Following today’s UK House Price Index for May 2024 tat showed that sold prices increased by 1.2% between April and May of this year, industry experts have commented.
Lomond CEO, Ed Phillips, commented: “Sold prices have continued to climb in recent months despite the fact that mortgage rates are yet to come down.
“Now that the dust has settled on both the general election and England’s Euros ambitions, both of which have acted as distractions to buyers and sellers, we expect the market will now pick up the pace as we enter what is traditionally the busiest time of year.
“This market momentum is only likely to accelerate when a cut to interest rates does materialise and this is very much a case of when, not if.”
Paul Glynn, CEO at Air, comments: “After three consecutive months of house price growth, there is no doubt that the UK property market has settled into a stable holding pattern. The turbulence of 2023 is finally in the rearview mirror and the market temperature is heating up. With a new government in office and a potential interest rate cut on the horizon, scores of buyers may feel empowered to brave higher mortgage rates to secure their dream home.
“Nevertheless, the unavoidable truth is those buyers who do step onto the ladder will likely carry their mortgage repayments into retirement. The later-life market is splitting into two categories: the traditional equity release market, and the new generation who may lean on specialist lifetime mortgage products to reduce their interest burden in their autumn years. In the future, the homeowning journey may last a lifetime, so advisers must be on hand to ensure buyers can benefit from a smooth continuum of lending.
Ben Waugh, Managing Director, more2life, said: “The uptick in house prices speaks to a market that is gaining momentum and poised to grow even stronger as we progress through the second half of the year. Concerns that political change might dent the recovery have been put at ease, with the new Government marking its intentions to prioritise a robust property market from the outset. Healthy demand for housing and overall market confidence bodes well as we await the Bank of England’s decision on its central rate in early August. Homeowners looking to put their houses on the market will be encouraged by these raising figures and advisers are in an important position to provide expert guidance at this time as more buy and sell activity picks up.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, said: “House prices defied predictions with a stronger-than-expected performance in May as the economic tide continues to turn.
“The property market is gearing up for a summer boost, driven by May’s economic rebound and stable inflation rates. After April’s stagnant figures, this recovery marks a promising shift in the real estate landscape.
“These positive indicators could allow the Bank of England to lower the base rate this summer. This adjustment would make mortgages more affordable and accessible, opening doors for many, especially first-time buyers.
“Meanwhile, we’re already seeing increased activity, with HMRC figures showing a 17% rise in transactions compared to last year. This uptick reflects easing financial pressures amid the improving economic climate.
“May’s economic strengthening was bolstered by a rise in construction, which grew at its fastest rate in nearly a year. The surge in house-building and infrastructure projects is set to boost the supply of homes, helping to balance rising demand.
“As we move further into summer, these factors paint a picture of a robust and dynamic property market, poised for growth and supported by increased supply and improving affordability.”
Nathan Emerson CEO of Propertymark comments: “It is fantastic to see that the general election did not disrupt the housing sector greatly, and despite many challenges, the market still delivered growth. Propertymark remains keen to learn more on how the supply of 1.5m new homes across this parliamentary term will be delivered, along with what support may be offered to first time buyers. Home ownership must always remain a realistic and workable proposition for those who choose it. Across the coming weeks, we hope to see a dip in interest rates too, and for this to translate into lenders offering a raft of targeted mortgage deals.”
Richard Harrison, Head of Mortgages at Atom bank, comments: “The fact that the ONS has now reported three months of straight house price increases is a good indication of the growing confidence in the market. This data predates the calling of the general election, however, which may have had a temporary effect on buyer demand and with it house price movements.
“The general election inevitably brought some uncertainty to the market, but the fact that we had such a definitive result means that some sellers and buyers will feel more comfortable pushing on with plans. There may also be some encouragement from the new government’s proposed Freedom to Buy permanent mortgage guarantee scheme, which is aimed at providing more options for buyers with small deposits. We have long been a champion of such buyers, focusing on delivering competitive rates for those with smaller deposits, but more choice would be welcome.
“Eyes will now turn to the Bank of England, and when it will look to start reducing bank base rate, as reduced rates will also serve to boost buyer confidence. With inflation continuing to move in the right direction, it’s simply a question of when, not if.
Director of Benham and Reeves, Marc von Grundherr, commented: “Despite the brief period of political uncertainty spurred by a snap election, we’ve seen little deviation from both buyers and sellers with respect to their property transaction plans and this has ensured that positive house price growth has been maintained.
“While higher mortgage rates continue to restrict buyer purchasing power at present, it’s only a matter of time before interest rates are cut. When this does happen, we expect it to act as a significant shot in the arm to the UK property market and the slow but steady performance of recent months should giveaway to an altogether more active market landscape and a stronger rate of house price appreciation.”
CEO of Yopa, Verona Frankish, commented: “House prices have continued to creep up in recent months which demonstrates that market confidence has been building, but it’s fair to say that we’re currently witnessing the calm before the storm.
“There’s a great deal of pent up demand on the side of buyers at present and whilst some of this will now be released post-election, we anticipate that the real surge in market activity will come once interest rates start to ease.”
Co-founder and CEO of GetAgent.co.uk, Colby Short, commented: “Having weathered the storm of higher interest rates and the more recent blindside of a snap election, the property market remains in very fine health.
“It’s still too early to say for sure if a post-election bounce is in progress, however, the sentiment coming from agents on the ground is that they are gearing up for a very busy summer.
“For those sellers who may still be sitting on the fence, now is the time to act if you want to have your home market ready in order to take advantage of improving market conditions.”