Following Halifax’s latest HPI data that showed property prices grew by +0.3% annually in March (vs +1.6% last month) with house prices up +2.0% on previous quarter, industry experts have shared their thoughts with IFA Magazine.
Kate Steere, property expert at personal finance comparison site finder.com says: “Today’s figures show that the events from last year are still weighing heavily on prospective buyers’ minds. While lenders have cut mortgage rates and wage growth has outstripped inflation, the turmoil from the past 12 months is still casting a dark shadow on demand. The Bank of England’s decision to hold rates has dampened UK house price recovery. Half of experts believe that the Bank will wait until June 2024 before cutting rates, so as a result we’re likely to see only a subdued recovery in house prices over the next couple of months.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, said: “An increasingly busy property market helped to prop up prices on an annual basis at the beginning of spring, but the monthly fall shows there is still some turbulence.
“Buyers are in a strong position and vendors are more open to negotiation, which is bringing prices down in some areas.
“The market is proving to be resilient in the face of ongoing economic challenges, and February’s mortgage approvals reached their highest levels since September 2022 thanks to activity levels starting to bounce back. Demand has remained steady since, with a strong showing over the Easter bank holiday weekend.
“Buyers are particularly encouraged by continued competition between mortgage lenders, which is making it easier for them to budget. A strong jobs market and wage growth is boosting overall consumer confidence.
“There is currently a healthy balance between demand and the steady drumbeat of more properties coming onto the market.
“This is encouraging more people to market their properties as they can see they have somewhere to move to, unlike a couple of years ago where a chronic undersupply of homes became a barrier for potential sellers.”
Daniel Austin, CEO and co-founder at ASK Partners, said: “This data shows that the property sector is showing signs of recovery and the outlook has considerably improved. Rent values have seen sustained growth, positioning real estate as reasonably valued in comparison to gilts and presenting growth potential. In the realm of commercial real estate, factors like physical condition, location, and age significantly influence a property’s value. Well-maintained properties boasting modern amenities tend to command higher prices, while neglected ones may struggle to attract tenants or investors. In the current market, the emphasis has shifted towards the importance of location and quality over the yield on debt or cost. We anticipate opportunistic acquisitions of prime properties in prime locations.
“A RICS survey uncovered that non-traditional market segments, such as aged care facilities, student housing, data centres and life sciences real estate are yielding the most robust returns. With housing set to be a battleground point in this year’s election and as the sector moves to the top of the agenda for all parties, we hope to see a long-term plan for new homes, including social housing, however, we expect we will see more short term fixes. Stimulus will be welcome but can create unnecessary froth. For voters, a stamp duty holiday or reprieve may be a welcome sign. For developers, eased planning regulations for brownfield sites and conversions will be popular. However, the government will be faced with a challenge – striking a balance between trying to increase housing supply and therefore affordability by supporting developers and private landlords but appealing to voters who do not want to see greenfield development. The planning system remains hotly political and as a result, landlords and developers are unlikely to see much in their favour.
“As a debt provider, we hope to support the best sites in prime locations with well-capitalised sponsors who understand their product. Following this strategy, we aim to bolster developers’ initiatives with the flexible underwriting approach that is necessary for navigating current planning rules and market uncertainty. This will enable us to continue to offer opportunities for the growing number of private individuals opting to invest in property debt.”
Nathan Emerson CEO at Propertymark comments: “Spring tends to be one of the busiest times of the year for the housing market, and with inflation falling and interest rates remaining static, homebuyers have adjusted to the latest market conditions. This should result in a surge of new buyers, sellers, and properties coming to the market as the year progresses. This was reflected in Propertymark’s latest Housing Insight Report, which found that there has been an 18 per cent increase in the number of new properties coming to the market. However if inflation continues to drop to pre-pandemic levels, Propertymark is hopeful that interest rates will also start to fall, and the whirlwind of economic turbulence will finally settle for everyone once again.”
