Property industry reacts to Nationwide HPI

CEO of Alliance Fund, Iain Crawford, commented:

“Despite growing economic uncertainty the housing market continues to stand firm, posting a very robust level of growth over the last year.

That said, with interest rates increasing in an attempt to curb inflation, homebuyers are now seeing the monthly cost of their mortgage start to climb. This increased cost, coupled with the usual seasonal slowdown seen during this time of year, will inevitably curb the high rates of house price growth seen over the last year or so.

However, those anticipating a crash are likely to be disappointed and we’ve seen the property market survive far worse in recent times, including a prolonged period of political uncertainty and a global pandemic.

Real estate remains one of the safest and most sensible investments you can make and this will remain the case despite what challenges lie ahead for the wider economy.”

Director of Benham and Reeves, Marc von Grundherr, commented:

“The first single digit rate of house price growth since last October will no doubt be pounced upon as signs that the market is starting to crumble. However, this would be inaccurate, to say the least, much like the mass panic that was spurred earlier this week by the creative take on a marginal reduction in mortgage product availability.

The reality is that we remain in a very strong position and not only will this increased cost of borrowing fail to dent the insatiable appetite of the nation’s homebuyers, but a severe shortage of appropriate housing stock will also ensure house price growth remains stable.

Despite London trailing the rest when it comes to the rate of house price growth being seen, the region remains the pinnacle of the UK property market. Home to the highest house prices in the nation, the capital’s homebuyers are actually enjoying a higher pound and pence increase in the value of their bricks and mortar assets despite a far lower rate of growth.”

James Forrester, Managing Director of Barrows and Forrester, commented:

“In any other market, such high rates of annual house prices growth would be lorded as proof of a property market boom. But, we’ve become so accustomed to seeing regular double-digit rates of growth that any marginal slowdown is now sparking fears that a crash is imminent.

This simply isn’t the case and we’re yet to see any definitive proof that the tide is starting to turn from boom to bust. Of course, the increasing cost of securing a mortgage will impact the price buyers are willing to pay, but the issue of homebuyer affordability is certainly nothing new and so a reduction in mortgage product choice is unlikely to topple the might of the UK property market.

Managing Director of HBB Solutions, Chris Hodgkinson, commented:

“The market seems to have hit the wall where the monthly rate of house price growth is concerned and this will come as little surprise given the fact dark clouds have been building for quite some time.

Mortgage approvals are starting to slide, driven by the increasing monthly cost of a mortgage pricing many buyers out of the market. Buyers can no longer match the inflated pandemic price expectations of many sellers and it’s only a matter of time before this adjustment causes house prices to decline.

Those currently looking to sell are advised to do so quickly because it won’t be long before their home is commanding considerably less, or failing to sell altogether due to an unrealistic asking price expectation.”

Founding Director of Revolution Brokers, Almas Uddin, commented:

“A property market price correction may be impending, but this will do little to comfort the nation’s current buyers who are still facing a huge task in climbing the ladder. Not only are house prices considerably higher than they were just a year ago, but the cost of securing and repaying a mortgage is also continuing to climb.

The good news is that, while some lenders have pulled a range of product offerings, there remains a wealth of options to choose from. While it’s always advisable to consult a whole of market broker, doing so in the current climate will ensure you get the best view of the mortgage products on offer and which can best suit your individual financial situation.”

CEO of Octane Capital, Jonathan Samuels, commented:

“Both homebuyers and sellers are best advised to buckle up as the remainder of the year looks to be a turbulent one for the UK property market.

There’s no doubt that aspirational buyers will continue to pursue their dream of home ownership despite the increasingly unstable economic landscape. The question is to just what extent this economic uncertainty will impact the price they are willing, or able, to pay when purchasing.

While we don’t expect the market to combust completely, something has to give and we can expect the current rate of house price growth to cool as we head into what is also a traditionally quieter period.”