Halfiax’s latest HPI data has revealed that average house prices rose by +1.1% in October, compared to a fall of -0.3% in September.
In response to the findings, IFA Magazine have collated the thoughts of industry experts below.
Nathan Emerson CEO at Propertymark comments: “Although we have recently seen interest rates hold steady again at 5.25 per cent, this combined with a stubbornly high rate of inflation, continues to translate into a challenging marketplace.
“We currently have the situation of many people being extremely mindful on affordability who need to feel reassured they can confidently come to the market for the long-term journey. Our own Housing Insight Report shows that 76 per cent of member branches reported properties selling for under their initial asking price. We need a housing market that delivers stability for buyers and sellers alike to reignite sales volumes.
“Propertymark remain resolute that the UK Government must firmly tackle high inflation and with the optimism that interest rates will start to return to more favourable levels again. When all this starts to snap into place, we will start to see that equilibrium which works well for both buyers and vendors once again.”
Jonathan Hopper, CEO of Garrington Property Finders, comments: “The property market is inching its way from reboot to recovery. Two house price indices in a week have found that average prices nudged upwards in October, with the Halifax even estimating that the average home rose in value by £3,000 over the month.
“For sellers and those considering putting their home on the market, this settling of prices is welcome news. But no-one will be celebrating yet, and most estate agents continue to hold their breath as the number of homes coming to market is still well down on where it would typically be at this time of year.
“So much so that the uptick in prices is more likely to be due to a lack of stock rather than any meaningful rise in demand. Buyers remain highly price sensitive, with many using their strong bargaining position to demand – and get – significant discounts off asking prices.
“However two factors could now prompt would-be buyers who had been holding off into action. One is the gradual fall in mortgage rates after the Bank of England held its base rate steady for a second time last week.
“The second is the increasing sense that prices may be about to bottom out, which could nudge tactical buyers into stepping up their search while the best deals are still to be had.
“With prices down across all regions, more buyers are starting to look beyond mortgage rates at the money they can save on the purchase price.
“High interest rates are still a barrier for some buyers, but among those with some equity under their belts, there’s an increasing realisation that while the current mortgage rates aren’t for life, the agreed purchase price is.
“The days of generous discounts available to buyers could be numbered if the market continues to show signs of stabilising.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, said: “Steady buyer demand has helped to provide a cushion against month-on-month price falls, and the housing market remains in a relatively stable position.
“There are more promising signs ahead thanks to the recent pauses in interest rate rises.
“Many buyers searching for their next home need stability in the mortgage market so they can trust that their affordability won’t change substantially while they’re viewing properties — and the Bank of England has now provided that extra dose of confidence.
“This boost to the housing market comes alongside the traditional seasonal spike in demand, which is helping to support solid levels of activity this autumn.
“While buyers are being careful not to overstretch themselves, they remain highly motivated to move, which should give sellers further encouragement to begin marketing their property.”
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.”
Matt Thompson, head of sales at Chestertons, says: “The recent price adjustment that some of the property market has seen led to more house hunters continuing their search in October. The vast majority of buyers have accepted that interest rates are here to stay and, after readjusting their budget or search criteria, are no longer willing to delay their property search any further.”
Robert Winfield, Managing Director at Chartwell Funding said: “I wasn’t surprised to read Halifax reporting house prices rose in October as this mirrored what we saw at Chartwell Funding.
“The recent end to base rate increases and the subsequent falls in the cost of fixed rate borrowing have given confidence to a lot of people to consider moving. Once the decision is made, they will notice the massive lack of stock in Estate Agents windows right now and what is available tends to have a toppy asking price due to the age old supply and demand issue.
“People I speak to are now more confident to consider their next move and some are engaging with Estate Agents to test the market in the spring. As a result of this I am expecting to see a small property price increase in November, a static December and then a bumper January!”
Sam Pemberton, Senior Financial Adviser at Roxborough Wealth Management said: “Lack of good quality housing stock in the market is keeping prices high. The price vendors are willing to accept and the price that potential buyers can now afford, given the rise in interest rates, is still some way off. Vendors are stubbornly keeping the price increases on the same trajectory as they were during more buoyant times, irrespective of the economic climate.
“This has led to a slow down in the market and little new stock coming on, as a result the prices have remained high through a supply side reduction even though market conditions would suggest they should come down.”
Simon Redler, Director at Prudell said: “As predicted, the base rate remained at 5.25% and over the last 6 weeks we are seeing green shoots by way of a reasonable flow of new purchase enquiries
“The majority of these enquiries are from first time buyers who are being squeezed out of the rental market and seeing the purchase as a more financially secure option
“When discussing their mortgage options we are focussing on the monthly mortgage payments, both now and possible changes over the next few years, and not concentrating on the interest rate charged. Interest rates can be an emotive subject and often cloud the picture
“We challenge our buyers in asking them “if they are not looking to buy now then what are they waiting for to happen before they choose to buy?”. The answer is usually “a reduction in the interest rate” to which we explain that it is highly likely that with any reduction in interest rate will come with an increase in the purchase price.
“Once they understand that the purchase price is far more important that the interest rate they conclude that buying now, with a higher rate is the more palatable option. We expect 2024 to be a busy year.”
Nick Green of Alternative Investments said: “The Halifax data is a good guide to the market. However, this doesn’t show cash buyers nor BTL customers. With higher interest rates we are seeing more cash buyers come into the market and also the downsizers buying cash. So this doesn’t accurately reflect the way the market has moved over the last 12 months towards less financing.
“I agree the market has dropped slightly from the highs of last year and as we come into towards the end of the year the housing market does quiet down. I disagree with the house price falls for next year as the market has been slowly moving upwards with lack of supply and lower mortgage rates.
“I personally think early next year will show signs of recovery price wise, not necessary huge price rises, but I can see a modest growth in the market through the year so long as interest remain the same or lower in the coming months as buyers have accepted that the low historic rates are probably a thing of the past now.”
