Nationwide’s latest HPI data highlighted that UK house prices rose 0.7% month on month in January. Following this news industry experts have shared their thoughts with IFA Magazine.
Nathan Emerson, CEO of Propertymark, comments: “The reported month on month increase in house prices will start to encourage homeowners to feel more confident that they can potentially make their next move. 2024 seems to be starting off more positive for the housing market, and let’s hope that trend continues. If the Bank of England decide to bring down interest rates too, this should give sellers even more confidence and ease the pressure on affordability. Hopefully this is the start of a period of economic recovery for the nation.”
Ruth Beeton, Co-Founder of Home Sale Pack, says: “Despite interest rates remaining at their highest since 2008, we’ve seen buyers tempted back to the market with a carrot of increased mortgage affordability in recent weeks. Whether or not mortgage rates will remain as attractive moving forward is another question, however, all signs currently point towards a property market that is very much on the up.
“With murmurings on another Government initiative focussed on fueling demand on the horizon we could be in for a very busy year. So now could be the ideal time to buy while property values are creeping up and competition isn’t as fierce, as we all know what happened following the launch of the stamp duty holiday.”
CEO of Open Property Group, Jason Harris-Cohen, commented: “The property market has continued to defy expectations, registering strong signs of improvement with house prices increasing on a monthly basis yet again and now sitting just shy of where they were this time last year.
“This growth is being driven by an increasing level of buyer confidence, with property prices proving ever resilient, despite a wider landscape of macro uncertainty and interest rates remaining at their highest in over 15 years.
“We expect this confidence will grow further should the Bank of England hold rates again this week and while the decision to do so may cause mortgage rates to creep back up, it’s unlikely to dent the appetite of the nation’s buyers and we expect market activity to continue to build over the year ahead.”
CEO of Yopa, Verona Frankish, commented: “The property market has started the year where it left off in 2023 – very much on the front foot. We’re seeing buyers return with confidence, spurred on by a reduction in mortgage rates, and there has also been an increase in for sale stock reaching the market as sellers look to ride this wave of improving market sentiment.
“While we expect that interest rates will remain at 5.25% this week, this will only help to steady the market further, providing buyers with the confidence that they can proceed with their purchase without the goal posts of mortgage affordability moving during the process.”
Daniel Austin, CEO and co-founder at ASK Partners, said: “Today’s data shows that the property sector is beginning to show signs of recovery. With a decline in inflation YoY and the peaking of interest rates, the overall outlook has considerably improved. 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 survey conducted by the Royal Institute of Chartered Surveyors (RICS) 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. Although the lead-up to the general election may pose some uncertainty, a subsequent boost in productivity and a decrease in interest rates are expected. The hope is that any new government can address local planning issues to stimulate construction and guide the economy out of the downturn.
“As a debt provider, at ASK our focus will be on supporting the best sites in prime locations with well-capitalised sponsors who understand their product. Following this strategy, we aim to bolster developers’ initiatives by adopting a flexible underwriting approach, thereby continuing to offer opportunities for the growing number of private individuals opting to invest in property debt.”
Iain McKenzie, CEO of The Guild of Property Professionals, comments: “UK house prices seem poised for a strong 2024, with January’s data signalling further market recovery.
“Despite the surprising uptick in inflation in December, buyers appear to believe there are bargains to be had, and are returning to the market faster than expected.
“Tomorrow’s Bank of England base rate announcement will be pivotal for those who have delayed their decision. Prospective buyers hope the temporary December blip won’t lead to a spike in interest rates, which has plateaued at 5.25% since September.
“But with inflation expected to continue falling, many are optimistic we’ve reached the peak of the rate-rise cycle – potentially prompting further cuts to the base rate.
“This is likely to motivate lenders to continue reducing mortgage rates, enhancing accessibility to homeownership, particularly for first-time buyers eager to enter the property market.”
Nicky Stevenson, Managing Director at national estate agent group said: “The housing market has started the year strongly, and increasing buyer demand has pushed average prices up in the first month of the year.
“The housing market has been resilient during a turbulent period for the economy, and although the recent rise in inflation is a reminder that there could be more bumps ahead, there are many reasons to be positive.
“Mortgage approvals continue to rise month on month, as buyers return to the market at a steady rate. Many of them have been enticed to begin or resume their property search as a result of falling interest rates.
“Yet the Bank of England has a big decision on its hands tomorrow when it decides what will happen with the base rate.
“Another pause in rate hikes, or even a fall, will keep encouraging buyers to the market, but a move in the opposite direction could put a bit of a damper on activity in the early part of 2024.”
Director of Benham and Reeves, Marc von Grundherr, commented: “Those who were quick out of the blocks at the start of the year with yet more predictions of a property market demise are already reaching for a flannel to wipe the egg off of their faces.
“We’ve seen a coiled spring of buyer demand developing in recent months and with mortgage rates having fallen in 2024, this is now starting to unwind as buyers look to make hay while the sun is shining.
“Of course, affordability remains an issue, particularly for first-time buyers. However, for those who can overcome the initial financial hurdle of a mortgage deposit, now remains as good a time as any to make their move.”
Jonathan Hopper, CEO of Garrington Property Finders, comments: “One month into 2024 and the property market is sticking to its New Year’s Resolution.
“Prices are stabilising in many areas, the number of homes coming onto the market is slowly ticking up and we’re seeing would-be buyers who held back last year begin their property search in earnest.
“January is often a busy month for buyer enquiries, but this year activity has been buoyed by two factors – 2023’s reset in prices has made homes cheaper in large parts of the country, and the flurry of interest rate cuts announced by mortgage lenders at the start of the year.
“With the Nationwide’s latest data adding to the sense that prices have bottomed out, increasing numbers of buyers have decided to act now before prices start to pick up again.
“While the Nationwide’s headline figure shows the average home was worth just 0.2% less this January compared to last year, in some regions the price correction has been much more dramatic – and homes in many desirable locations are significantly better value than they were a year ago.
“While Britain’s inflationary dragon is far from slayed and as a result the Bank of England is unlikely to cut interest rates as fast as hoped, many tactical buyers sense a window of opportunity as the market approaches a sweet spot of better value prices and more affordable mortgage borrowing. The recovery is still tentative, but it’s on.”
