07 March 2023
If you are covering the latest Halifax House Price Index, please see the following comment from Charlotte Nixon, mortgage expert at Quilter:
“House prices appear to be somewhat stabilising despite the ongoing pressure of the cost-of-living crisis on the housing market. This morning’s Halifax house price index shows the annual rate of house price growth remained at 2.1% for the third consecutive month, while month-on-month prices saw a slight uptick of 1.1%. However, house prices are down 2.5% on the quarter.
“The slight uptick in January was likely as a result of the fall in mortgage rates compared to the peak seen towards the end of last year which likely boosted buyer confidence – albeit potentially short-lived. Although we have hopefully passed the peak of inflation, it’s still likely that interest rates will still rise further, and the current unpredictability of the market will be concerning for homeowners who may be looking to sell their properties.
“While this morning’s figures are slightly more positive than some may have expected, the high cost of energy and increased mortgage rates could see a return to falling prices over the next few months. Many homeowners are struggling to keep up with the increasing energy bills, which is causing them to cut back on their spending elsewhere. This, in turn, has decreased demand from buyers as people are hesitant to make such a significant investment in a time of financial uncertainty.
“Similarly, high-interest rates have made it more challenging for potential buyers to secure a mortgage, which is further impacting the demand for homes.
“Despite these challenges, there is still opportunity out there for those looking to buy or sell a home. For those selling, it is essential to be realistic about the current market conditions and adjust pricing expectations accordingly. There must be a mental shift away from the years of the pandemic when the market was incredibly hot but for many this will still mean that their house has increased in price particularly if bought over ten years ago.
“For those hesitant to buy, if you feel financially secure it may still be worth making the leap despite the costs that come with moving. If interest rates do climb higher, you may be able to lock into a cheaper deal now than in the future. While the spring is typically when the housing market gets moving, people may have an eye this year on whether the government will continue to provide support for energy bills post April before making big financial commitments.
“However, while predications are always difficult to make it’s likely that there is still some froth yet to come out of the market as the cost-of-living crisis rages on."
