Nationwide May HPI: “momentum less surprising than absurd” – reaction from real estate agents, brokers and developers

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Following this morning’s release of the National House Price Index for May, a selection of real estate agents, mortgage brokers and developers shared their views.

Amey Hellen of Derby-based estate agents, Boxall Brown & Jones: “The fast and aggressive market conditions we have become accustomed to may be over as people re-evaluate if this is indeed a good time to buy. May 2022 has been exceptional for trading and completions, probably our busiest month since the end of the first pandemic lockdown, but has felt calmer in terms of potential buyers looking to buy homes.If buyers abandon the market, reducing demand, we could finally start to see some parity with the supply, which in turn will slow price growth.

“We don’t see a crash materializing or a drop in prices, but rather a much more stable market until the cost of living is reduced, especially gas and electricity bills. They are really weighing on people’s minds.Mortgage rates will have to rise much more to start impacting borrowing and house prices, as they are still very low by historical standards.If affordability checks and the budgeting is done correctly and if someone is finally in a position to buy, especially if they are a first time buyer looking to move out of a rental property, many still go in. However, home improvements may need to be done. -be put on hold as people focus on spending.

Ross Boyd, founder of the still-active mortgage comparison platform, Dashly.com: “The continued momentum in the real estate market is less surprising than absurd. Annual price growth may still be in the double digits, but few can deny that the real estate market has significant challenges ahead. The rising cost of living is eroding confidence day by day and interest rates are rising. The low rate paradise we were in for so long is now lost. The only positive point is the job market, which is holding up for now. But if we enter a recession, as many are predicting, job numbers will deteriorate and this will affect sentiment, reduce demand and potentially increase supply as people are forced to sell.

“The result will be pressure on prices. The property market has seen two surreal years of growth since the introduction of the stamp duty exemption, but a cooling now looks a certainty, despite the strength of the market in May. The real estate market is driven by confidence and that is disappearing day by day. It’s the calm before the storm.

Jamie Lennox, director of Norwich-based mortgage broker, Dimora Mortgages:The tide could turn as a number of customers who had been looking for a home for six months are finally getting accepted offers where before they were constantly outbid by other buyers. Many buyers are currently wedded to the idea of ​​moving, but once they are finally done, we think the housing market could start to change drastically with a lack of new people considering moving. Prices in Norfolk, as in much of the country, have so far remained extremely resilient in the face of rising interest rates and inflation. This is largely due to the extreme lack of stock in our area. On top of that, a lot of money is pouring into London from people looking to relocate as the shift to remote working continues.

Joe Garner, managing director of London-based property developer New Place Associates: While the labor market appears to be robust for now, the rising cost of living is expected to negatively impact mortgage seekers’ affordability calculations in the coming months. The lack of a replacement for the purchase assistance program is exacerbating uncertainty in the market and could well stimulate transactions in 2022.

“Despite the cost of living crisis, our market analysis indicates a panic buying situation later in the year as the deadline for purchase assistance looms, followed by stagnation in sale price coupled with a significant increase in the cost of private rental rates.The Kafkaesque bureaucracy of the mortgage application approval process, coupled with overburdened lawyers and nervous appraisers, could deliver a quick and serious blow. brutal for property transactions in the UK.

Rob Peters, Director of Altrincham Quick and easy mortgage loan: “In May 2022, the real estate market continued almost undeterred by rising rates, inflation and the cost of living. This is partly due to the fact that we are still sitting in a lag zone time frame, where the full impact of these economic stressors hasn’t filtered down to the data. I would expect a real estate downturn in the coming months, but I don’t think we have a strong enough mix of disastrous ingredients at this point for a full fledged real estate recession.

“Property buying activity will continue to be driven by the lack of homes and the desire of the British public to own their own bricks and mortar. Although the dream of buying a home may stray away from first-time buyers and of those in a weaker financial position, there are currently enough buyers in a strong financial position to take their place.

Lewis Shaw, founder of Mansfield Shaw Financial Services: “The real estate and mortgage market in May was more active than Sue Gray, so there is still life in real estate, although not as robust as it was six months ago. Although rates are rising, inflation is high and wages are stagnating, there is no slackening in demand, and while house prices are showing signs of slowing down, this does not automatically translate into a housing crash.

“They couldn’t keep going at the same pace, so a little break to catch our breath is a good thing. Of course, the question on many people’s minds is: are we heading into a recession? Unfortunately, we have all the necessary and sufficient conditions for a recession: declining consumer confidence, runaway inflation and stagnating wages. Unfortunately, all rivers lead to the sea right now.

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