09 May 2023
If you are covering the Halifax House Price Index, please see the following comment from Karen Noye, mortgage expert at Quilter:
"House prices stuttered again in April after what appeared to be a small but consistent rebound in prices over the past few months following a more significant drop following the fallout from the mini budget last year. According to the Halifax house price index, the average house price dropped by 0.3%, which is at odds with what is to be expected at this time of year as typically more people look to enter the market and compete for properties driving prices up.
"However, considering the economic backdrop this is only a small drop and prices remain resilient. One element that keeps prices buoyant is an increasingly competitive rental market. Those that have managed to save enough for a deposit are increasingly finding that they can achieve the same monthly payments, if not less, by buying a property rather than renting even with higher interest rates. This is helping the market avoid a situation where housing stock piles up because there is a lack of demand. This is evidenced by the news that Skipton Building Society is bringing back the 100% mortgage. This is the first time a product like this has been on the market since the financial crash and should help those trapped renting find properties even if they don’t have a deposit.
"While the cost-of-living crisis continues to put pressure on budgets generally people in the main seem able to cope with rising mortgage rates which has ensured that house prices do not dip too much despite a somewhat subdued market.
"As we enter into election season housing may be a key battleground as house prices need to stabilise to a degree to keep everyone happy. Homeowners will not want to see the value of their properties plunge while first time buyers who are gradually making up a larger and larger proportion of the voting population will not want to see huge house price increases like those during the pandemic. Ensuring the right schemes are in place and more houses are built will need to be front and centre of any manifesto. The property market is in desperate need of some balance as it precariously navigates a difficult economic tightrope."
