UK house costs elevated by 0.4% in May, after taking account of seasonal results. This resulted in a slight pickup in the annual price of house price growth to 1.3% in April, from 0.6% the earlier month.
Commenting on the figures, Nationwide’s chief economist Robert Gardner stated: “The market seems to be displaying indicators of resilience in the face of ongoing affordability pressures following the rise in long run rates of interest in current months. Consumer confidence has improved noticeably over the previous couple of months (see chart under), supported by stable wage positive factors and decrease inflation.”
Fine & Country property agent managing director Nicky Stevenson identified that house costs had been yo-yoing from financial gales, however May’s figures indicated calmer waters forward for the housing market.
“Previously hesitant dwelling patrons are feeling extra assured to pull the set off on transferring plans as monetary strains ease.
“With inflation transferring nearer to the federal government’s 2% goal and potential rate of interest cuts this summer season, demand could surge additional into 2024. This will assist to stabilise and even nudge costs upwards amid purchaser competitors – a optimistic growth for sellers.”
Stevenson stated lenders had been additionally reducing charges in response to extra beneficial circumstances, making homeownership extra attainable, particularly for first-time patrons beforehand deterred by excessive month-to-month funds or excessively lengthy mortgage phrases.
“If present tendencies persist, the UK housing market might expertise a gradual rebound, with costs rising reasonably in standard areas and scorching markets.
“However, affordability issues could linger, significantly for these on decrease incomes or in areas with excessive dwelling prices.”
Foxtons chief govt Guy Gittins defined that not solely has there been an uplift in purchaser exercise, however we’re additionally seeing extra sellers return to the fold in order to benefit from rising market momentum with the variety of gives being accepted at its highest since 2016.
“This optimistic begin to the yr has come regardless of rates of interest remaining at 5.25% and as market sentiment has improved, this has naturally led to a higher diploma of optimistic property price growth.”
He added: “Going ahead, we don’t anticipate that the upcoming common election will dampen this rising market sentiment and we anticipate additional growth will materialise over the summer season months because the market continues to warmth up, significantly with the potential of an rate of interest minimize firmly on the horizon.”
Together director Chris Baguley stated that whereas at present’s price rises will add to higher confidence in the market, first time patrons and residential movers will nonetheless be cautious, preferring to maintain out till mortgage charges start to fall.
“The Bank of England held the bottom price at 5.25% for the sixth consecutive time however there may be optimism {that a} minimize could come in the summer season. This might spell nice information for patrons as decrease base charges can have a knock-on impact on the speed at which they will safe a mortgage.
“That’s not to say there aren’t these in a position to make the leap now and for this group, having fast entry to finance may very well be key to them securing their first dwelling or the property of their goals.”
