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Property Industry Eye
9 Oct 2023
As the UK's housing market experiences a consistent decline in property prices, industry leaders are offering their insights into the situation. According to the Halifax house price index, residential property prices in the UK fell by 0.4% in September, marking the sixth consecutive month of decline. Although this recent decrease is less severe than the 1.8% drop observed in August, it raises important questions about the factors driving this trend.
Industry experts have been quick to respond. Sam Mitchell, CEO of Purplebricks, noted that there is a lag indicator to the Halifax data and that recent weeks have seen a shift in market sentiment due to lower-than-expected inflation and the Bank of England's unexpected decision to maintain interest rates. This has led to an uptick in property listings, increased buyer activity, and renewed confidence, particularly among those seeking mortgages.
Fred Jones, COO at Upstix, expressed concern for homeowners waiting for cheaper mortgages and a resurgence of high demand in the housing market, stating that they might be disappointed. He also warned of the increased risk of transactions falling through and disrupted property chains due to consistently low demand.
Verona Frankish, CEO of Yopa, pointed out the challenges faced by today's buyers due to climbing property ladder costs and the reduction in mortgage market activity. However, she expressed optimism that the pause in base rate hikes and competitive mortgage rate reductions would boost buyer sentiment in the coming months.
The general consensus is that while property prices have fallen, they still remain significantly higher than pre-pandemic levels. The housing market appears to be adapting to a new normal, with supply and demand dynamics shifting. Buyers now have more options, negotiation power, and room to haggle with sellers, which is contributing to declining prices.
While ongoing economic challenges, the impact of rising interest rates, and high living costs remain concerns, there is hope that interest rates have peaked, offering stability and renewed confidence to both buyers and sellers. The current property market is characterized by motivated buyers, cautious mortgage-dependent buyers, and room for cash buyers to secure deals below asking prices.
Jonathan Hopper, CEO of Garrington Property Finders, sees signs that the property price correction may be easing. While the market may remain in favor of cash buyers, the gradual improvement in affordability for mortgage-dependent buyers is expected to stimulate demand in the months ahead.
[Source: Property Industry Eye]