Urgent media opportunity - Nationwide house price index

While December saw many buyers put the brakes on, in January they put their skates on. We have had an influx of enquiries from people looking to remortgage or move this year. I think the Bank of England will increase the base rate this week but the increase has already been priced into the fixed rates being offered. This means current activity levels should continue. However, the main challenge we are facing is buyer confusion around the link between the base rate and lenders pricing their products. We have been educating our clients more on swap rates and how the rates are actually looking, as opposed to the doom and gloom of the headlines. We are simply going through a slight correction to pre-pandemic prices and I will be surprised if average values drop by more than 10%.

January was a tale of two halves. The first half saw tumbleweed on the streets while the second half was particularly energetic. Once schools had returned, parents were able to breathe a sigh of relief and activity levels immediately picked up. The high number of browsers reported by the portals in the first half of January did not materialise into viewings until later in the month. An interest rate hike this week will cause people to pause for longer but as long as we continue to see the number of mortgage products increase and fixed rates decrease, we'll see the return of buyers. Locally, I don't expect prices to fall in 2023. In fact, a small rise is likely and this will be the same in many areas of the South East. Nationally, of course, the picture may be different. 2023 could be a patchwork property market in terms of values.

January has been busy as fixed-rate mortgages have started to come down considerably compared to October 2022. This is having a positive impact on house prices as they aren't dropping as much as experts and the media estimated. Even back in Q4 2022 I felt house prices would only drop around 5%-8%, which would be a market correction rather than a housing market crash, and this seems to be the case. People still want to sell and more importantly, people still want to buy. When the base rate increases again, it won't have much impact on the mortgage market, unless you're on a standard variable rate or a tracker product. The fixed rate market has become a lot more competitive and we are seeing rate reductions constantly, so more people are interested in buying again, despite the numerous economic headwinds.

We have seen a lot of remortgage enquiries and a small amount of enquiries regarding buying or moving home. We often see a lot of people looking at what they can afford at this time of year and this correlates with an increase in properties on the market. Although we do have some enquiries about affordability and clients looking to move, it has not been the usual January rush. The Bank of England increase that is forecast this week will have little impact on fixed rates as these are already priced to include the expected base rate increases, but people who have taken out tracker rates will see a difference and discounted rates will likely be tweaked. I don't think there will be a property crash, but more of a correction in prices from the highs we have seen over the past couple of years.

After a quiet start to 2023, mortgage enquiries have risen dramatically from mid-January to something approaching pre-mini-Budget levels. Flat-lining property prices have enticed buyers into the market, and the outlook for the property market looks better than many expected.

The level of activity and enquiries has been surprisingly active in January, from first-time buyers to first-time landlords and developers alike. We have seen an uptick in enquiries from first-time buyers, especially those looking to utilise recent salary increases or receipts of their annual bonuses towards mortgage affordability, to allow them to make a move in the market, which they may have delayed in the fourth quarter of 2022. Landlords and developers are still active and looking for opportunities in the marketplace, as stress tests reduce and loan-to-values increase. A base rate increase is likely but we are hoping that some of this may be priced in, with swap rates maintaining their level and lenders needing to remain competitive to position themselves in the market. Hopefully, this will see rates remain consistent.

Despite initial concerns, January has been extremely buoyant with plenty of people looking to buy or move. The right property at the right price will continue to sell even with the economy where it is. However, agents who have overvalued properties to win listings are going to find they are stuck with stock that won't move. Any further base rate increases will have minimal impact on customers looking to buy given that the pricing of fixed-rate mortgages continues to fall.