Industry reaction: UK House prices rise for the first time in a year

UK house prices rose 0.7% month on month in February driven by lower mortgage rates, says Nationwide.

Industry reaction: UK House prices rise for the first time in a year
House prices are just 3% below the all-time highs recorded in the summer of 2022 after they rose for first time in over a year during February, data from Nationwide has revealed.

UK house prices rose 0.7% month on month during February taking the annual rate of house price growth to 1.2% from -0.2% the previous month.

UPTICK

Robert Gardner, Nationwide‘s Chief Economist, says: “The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.

Robert Gardner, Nationwide

“Indeed, industry data sources point to a noticeable increase in mortgage applications at the start of the year, while surveyors also reported a rise in new buyer enquiries.”

But he warns: “Near-term prospects remain highly uncertain, in part due to ongoing uncertainty about the future path of interest rates. After falling sharply in late December, swap rates, which underpin fixed rate mortgage pricing, have drifted back up.

“Borrowing costs remain well below the highs recorded last summer but, if the recent upward trend is sustained, it threatens to restrain the pace of any housing market recovery.”

WELCOMED

Nevertheless agents welcomed the news.

Iain McKenzie, The Guild of Property ProfessionalsIain McKenzie, The Guild of Property Professionals

Iain McKenzie, Chief Executive of The Guild of Property Professionals, says: “We’re expecting to see the house market back on the march this year, and a return to positive annual price growth is another good sign.

“Growth will be welcomed by sellers that have been cautious to stick out the ‘for sale’ signs since prices began to ease.”

And he adds: “This resurgence in activity is a promising sign that should bring more buyers out of hiding and encourage growth in the sector. We are already seeing this play out, with HMRC also recording an uptick in sales at the start of the year.”

CONFIDENT

Matt Thompson, Chestertons’ Head of Sales, says: “Buyers have become increasingly confident since the end of last year when interest rates were held at 5.25% and mortgage rates started to come down.

Matt Thompson, ChestertonsMatt Thompson, Chestertons

“This sentiment carried through to January and February 2024. Meanwhile, sellers have also been feeling more optimistic about attracting the right buyer for their home which has led to a slight increase in the number of properties being put up for sale.”

Tom Bill, Head of UK residential research at Knight Frank, adds: “Buyers feel confident that the only way for the base rate is down, which has seen demand and house prices pick up in recent months.

Tom Bill, Knight FrankTom Bill, Knight Frank

“The upwards pressure on mortgage rates in recent weeks shows sellers the importance of getting the asking price right.

“Banks are keen to lend and should eventually lower rates this year as inflation comes under control, which we believe will sustain positive annual growth in 2024 and see UK house prices increase by 3%.”

UPWARDS

Amy Reynolds, Head of Sales at Richmond-based Antony Roberts, adds: “In line with the bustling activity we are seeing on the ground, Nationwide’s latest house price index underscores the upwards trajectory in property prices.

“It is an opportune time for buyers and sellers to seize the moment. We’ve seen an uptick in applicants with sizeable budgets seeking to upsize to their forever homes, as well as first-time buyers and second steppers wanting flats with outside space.”

Jeremy Leaf

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “In our offices, more valuations, listings and viewings combined with fewer fall-throughs than this time last year are feeding through to agreed sales, mortgage approvals and exchanges.”

But he cautions: “While Nationwide reports another rise in prices, the market does remain price sensitive. Only competitively-priced properties are attracting attention. Sellers must price realistically or offers won’t be forthcoming and market improvement may not be sustained.”

emersonNathan Emerson, Propertymark

And Nathan Emerson, Chief Executive of Propertymark, says: “The housing market always reacts to changing economic trends, so it is encouraging to witness many homeowners seeing both a month on month and year on year uplift on the price of their homes.

“This should help provide people with the confidence to potentially sell where they may have been holding back. The UK Government need to build on this as a chance to prove that the economy is heading in the right direction.”

MORTGAGE BROKERS

Mortgage brokers welcomed the news too.

Mark Harris imageMark Harris, SPF Private Clients

Mark Harris, Chief Executive of SPF Private Clients, says: “With a growing feeling that base rate has peaked, and the next move in rates will be downwards, this is supporting buyer and seller confidence and boosting activity in the market.

“Mortgage rates are more attractively-priced than they were several months ago, even if the ‘best buy’ deals have been pulled recently.

“There will be ups and downs in mortgage pricing in the weeks and months ahead but there is a growing feeling of optimism that the situation is improving, which will be welcomed by hard-pressed borrowers.”

Riz Malik, R3 MortgagesRiz Malik, R3 Mortgages

And Riz Malik, Founder & Director at Southend-on-Sea-based R3 Mortgages, told Newspage:

“The UK housing market is poised in the starting blocks waiting for the starter pistol.

“This could either be an announcement in the upcoming Budget or the first cut in the base rate.

“That first cut in the base rate, when it comes, will see the property market spring out of the blocks.”

 



Get in touch with us

First Name*
Last Name*
Your Email Address*
Mobile Phone*
Are you looking to*
Please enter message here*
Please confirm that it is okay for us to contact you about this information as well as products and services. (You will always be given the right to unsubscribe at any point in the future)*

Register for Property Alerts

Ever missed out on the perfect property just because you heard about it too late, or the Estate Agent never told you about it as it was slightly outside of your criteria? Never miss out again by using our “Heads Up Property Alerts”.

Meet Our Founding Director James

Meet Our Founding Director James

James Allen is the founding director and owner of Allen Residential. James started in estate agency back in 1997 and after working for a couple of strong independent estate agencies he established Allen Residential in 2005 Keen to invest back into his team, James is dedicated to ensuring that each team member at Allen Residential is a key part of the business, emphasizing the importance of their contributions. His leadership style highlights the significance of a cohesive and dedicated team, fostering a supportive and growth-oriented environment. The business has flourished in recent years, thanks to the staff's commitment to excellence and the implementation of effective systems. James' appreciation for his team’s hard work and dedication is evident, making Allen Residential a thriving and dynamic company.

Why choose Allen Residential?

Why choose Allen Residential?

With an owner who has 35 number of years experience in the industry and 20 years of company history, we bring knowledge, reliability, and expertise to every property transaction.

Our approach is casual and professional, aiming to form personal connections with the people we work with instead of treating them as a number.

About Us