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Nationwide November 23 House Price Index - reaction

ended 01. December 2023

This morning, the Nationwide published its November house price index. It showed UK house prices rose 0.2% month on month in November and that house prices are down 2% compared with a year ago. Newspage sought the views of 15 experts, below.

14 responses from the Newspage community

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Ken James
Director at Contractor Mortgage Services
The property market is moving again. We saw a tangible increase in the level of enquiries during November. Ongoing reductions in mortgage rates, coupled with the positive news on inflation and the base rate being left on hold, have had a positive effect on sentiment and demand. The exception is in the buy-to-let market, which has been like a graveyard all year. There's been the odd bit of activity but overall, given the high stress rate calculations and rents not being sufficient to get landlords the traditional 75% loan-to-value mortgages, a lot of investors are backing away from the deals. To make them work they would have to put more skin in the game and the higher rates out there now mean many have balked at proceeding. Yes, rates have been coming down and some stress rate calculations have eased but in its place we have seen the return of high fees that are attached to the lower rates.
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Charles Breen
Founder at C B
The market has definitely reached the bottom now and it’s the ideal time to either buy or start getting ready to buy. Once the base rate begins to decrease, as it may well do by the summer of next year to stimulate the economy, it will cause a feeding frenzy in the housing market and prices will rise again. The window of opportunity will be quickly slammed shut. Oscar Wilde said “a pessimist is somebody who complains about the noise when opportunity knocks” and, in my opinion, opportunity is knocking very loudly right now for first-time buyers. Now is their chance to get on the property ladder at a discount. To put a rocket under the market and for it to really take off, the Bank of England needs to grow a backbone and reduce rates. People want to buy but 18 months of rate increases and a tsunami of bad news have sucked a lot of confidence out of the market.
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James Bull
Mortgage Broker at JB Mortgages
House prices will always vary from region to region but they seem to be holding up better than expected. Many potential buyers who have waited in the hope of price reductions look set to be disappointed. Mortgage rates are still high but they have been dropping on a daily basis, and the cuts are getting ever more pronounced as lenders battle for market share. Hopefully, better mortgage rates will stimulate the flagging housing market as we head into 2024. The impact of mortgage rates on the property market is significant.
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Steven Hargreaves
Mortgage and Protection Adviser at The Mortgage Co
The ongoing reduction in mortgage rates is definitely starting to make a difference in terms of demand, although during December activity levels will likely remain muted for the usual seasonal reasons. A lot more first-time buyers are returning to the market and there is plenty of pent-up demand out there. The challenge remains a lack of stock and some vendors still being overly optimistic, if not outright stubborn, on asking prices. However, there is ordinarily an influx of new properties being put up for sale in January and this, along with mortgage rates falling steadily, means the first quarter of next year should be a strong one. There is still much further to go on mortgage rates but things are heading in the right direction. For landlords to return, we need more realistic interest rates without the very high product rates and less punitive stress testing.
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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
Buyer sentiment has unmistakably shifted recently, with more and more aspiring buyers officially giving up on hopes of a significant house price crash. First-time buyers, encouraged by the more favourable trend in mortgage rates, are actively planning their early 2024 purchases. One possible dampener is the looming General Election, which may see slower overall market activity and further exacerbate the lack of stock on the market. Looking too far ahead is a risky business but a combination of lower interest rates and pent-up demand seems likely to kick off the 2024 property market with a first-time buyer-fuelled bang. Whether the sparks are hot enough to ignite a broader market surge remains to be seen.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
The property market in November was sluggish and inactive and looks set to stay that way in December. 2024, by contrast, could see all the pent-up demand from 2023 burst through, especially in the first-time buyer market. With mortgage pricing on a downward trajectory and property prices starting to look palatable, the window of opportunity is opening. Into 2024, and with the cessation of Help to Buy, housebuilders are planning ways to reignite interest and sales in their newly built homes. Expect something significant from them very early in the year to get the new build market moving at a serious pace again. 2024 will be a year of innovation, from home builders to lenders. I expect a robust approach from all to get the market alive and kicking again.
