Following the Nationwide February House Price Index, Newspage shared the following comments from estate agents, property developers and mortgage brokers with IFA Magazine.
John O’Malley, director of Scotland-based estate agents, O’Malley (which has branches in Alloa, Edinburgh, Stirling and West Lothian): “When you look at the broader economic backdrop, it’s no surprise both monthly and annual price growth are now in the red. Buyers are wary and many sellers are struggling to come to terms with the fact that their properties are no longer worth what they were six months ago. 2023 will be a tough year for many households and the property market will not be protected from the ongoing cost of living crisis and higher mortgage rates. Buyer demand has dropped for 10 consecutive months and may continue to fall as people start to consider alternative, more affordable accommodation. It is not unusual to see a drop in both supply and demand in February as buyers and sellers alike batten down the hatches and wait for the Spring. However, this February, the demand for property was almost half that of last year, while the supply of property was also weaker than usual.”
Kundan Bhaduri, director of London-based property developer and portfolio landlord, The Kushman Group: “With annual house price growth now negative, the first quarter of 2023 is the best buying opportunity in the UK property market we have seen over the past 15 years. With 10-year swap rates well under the 4% mark, and inflation set to come down to mid-single-digit figures within the next two quarters, this depressed sales market is particularly suited to professional portfolio landlords. I expect sales volumes overall to plateau until summer and rise in the second half of the year, on account of strong demand led by lower interest rates and greater market confidence. It remains to be seen how the Sunak/Hunt duo deliver on the much-needed landlord tax reforms over the next two quarters. Depending on the outcome, there could be a sharp increase or plateau in demand from the landlord community this year.”
Nick Harris, co-founder at Wokingham-based Quarters Residential Estate Agents: “Though this data shows downward pressure on prices, demand for property was actually far higher in February than January. This shows that while discretionary buyers are sitting tight, the serious buyers remain active. Sellers are being much more realistic on price, and are typically also buyers so they appreciate a more balanced property market. Locally, we don’t expect to see the often reported ‘crash’ but can certainly see that a correction of circa 5% is realistic. It’s no secret the market is currently favouring buyers. On a positive note, people are no longer panic buying property. A base rate reduction later this year, once inflation is under control, would certainly stimulate demand and while it’s doubtful that prices will start to rise again, transactions should increase.”
Luke Thompson, mortgage adviser at King’s Lynn-based PAB Wealth Management: “Despite the fact this data paints an ominous picture, demand was fairly strong in February and was definitely busier than we saw at the end of 2022 and in January. I think there has been a correction in the market now, as buyers are more aware that monthly payments will be higher than this time last year and this has led to them being more cautious when making an offer on a property. Sellers have had to become more accustomed to the fact that they may not achieve the full asking price for their property as we aren’t seeing multiple people bidding for a property like we were at the end of 2021 and into 2022. If the base rate falls later in the year, I think it will stimulate some demand and help to keep house prices higher. But borrowers need to be aware that we aren’t returning to the ultra-low interest rates we have seen since the Global Financial Crisis of 2008.”
Marie Johnstone, managing director at Edinburgh-based estate agents, Wilson Property Group: “February was definitely a busier month than January. We operate primarily in the off-market space in Edinburgh and Lothians and completed £3.3m of property sales in February. Whilst I know many estate agents will report lower than average sales prices, we have not experienced this at all with our average home still achieving 12% above the home report. Edinburgh has always been a very buoyant market and while it is natural for us to predict a downturn at some point, overall I see no changes so far. At the moment in Edinburgh we have been significantly impacted by the new short-term lets rules, resulting in an abundance of flats coming to the market. As a result, we will see a significant price decrease in flats and apartments in the city.”
Nicola Schutrups, managing director at Southampton-based mortgage broker The Mortgage Hut: “Our team saw a bounce in enquiries from new and existing customers looking to secure a mortgage in February. New purchases have most certainly increased, with a near 100% increase on Q4 of 2022. Very much like during COVID and Brexit, we’ve seen resilience in our clients and an adjustment in customers’ expectations towards rates and monthly payments. Our clients who are first-time buyers have seen their rents also increase and want to get on the property ladder for more certainty. Personally, I do not see the base rate coming down in 2023, however, with energy costs and other key inflationary pressures reducing, I do think the pressure is reducing on consumers.”
