Property industry reacts to latest UK house price data

Residential property prices in the UK increased by an average of 0.5% in November, the second consecutive monthly increase after a six-month streak in monthly falling values, the latest data from Halifax revealed yesterday. This follows a 1.1% month-on-month increase in October.

The average property price stood at £283,615 in November, which is an increase of around £1,300 compared with a month earlier.

Compared to this time last year, house prices are still lower, but only by a modest 1%.

Kim Kinnaird, director, Halifax Mortgages, said: “Over the last year, despite the wider economic headwinds, property prices have held up better than expected, falling by a relatively modest 1.0% on an annual basis, and still some £40,000 above pre-pandemic levels.

“The resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand.

“That said, recent figures for mortgage approvals suggest a slight uptick in activity levels, which is likely as a result of an improving picture on affordability for homebuyers. With mortgage rates starting to ease slightly, this may be leading to increased buyer confidence, seeing people more inclined to push ahead with their home purchases.

“However, the economic conditions remain uncertain, making it hard to assess the extent to which market activity will be maintained. Other pressures – like inflation, the broader cost of living, overall employment rates and affordability – mean we expect to see downward pressure on house prices into next year.”

Industry reactions:

Tom Bill, head of UK residential research at estate agent Knight Frank, said: “The jury is still out on the sustainability of recent rises in such a thin market, but if we are not at the bottom of the current housing market slowdown, we must be close.

“The key is that sentiment has become more buoyant in recent weeks as the economic data improves and keeps downwards pressure on mortgage rates.”

 

Jeremy Leaf, a north London estate agent, commented: “Of course, the shortage of stock is supporting house prices. There is no doubt either that recent falls in inflation and mortgage rates as well as the continuing strong employment figures have improved confidence in the market.”

 

Matt Thompson, head of sales at Chestertons, said: “Last month, first-time buyers welcomed the Autumn Statement’s news that the Guaranteed Mortgage Scheme will be extended until June 2025. This, in addition to the previous announcement that interest rates remain at 5.25% for the time being, led to buyers feeling more motivated to continue their property search in November.”

 

Sam Mitchell, CEO of Purplebricks said: “Purplebricks has seen viewings and offers increase week on week in November, a surge in activity which is highly uncharacteristic for this time of year where the market is usually experiencing a seasonal slowdown. This follows on from two consecutive interest rate holds that have caused banks to grow more competitive in the rates they’re offering to customers.

“It lines the housing market up for a strong start to 2024, where buying and selling decisions previously stalled by continuously rising interest rates are now being advanced. Increased heat in the rental market will also bolster first-time buyers’ drive to get on the property ladder, reflecting improved confidence across the housing market as a whole.”

 

Guy Gittins, CEO of Foxtons, commented: “A second consecutive monthly increase demonstrates further signs of property market positivity today.

“Although the market is yet to return to full health when viewing house price performance on an annual basis, it appears as though a freeze in interest rates is helping to boost homebuyer sentiment and bring a greater degree of stability. This puts us in very good stead looking ahead to the new year”

 

Verona Frankish, CEO of Yopa, said: “It appears as though cooling market conditions have now started to thaw, with multiple house price indices showing that the market is now heading in the right direction, as house prices continue to climb on a monthly basis.

“A hold on interest rates has brought greater stability for buyers who are already returning to the market despite the usual Christmas break fast approaching and we’ve already seen seller numbers increase notably in recent weeks.

“This suggests that both parties are keen to hit the ground running in the new year and this boost to market sentiment will help to further improve market health.”

 

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The property market is showing resilience and stability in the face of the economic challenges that have rocked the country throughout 2023.

“As the year draws to a close, there is light at the end of the tunnel, though market conditions will remain uncertain with many households still expressing affordability concerns.

“The annual picture shows a fall of 1%, which is more optimistic than forecasts at the start of the year, and will be a further motivator for buyers looking for properties at a slightly reduced rate.

“The uncertainty on house price trends has caused some sellers to be hesitant to put up the ‘for sale’ signs, causing a current shortage of stock that will undoubtedly be propping up house prices. The demand for good-quality housing is still strong and our research shows that over one in five home moves are currently needs-based.

“Inflation is finally coming down and lenders are taking this into account, with mortgage approvals seeing an upward trend. This is great news for first-time buyers that are facing the squeeze more than other groups.”

 

Jason Tebb, CEO, OnTheMarket, added: “With property prices picking up again month-on-month, it may be tempting to conclude that buyers are prepared to pay more but the high cost of living and numerous rate rises continue to impact affordability and how much purchasers are willing or able to pay.

‘What is trickling through is a level of confidence, boosted by the belief that interest rates may just have peaked, which is having a steadying effect on the market.

’There may be fewer buyers on the ground but speculators have fallen away and those looking to move at this time of year are focused. Sellers looking for one of these buyers must be sensible on price and come to market at the right level.”

 

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