Today’s Nationwide House Price Index statistics showed that UK house prices rose by 0.9% month on month in October but were down 3.3% on this time last year.
Following the announcement industry experts have shared their thoughts with IFA Magazine.
Nathan Emerson, CEO of Propertymark, comments: “As expected, the Nationwide House Price Index shows us an overall dip in house prices year on year of over 3 per cent. The picture is a little more positive when comparing last month’s figures with this month, however this is a trend we will need to watch closely before feeling more confident. There remains a high level of market uncertainty, not helped by high inflation which has translated into five interest rate hikes for homeowners and buyers to deal with this year alone.
“Propertymark’s own Housing Insight Report shows there has been a slight reduction in the number of available properties for sale at each member branch in September 2023, this fused with issues regarding the cost-of-living crisis continues to affect the housing market overall.
“Sales in some property segments remain extremely fragile, nonetheless rising incomes should help increase housing affordability across the next twelve months. It does however remain encouraging to witness many buyers still having the confidence to enter the market currently. Propertymark is hopeful to see a firm drop in inflation and for this to potentially translate into reduced interest rates.”
Karen Noye, mortgage expert at Quilter: “This morning’s house price index from Nationwide suggests that despite the ongoing economic pressure and high interest rates, the property market is faring a little better than expected, with a 0.9% uptick in house prices reported in October.
“Despite this unexpected increase, however, the future of the UK housing market remains uncertain. Though inflation has continued to lower, house prices are nowhere near keeping up with the level of inflation elsewhere in the economy – particularly as Nationwide reported house prices are down 3.3% year on year. The Bank of England is also widely expected to keep interest rates higher for longer, which will pile continuous pressure on those with mortgages and will make taking the first step onto the property ladder unaffordable for many.
“Just yesterday, new figures showed the UK property market remains in a deep freeze, as UK residential transactions fell by 17% in September compared to the year prior. What would typically be a busy summer has been remarkably quiet as buyers have been in ‘wait and see’ mode. Given the property market tends to slow in the winter months anyway, we could see house prices buckle under the pressure and this 0.9% uptick may prove to be a one off.
“Tomorrow’s BoE interest rate decision will reveal whether prospective buyers can hope for a more stable interest rate environment, and will also play a role in how house prices fare in the coming months. If the Bank opts to hold rates, predictability will improve which can be invaluable for prospective buyers. However, if the Bank opts to hike rates further then it will prolong the dearth of demand in the market which could see house prices dip.”
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.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country said: “House prices showed signs of recovery in October, finally gaining back some momentum after the summer lull and boosted by a pause in interest rates.
“The Bank of England’s surprising decision to hold off on a rate hike in September was a relief for hesitant buyers, who were waiting for economic stability before committing to a purchase.
“All eyes will be on tomorrow’s announcement to see if the pause was a fleeting respite. If interest rates continue to hold steady at 5.25%, it would instil much-needed confidence and encourage market stability.
“The decision also sparked competition among mortgage lenders, who have been cutting their repayment rates in response. For first-time buyers with limited deposits and cash reserves, this has been a welcome move and could encourage more to step onto the property ladder.
“If we see another pause in rate rises tomorrow, it should provide an extra boost to autumn sales, as sellers recognise this as a prime listing opportunity.”
Guy Gittins, CEO of Foxtons, said: “There continues to be opportunities for buyers in the current market as reduced demand and lower available stock have created an environment where house prices are not growing at rates seen over recent years in London.
“The cost of borrowing remains comparatively high when viewed against historic low levels but buyers and investors can still find good finance deals when working with a professional broker. This will be especially important for first-time buyers or those with smaller deposits.
“All eyes will be on the Bank of England this week and the latest decision with regard to the base rate. A decision to hold, or even reduce, interest rates is unlikely to generate a dramatic uplift in market activity, especially with Christmas fast approaching, but it will add confidence to the market ahead of January.”
CEO of Yopa, Verona Frankish, commented: “An increase in the monthly rate of house price growth, however incremental, demonstrates that the nation’s homebuyers still have an appetite to transact, even in tough market conditions.
“Of course, higher borrowing costs continue to dampen the market to an extent, with fewer buyers taking the plunge and property values remaining off the record pace set last year.
“However, it appears as though the recent decision to freeze interest rates has helped boost market confidence and with the potential of a reduction on the cards this week, we could see a stronger finish to the year than many would have previously anticipated.”
Managing Director of Barrows and Forrester, James Forrester, commented: “While the previous decision to freeze interest rates would have been warmly welcomed by the nation’s struggling homebuyers, it hasn’t been enough to relight the touchpaper with respect to current market performance, albeit it has spurred a marginal monthly increase in property values.
“This is largely due to the fact that the cost of borrowing remains substantially higher and this has continued to restrict both the number of buyers entering the market with the help of a mortgage, as well as their purchasing power.
“The result of this reduction in buyer activity has been a stagnation of house prices and we can expect this air of lethargy to remain hanging over the market for the remainder of the year, at the very least.”
Director of Benham and Reeves, Marc von Grundherr, commented: “It really remains a case of ‘nothing to see here’ when it comes to the current performance of the UK property market.
“Yes, the rate of house price growth has stalled in recent months, but at the same time, we’re yet to see any meaningful reduction in property values materialise.
“With the countdown to Christmas now on, the likelihood is that the market will remain in a state of house price limbo until January, at which point the usual uptick in activity should help spark some life back into proceedings.”
Managing Director of House Buyer Bureau, Chris Hodgkinson, commented: “House prices may have cooled when compared to the highs of last year, but all things considered, the market has weathered the storm rather well.
“The real issue facing home sellers today isn’t necessarily the price they can achieve, it’s whether or not they have the patience to achieve it.
“Buyer numbers have dropped quite drastically and so finding a genuine buyer is the name of the game in the current market. For those who can wait it out, the chances of securing a fair price are good.
“However, for many, the far longer time spent on the market has been the driving factor behind their decision to reduce their asking price expectations in hopes this will entice more interest.”
