Why house prices will rise this year as the election does nothing to dampen demand, according to property expert Jonathan Rolande
House prices will continue to rise this year
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The Halifax reported price drop is so insignificant we can safely ignore it. I suspect the owner of the average home will be more concerned with their energy bills which are probably far higher than this tiny fall.
The reduction is something of a recent phenomenon with prices rising from October 2023 to this February and they are set to continue towards the end of this year.
Why house price rises might continue
We haven’t seen the base lending rate fall as hoped and this has caused many lenders to toughen their approach to lending – mortgage rates have crept up, as have administration fees.
Many buyer incentives have been pulled too. This has had a knock-on effect on affordability.
There is still buyer demand, an expert explains
GETTYHowever, the important thing is that there are still buyers out there, with a good appetite to purchase.
Yes, the amount that can be borrowed has been clipped back but where there is demand, there will be sales that follow. As soon as the cost of borrowing eases a little, prices will increase again.
The upcoming election is doing little to dampen things, the market is as active now as it was before Rishi Sunak stepped out into a rainy Downing Street.
The likely change of Government may cause an initial jitter – buyers don’t like uncertainty and change – but I expect this to be temporary. The second half of 2024 looks set to be a period of house price growth.
LATEST DEVELOPMENTS
Jonathan Rolande shared his analysisJonathan RolandeWhat did the Halifax House Price Index show?
According to the latest data from Halifax, house prices were “static” in May after falling 0.1 per cent on a monthly basis. The lender’s latest figures suggest the average UK house price was £288,688 last month.
The figure was up 1.5 per cent annually, slightly better than the 1.1 per cent posted in April. The Northwest was the strongest performing nation or region in the UK, where house prices grew 3.8 per cent on an annual basis in May.
The average price of a property in the Northwest is now £232,258. Northern Ireland continues to show strong annual growth, up 3.2 per cent in May, pulling back slightly from 3.3 per cent in April.
Eastern England recorded the largest decline in annual growth across the UK. House prices there now average £329,853, down 0.8 per cent in May on an annual basis, according to Halifax.
Unsurprisingly, London continues to have the most expensive average price tag, now at £536,821, up marginally by 0.2 per cent compared with last year.
Jonathan Rolande is a property expert from the National Association of Property Buyers and founder of House Buy Fast