House prices in the three months to October were 1.6 per cent higher than in the previous three months, according to the latest house price index from the Halifax. Bien Media clients Nicholas Ayre of buying agency Home Fusion and Mark Harris of mortgage broker SPF Private Clients, give their views below.
Nicholas Ayre, managing director of homebuying agency Home Fusion, says: ‘While October figures are higher than the previous three months, we are also seeing a growth slowdown on a quarterly basis.
‘There may be a ‘press-commentary-effect’ here, where people are taking note of what is being said in the press about a housing bubble and then thinking twice before jumping in. That said, we are also entering a quieter phase for the market, with December traditionally a subdued month for housing transactions. So sellers may well be thinking ‘let’s get on with things’ before the December period and get our house sold.
‘There are also indications that supply may be waking up to demand, with house builders starting to snap up land for building. What may have been a marginal plot of land to develop up until now, may be looking more profitable as prices rise. A two-bedroom house which may have only been worth £250,000 a while back, but which may be worth over £300,000 now, looks far more enticing in terms of profitability. So builders seem to be stepping up to the plate, which will help with the supply side of the equation.’
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: ‘Affordability is not an issue for buyers – yet – with the low level of mortgage payments in relation to income helping boost demand. This is encouraging as it suggests buyers are not over-stretching themselves but if demand continues to soar and supply can’t keep up, it could become an issue. This would affect first-time buyers in particular, which are so crucial to the health of the housing market. We are just seeing their numbers start to recover over the past few months: it would be a disaster if they were priced out of the housing market all over again.
‘The ultra low interest rates we have seen in recent months show no signs of abating. Lenders have business to do before the end of the year which will ensure they continue to offer competitive deals. Help to Buy has stoked interest in the market but with lenders increasingly offering high LTV deals outside of the government scheme, there is a range of options available for buyers.’