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Nationwide March House Price Index: "There's no doubt that the trajectory of interest rates will be key"

ended 02. April 2024

This morning, the Nationwide published its March (and Q1 regional) House Price Index. It showed UK house prices fell by 0.2% in March, after taking account of seasonal effects, and that the annual rate of house price growth edged higher to 1.6% in March, from 1.2% in February. Newspage asked experts for their views, below.

11 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
As the Nationwide points out, all eyes are on interest rates and above all Threadneedle Street. But there's no doubt that the first quarter of 2024 was far more active than the final quarter of 2023. Last year was challenging, and defined by muted demand, but sentiment is improving by the day. On the mortgage front, there was March madness with multiple lenders making opposing rate moves on the same day so it's no surprise the market fell slightly last month. Even if the Bank of England keeps the base rate at its current level until mid-year, when that first cut comes it could turbocharge activity levels.
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Harps Garcha
Director at Brooklyns Financial
In the first quarter of 2024, the mortgage market saw a notable increase in activity compared to the end of 2023. Lenders have played a crucial role, offering rate reductions and introducing innovative products, making it an opportune time for buyers. It's still a buyer’s market, despite a rise in asking prices, which is likely due to a shortage of housing stock. The Bank of England is currently in the spotlight, as the anticipated rate reduction is poised to ignite heightened activity across the property industry.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Yes, activity levels remain subdued by historic standards, but sentiment is starting to improve. A base rate reduction by the Monetary Policy Committee would be welcomed and could encourage many more buyers to make their move. As we enter the second quarter, I feel more first-time buyers will be confident to move. This is being helped by lenders like the Yorkshire injecting confidence into that corner of the market with their £5000 deposit product. A lot of would-be buyers were hanging on for the Budget to give them a helping hand, which didn’t come.
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Hannah Bashford
Director at Model Financial Solutions
There's no doubt that the trajectory of interest rates will be key to the recovery of the property market moving forward. If the Bank of England cut rates in the next few months, this will definitely help to stimulate the market and we’ll see more people moving again, which will help to boost house prices. We're finding more people are coming to terms with the idea of higher interest rates so are moving on with their lives and this means the market hasn’t stalled as it was expected to. We’ve seen a couple of remortgage properties subject to down valuations, but in an uncertain market we often see surveyors valuing properties cautiously. House prices in both Surrey and the South Hams seem to have held their own.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Though the Nationwide index shows a slight dip in March, a month of data does not a market make and the annual growth figure continues to improve. Activity among buyers has been booming in the first few months of 2024 compared to the last quarter of 2023. A combination of mortgage product innovation, reduced deposit requirements from some lenders, pent-up demand and an urgent sense of catching the wave before property prices run away again, has mobilised buyers in numbers.
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Ken James
Director at Contractor Mortgage Services
Growth in adversity is how 2024 seems to be going, January was surprisingly strong on the activity front due to the mortgage rate war, February was poor whilst March improved and showed us that the market is ready to pick up and run. A massive shot in the arm would be a base rate cut in May. This would give the economy and mortgage market some added adrenaline to carry us forward into a possible hot summer.
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Bob Singh
Founder at Chess Mortgages
Business was brisk in the residential property market during the first quarter and this trend is likely to continue into the rest of the year. The confidence in the markets can be evidenced by lower swap rates. There have been a number of 99% and 100% loan-to-value products in various guises along with some easing of criteria in the the buy-to-let market. There are still some choppy waters ahead so caution should be exercised.
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Dariusz Karpowicz
Director at Albion Financial Advice
The property market's been a bit quiet lately, especially if we're talking about March and Q1 activity compared to last year. It's been somewhat cooler, reflecting a bit of hesitance perhaps. As for the much-anticipated Bank of England rate cut, I wouldn't hold my breath for a market shake-up. They seem likely to play it safe, so any impact might be more of a gentle nudge rather than a big push. Despite Rightmove showing an uptick in asking prices, the scales still tip towards a buyers' market. More properties up for grabs mean buyers have the upper hand, at least for a bit longer. During the rest of 2024, barring any major surprises, we're probably not going to see dramatic shifts in house prices. I think slow and steady is more likely than any wild swings. Locally, in Doncaster and south Yorkshire, things are consistent with the broader trend: plenty of options and some wiggle room for negotiation.
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Rohit Kohli
Director at The Mortgage Stop
Despite the slight dip in prices in March, demand in the first quarter was strong, as buyers who put off their plans in 2023 realised that prices were not going to collapse in the way that some predicted and acted on that. We're seeing confidence grow each day, and with new products such as ultra-long-term fixed rates, this seems to be putting some borrowers' minds at ease. We're not quite at the point where sellers are setting the price but if the Bank of England cuts rates in the next couple of months, this could trigger many more would-be buyers back into estate agents. Prices in Hampshire, especially in the south, have remained strong in the main and we expect this to continue into the rest of 2024.
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Andrew Montlake
Managing Director at Coreco
The market in the first quarter of the year has been bustling compared to the tumbleweed of the previous quarter. After the Easter break, I suspect we will see a further rise in activity as pent-up demand from buyers, further buoyed by the easing of mortgage rates and criteria, prevent property prices from falling further. Add to this a handful of lenders who have at least made an attempt at innovative new products, and expectation of another Government scheme, and the property market will continue to confound those consistently, and wrongly, predicting wholesale doom. As sentiment improves, this in itself will see more buyers hit the market as they will not want to miss the boat before house prices, especially in high demand areas, begin to stabilise and rise once more, albeit at a slower pace than in previous years.
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Akhil Mair
Director at Our Mortgage Broker
Residential property market activity surged in March and the first quarter as a whole, surpassing activity in the final three months of last year. But there are still a number of uncertainties ahead as the economy is fragile and household budgets stretched. Amid the economic turbulence, the first Bank of England base rate cut has the potential to really ignite the market. For now, it remains a buyers' market, albeit with subtle shifts in power dynamics as mortgages rates once again start to drop. There's both optimism and caution at present, creating an intriguing landscape of opportunity and risk.