06 April 2023
If you are covering the latest Halifax house price index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“The latest house price index from Halifax shows prices continue to defy the odds with a further 0.8% month-on-month uptick in March, following a 1.2% rise in February.
“While prices increased in March, the annual rate of house price growth fell to 1.6% down from 2.1% in the previous three months - the weakest rate of annual growth for more than three years.
“Given the predictions of a major drop in house prices in 2023, the housing market so far appears to have weathered the storm far better than had been anticipated. The fall in mortgage rates compared to the peak seen at the end of last year appears to have boosted buyer confidence, and this is likely to be holding off a significant fall in prices for now.
“However, while the market appears to be resilient at present, there remain considerable pressures that could bring further turbulence throughout the year. Inflation rose unexpectedly in February, and the Bank of England further increased its base rate in response. For those currently sitting in ‘wait and see mode’, the ongoing unpredictability of the market and wider economy will be concerning and they may look to hold off further until there is a clearer path ahead.
“What’s more, high energy bills and increased mortgage rates will leave many homeowners struggling to keep up and needing to cut back on spending elsewhere, and many will find it more difficult to secure a mortgage due to affordability criteria. In a time of financial uncertainty, it is likely that potential home buyers will be hesitant to make such a significant investment, and this could have a knock-on effect on demand. If this continues, we can expect the shift in supply vs demand to result in a dip in prices in the coming months.
“Despite the ongoing challenges, there is still opportunity out there for those looking to buy or sell a home. For those selling, it is important to be realistic about the current market conditions and adjust pricing expectations accordingly. 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.”
