Do today's Halifax March HPI data signal a 'spring bounce' for house prices? Reaction from estate agents and brokers - IFA Magazine (2023)

The latest HPI data released by the Halifax today has revealed that average house price increased by +0.8% in March (following +1.2% rise in February) and that the annual rate of house price growth had slowed to +1.6% (vs +2.1% for previous three months in a row).

Mortgage brokers and Estate Agents have been sharing their views on this latest move in house prices as indicated by the Halifax HPI data as follows:

Nicky Stevenson, Managing Director at national estate agent group Fine & Country said: “Spring has started strongly with a robust set of house price results, and this coincides with a welcome uptick in demand as mortgage rates continue to ease.

“These are the kind of figures that will give sellers confidence that now is a good time to list their property, though many are also being realistic about pricing and buyers’ expectations for a negotiation.

“All the signs point to the property market emerging from the challenges it has faced since the Mini Budget, with the weather set fair for a strong showing over the next few months, in what is traditionally a very busy period.

“Although demand is increasing, so is housing stock. We’re starting to see signs of a much healthier market in terms of supply and demand than we saw during the mad rush over the last two years.

“In some areas there are many more properties for sale than this time last year when the market was still in the middle of a historic boom in demand.”

Adam Smith, directorat Northampton-based mortgagebroker,Alfa Mortgages: “The outlook for house prices in 2023 will be heavily influenced by consumer confidence, which in turn will be shaped by a complex interplay of factors including inflation and uncertainty surrounding interest rates. A decline in consumer confidence could lead to a sharper decrease in the value of UK bricks and mortar, but the extent of this remains uncertain and is the million-dollar question on everyone’s mind. There are so many variables at play it’s hard to know where the UK property market is going next.”

Carl Howard, Group CEO of Andrews estate agents, comments: “A second straight monthly propertyprice rise suggests a spring bounce, led by sellers who have stepped up and kept this market ticking over.

“They’ve had a few months now to adjust their eyes to a gloomier outlook, and a realistic attitude on prices is helping grease the wheels and get more deals over the line.

“Meanwhile demand for properties is creeping up from a low base as buyers warm to a market moving in their direction and make more enquiries.

“Although interest inhomes is down from the same time last year, sales are being supported by a boost in supply, particularly in cheaper price brands. Mixed with a surge in rental prices, this should also encourage more buyers into the market.

“There are still storm clouds lingering, particularly around affordability, but lending rates are continuing to soften, meaning less of a jolt for first-time buyers and owners whose current fix is coming to an end.”

Jamie Minors, managing director at Norwich-based estate agents, Minors & Brady: “UK house prices are still going through a period of correction, which means unrealistic prices that were exacerbated by a poor supply of stock are now re-aligning with demand. With mortgage ratessteadily reducing and consumer confidence returningafter the disastrous Kwarteng/Truss administration, we are seeing strong levels of demand matching good levels of supply. Unemployment is still incredibly low, so as long as mortgage rates don’t suddenly rise and people still have their jobs, buyers will continue to purchase, resulting in prices holding without further big reductions and a rally upwards in 2024.”

Chris Barry, director at Gloucester-based conveyancer, Thomas Legal: “House prices, despite the recent turbulence, should remain fairly steady throughout 2023. Though demand levels dropped following the mini-Budget, the latest base rate rise may be one of the last for a while, which has increased confidence. Recently, many buyers have come back to the market, something evidenced by the recent increase in mortgage approvals. Demand is continuing to grow as confidence and economic stability improve, which may see supply and demand meet in the middle sometime this year, creating the perfect housing market. The market that has pushed on quickly this year is the new build sector. We think this is due to a short freeze in building projects during the economic uncertainty in October but we are now seeing a sharp rise in new build properties coming to market and a rise in demand from a broad range of clients. We are also seeing developers offering large incentives to buyers. Developers want to sell and there are still people who want, and are able, to buy.”

Kundan Bhaduri, director of London-based property developer and portfolio landlord,The Kushman Group:“London homes are taking an age to sell. It’s currently taking a whopping 44+ days to shift property in the nation’s capital, where prices have been higher than Snoop Dogg on his herbals. It seems sellers in central London are in no hurry to sell, holding out for offers so high they could make Elon Musk’s bank account look like pocket change. But it’s not all doom and gloom in the housing market. The supply of properties is picking up and buyers and sellers are finally seeing eye-to-eye on pricing.”

Ross McMillan, owner at Glasgow-basedBlue Fish Mortgage Solutions: “Based on what we’ve seen so far in 2023, the Scottish property market could rightly proclaim that “rumours of my death have been greatly exaggerated”. Although not without its challenges, unexpected resilience is evident, with prices generally holding steady. As always, the supply versus demand battle is largely dictating market conditions and the eagerness of agents to acquire new stock indicates that an imbalance undoubtedly still exists. First-time buyers remain the most active and with many lenders reducing rates in recent weeks at all levels of loan to value, affordability and borrowing power for many is trending positively. It is noteworthy that for buy-to-let, given increasing government intervention in the sector and reduced cashflow, there are unquestionably more landlords selling up all or part of their portfolios. A sudden rise in listings via specialist estate agents selling tenanted properties is evidence of this ongoing landlord exodus.”

Joe Stallard, director of Stroud-based House & Holiday Home Mortgages: “In some ways, nothing has changed when it comes to the housing market. There have always been fluctuations and we advise our clients to study their local area carefully. It’s true that house prices are down nationally, but this varies from region to region, so keeping a watching brief on what’s happening where you’re looking to buy is the wise thing to do. Surprisingly, our business levels have remained strong. People are still searching for the right property, no matter what. Right now, most families are exploring ways to reduce their outgoings overall. And as they fall off fixed rates, they’re finding higher rates are the norm. Having said that, the shock factor has largely been avoided because information about rate rises has been widely available all along.”

Graham Cox, founder of the Bristol-based broker, “I don’t see any other outcome than a steep decline in house prices this year and well into next. Mortgage approvals are down over 40% in the past few months, inflation continues to erode living standards and interest rates are still on their upward trajectory. Over the next six months, I believe we’ll see very sharp falls in house prices of1%-2% a month. The trigger will be the traditional springtime rush to list property for sale. Demand simply won’t match it, as prices are far too high given where mortgage rates are.”

Nick Harris, co-founder at Wokingham-basedQuarters Residential Estate Agents:“Property prices are down but demand has been steadily increasing in the first three months of the year, in particular March. There’s more confidence out there than many think. Thisshows that while discretionary buyers are sitting tight, the serious buyers remain active. Sellers are being much more realistic on price, and are typically also buyers so they appreciate a more balanced property market. Locally, we don’t expect to see the often reported ‘crash’ but can certainly see that a correction of circa 5% is realistic. It’s no secret the market is currently favouring buyers.”

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