Following the April national HPI published this morning:
Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco: “House price growth is still in the double digits, but so are the number of factors that are starting to weigh on the property market. The slowdown in growth seen in April is expected to continue through 2022.
“We are now seeing real signs of a storm blowing. Inflation and the cost of living crisis, as well as the continuing war in Ukraine, are making buyers more cautious and creating nervousness among lenders who could see their fabric cut accordingly in the second half of this year.
“That said, although interest rates are rising, they are still historically low and this will maintain some demand.
“The space race also continues, although at a slower pace than a year ago. The rate of price growth should continue to decline in 2022, but the drastic lack of supply could prevent prices from falling.
Charles Yuille, managing director of Bath-based independent mortgage broker, Willow Brook Mortgages: “The housing market is the ultimate economic offender, but even it will come into line as the cost of living crisis gathers pace and interest rates rise. April appears to be the first sign of this happening.
“It’s not so surprising that property prices have remained buoyant in the current climate, but absurd. The level of price growth we have seen during the pandemic simply cannot continue and will almost certainly decline further in 2022.
“However, the sheer lack of supply will ensure that prices stabilize rather than fall off a cliff.”
Dominik Lipnicki, Director of Your Mortgage Decisions: “A slowdown in the rate of price growth was always to be expected given the huge spike in the cost of living and rising mortgage rates. Buyers and lenders are looking at affordability and further possible increases in mortgage interest rates over the next 12 months.
“We are already seeing many borrowers forgoing their fixed rate and having to pay significantly more to fix again. The lack of inventory will help support prices, even as the rate of growth continues to slow.”
Graham Cox, founder of Bristol-based broker, SelfEmployedMortgageHub.com: “The demand is still very strong. A client told us that a property he was interested in received over 50 inquiries this week. However, the cost of living crisis is already making it harder to get a mortgage. Some lenders attempt to compensate by allowing larger borrowing multiples or relaxing certain criteria.
“What would really help buyers, of course, are lower prices. Many people who speak to us are unsure whether to buy now or wait until later in the year.
“For buyers, it’s a mix between probably lower interest rates now and potentially lower prices later in the year. If I was a bettor, my money would be on falling house prices.
Andrew Simmonds, Bristol manager Parker’s Realtors: “Overall, the start of 2022 has been slow, with transactions limited by lack of inventory and people staying indoors during the winter months. However, the past few weeks have seen an increase in new instructions and buyers seem to have become more active again.
“As the weather improves, the real estate market improves overall. The stock is still limited and this hinders the level of transactions. As always, properties for sale at fair value sell very quickly. Despite the worrisome global backdrop and inflation, coupled with a slowing domestic economy, I don’t see as much nervousness as some might have you believe.
“I think the next quarter will see a strong transactional market, as spring and early summer are often a key time to buy and sell homes, and longer term, I see the next twelve months going to be very assets.”
Rob Peters, Director of Altrincham Quick and easy mortgage loan: “We have yet to see the real impact of inflation, rising cost of living and tougher lender affordability criteria in the property market because there is always a lag, but April may be the first glimpse.
“While all signs suggest that house prices could come under severe pressure, the real estate market is unlikely to simply turn around. The laws of supply and demand will continue to prevail. Strong buyers with strong good deposits and higher earnings will become buyers’ favorites.
Joshua Gerstler, Certified Financial Planner at The Orchard Practice, based in Borehamwood“We are still seeing strong demand for home loans from buyers, but they are struggling to find properties.
“The property closet has never been so empty. The cost of living crisis and rising interest rates have caused lenders to become stricter in their lending and it is not impossible that prices , which are finally slowing down, begin to fall.
Ashley Thomas, director of a London-based mortgage broker, Magni Finance: “We have recently seen a number of clients outbid with properties having offers above the asking price. However, property prices will be tested in the coming months as the cost of living crisis and rising interest rates bite.
Rhys Schofield, managing director of Belper-based Peak Mortgages and Protection: “While the rate of price growth has slowed, it’s still frenetic there. One thing we’re definitely seeing a little more, though, is the additional demand for energy-efficient homes as utility bills become a real concern for consumers and landlords need to consider changes in legislation to make the rental stock energy efficient.
“I think we’re seeing the start of landlords who just can’t bury their head in the sand in the face of Britain’s drafty housing stock.”
Scott Taylor-Barr of the Shropshire-based broker, Carl Summers Financial Services: “The main concern in the market right now is affordability and whether that will impact house prices later in the year.
“With rising national insurance and energy prices, as well as rising costs for food and other essentials, all feeding into the official datasets that most lenders use in their affordability models, we expect a reduction in the size of borrowers secured for a given income over the next few months.
“While no one expects this to be a core issue in the housing market, many are anticipating a slowdown in the raging growth we’ve almost become accustomed to.”
Marcus Wright, managing director of Bolton Business Finance: “We are still seeing quite strong demand in the housing market and prices are being supported by a lack of available homes. This is also reflected in the rental sector, with rents increasing in almost all areas.
“One thing we’ve noticed is a much stronger demand for 5-year fixed rates, to protect homeowners against further expected base rate hikes. As we saw in April, I think the rate of house price growth will slow this year, but prices are unlikely to fall because supply is so low.
Rob Gill, founder of the London-based company Altura Mortgage Financing: “Having experienced double-digit growth during a global pandemic, the UK property market has proven resilient enough to thrive during the country’s biggest crisis since World War II.
“While the cost of living crisis will have a significant impact on many, it is a brave person who would bet against house prices continuing. Logic and the real estate market do not mix.
Lewis Shaw, founder of Mansfield Shaw Financial Services“While the housing market is still pretty busy, or as busy as it can be given the lack of inventory, I can’t help but have a deep feeling about the economy as a whole. You just feel like 2022 could be the year the wheels really come off, and if it doesn’t happen this year, it will next year.
“Are real estate prices going to fall? Probably not, mainly due to lack of supply. Are mortgage lenders starting to show signs of tightening their belts and taking a more cautious approach? Yes. This will temper trading levels in the coming months. Much will depend on the strength of the job market and its ability to withstand the myriad headwinds it faces.