Housing market remains robust, but there are signs of slowdown
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, comments on publication of Nationwide house price index for July, showing housing market remains robust, but there are signs of slowdown.
Key points from publication:
- Strong momentum continues to push the housing market with annual house price growth at 11%, up from 10.7% in June.
- There are tentative signs of a slow down as mortgage approvals dip. Cost of living pressures are also expected to put pressure on people’s finances.
- Market is supported by high employment and a relatively limited stock of homes for sale.
- The stamp duty holiday gave people an incentive to move. Transactions in the three months to May are down 20% from their stamp-duty holiday high, but still 5% above pre-pandemic levels.
- The first-time buyer market remains robust.
Helen Morrissey says:
“The housing market remains robust posting its 12th successive monthly increase – an extraordinary feat in the face of the biggest cost of living crisis in living memory. High employment and a limited number of homes on sale have supported market growth with activity strong across all buyer types.
“However, like the Zoopla figures published earlier today there are early signs that the market is starting to slow. Mortgage approvals are starting to decline so we can expect to see activity become more muted as people tighten their belts as their bills continue to increase. The prospect of further interest rate increases on the horizon may also make people think twice about whether they can afford to move home.
“The pandemic and the growth of flexible working was a huge factor in recent house price activity. Not having to go into the office every day made people reconsider where they live and whether they could move elsewhere to get a bit more space. This fuelled market behaviour in recent times but could dip as we emerge from the pandemic and more of us return to the office.”
Kindly shared by Hargreaves Lansdown
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