01 July 2024
If you are covering the Nationwide house price index, please see the following comment from Karen Noye, mortgage expert at Quilter:
"According to Nationwide’s latest House Price Index, house prices have remained relatively stable, with the average house price in June, up 0.2%. This stability reflects a housing market that, despite the lack of significant growth, remains resilient amid broader economic trends.
"As we approach the general election, while any immediate impact on house prices might be minimal, the future policies of the next government will be crucial in shaping the housing market over the long term. Labour’s ambitious pledge to build 1.5 million homes over five years presents a significant opportunity to address the UK’s housing crisis. By reforming the planning system and utilising brownfield and "grey belt" sites, Labour aims to increase housing supply, making homeownership more accessible for younger generations. Whether this becomes a reality though is yet to be seen, lofty targets are often bandied around during election campaigns and then missed.
"Similarly, Labour’s “freedom to buy” scheme, which seeks to make the mortgage guarantee a permanent fixture is unlikely to move the dial much for young people’s hopes of homeownership. It fails to address deeper issues of affordability and high property prices relative to average incomes. First-time buyers often struggle with borrowing limits, and high loan-to-value ratios increase the risk of negative equity, leaving new homeowners vulnerable if house prices fall.
"On the Conservative side, their housing policies have focused on supporting first-time buyers through initiatives like Help to Buy and the Starter Homes scheme. The Conservatives have pledged to permanently abolish stamp duty for properties up to £425,000 for first-time buyers and to scrap Capital Gains Tax for landlords selling to sitting tenants, aiming to free up more housing stock from the private rental sector.
T"he current market conditions, characterised by high mortgage rates, continue to be a significant hurdle for many buyers. The Bank of England will eventually drop the base rate, but it is still uncertain when this will happen which heaps paralysis on the market. This, more than anything either party can do in the short term, determines house prices."
