Following the release of the Nationwide HPI data that showed UK house prices fell 0.4% month on month in April as annual rate of change slowed to 0.6%, from 1.6% in March, industry experts have reacted.
Matt Thompson, head of sales at Chestertons, says: “The uplift in market activity typically associated with spring was slightly delayed this year but became more evident over the course of April. Compared to March, we saw an increase in the number of London house hunters which also led to sellers feeling more confident about putting their property up for sale. Still, demand continued to outweigh supply in April which gave the majority of sellers the upper hand during price negotiations.”
Arjan Verbeek, CEO, Perenna comments: “Despite year-on-year growth in house prices slowing, first-time buyers are still constrained by affordability.
“We have a broken mortgage market that does not cater for many underserved segments. Prospective homeowners cannot wait on house prices or interest rates to change – the market must change to support a new generation of people that can’t get onto the housing ladder. Opening up the market to long-term fixed rate products, for example, will help first time buyers and offer certainty over their mortgage costs in the long run.”
Kate Steere, property expert at personal finance comparison site finder.com says: “Uncertainty around when the Bank of England will cut rates and by how much has dampened demand. Buyers are still struggling with affordability issues and several big lenders have increased their rates in the past week. It’s clear the market is still adjusting to the end of ultra-low mortgage deals, with millions of borrowers due to remortgage this year. Buyer demand remains subdued and, as a result, house prices have dipped slightly. A lot rides on the Bank of England’s actions over the coming months. However, half of experts believe we will have to wait a bit longer before we see rates cut.”
Karen Noye, mortgage expert at Quilter: “The lack of momentum in the housing market appears to be having a knock-on effect on house prices. Nationwide’s latest house price index reveals house prices fell 0.4% month on month in April, while the annual rate of change also slowed to 0.6% down from 1.6% in March.
“House sales typically pick up in the spring, but ongoing affordability pressures appear to be dampening this trend this year. Given many lenders have upped their mortgage rates in recent weeks, we can expect this to continue and could see it translate into a further dip in house prices in the shorter term. Yesterday’s UK monthly property transactions data evidenced a continued stall in sales, and though we saw a minor 1% uptick in seasonally adjusted residential property transactions in March compared to February, rising to 84,200, this was still 6% lower than the level of transactions seen in the same period last year.
“Though the housing market is suffering a relatively subdued period at the moment, it may not last for too much longer as we could see a turning point during the summer months which could buoy house prices. The Bank of England is expected to announce its first interest rate cut later this year given inflation has continued making progress back down towards the Bank’s 2% target, falling to 3.2% in March. The prospect of a cut could translate into lower mortgage rates which could make moving home or taking the first step onto the property ladder more affordable and thus more attractive to prospective buyers who have been stuck in ‘wait and see’ mode.
“Despite the lull in house prices at present, the outlook for the housing market is starting to look a little more optimistic, particularly if the Bank of England cuts rates sooner rather than later. For those who are looking to purchase a property this year, it is important to seek professional mortgage advice to ensure you make the best possible decisions for your circumstances.”
Nathan Emerson, CEO of 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 year on year, 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.”