Jonathan Hopper, CEO of Garrington Property Finders, comments: “Rather than accelerating away into another boom, changing market conditions have applied a slight dab on the brakes to house prices.
“Two things are behind March’s 1% dip in average prices – a jump in the number of homes for sale and the plateauing cost of borrowing. In some areas the number of homes coming onto the market is four times higher than the number of new buyers registering with estate agents – and this surge in supply is holding back prices.
“Gone too is the flurry of cheaper mortgage deals announced in the early weeks of the year that kick-started the market and sent property prices notching up. Instead mortgage rates are now holding broadly steady, and we’re unlikely to see lenders cutting rates significantly again until after the Bank of England confirms it is ready to unwind its tight monetary policy.
“As a result, all buyers remain highly price-sensitive and affordability is still a major hurdle for many would-be first-time-buyers. For them, the sums simply don’t add up yet – even though homes are cheaper in many parts of the country than they were a couple of years ago, borrowing the money needed to buy them costs much more. That’s why we’re seeing prices rise fastest in regions where affordability is better. Average prices jumped by 3.7% in the North West, but dropped by 0.9% in Eastern England in the 12 months to March.
“At a national level, the news is good. The number of mortgages approved in February climbed to a 17-month high, as buyers who sat out 2023 return to the market, and as more stock comes onto the market things are becoming much more free-flowing.
“Regional differences in prices are throwing up some strong buying opportunities, but across the UK as a whole we’re likely to see price growth meander for the next few months as we wait for mortgage rates to start falling again.”
Foxtons CEO, Guy Gittins, says: “House prices have continued to creep up since the start of the year and this improvement in market health has been driven by the returning appetite of UK homebuyers.
“While higher mortgage rates certainly remain an obstacle, there has been a dramatic increase in buyer activity levels and it’s not just in the form of enquiries and viewings, with more offers also being made.
“With the general expectation that interest rates are set to fall sooner rather than later, we anticipate that market conditions will only continue to improve as buyer confidence builds.”
Director of Benham and Reeves, Marc von Grundherr, commented: “It’s clear that nation’s homebuyers are marching on, determined to realise their aspirations of homeownership in 2024, regardless of higher mortgage rates and a lack of any government offered incentives.
“This determination has already had a positive impact on the UK property market and we’ve started the year with a far greater degree of market stability than we’ve seen in recent months, with conditions only likely to improve as the year progresses.”
CEO of Open Property Group, Jason Harris-Cohen, commented: “We’ve seen buyers returning to the fold so far this year but patience remains key for those looking to sell. Yes, market conditions have improved notably, but the higher cost of borrowing remains a challenge and so it’s important to take your time and find a buyer in a proceedable position, rather than opting for the one offering the highest price.
“Doing so will give you a far better chance of making it through to completion unscathed and without succumbing to the dreaded fall through.”
Lomond CEO, Ed Phillips, commented: “We certainly don’t want to run before we can walk, however, the consistently positive house price performance seen since the start of the year certainly suggests that the market is heading in the right direction.
“While it’s likely to be a more measured year compared to the explosive rates of house price growth seen during the pandemic boom, property values remain close to record highs and there’s no sight of the market collapse that was so widely predicted last year. In this respect, it’s never been a better time to sell.”
Ruth Beeton, Co-Founder of Home Sale Pack, says: “Following a period of prolonged fence sitting, the nation’s buyers and sellers are now returning to the fold and while this is great news for overall market health, this increase in demand is likely to put a strain on the industry from an operational standpoint.
“We saw just how ill-equipped the UK property market was when it came to dealing with heightened market activity levels during the pandemic boom and the long delays that followed as a result of an archaic home selling process. Not to mention the sharp increase in the number of sales that fell through.
“Unfortunately, little has been done to learn from this and so buyers and sellers are best advised to act sooner, rather than later, if they don’t want to suffer from the same fate as the market starts to heat up.”
