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Nationwide house prices July 22

ended 01. August 2022

At 07:00 on Tuesday, the Nationwide July house price index is being published. Please answer any or all of the Qs below. No more than 150 words max please.

  • How did the property market fare in July? Bit quieter as holidays began, or still busy as people seek to move ahead of further rate rises?
  • What are you expecting to happen to house prices during the second half of the year, and why? Are further rate rises and spiralling inflation going to hit demand?
  • Could a recession, which many believe is likely, see house prices drop as opposed to slow or stabilise? Or will the lack of supply prevent a fall?
  • If jobs start to be lost at scale, what happens to the property market (and lender appetites) then?
  • Any sectors of the market particularly busy, e.g. landlords, overseas investors? Any other interesting trends you're seeing?
  • How's activity in your neck of the woods?

6 responses from the Newspage community

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Rob Peters
Principal at Simple Fast Mortgage
With inflation at a four-decade high and a cost of living crisis in full flow, the chances of a recession in the UK look quite high. But this does not mean the property market will crash. In fact, it is fairly unlikely. We fully expect house price growth to stabilise. The rampaging house price growth of recent years just cannot be sustained. Yet at the same time there remains a high demand for homes. Buyers in a weaker financial position will be replaced by those in a stronger position, and the show will go on. The Great Recession of 2008-2009 was linked to a US sub-prime mortgage crisis and poor regulation regarding the stability of the banking sector. This just isn’t the case today.
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James Miles
Director - Mortgage Adviser at The Mortgage Quarter
In the South West, we're seeing continued price increases throughout all type of properties. Supply is low so that first-time buyers are fighting over new homes but often being outmuscled by others moving to the area, often from the capital as the homeworking trend continues. As always, prices are increasing because investors see the excellent potential in capital growth and rising rental prices driven by the standard of living and holiday-let sector. I would expect to see house prices stabilise but not reduce due to the lack of supply. We're still seeing applications perform strongly despite the holiday season now amongst us. The biggest challenge is the gulf in the difference between buyers' incomes to property values and the multiples of income lenders use not being sufficient. There's also a huge unknown as to what living costs will be on such things as energy bills and rising interest rates.
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Graham Cox
Director at Bridging Hub
The Bank of England base rate could be around 3% by the year-end. Mortgage rates, if that happens, will be around 5%. This will be catastrophic for anyone coming off a fixed rate and needing to remortgage. For years, ultra-low rates have masked the economic reality of an over-indebted nation and a Ponzi housing market. I believe prices are about to fall, and quickly, possibly by 5%-10% over the next 12 months.
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Jamie Lennox
Director at Dimora Mortgages
Although July has continued to see strong demand for mortgages, I feel we lag behind what's really going on in the industry. When speaking to local agents, they are seeing fewer listings come to the market, which could be due to the cost of living crisis or the fact we are now heading into the holiday season. A recession doesn't automatically mean house prices collapse. However, a lot will hang on mortgage lenders still being willing to lend in potentially challenging economic conditions. If they stay as they are I feel the market will stabilise. If lenders become more restrictive we could see prices drop. Ultimately it's a flip of a coin on what can happen from here.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
A well known fact to those in the industry is that when the weather is good, no one is bothered about buying houses. That being said, it was another very, very busy month and I would expect to see yet another rise in house prices. Some sectors of society love to talk up the prospect of a crash but the reality is still that demand is fierce, transactions still way up on pre-pandemic levels and the alternative to buying is rentals where there is even more pronounced shortage of stock and rent rises are dwarfing what's happening with purchase prices.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
If the predicted recession brings a large number of job losses alongside the rising cost of living, house prices could potentially fall due to people being unable to buy. This of course will also lead to people not wanting to sell as they would make a loss, so there is every possibility that this scenario could potentially prevent a drastic fall in prices.