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Nationwide October House Price Index – reaction from mortgage experts

by | Nov 1, 2022

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The Nationwide October house price index has revealed a sharp slowdown in annual price growth. Below, a selection of mortgage and property experts share their thoughts:

Sofia Jones, Managing Director at London-based independent mortgage broker, Penny House: “Few will be surprised at the sharp slowdown in annual price growth in October. Over the past five to six weeks, since the now infamous mini-Budget, demand from buyers understandably dropped off a cliff as mortgage rates shot up and political turmoil rose to Alpine heights. Where we were active in October was with requests to remortgage as people sought to protect themselves as best they can. We’re predicting a busier November and December as buyers who held off in October amid the chaos decide to move forward with their purchases, as they see lenders reducing their fixed rate deals across the board. Let’s hope the Nationwide are right in that a soft landing is still possible. The lack of supply and strong jobs market may well serve to support that.”

Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco: “The impact of the mini-Budget on the property market is clear for all to see in this latest Nationwide house price index. The property market was hit for six as mortgage rates soared and many people put their buying plans on hold due to the extreme political uncertainty. House prices are set to come under further pressure during the winter months, but the sizeable drops of 10%-15% that some are predicting are frankly implausible given the sheer lack of supply and the fact that the jobs market is still strong.”


Ross Boyd, founder of the always-on mortgage comparison platform,“To say the outlook is uncertain is an understatement. With inflation where it is, and mortgage rates on a different plane to where they were just six months ago, 2023 could be like 2008 all over again for the property market. Another rate rise to control inflation could further reduce demand for property, putting prices under real pressure. Those people who are currently locked into some of the lowest mortgage rates ever will be in for a profound shock when they come to remortgage, as they are already under pressure due to the cost of living crisis and soaring energy bills. The short-term outlook for the property market may be savage but, as ever with bricks and mortar, at some point things will bounce back.”

Riz Malik, director of Southend-on-Sea-based R3 Mortgages“There is more chance of King Charles writing the foreword to Prince Harry’s new book than there is the property market seeing significant house price growth over the next six months. For activity to pick up in the housing market, confidence and some form of stability need to return and both are sorely lacking. The past six weeks or so have blown confidence to smithereens. A lot of people will be sitting on their hands and waiting to see what happens when the Bank of England meets this week.”

Aaron Forster, director of Derby-based mortgage broker, Create Finance: “This October house price index is a lesson in how political decision making can hit the property market. The market generally slows down in the closing stages of the year anyway as people’s attention switches to Christmas but this year that could happen earlier than usual due to the level of mortgage rates and the depth of economic and political uncertainty. As mortgages become unaffordable, especially for landlords, there will be an increase in properties on the market, which will apply downward pressure on prices. We may even see a raft of forced sales next year, adding to that pressure. With the cost of living also sky high, increased mortgage payments will put unprecedented pressure on people’s finances and that will ripple through to the property market.”


Rob Peters, director of Altrincham-based Simple Fast Mortgage: “That was a bleak October for the property market. Expect values to continue to fall during the close stages of the year. The timing of market volatility and interest rate rises has culminated perfectly at what is traditionally the quietest part of the property calendar. Early 2023 will certainly see property values in some areas fall, but by how much or how long nobody knows. Adding fuel to the fire, the Bank of England is expected to increase interest rates further when it meets this week. However the impact on mortgages rates is expected to be minimal given most lenders have already priced in far more than their fair share.”

Graham Cox, founder of the Bristol-based broker, “October 2022 will go down as the month the property market became a buyer’s market. However, due to the time lag between transactions being agreed and the Land Registry reporting completed sales, the true extent of house price falls, for several months yet, will be masked by declining year-on-year property price growth. Early next year is when it will become obvious the market has turned and house prices are actually falling sharply. A drop of 20% or more over the next 18 months is quite possible.”

Michael O’Brien, managing director at Romford-based Home of Mortgages“The property market, though under pressure as this data shows very clearly, is still not in the grave position it was back in 2008 yet. There’s no doubt that the cost of borrowing is increasing, however, faced with the alternative, namely the ever-increasing cost of renting, a mortgage is still a more comfortable alternative. That will likely support prices as people will still want to exit the rental market wherever possible.”

James Miles, director of Exeter-based broker, The Mortgage Quarter: “The property market pressure cooker is about to pop. We’re seeing borrowers strongly re-evaluate their lending options and demand will almost certainly continue to weaken as people wait and see what happens next. If demand drops then prices, or at least the rate of price growth, will too.”

Imran Hussain, director at Nottingham-based Harmony Financial Services“Demand for mortgages slowed down in October due to the extreme market volatility caused by Trussonomics. We could well see a drop in house prices across certain regions until stability returns and there is more clarity on mortgage rates, but the fall unlikely to be extreme due to the lack of stock on the market.”

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