House prices edge down – industry reactions

UK house prices edged down by 0.1% in May from April, Halifax said on Friday.

In the 12 months to May, residential property prices rose by 1.5%, which is faster than the average forecast in the Reuters poll for an annual increase of 1.2%.

“Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook,” Halifax’s head of mortgages, Amanda Bryden, said.

Earlier this month, rival lender Nationwide said its measure of house prices increased in May after falling in the previous two months.

Industry reactions: 

Myles Moloney, area sales manager at Chase Buchanan, commented: “The market in May showed continued signs of growth, with buyers feeling increasingly confident to resume or finalise their property search as the announcement of the General Election and the likelihood of falling interest rates provided more political and financial certainty. Pricing remained stable, with well-presented family homes being particularly popular and in many cases receiving multiple offers.

“As rent levels continue to hold, or in some areas likely increase further over the coming months, we expect to see more aspiring homeowners beginning their property search which will fuel a competitive property market this summer.”

 

Sam Mitchell, CEO of Purplebricks, said: “It is no surprise that with rates edging up and a date set for the general election, there is some uncertainty about the housing market. However, as there are no housing “giveaways” or unrealistic policies that can distort people’s expectations, the market seems to be continuing as if it is business as usual. For the housing market, rates edging up actually seems to have created some buyer urgency to get themselves in gear to act sooner rather than later. There are also some relatively new mortgage providers keeping their rates the same and offering more flexible products which is particularly beneficial for first time buyers.

“We are seeing the property market continue on its road to recovery, with good stock coming to market and a sharp increase in viewings. What we need in the coming months is for the new government to focus on policy that will help people across the country get on the property ladder, through lower mortgage and interest rates, lower transaction costs, and lower rents.”

 

Tom Bill, head of UK residential research at Knight Frank, commented: “House prices remain under pressure as an interest rate cut moves further over the horizon. Demand will typically rise in spring but there has been a 0.3% price decline over the last three months thanks to stubborn services inflation and rising swap rates. There should be a more noticeable bounce this autumn when the first rate cut since March 2020 is likely to have happened and the political backdrop will have stabilised. We expect UK prices to rise by 3% this year as the prospect of more mortgages starting with a ‘three’ gets closer.”

 

Foxtons CEO, Guy Gittins, said: “The house price figures provide further proof that the UK property market is in great form and, while this may have started with an initial spring surge in buyer interest, we now look set for a summer of sustained market activity.

“In recent weeks we’ve seen buyer enquiries peak to some of their highest levels in recent years and sellers are responding favourably with the same peak being seen in the number of offers accepted. This is despite the fact that interest rates are yet to come down.

“We’ve also seen no inkling of election related jitters on either the side of buyers or sellers.”

 

Verona Frankish, CEO of Yopa, commented: “The property market looks set to enjoy a summer of stability with buyers and sellers having adjusted to the new norm with respect to current mortgage rates.

“The expectation of a rate cut on the horizon will also be tempting many buyers back to the market over the following months and when it does materialise, we expect the current rate of house price growth to accelerate.”

 

Ruth Beeton, co-founder of Home Sale Pack, said: “A further stabilisation of the property market was to be expected given the positive growth seen in mortgage market activity in recent months and the landscape has settled considerably when compared to much of last year.

“Affordability certainly remains an issue and will continue to constrict buyer purchasing power, however, the outlook for the year ahead is a very good one all things considered.”

 

Nathan Emerson, CEO at Propertymark, remarked: “The housing market seems to be generally moving in the right direction, with house prices going up annually from this time last year. With a general election now on the horizon, there may be potential caution from buyers and sellers, especially those hoping to step onto the housing ladder for the first time, as they await any announcements regarding government support. People will also be carefully awaiting the Bank of England’s next announcement this month.”

 

Jason Tebb, president of OnTheMarket, added: “With property prices stabilising, buyers remain sensitive as to what they are prepared to pay and perceive themselves to be in a good negotiating position.

“Despite a looming general election, it does not seem to be dampening housing market activity. With the uncertainty which most elections generate largely absent, buyers and sellers have been getting on with the task in hand. 

“Of far more interest than a new government is when the Bank of England is going to start reducing interest rates, which many anticipate happening by the end of the summer. Affordability has become stretched, thanks to numerous interest rate rises and the cost-of-living crisis, but with inflation moving in the right direction, there is a growing feeling that the worst may be behind us.”

 

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