Housing market unlikely to see significant fluctuations in the near term
UK house prices were largely static in May, edging down by 0.1%, or around £170 monthly, Halifax has reported.
Annually, house prices rose for the sixth consecutive month, increasing by 1.5% compared to 1.1% in April. The average property price now stands at £288,688.
“Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook,” said Amanda Bryden, head of mortgages at Halifax. “This has been reflected in a broadly stable picture in terms of property price movements, with the average cost of a property little changed over the last three months.
“A period of relative stability in both house prices and interest rates should give a degree of confidence to both buyers and sellers. While homebuyers and those remortgaging will continue to respond to changes in borrowing costs, set against a backdrop of a limited supply of available properties, the market is unlikely to see huge fluctuations in the near term.”
Commenting on the latest Halifax House Price Index, Sam Mitchell, chief executive of estate agency Purplebricks, said it is no surprise that with rates edging up and a date set for the general election, there is some uncertainty about the housing market.
“However, as there are no housing ‘giveaways’ or unrealistic policies that can distort people’s expectations, the market seems to be continuing as if it is business as usual,” he said. For the housing market, rates edging up actually seems to have created some buyer urgency to get themselves in gear to act sooner rather than later.
“There are also some relatively new mortgage providers keeping their rates the same and offering more flexible products which is particularly beneficial for first time buyers.
“We are seeing the property market continue on its road to recovery, with good stock coming to market and a sharp increase in viewings. What we need in the coming months is for the new government to focus on policy that will help people across the country get on the property ladder, through lower mortgage and interest rates, lower transaction costs, and lower rents.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, agreed that the prospect of an imminent general election is not deterring buyers and sellers.
“That said, continued uncertainty as to when interest rates might start coming down and the cost-of-living is leading to some caution, properties spending longer on the market and harder price negotiations,” she said.
“First-time buyers, in particular, are finding it difficult to raise deposits and are relying on the Bank of Mum and Dad more than ever to buy, especially in London. Some stabilising of prices will be welcomed by them, in particular.”
“Affordability certainly remains an issue and will continue to constrict buyer purchasing power,” added Ruth Beeton, co-founder of Home Sale Pack. “However, the outlook for the year ahead is a very good one all things considered.”
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