First-time buyers have a particular advantage as caution sets in
Buyers and investors will continue to be the winners in the housing market after monthly house prices edged down 0.1% for the second month running in May, according to the latest figures from the Halifax Price Index.
The average property price was £298,806 in May, down from £299,251 in April. However, annual growth rose slightly, from 0.4% in April to 0.5% in May.
Nationally, limited supply is driving growth in Northern Ireland, where average prices are up 7.8% over the past year to £227,177 and marking the highest rate of annual growth in the last six months. Scotland also recorded strong annual growth of 3.8%, and an average price of £222,650. Growth in Wales slowed, up 0.1% annually to £230,355.
Regionally, price growth continues to be strongest in the north, with prices in the North East up 3.1% over the year to £181,703 and in the North West up 3% to £248,304. Meanwhile, prices in the South East fell 2.1% year‑on‑year to £382,704 and were down 1.5% to £534,375 in London.
Reflecting the uncertainty of the Middle East conflict
Amanda Bryden, head of mortgages at Halifax, said that higher property price trends reflect the uncertainty caused by the Middle East as higher mortgage rates continue to stretch affordability for many buyers and temper demand.
“Even so, overall activity has held up well, reflecting the underlying resilience of the UK housing market. Latest industry figures show transaction levels remain relatively stable, suggesting buyers and sellers are still moving,” she said.
Jonathan Hopper, CEO of Garrington Property Finders, said: “With so many sellers jostling for buyers’ attention, this is unquestionably a buyer’s market. With asking prices softening, and pragmatic sellers more open than usual to price reductions, there are some fantastic opportunities for committed buyers.
“For buyers who calculate that the extra value offered by lower purchase prices far outweighs the impact of higher mortgage interest rates, this has become a compelling time to buy.”
Tomer Aboody, director of specialist lender MT Finance, agreed: “With rates and inflation still unsettled and on the higher side, buyers are trying to stay active. More activity in the market is being encouraged as more sellers are coming to the market, and buyers finally having some stock to look at.
“With the macro climate still uncertain and rates potentially going to be higher by the end of the year, buyers are not wanting to hang around and wait.”
First-time buyer opportunity
The figures show annual price growth for first-time buyers was only 0.3%, which, alongside increasing support from lenders, is also opening up opportunities.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “First-time buyers will be encouraged as house prices remain steady rather than soar. Lenders are working hard on offering solutions to those trying to get on the ladder for the first time, which is leading to a small improvement in their numbers.”