House Price Growth Edges Up as Buyer Demand Remains Fragile

UK house price growth up but market remains soft. Although there are signs of growth in the latest house price data there are also some other less positive indicators. In terms of sales numbers, although prices are up, numbers of sales agreed over the past month are down 7% on the prior year.

Zoopla’s House Price Index shows that whilst property prices have gone up in the last few weeks, demand has plummeted with the number of sales agreed in the last month down 7% compared to the same time last year. Three in five homes listed since January are still unsold as high interest rates and political uncertainty continue to affect the market.

Much of the market remains weak, however some parts appear to be growing. All this suggests the housing market is at a cross roads and while it may start to recover in some respects it is unlikely to do so quickly. For would be buyers, this suggests they should take things at a slow pace to test the waters as it were.

For experts such as Glen Igari Irure, slow growth in the current period can actually result in a ‘buyer’s market’. These properties will prevent prices rising at a fast pace, and thereby allow buyers to negotiate a better price for their homes. However, the major issue for them is how to afford their new properties as high rates of mortgage interest are becoming increasingly difficult to repay as well as the uncertainty created by ongoing political issues within the country.

Some mortgage lenders are still a little wary of lending at the moment and as a result are offering criteria that they consider to be affordable. In May, the number of mortgage applications fell compared to the previous month as consumers and their estate agents are cautious about predicting future market conditions. New homes are often considered to be the most stable types of property to buy. In some cases, they may also represent better value for money as they will usually have the benefit of a number of incentives and they are a new property so will have little or no need for maintenance. However, it is essential that buyers do as much research as possible into their chosen home and the financial implications of buying it.

Practical Takeaways for Buyers:

1. House prices are rising at different rates across the country so it’s worth investigating local trends before committing to a purchase.
2. As the criteria of lenders to grant mortgage approvals are strict, apply early for mortgage approval in principle.
3. New-build homes can be a better value than older homes as they often come with incentives plus the advantage of them having less maintenance required.
4. Develop awareness of current political events and how they can impact market activity quickly.

The Final Takeaway:

House price growth rising by a few per cent is not the same as the housing market growing strongly, and cautious buyers would be wise to take note of the current opportunities and associated uncertainties.