Following the Nationwide HPI data that revealed UK house prices fell 0.2% month on month in August, industry experts have shared their thoughts with IFA Magazine.
Nigel Bishop of buying agency Recoco Property Search says: “We helped a number of house hunters secure a property in August but some buyers are still hesitant to finalise their search as they first want to observe the Labour government’s impact on the wider economy. Meanwhile, more homeowners have been motivated to put their property up for sale amid fears over an increase in Capital Gains Tax and Inheritance Tax in the upcoming Autumn Budget. As we are seeing more sellers entering the market, we predict buyer interest and activity to pick up after the summer holidays. Although this will create a more competitive market environment for house hunters, the influx of homeowners wanting to sell quickly will allow more room for price negotiations.
“On the topic of EPC ratings, he adds: “”Over the past years, good eco-credentials and sustainability have become a deciding factor and many buyers are enquiring about EPC ratings or a property’s potential for eco-related upgrades. Depending on the EPC rating, some properties can demand a premium of around 15%.”
Karen Noye, mortgage expert at Quilter: “The latest data from Nationwide reveals house prices experienced a drop during the usual mid-summer lull. In August, house prices edged down by 0.2% but the annual rate of house price growth continued to edge higher. Average prices were up 2.4% year on year. These quieter months usually see a slowdown as people focus on holidays rather than house hunting. However, this summer has still marked a recovery after several months of relatively flat results, reflecting the challenging economic conditions but a strong housing market.
“As conditions become more predictable, both buyers and sellers are gaining confidence that they can achieve their housing goals without the looming threat of mortgage shocks, which might mean there is a bounce in prices in the autumn. The recent decision by the Bank of England to cut its base rate from 5.25% to 5% has further bolstered this confidence, even though the cut’s direct impact on tracker mortgages and standard variable rate mortgages (SVR) will be relatively minor, and fixed-rate mortgage costs have largely already factored in this small reduction.
“The structure of the mortgage market, with a large proportion of homeowners on fixed-rate deals, has so far cushioned many from the full impact of rising interest rates. However, as these deals begin to expire, the market could face renewed pressure, particularly if further rate cuts are slower or less substantial than anticipated, which could curtail house price growth later this year and next.
“Prospective buyers now face a dilemma: whether to lock in a fixed-rate mortgage now or opt for a tracker mortgage that allows them to benefit from potential future rate cuts. However, the appeal of fixed-rate deals, offering certainty in uncertain times, continues to attract many.”
Nathan Emerson, CEO of Propertymark, comments: “Considering the number of disruptions within the economy across the last few years, it’s extremely encouraging to see stability across the housing sector. When politicians return from their summer recess in September, it is essential to see progression in delivering nearly two million homes across the next parliamentary term as promised by the UK Government. The starting block for this is ensuring the Planning and Infrastructure Bill takes robust shape to help ensure supply keeps pace with current housing demand.”
Co-founder and CEO of GetAgent.co.uk, Colby Short, commented: “Patience has certainly been a virtue for UK home sellers in recent times, but there’s no doubt that they are now being rewarded, as the UK property market continues to demonstrate a high level of resilience with yet another annual increase in property values and the largest increase since December 2022.
“This growth is being driven by an uplift in buyer activity and whilst this has been building since the start of the year, we’ve certainly seen it step up a gear since the general election.”
Lomond CEO, Ed Phillips, commented: “It’s been a story of two halves for the UK property market so far this year, with a tentative first six months seeing a stable but largely static market, whilst the pace has really started to pick up since the July election, with an increase in buyer confidence helping to drive annual house price performance.”
Director of Benham and Reeves, Marc von Grundherr, commented: “Summer may be coming to an end but there’s certainly no end in sight when it comes to the improvements being seen across the UK property market.
“It’s quite remarkable just how swiftly the market has accelerated in just a few short months both with respect to the number of mortgage approvals being seen, as well as the increase in the rate of annual house price appreciation.
“Although Labour are now warning of a ‘painful’ budget to come in October, this is unlikely to derail the ambitions of the UK’s buyers and sellers, who are now making their move with confidence following a prolonged period of market uncertainty.”
CEO of Yopa, Verona Frankish, commented: “Today’s figures provide the first look at house price performance since interest rates were cut at the start of August and despite the very marginal monthly decline, it’s clear that the first reduction in four years has helped to further boost the market momentum, with yet another strong rate of annual house price growth being seen.
“Whilst the base rate remains considerably higher than many buyers and sellers may be accustomed to, the expectation is that another cut will come before the year is out, which should only help to strengthen buyer appetites further.”
Iain McKenzie, CEO of The Guild of Property Professionals, comments: “A slight downwards readjustment in house prices, tempered with strong annual growth, reflects well on a property market that is showing resilience in the face of ongoing challenges. We are seeing house prices rising at the fastest pace since the closing months of the pandemic when there was a rush to buy properties as people adjusted to remote and hybrid work patterns.
“The Bank of England believes that inflationary pressures have eased enough to start cutting borrowing costs, which in turn will enable more buyers to get a mortgage in principle. This could push sellers to be less flexible on the asking price if there is a significant boost of hopeful buyers in their area.
“While headline inflation figures are looking brighter than last year, many first-time buyers are still not out of the woods yet when it comes to the challenging living costs. Estate agents across the country are telling us that the market conditions in their areas are improving and there is a strong demand for good-quality housing.
“A notable trend is the growing emphasis on energy-efficient homes, with buyers seeking properties with lower fuel bills and a smaller environmental footprint. This is particularly important right now as energy prices are set to rise again this winter. Properties that benefit from these benefits will be in high demand.
“Overall, the modest growth we are seeing will be a benefit to homeowners, while ensuring that buyers are not priced out of the market. We are forecasting that the year will continue to play out this way.”
