07 November 2023
If you are covering the Halifax House Price Index, please see the following comment from Charlotte Nixon, mortgage expert at Quilter:
"The latest Halifax house price data shows a surprise 1.1% increase in prices despite very subdued transaction levels in the market. We are yet to see a huge influx of properties on the market, which if paired with this low demand will have a negative impact on prices. But because potential sellers are holding out, stock levels remain tight and therefore the buyers who are out in the market are still having to compete keeping levels relatively buoyant. However, prices are still down by -3.2% compared to last year.
"Yet, despite these drops, the typical UK home still stands at £281,974, which is still not far off early 2022 levels, still significantly above pre-pandemic values and up £3,000 on the previous month. This shows that even as we've weathered a storm of rate rises, the value of bricks and mortar has held a relatively steadfast course through the economic difficulties of the cost of living crisis.
"The Bank of England just last week opted to hold rates and the reality is we may all need to get used to rates at this level as we enter a "higher for longer" phase. The result of this will not be a housing market in freefall but one that is recalibrating after a period of cheap debt-fuelled buoyancy.
"As mortgage deals come up for renewal, the landscape will continue to shift especially considering ultra-low mortgage rates are now a relic of the past. This will force some people to sell, pushing prices down. For many sellers, especially in the south where the greatest price pressures are felt, the current situation is a reminder that price resilience is a regional affair as in South
"East England prices decreased by -6.0% over the last year. While some buyers may hold out for pre-pandemic valuations, the interplay of supply and demand, coupled with shifting economic winds, may necessitate a new approach to price negotiations. For those considering their next move, the strategy is less about rushing in and more about measured decisions that suit your life needs in the here and now rather than trying to time the market
"Demand will start to return as even in this difficult financial time, buying a home remains a priority for many. The reduction in buyer demand will return as these higher rates can’t completely quench the desire to own a home. First-time buyers, in particular, are still a driving force, bolstered by contributions from the Bank of Mum and Dad and weighed against the rising costs of renting.
"Patience and preparation are key for both sellers and buyers in the current market. Whether you're planning to buy, sell, or remortgage, it's essential to keep a close eye on economic indicators and to seek advice tailored to your financial circumstances."
