House prices climbed by 0.1% in October versus the previous month, although this monthly rate of growth slowed from 0.6%. On an annual basis they increased by 2.4%, with this annual rate of growth again slowing from 3.2% the previous month. Here what some of the industry’s leading experts have to say following the first post budget HPI.
Director of Benham and Reeves, Marc von Grundherr, commented:
“A slower rate of house price growth was always to be expected during a Budget month as the housing market pauses for breath to see what the government has up its sleeve, but despite this, the market still recorded positive growth on both a monthly and annual basis which demonstrates just how far we’ve come so far this year.
Whilst there were no positive Budget initiatives announced that will supercharge market activity, we do expect to see a heightened level of activity between now and March of next year, as homebuyers scramble to complete before stamp duty relief reverts back to previous thresholds.”
Lomond CEO, Ed Phillips, commented:
“Stability has been the key component to the returning health of the UK housing market and so it’s no surprise that the rate of house price growth slowed during October, with the property sector enveloped by Autumn Statement uncertainty.
Now that the dust has settled and the property market has escaped largely unscathed, we expect the rate of growth seen across the market to once again accelerate, particularly with further cuts to interest rates on the cards.”
CEO of Yopa, Verona Frankish, commented:
“House prices have held firm during Budget month which is an impressive performance in itself despite the rate of growth seen falling month on month.
The impending stamp duty relief deadline in March of next year will certainly light a fire under those buyers currently progressing through the transaction process, or considering a purchase this side of Christmas.
However, whilst many will be keen to transact before stamp duty thresholds increase, it certainly won’t cause a cliff edge for the housing market come next year. Stamp duty has long been a thorn in the side of homebuyers but not one that is significant enough to deter them from their aspirations of homeownership.
In fact, the prospect of further interest rate cuts and the increase in long-term mortgage affordability that these will bring are far more likely to influence buyer ambitions and help keep the housing market moving forward.”
Jonathan Hopper, CEO of Garrington Property Finders, commented:
“The late summer heat enjoyed by Britain’s property market is cooling fast.
“In part the slowdown in price rises is a side-effect of the post-election surge in activity.
“The rush of sellers putting their home on the market in early autumn means that many buyers now find themselves spoilt for choice and able to negotiate hard on the price they pay. When buyers hold the cards like this, price inflation tends to be kept in check.
“But there are other more worrying factors at play too. Anxiety about what this week’s Budget might hold cooled activity sharply in October, especially at the top end of the market. Many of the estate agents we work with saw the number of viewings halve as buyers opted to wait and see.
“And then there’s the mortgage market, which has veered off the script that many wrote for it after the Bank of England first cut its Base Rate in August. Even if the Bank does announce another rate reduction next week, many mortgage lenders are having to push up the rates they offer to new borrowers.
“More expensive, rather than cheaper, mortgages will not ease the fragile sentiment.
“The fallout from the Chancellor’s decision to impose higher Stamp Duty on anyone buying a second home or a buy-to-let property could now cool the market further. While pragmatists will reflect that the tax raid could have been worse, the market spent much of October in the brace position and not everyone is ready to come out of it yet.”
Iain McKenzie, CEO of The Guild of Property Professionals, comments:
“As we come into the closing months of the year, we’re increasingly seeing the tell tale signs of a market in recovery. House prices, property sales and mortgage approvals are all showing resilience and stability in the face of continued cost-of-living challenges.
“While the pace of house price growth has slowed, there was a marginal increase in October, which should still come as welcome news to the industry. It is also another reminder that the frenzy of activity that we saw during the pandemic era is now a distant memory.
“The annual rate of growth may begin to slow in the coming months, as we will be comparing to a time when the market was recovering from the disastrous ‘mini budget’ of 2022.
“Mortgage approvals are up to pre-pandemic levels which is very encouraging news and will be welcomed by estate agents and their clients. Buyers are still finding suitable mortgages despite the prevailing high interest rates.
“While sellers would no doubt like to see house prices climb faster, they need to remain realistic on asking prices. Buyers will still be looking to haggle for a bargain, especially if they have struggled to save for a deposit in recent times.
“There are healthy levels of housing stock on the market, so sellers should expect some competition. If you’re selling a property, work with your estate agent to set a price that allows for some wriggle room.”