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Industry experts react to latest Nationwide HPI data

by | Dec 1, 2023

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Following the release of the latest Nationwide HPI data that showed house price recovery continued in November, Industry experts have have shared their thoughts with IFA Magazine.

Nicky Stevenson, Managing Director at national estate agent group Fine & Country: “House prices rose slightly in November, underpinned by a pool of motivated buyers who are expressing additional confidence after the base rate plateaued. 

“Mortgage approvals, an indicator of future sales, rose again in October to reach a three-month high, indicating that people are still eager to move home.

“Competition in the mortgage market is adding extra encouragement, which is creating a calmer property market in the final months of the year when combined with falling inflation and stable employment figures. 

“We expect to see steady demand in the new year as people decide to renew their ambitions to move, and this should help to keep prices relatively stable. 

“Although it remains important for sellers to price their property realistically, good quality homes in sought-after locations continue to attract strong demand.” 

Matt Thompson, head of sales at Chestertons, says: “Although the Autumn Statement did not include much for house hunters, first-time-buyers in particular welcomed the news of the Guaranteed Mortgage Scheme being extended until June 2025.

“This, in addition to the previous announcement that interest rates remain at 5.25% for the time being, has led to a boost in buyer confidence in November. Many house hunters also don’t expect property values to fall much further; particularly as prices haven’t decreased to the extent as initially predicted. As a result, buyers have been more motivated to continue their property search last month.”

Jonathan Hopper, CEO of Garrington Property Finders, comments: “All the property market wants for Christmas is stability – and on this evidence, it might just get it.

“The Nationwide’s data has shown average prices nudging upwards in each of the past three months and the quarterly rate of growth has now crept back into positive territory for the first time in over a year.

“But the progress is tentative and it’s too soon to talk of a recovery, let alone a rebound. The market remains highly polarised with wide variations depending on price point and location.

“We’re still seeing double-digit price reductions in some areas, but equally some property types are now selling much more quickly than they were six months ago.

“Even though more homes are coming onto the market, transaction volumes are still low. Official data shows the number of homes sold in October was down 21% on the same time last year, and buyers remain deeply price sensitive.

“However sentiment is improving and previously hesitant buyers are coming off the fence, encouraged by some positive news from the mortgage market. Many lenders have begun to trim their interest rates as expectations grow that the Bank of England Base Rate has peaked.

“Widespread falls in price mean that homes in many areas are better value than they were a year ago. This, combined with cheaper borrowing costs, should give the market a welcome lift as we enter the New Year – though price movements are likely to be gradual rather than dramatic in the months ahead.”

Foxtons CEO, Guy Gittins, commented: “More property market positivity today, with house prices recording a second consecutive monthly increase. 

“Although the market is yet to return to full health when viewing house price performance on an annual basis, it appears as though a freeze in interest rates is helping to boost homebuyer sentiment and bring a greater degree of stability and this puts us in very good stead looking ahead to the new year”

CEO of Yopa, Verona Frankish, commented: “A second consecutive monthly increase in the rate of house price growth provides further evidence that the UK property market will finish the year on the front foot

“The latest Bank of England data also shows that mortgage approvals have started to climb following a second decision to hold the base rate at 5.25%.

“It’s clear that this greater degree of stability is already boosting market sentiment and allowing buyers to act with more confidence. 

“The fact that they are also choosing to do so this side of the Christmas break is positive and suggests that we should see a far more settled landscape come the new year.”

Director of Benham and Reeves, Marc von Grundherr, commented: “It’s been a strange and uncertain year for the UK property market and so it’s only fitting that house prices should start to rally at a time of year when we usually see a seasonal lull. 

“Home sellers will rejoice at the strongest house price performance in nine months and, with mortgage market activity also starting to increase, the current outlook is very positive indeed.

“However, those who have so widely prophesied the demise of the market over the last year will no doubt turn green with Grinch like fury having been proven wrong once again.”

CEO of Octane Capital, Jonathan Samuels, commented:  “Higher mortgage rates have been the key factor impacting property market performance of late. However, the decision to hold the base rate at 5.25% has helped stabilise the market and swap rates have been reducing consistently as a result. 

“With buyers now confident that their mortgage terms are only likely to change for the better, we’ve seen an almost immediate increase in the number entering the market in the form of a mortgage approval uplift, 

“This is also starting to help push house prices in the right direction and while the current rate of growth may seem insignificant, it’s only a matter of time before this market momentum starts to snowball.”

Nathan Emerson, CEO of Propertymark, comments: “There is no denying 2023 has been a very uneven year for the UK housing market. We have seen the most ‘unperfect storm’ of high inflation and high interest rates giving many households an unpresented and near unworkable scenario each month.

“While there are indications a turning point maybe on the horizon, the dust needs to fully settle and we must remain prudent. Andrew Bailey, Bank of England Governor, recently suggested there will be no quick drops in base rate for the foreseeable future to keep inflation in check – so ultimately the pressure will remain on many households for a while longer yet.

“Propertymark remain optimistic the entire UK housing market will steadily gain traction, but it’s unlikely to be a quick process.”

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.

“The New Year will bring with it a new and exciting set of challenges and opportunities for growth and progression in what we do. We are looking forward to continuing to work with borrowers and investors and delivering for them. The dynamic landscape of the markets that we serve, and the wider economy requires us to evolve to stay relevant in addressing diverse challenges including the climate crisis, and changes in the way we are all living. 2024 will see Ingenious broaden the reach of our widely embraced development lending product. This expansion aims to offer extended terms for stabilisation to specialised developers within the rental sectors. Additionally, special lending terms will be introduced for developers with a specific focus on minimising embedded carbon in their construction practices.”

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