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Halifax August HPI

ended 06. September 2022

I'm currently stinging all over, having whipped my naked flesh with fresh West Country nettles. Why? Because here I am once again asking you for your views on the property market, as on Wednesday morning at 07:00 we're getting the August Halifax house price index. I'll probably pin you if you can drop in a line from Under Milk Wood.

  • How were activity levels in August overall? Usual seasonal dip or more pronounced than usual amid the cost of living crisis?
  • Which segments of the market are still active, e.g. FTBs, landlords, overseas investors?
  • Are we going to see a slowdown in the rate of price growth or prices actively start to fall?
  • The property market has had two surreal years of growth during the pandemic. Are the wheels about to come off or will the lack of stock/supply save the day?
  • Are we now in a buyer's market or a seller's market?

Any other thoughts, jot them down. Do NOT write an essay. 2-3 pars max please.

9 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Even though the economy is expected to be in the bin for the next 12-18 months, I don’t expect the property market to implode. We will almost certainly, however, see a marked slowdown in the rate of price growth. Transaction levels may well go off a cliff as moving house is not a priority when you are penny pinching due to frightening increases in energy bills, food shopping and the cost of living more broadly.
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Mike Staton
Director at Staton Mortgages
August is usually a relatively quiet month in the mortgage and property market, but this time round there were no signs of a dip in activity. It may be that people are keen to buy, lock into a low rate and batten down the hatches before we enter a time of potential extreme economic turbulence. First-time buyers remain a particularly active demographic within the market, with many now looking at higher loan-to-values of 90% to 95% mortgages due to the house price inflation of the past two years. Although we are starting to see a reduction in the level of competition to buy houses, it remains a sellers' market for now as there are still more than enough buyers out there. In fact, this has been our biggest August on record as a business, especially with people looking to remortgage up to six months earlier to lock into that lower interest rate before another anticipated interest rate increase.
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Imran Hussain
Director at Harmony Financial Services
August is historically a quieter month, like December, but this year, despite the fact rates are rising and bills are skyrocketing, it was like the Wild West. With rents rising quicker than ever before, we're finding that first-time buyers are keener than ever to get onto the housing ladder. Mortgage rates may be rising but in many cases it's still cheaper to own than to rent.
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Rob Peters
Principal at Simple Fast Mortgage
August was another strong month to bolster a year of strong months. While many naysayers have predicted the property market's wheels to come flying off, for now at least the market has defied the laws of inflation and energy rises to come out victorious again. The almost frantic stream of new buyers has been replaced by a seemingly steady stream of movers and remortagers with many investors sitting on the sidelines ready to pounce should economic opportunity come knocking. So no drastic change just yet, but like the weather as we approach Autumn, it does feel as though the wind has shifted course slightly.
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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
Though the property market remains in a relatively healthy state for now, there's nowhere near the frenzied activity that has defined the market during the past couple of years. We're typically now seeing just two or three buyers competing for a property rather than two dozen, as was the case this time last year. In some instances, some old-fashioned negotiation between a single buyer and seller is now making a comeback. Whilst there is still a general lack of supply, sellers' expectations are also becoming more reasonable and generally more in line with valuations. The current flattening in the market and greater equilibrium between buyers and sellers is a good thing and in the past month I have had several clients make successful offers after some had been looking and offering unsuccessfully for upwards of 2 years. Arguably the most important element of the housing market is that it remains fluid and functional and - unlike in 2007/8 - as mortgage lending remains abundant, whilst prices may well stagnate or even fall slightly, I am confident that demand will remain and the market will function successfully and perhaps in a more sustainable manner over the coming months. With the general chat around interest rate rises and cost of living crisis, remortgage enquiries are increasing. However, in many cases, these are often people simply eager for information rather than actively looking to sacrifice the remaining term of their historically low rates and incur early repayment charges in return for the longer term stability that the higher current rates may offer.
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Mark Robinson
Managing Director at Albion Forest Mortgages
If there was any form of dip in August, we didn't see it. August was busier than ever, with first-time buyers especially active. Even as we enter dark winter for the economy, I cannot see house prices falling due to the sheer lack of supply. We are, however, far more likely to see a slower rate of house price growth. Though there is slightly less competition than a year ago as some prospective buyers put their plans on hold amid the cost of living crisis, it's still a sellers' market.
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Jamie Thompson
Mortgage Broker at Jamie Thompson Mortgages
There's no such thing as a buyers' market in the UK. I don't think there ever will be again. The only way to tip the balance back towards buyers and away from existing owners who are now sat on eye-watering amounts of equity in their property it to build more homes and we're not doing that. I'm doing mortgages at the moment for people who bought their first house just two years ago placing down 5% and 10% deposits who now have so much equity they are moving up from small starter homes to detached family homes. Lenders' criteria are getting more lax by the day with Nationwide extending the 5.5 times income limit to existing customers, not just first-time buyers with higher incomes, and Halifax and Accord are also increasing the maximum borrowing amount for many borrowers. As the banks allow buyers to borrow more they will increase their bids and house prices will remain high. It's simple economics.
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Graham Cox
Director at Bridging Hub
For us, August was still busy but we've noticed a marked change in buyer sentiment since the new energy cap was announced. Whilst some lenders attempt to mitigate the effects of higher mortgage rates by increasing their maximum loan-to-income ratios, that's mainly for employed applicants. The self-employed are largely restricted to 4.5 times income. Property prices have ballooned to increasingly absurd levels over the past two years and are unsustainable. I believe we'll see a 5-10% fall over the next year. We actually need house prices to not increase at all for about a decade or more, to allow wages to catch up.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
Truss’ proposed tax cuts to stimulate the economy will most likely see interest rates rise further and affect millions of mortgage holders amid concerns of a severe and protracted recession. Although the Bank of England denies speculations from analysts that interest rates will hit the same level seen during the early 80s, Truss’ strategy has serious implications on the mortgage market since it will likely compel Threadneedle Street to hike its benchmark interest rate closer to the 3.25% threshold some time in 2023. This will mean materially higher payments for those not locked into longer fixed-term mortgages, which shield them from interest rate hikes. Truss’ expansionary measure is designed for a short-term GDP and productivity boost, but its impact on property prices remains to be seen.