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Craig Fish
Director at Lodestone Mortgages
House prices probably aren't at the bottom quite yet. Despite the slight uptick in demand being driven by slowly reducing mortgage rates, and people just wanting to get on the property ladder and take advantage of some of the bargains that can be had right now, there's likely a little further to go. Overall, I feel positive about 2024, as mortgage rates are expected to continue on their downward trajectory and lenders will not want a repeat of this year with reduced business levels. Lenders have had a torrid 2023 and will be looking to start 2024 on the front foot. The real data is going to be seen in the Land Registry numbers but sadly there is a lag of several months on that data so the full extent of the drops now won't be seen until next year.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Over the past month or two, we've seen a significant increase in enquiries but agreed sales are still lower than usual. A lot more people are bracing to buy but we're finding most are waiting until early 2024 to make their move. The Government definitely missed a chance in the Autumn Statement to kickstart the property market so we now need either further mortgage rate reductions or house price falls to ignite the market. Thankfully the former are happening on an almost daily basis.
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Elliott Culley
Director at Switch Mortgage Finance
We have seen a definite uptick in demand from people looking to assess their mortgage options ahead of buying, but many are finding there simply aren't enough properties to view. With mortgage payments now much more expensive, people expect more quality from a property. With rates reducing at some point there will be a tipping point and more properties will come to the market. It's very difficult to judge when house prices have hit rock bottom, and there are so many variables to consider that can impact prices. If the economic forecast remains bleak and inflation continues to edge down, the Bank of England could cut rates sooner rather than later. For years, the Government has added stimulus to the market, such as Help to Buy and stamp duty reductions, but in the latest Autumn Statement there was nothing. The tax burden is increasing and people in the UK will have less money in their pocket. There is a chance that this could lead to a further decline in house prices.
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Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
Activity levels continue to be subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales. Borrowing costs and hostility towards landlords are the primary factors causing this decline. Given the downward spiral, homeowners naturally become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market. The Treasury must advocate policies that promote a symbiotic relationship between landlords and tenants, recognising the intertwined roles that landlords and tenants share. Tenant advocacy is essential for a robust private rented sector and the rise of lobby groups that adopt an adversarial stance toward landlords isn't helpful at all. Vilifying landlords as the enemy, these groups risk oversimplifying a complex issue. The challenges in the housing market are multifaceted and are influenced by economic factors, policy decisions, and societal changes.
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Joe Garner
Founder & Managing Director at Joe Garner Consulting
The fate of the property market in 2024 will depend on a multiplicity of factors, from economic indicators and policy decisions to external shocks. Revitalising the property market may be achieved through targeted policy interventions, improved economic conditions, or innovations in housing finance. Conversely, risks capable of delivering substantial blows could arise from economic downturns, unforeseen shocks, or shifts in market sentiment. While supply-side limitations are crucial, it's essential to recognise the significant role of demand dynamics. Housing markets operate in a delicate balance between supply and demand, requiring a thorough analysis considering both aspects and any concurrent increases in demand influencing growth.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
What a difference 12 months make. In 2022, the market ground to an early Christmas halt from around October. The property market, whilst not at COVID levels of briskness, appears to be holding steady late into the year. This bodes well for what will be a good 2024 for transaction volumes and house prices.
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Graham Cox
Director at Bridging Hub
If the economy avoids recession, I think it's likely that house prices will only drift slowly lower next year, perhaps by around 5%. If not, 10% is more likely in my opinion. Either way, mortgage rates in the 4.5%-5.5% range seem likely for the foreseeable, so it will remain a buyer's market. The key is not to overpay if you're buying or overprice if you're selling. Of course, all the above assumes the Government doesn't bribe the unwary with a stamp duty holiday, help to buy on steroids or some other ridiculous gimmick.
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Jamie Thompson
Mortgage Broker at Jamie Thompson Mortgages
We’re far to obsessed with house prices in this country. If you buy a house in your twenties or thirties you’ll probably own property for fifty or sixty years. Prices will go up. Prices will go down. Accept it. Get on with it.