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Halifax House Price Index - Feb 2023

ended 05. March 2023

Alongside death and taxes, the other thing that's certain in life is the Halifax House Price Index coming out a few days after the Nationwide one. Yesterday we bagged an absolute ton of coverage for our users, from estate agents and mortgage brokers to property developers, so if you want the chance to feature in the local, national and trade media early next week, please answer any or all of the following Qs:

  • The Nationwide February HPI showed annual and monthly growth were both in the red, but many of you are saying the property market was fairly busy last month. What's going on? Are lower prices stimulating demand?
  • Some Newspagers are still predicting falls of 20%-25% over the next year, while others believe the market is close to bottoming out already with asking prices already down 5%-10% on average. So again: what do you think will happen to prices in 2023?
  • What, for you, are the key factors that will influence the trajectory of house prices in 2023, e.g. the health of the jobs market, inflation, Bank Rate? Is there one thing that will be a particular influence?
  • Which sub-sectors of the market are proving active, e.g. FTBs seeking a bargain, portfolio landlords? Or are they waiting for prices to come down further?

9 responses from the Newspage community

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Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
The property market is stagnant at best, rotting at worst. Confidence has been knocked out of the market by a series of unnecessary rate hikes by the central banks and an inept Government piling more pressure on households by increasing taxes and withdrawing support for energy bills. It's no wonder house prices are on the slide, and expect a further 10% decline this Spring before the Bank of England realises what a pickle we are all in and starts to slash rates in late summer. We've got a Budget just over a week away and the best way to stop the rot in the housing market is to stimulate the economy in general. He's uncovered an extra £56bn, so let's see if he uses it wisely. Maybe on building some new homes, as we are at a 75-year low. Or will he keep taxes high and snuff out any possibility of growth?
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Justin Moy
Managing Director at EHF Mortgages
It's hard to gauge the market as some of the property purchases currently taking place are still on the old rates from last summer. There has been an upturn in properties available for sale in our local area, so activity is better due to increased supply. Many are those properties being offloaded by 'accidental landlords', typically 2-3 bedroom properties evident by the 'no-onward chain' moniker. The prohibitive cost of renting locally is still making property ownership attractive, and first-time buyers will be attracted to these properties hitting the local market. Landlords have made their money over the past 7-8 years, and if sold at the right prices, they will in turn feed the local first-time buyer market. Very interesting sub-market, almost an orchestrated plan if you didn't know better.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Buyers in the UK property market are like thrill-seekers on a rollercoaster, with stomach-churning doubts creeping in as they approach the end of the ride. No one wants to be left holding the bag if the market takes a nosedive between application and completion. And let's be real, buyers involved in chains are like a nerve-wracking game of dominoes. Will the deal hold up or come crashing down? It's a real-life drama that would make Hitchcock proud.
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Editor
Rohit Kohli
Director at The Mortgage Stop
It's not surprising that prices are falling but people need to remember that conversations in the media last year were that people were overpaying for properties with offers well above the asking price being the "norm". So a drop compared to this was always going to happen. When you add in the high cost of living, interest rate hikes and the level of uncertainty in the economy, confidence in buyers was always bound to fall. Buy-to-let is the worst hit. Confidence has been knocked out of landlords and they are selling up. However we are at a pivotal moment, there are positives, especially with government borrowing being so much lower than expected. On March 15th, the Chancellor has an opportunity to take action to rebuild consumer confidence, invest wisely and lift expectations. Whether he is capable enough to do it is another question.
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Luke Thompson
Director at PAB Wealth Management
The recent asking price reductions and house price drops that have been reported have mainly been fuelled by weaker demand in the market. There are very few instances currently of customers getting involved in bidding wars. With this in mind, the power has switched and the buyer is now much more in control of the process than they have been in the previous 18 months. I think the biggest influence on house prices during 2023 will be inflation and the base rate. If inflation begins to fall, the base rate stabilises and potentially begins to drop towards the end of the year. Borrowing will then become more affordable, which will help to drive house prices upwards again.
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Graham Cox
Director at Bridging Hub
House prices are directly correlated to mortgage rates. There's no getting around that fundamental fact and I don't believe the Bank of England will return to near-zero base rates anytime soon. The new norm for mortgage rates is probably around 4%, so I expect house prices to continue their steady decline for the next 12-18 months, possibly falling as much as 20%-25%, before levelling off.
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Jonathan Burridge
Founding Adviser at We Are Money
With several million mortgages ending their special rate this year and facing considerable rises in costs, much will depend upon interest rates and the cost of living. If we see a significant rise in financial distress for mortgage borrowers, that could see the market stall as people won't be buying. There is unlikely to be a flood of possessed properties hitting the market, certainly not this year and there remains the stark fact that we have 880 properties per 1,000 households. These factors will prevent any long-term house price depression. We may well see some property value fall, but it will not last long. Of course, we must remember that all forecasts are either wrong or lucky.
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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
The Scottish market is showing surprising signs of resilience in 2023 so far.

Prices appear stable as the battle between supply and demand continues and the rabid desperation of agents for new stock shows that an imbalance remains.

Demand from residential buyers remains robust but - with increased uncertainty on several fronts - BTL investors are mostly dormant.

Home Report valuations are finally now appearing to more accurately reflect current market conditions, with sellers showing signs of more willingness to accept offers around this.

Subsequently, first-time buyer activity is beginning to sparkle again now that greater confidence exists that securing their first home without having to sell a kidney or empty their parent's savings accounts to raise excessive deposit funds may now be a real possibility!
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Austyn Johnson
Founder at Mortgages For Actors
Residential mortgage enquiries went through the roof for us in February. We have had a huge amount of enquiries overall, with buy-to-let the only subdued area of the market. Usually, in property, demand for buy-to-let will be much more common due to each client wanting more than one, but it's good to see that our clients are looking to buy a home. Hopefully, the solicitors will not let them down so they can all complete. Nothing better than a picture of a couple dangling keys in a doorway. Where demand has been weak has been for new builds though. Maybe they have finally caught up with demand and will need to lower the prices again.