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Nationwide May HPI: "We're not sure buyers are as resilient to affordability as the Nationwide suggests"

ended 31. May 2024

UK house prices rose 0.4% in May, while the annual growth rate picked up to 1.3%, from 0.6% in April, according to the Nationwide May House Price Index published this morning. Newspage asked experts for their thoughts, which can be found below.

11 responses from the Newspage community

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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
We're not sure buyers are as resilient to affordability as the Nationwide suggests. There has been a surge in property listings, accompanied by an increase in viewings. However, many of these viewings are not yet translating into sales. The market is in danger of oversupply, shifting the balance in favour of buyers as it will present them with more options. Despite this advantage, buyers continue to face the challenge of high mortgage borrowing costs, which remains a significant consideration for many when deciding to move. The property market is on a knife edge.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Enquiries from aspiring homebuyers and movers increased again in May, and while many have adapted to the new mortgage rate environment, a lot are waiting for house prices to edge down further before they proceed. But as this data suggests, prices are proving resilient and are not guaranteed to come down further. Equally, the eyes of buyers and movers around the country are focused on the Bank of England, as that first cut to the base rate could see mortgage rates, and affordability, improve significantly. Of course, falling mortgage rates could see prices start to rise again so it's difficult to time the market perfectly. More often than not, time in the property market beats trying to time it.
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Riz Malik
Independent Financial Adviser at R3 Wealth
There are two things that will drive the market in the second half of the year and they are affordability and sentiment. Lenders are still showing signs that they want to lend and a changing political environment might motivate people to take action. I’m positive activity will start to ramp up over the summer months. There is a significant amount of pent-up demand.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Housing transactions have been stagnant for a long while now, and that trend continued in May. This pattern is likely to take a turn for the worse as the general election adds a degree of uncertainty into the mix. If Labour win, as expected, sellers may think that prices will ascend towards the end of the year and are holding off listing until then, drying up an already quiet market.
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Ben Perks
Managing Director at Orchard Financial Advisers
Consumer confidence is definitely returning. Borrowers feel that better times are around the corner and that mortgage rates at the end of the year will have improved significantly. However, while we are seeing more enquiries, buyers are still a little stand-offish. Getting within 0.3% of the magical 2% inflation rate didn't send mortgage rates tumbling as many hoped and there is still a lack of confidence in the market. The only thing standing in the way of better rates and a more active property market is the Bank of England. When that first rate cut comes, it could blow the doors off.
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Dariusz Karpowicz
Director at Albion Financial Advice
May has seen a steady rise in the number of enquiries, but affordability and mortgage rates remain a significant issue. Housing stock levels are at a record high, and it seems it takes longer to sell your property. The General Election announcement hasn’t had much impact yet, as we haven’t heard any promises that could influence the housing market. The main trend we’re observing is that buyers are cautious, heavily weighing their options due to current economic conditions and high mortgage rates. It’s a wait-and-see period, with many hoping for favorable policies to be announced during the election campaign.
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Justin Moy
Managing Director at EHF Mortgages
Many people continue to approach us to assess their mortgage budgets, so demand is definitely there. The issue is price. What many prospective buyers are complaining about is vendors holding out for premium prices, even when properties have been on the market since the start of the year and have not sold. Stock levels are increasing but many properties are languishing on the market due to price and the refusal of sellers to budge. Buyers, understsandably, just aren't playing ball. The attractiveness of leasehold flats is again wavering, as buyers look to avoid issues with service charge costs. Houses in good condition, properly priced, and in popular areas continue to be sold in days, rather than weeks.
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Craig Fish
Director at Lodestone Mortgages
Despite the ongoing high interest rate environment, enquiries continue to be at a consistent level, in particular from first-time buyers and those looking to move home. Agents are reporting that stock levels are up, which I believe is due to a combination of landlords exiting the market as recently reported by industry data and people downsizing. The general election has had little impact on enquiries at this stage, but it is likely to impact any expected reduction in the base rate, pushing the likelihood of this back to the August meeting.
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Michelle Lawson
Director at Lawson Financial
A slight tick-up in prices reflects the slight increase in activity we have seen, however the market is a long way off truly sparking. Borrowers are still hopeful of interest rates coming down but the ever-cautious Bank of England holds that touch paper. With the election looming, we need some stability and a sense of direction. Now is the time to buy, just before the upturn rather than after it.
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Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
Housing demand over the last couple of months has been relatively subdued. As an experienced property buyer, we are cautiously optimistic about the prospect of interest rates coming down within the next two MPC meetings. While tracking month-on-month HPI variance is sub-optimal for most retail buyers and landlords, it certainly provides a direction of travel for experienced market movers. The sense amongst most developers, property traders and landlords at the moment is that we are at the trough of the difficult phase in the market with inflation and interest rates on their way down by the end of the year. Therefore a house price bounce back to 2022 levels is likely by the end of the year. We believe now is an opportune moment to acquire property and are currently on a buying spree. The only fly in the ointment is a change of tack that a potential Labour government and their politics of jealousy would bring, which could negatively affect the supply side dynamics.
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Graham Cox
Director at Bridging Hub
Mortgage demand in May has been strong, but we're noticing some clients are hesitating to pull the trigger, in anticipation of a summer base rate cut and lower mortgage rates. The Bank of England MPC are meeting on June 20th, but a cut is unlikely in the middle of a General Election Campaign. August 1st, when they next reconvene, appears more likely.