Nationwide HPI shows house price uptick – Industry reaction

Posted on Wednesday, April 3, 2024

The latest Nationwide House Price Index shows that UK house prices remained largely unchanged on a monthly basis, falling by -0.2% between March and February.

Annually, house prices were up 1.6% on the previous year as the market continues to build momentum in 2024.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

“UK house prices fell by 0.2% in March, after taking account of seasonal effects. Nevertheless, the annual rate of house price growth edged higher to 1.6% in March, from 1.2% in February.

“Activity has picked up from the weak levels prevailing towards the end of 2023 but remains relatively subdued by historic standards. For example, the number of mortgages approved for house purchase in January was around 15% below pre-pandemic levels. This largely reflects the impact of higher interest rates on affordability. While mortgage rates are below the peaks seen in mid-2023, they remain well above the lows prevailing in the wake of the pandemic.”


The residential property industry gave its reaction to the figures.

Jonathan Hopper, CEO of Garrington Property Finders:

“We’re in recovery, not runaway, territory – and this may be no bad thing.

“Two things are clear from the Nationwide’s latest snapshot of the UK’s property market. The surge in price rises seen at the start of the year is easing off, and big regional disparities remain.

“While buyer confidence is back, and the widespread price falls of last year are firmly in the rear-view mirror, price rises are still being tempered by the high cost of borrowing.

“The mortgage market alternated between being an accelerator and a brake for the property market during the first quarter of 2024. The flurry of interest rate cuts seen in January fired the starting gun, tempting back to the table thousands of would-be buyers and movers who held off in 2023. But in recent weeks, many lenders have paused their rate reductions, and this is now keeping property price rises in check.

“As a result, the fastest price growth is being seeing in areas where affordability is better. Average prices in Northern England jumped by 4.1% in the first quarter of 2024 compared to the same period last year. Across England as a whole, prices were up just 0.4% over the same timeframe.

“While we may have to wait until the Bank of England’s next Base Rate decision in May before interest rates start to fall significantly, the property market is returning to health gradually and we’re seeing increasing numbers of buyers decide that now is the time to strike, while also being very price sensitive.

Anthony Codling, MD of RBC Capital Markets:

“House prices nudged down in March by 0.2% on a seasonally adjusted basis, but with wage growth ahead of house price growth housing affordability is improving. On an annual basis house prices were up 1.6%, but there is evidence of a North-South divide with house prices rising in the North and softening in the South. However, overall, we view house prices as stable, and stability is what the housing market needs in our view. Stable conditions will encourage more people to move home, and the level of housing transactions is on the up.”

“There’s a will to move for many, the challenge is finding a way. As a result prices are likely to meander in coming months.”

Iain McKenzie, CEO of The Guild of Property Professionals:

“The year is now in full swing, and so too is the property market. While there has been a slight fall in house prices compared to last month, we are now seeing a return to healthy levels on an annual basis, which will be welcome news to sellers.

“There is cautious optimism that the industry will see more activity this year, following the latest property sales data which showed a month-on-month rise. The outlook is still positive as we enter the spring, which is usually a busy season for estate agents.

“If you are looking to sell your house in the current climate, it is still important to price wisely if you want to attract attention. Your chosen estate agent should be giving you up-to-date valuations based on similar properties in your area.

“Buyers are well-informed of their advantageous negotiating position, so don’t be surprised if they expect some flexibility on pricing.

“However, as prices stabilise and even grow in some parts of the country, we expect to see the demand grow too, especially with more attractive mortgage products now being offered.”

Matt Thompson, head of sales at Chestertons:

“In March, the property market witnessed steady demand from buyers although some house hunters decided to pause their search in the hope for major incentives to be announced in the Spring Budget. As this wasn’t the case, the majority of these buyers have since resumed their property search. As a result, March concluded the first quarter of the year with a busy property market – particularly in the capital where demand continues to outstrip supply.”

Nicky Stevenson, Managing Director, Fine & Country:

“The property market is moving in a positive direction, with strong annual price growth. Demand is ramping up, with buyers feeling much more positive thanks to the heightened competition between mortgage lenders pulling borrowing rates down.

“This is making budgeting much easier, and easing some of the affordability pressures we have seen over the past year. Expectations that the Bank of England could soon commit to lowering the base rate is also driving more demand.

“Sellers still need to price sensibly to attract attention, as buyers know they are in a strong negotiating position. But reasonably-priced properties in desirable locations are still being snapped up quickly, and this is a factor behind some of the price growth we are seeing at the moment.”

Tom Bill, head of UK residential research at Knight Frank:

“House prices have risen marginally but the direction of travel for the UK market has been sideways so far this year.

“Demand will be unleashed once there is a more permanent drop in mortgage rates and that requires fewer mixed signals around inflation and a rate cut to appear firmly on the horizon.

“While the outlook is more positive than six months ago, a wave of people rolling off sub-2% two-year mortgages from early 2022 is adding to the financial pressures in the system and transactions are still a fifth below the five-year average.

“Despite the challenges, including mounting political instability, there should be a recognisable seasonal bounce in activity this spring and we expect UK prices to rise by 3% this year as the market recovers from a subdued 2023.”

Nathan Emerson, CEO of Propertymark:

“Sellers have every reason to start feeling positive about putting their home up for sale and being able to go on to buy their next perfect property. 2024 has shown a positive trend that house prices are growing once again following three years of economic turbulence.

“However the UK Government must look to make houses equally affordable for buyers and that can only be done by building more houses. Propertymark’s own Housing Insight Report found there has been an 80 per cent increase in the number of new properties becoming available, ultimately making it easier for people to consider a move.”

Via @PropertyIndustryEye