It’s Good News Week! Latest housing figures give rise to optimism
It looks like it will be a busy autumn after a series of optimistic figures in the first days of August.
Firstly the Nationwide house price index shows that prices increased by 0.6% between June and July of this year.
On an annual basis, the average house price increased by 2.4% up from a 2.1% annual rate of growth in June. As a result, the average UK house price now sits at £272,664.
Commenting on the figures, Robert Gardner, Nationwide’s chief economist, says: “Activity appears to be holding up well. Indeed, 64,200 mortgages for house purchase were approved in June, broadly in line with the pre-pandemic average, despite the changed interest rate environment.”
Secondly, property transactions increased in June according to HM Revenue & Customs (HMRC).
Seasonally adjusted figures show that residential transactions rose by 13% to 93,530, up from 82,510 in May. The non-seasonally adjusted total also climbed, recording a 17% month-on-month increase to 95,080.
Jason Tebb, president of OnTheMarket, says:
“These transaction numbers suggest that the housing market remains remarkably resilient. Despite wider economic and political concerns, four rate reductions in the past year have done much to boost activity and confidence, and with further reductions expected, these should encourage buyers and sellers to transact.”
Thirdly, expectations are running high for a base rate cut when the Monetary Policy Committee of the Bank of England meets on Thursday. Analysts are almost unanimous in forecasting a quarter of a per cent cut – and many lenders are already factoring this into their deals.
Mark Harris, chief executive at SPF Private Clients, says:
“Transaction numbers have risen again as base rate reductions encourage activity and enable borrowers to plan ahead with more confidence. Lenders continue to trim their mortgage rates, while easing of criteria should also enable borrowers to take on bigger mortgages in coming months.”
Responding to the latest house price data Jeremy Leaf, north London estate agent and a former RICS residential chairman, says:“On the ground, transactions are holding together relatively well. As a result, looking forward we expect to see a modest improvement all round, particularly if interest rates are reduced in the next month or so as widely expected, despite lingering concerns about the economy.”
And Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says:
“Nationwide reports what we have also found in our offices – that the property market isn’t slowing down for summer.
“While we braced ourselves for a long, quiet stretch until September when the schools return from their summer break, we’re already back in full swing: valuing good houses, agreeing off-market sales, and running packed diaries of viewings.”
Iain McKenzie, chief executive of The Guild of Property Professionals, comments:
“This isn’t a market running hot, but one that is responding logically to improved conditions. The driving force behind this stability is growing borrower confidence, which is being fuelled by an increasingly favourable mortgage environment.
“Mortgage approvals are rising, and transaction volumes are climbing steadily month-on-month and year-on-year. All eyes are now on the Bank of England.”
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