help reignite demand given many people are holding off in hopes of lower rates and reduced affordability pressures.”
