Mortgage market stability boosting buyer and seller confidence
For a third month in a row, UK house prices have risen showing remarkable resilience considering the negative forecasts of economists previously. Halifax said the average price rose by 0.8% month on month, to £287,880, which followed rises of 0.2% and 1.2% in January and February. The increase goes against economists’ expectations of a 0.3% fall. Kim Kinnaird, director of Halifax Mortgages, said the market had been helped by the easing in borrowing costs since the “sudden spike” at the end of 2022.
This is at the same time that it’s been announced that the number of homes offered for sale has jumped over the past year, despite falling house prices, as owners are getting more confident in the market now the mortgage market has stabilized. Currently, transactions are on track to hit 500,000 for the first six months of the year, according to Zoopla forecasts.
A more stable mortgage market following the turmoil of the “mini” Budget in September 2022 has also tempted people back into the market, Zoopla said. Richard Donnell, executive director of research at Zoopla, said he was optimistic about transaction levels. “There are going to be structural pressures for people to keep moving, just out of a need. That’s going to keep the market moving.”
“The average UK homeowner has made £45,000 on the value of their home in the last three years,” said Donnell. “If people are having to give away £15,000 on a discount, as long as they’re getting that discount on the next house, it keeps the market moving. There’s a realism on the part of sellers.”
All of this flies in the face of the doom and gloom of economists, and hopefully the property market will continue to show the resilience it has done in 2023 so far.