Property professionals have welcomed the latest UK house price data – a key indication that the outlook for the housing market appears to be improving.
The average price of a home unexpectedly dropped by 0.2% in August compared with a month earlier but there are key signs that conditions in the market are getting better, the latest data from Nationwide revealed on Friday.
In annual terms, property prices were higher than in August last year, with signs that housing market activity is likely to strengthen as affordability constraints ease.
RICS said earlier this month its measure of expected sales over the next three months was the strongest post-Covid.
Industry reaction:
Tom Bill, head of residential research at Knight Frank, said: “The housing market is in a better place than it was last summer as inflation comes under control and lenders trim their rates. Financial markets are pricing in another cut this year and as mortgage rates fall this autumn, it should underpin transactions and modest single-digit price growth, which doesn’t necessarily chime with recent government warnings about the state of the economy.”
Ed Phillips, CEO of Lomond, commented: “It’s been a story of two halves for the UK property market so far this year, with a tentative first six months seeing a stable but largely static market, whilst the pace has really started to pick up since the July election, with an increase in buyer confidence helping to drive annual house price performance.”
Verona Frankish, CEO of Yopa, stated: “The figures provide the first look at house price performance since interest rates were cut at the start of August and despite the very marginal monthly decline, it’s clear that the first reduction in four years has helped to further boost the market momentum, with yet another strong rate of annual house price growth being seen.
“Whilst the base rate remains considerably higher than many buyers and sellers may be accustomed to, the expectation is that another cut will come before the year is out, which should only help to strengthen buyer appetites further.”
Nigel Bishop of Recoco Property Search, remarked: “We helped a number of house hunters secure a property in August but some buyers are still hesitant to finalise their search as they first want to observe the Labour government’s impact on the wider economy. Meanwhile, more homeowners have been motivated to put their property up for sale amid fears over an increase in capital gains tax and inheritance tax in the upcoming Autumn Budget.
“As we are seeing more sellers entering the market, we predict buyer interest and activity to pick up after the summer holidays. Although this will create a more competitive market environment for house hunters, the influx of homeowners wanting to sell quickly will allow more room for price negotiations.”
“On the topic of EPC ratings, he adds: “Over the past years, good eco-credentials and sustainability have become a deciding factor and many buyers are enquiring about EPC ratings or a property’s potential for eco-related upgrades. Depending on the EPC rating, some properties can demand a premium of around 15%.”
Nicky Stevenson, managing director at Fine & Country, said: “August’s minor drop in house prices is likely to be seen as a hiccup, with longer-term indicators suggesting that the housing market is battling its way back to good health.
“The Bank of England’s base rate cut in August has encouraged many potential buyers to move forward with their plans, but for some there is a sense of hesitation. Speculation about another rate cut later this year may be causing some buyers to wait a little longer before making a move.”
Iain McKenzie, CEO of The Guild of Property Professionals, commented: “A slight downwards readjustment in house prices, tempered with strong annual growth, reflects well on a property market that is showing resilience in the face of ongoing challenges.
“We are seeing house prices rising at the fastest pace since the closing months of the pandemic when there was a rush to buy properties as people adjusted to remote and hybrid work patterns.”
“Estate agents across the country are telling us that the market conditions in their areas are improving and there is a strong demand for good-quality housing,” he added.
Nathan Emerson, CEO of Propertymark, added: “Considering the number of disruptions within the economy across the last few years, it’s extremely encouraging to see stability across the housing sector. When politicians return from their summer recess in September, it is essential to see progression in delivering nearly two million homes across the next parliamentary term as promised by the UK government. The starting block for this is ensuring the Planning and Infrastructure Bill takes robust shape to help ensure supply keeps pace with current housing demand.”