With the ONS’s house price index (HPI) showing that prices rose again in the year to March, Paresh Raja (Market Financial Solutions) and Darrell Walker (ModaMortgages) share insight on how the news will impact the UK property market.
Darrell Walker, group sales director at Chetwood Bank for ModaMortgages and CHL Mortgages for Intermediaries, said: “It’s important to consider the timing of this data, as it was collected in the final run-up to the implementation of the new Stamp Duty changes. At that time, there were concerns that the surge in activity was temporary and that the market might revert to low levels of activity and growth.
However, since then, the Bank of England has cut rates again, and average mortgage rates now sit a full percentage point below where they were this time last year. These developments should mean that the activity before the Stamp Duty changes was not a one-off anomaly. Investors are continuing to find ways to execute their plans, and we are experiencing high demand, even in the face of higher Stamp Duty costs.
That said, brokers will increasingly work with clients who require additional support as they continue to adapt to the new tax landscape and a more accommodative monetary policy environment. Lenders must remain focused on supporting market growth by offering flexibility and delivering certainty wherever possible.”
Paresh Raja, CEO of Market Financial Solutions, said: “March was defined by heightened anticipation and activity ahead of the Stamp Duty changes, so the fact that this data reflects significant growth was to be expected. At that point, there was some uncertainty about whether the growth was sustainable or merely a response to short-term incentives.
However, this uncertainty has been tempered by the recent rate cut from the Bank of England, and the improved outlook for the central Bank’s monetary policy. Inflation may have jumped to 3.5% this morning, but President Trump’s tariffs are expected to have a cooling effect on the UK economy, providing the Monetary Policy Committee (MPC) the space it needs to move faster with its rate cuts. In turn, this should mean that the growth represented in the ONS’ data will become part of a longer, more enduring trend – particularly as the number of homes for sale is at a 10-year high.
For growth to occur, however, lenders must be on hand to support borrowers and brokers as they navigate the months ahead. Pricing in the outlook for interest rates into product ranges will be a part of this, but so too will providing a high level of service and expertise, especially in regards to the new property tax landscape.”