Copy article

Nationwide House Price Index: "Politics took the steam out of the purchase market in June"

ended 30. June 2024

This morning, the Nationwide published its June House Price Index. Newspage asked a selection of property and mortgage experts for their views on how the market performed last month, and what they are expecting for the second half of the year. Their views can be found below.

6 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Bob SinghVerified
Founder at Chess Mortgages
In our experience, politics took the steam out of the purchase market in June. Since the snap General Election announcement in the latter stages of May, prospective buyers have adopted a wait-and-see approach and have deferred any moving plans until the election outcome is clear. Remortgages have still been busy, along with product switches, as people seek to lock into the lowest rates possible. With US inflation data finally looking better and UK swap rates edging down, many lenders started shaving their rates towards the end of June. This began to boost activity as did Lloyds Banking Group chief executive, Charlie Nunn, stating that rates were not expected to fall to the low levels witnessed post-Covid. This could mean more buyers stop waiting for an ultra-low base rate bus that will never come. The second half of the year should be busier once the election uncertainty evaporates and, as is looking increasingly likely, we get that crucial first rate cut in August or September.
Star Quote
Copy

Editor
Emma JonesVerified
Managing Director at Whenthebanksaysno.co.uk
The General Election announcement definitely triggered a drop-off in demand, at least in the first half of June. It's likely people were watching the debates rather than scrolling through Rightmove. But when a number of lenders started to lower rates towards the end of June, the market got its mojo back and demand picked up sharply. News that mortgage rates were getting cheaper put property front of mind and not politics. With an interest rate cut surely now not far off, we're expecting the second half of the year to be significantly more active than the first. The symbolism of that first rate cut will reverberate across the market and really boost sentiment.
Star Quote
Copy

Editor
Andrew MontlakeVerified
Managing Director at Coreco
Demand for property tailed off in June as a combination of sun, football, politics and the lack of an interest rate cut saw many potential buyers lose focus. With sellers also adopting a wait-and-see approach ahead of the General Election, June may well mark the calm before the storm. A stable government, focused housing policies and the potential for an interest rate cut at the next meeting could see a huge amount of pent-up demand unleashed. If we do get a cut when the Monetary Policy Committee next meets, the usual seasonal lull could turn into a mêlée. With a shortage of housing as it is, it won’t take much for prices to head north once more, leaving buyers yet again shopping in a sellers' market.
Copy

Editor
Craig FishVerified
Director at Lodestone Mortgages
In June, we saw an uptick in enquiries but a drop in applications, as more people have been saying that they believe rates will be dropping in August after the General Election. The demand is there but for now people are keeping their powder dry, sensing cheaper money by the end of the summer. Based on the rate cuts announced by a number of lenders last week, they may be proved right. We’ve also noticed an increase in enquiries from landlords looking to grow their portfolios. It’s almost guaranteed that we will see the base rate drop in August and so the second half of the year will see increased application levels and, I imagine, property prices beging to steadily increase.
Copy

Editor
Dariusz KarpowiczVerified
Director at Albion Financial Advice
Demand in June was similar to last year, with a slight increase. Buy-to-let mortgages are less active, likely due to higher rates, more regulations, and Labour's promises of even more regulation if they win, keeping landlords cautious. I'm not too optimistic about the second half of the year, especially with a new government on the horizon that hasn't demonstrated any positive ideas for the housing market, landlords or investors. I’m also not expecting a rate cut in August, as the market might see some turmoil post-election. Last week saw many lenders making rate cuts, which has boosted sentiment and demand slightly. However, overall uncertainty is keeping many potential buyers and investors cautious. The election run-up hasn’t significantly impacted demand yet, but the results could shake things up. Let’s see if the second half of the year brings more stability and some much-needed positive changes to the housing market.
Copy

Editor
Simon BridglandVerified
Director at Charwin Private Clients
In June, the housing market showed its resilience in spite of the strain on borrowers' affordability. Property prices held up well in our experience, although surveyors seem to be doing their damnedest to down value anything and everything, particularly when it comes to remortgages. Borrowers could be forgiven for overstating the value of their homes, as any search on property websites still indicate asking prices are holding well. Many mortgage brokers feel that sentiment within the public is good, as both enquiry and application numbers saw a significant uptick last month. Given the inevitable election result, this should continue the positive outlook well into summer, even with a base rate cut potentially months away. The missed opportunity for radical housing reform from any party in the lead up to the impending election means some sectors such as buy-to-let and first-time buyers are still stuck in limbo, not quite knowing what to do, or when.