House prices January 22

ended 22. March 2022

On Wednesday at 09:30, the Land Registry is publishing the latest house price data for January. This is data based on completed sales as opposed to all that Rightmove asking price nonsense. Few Qs:

  • What are you expecting the data to show?  
  • What's your view on the property market right now?
  • Is it going to become harder to buy as lenders tighten their affordability criteria amid the cost of living crisis?
  • Is the property market going to go belly up later this year or will the lack of supply/stock prevent that?

Any other thoughts, jot them down. Use the word ‘skyrocket’ or ‘skyrocketing’ and your Newspage will be deleted. x

13 responses from the Newspage community

Star Quote
"Winter is coming, to quote the Game of Thrones. House prices continue to defy expectations as they march relentlessly upwards for the umpteenth month in a row. I warned 12 months ago that we had a nasty recession coming down the tracks due to the impacts of Covid and Brexit. Nevertheless, prices kept rising and mortgage balances grew with a frenzy of activity made worse by greedy, near parasitical estate agents. Now we're about to reap what a lot of people have sown, and it's going to get very ugly indeed. And this is before the impact of Ukraine was factored in. "Will house prices reduce? Unlikely as the structural supply-side issue gets worse by the day, which will keep values buoyant. However, with the massive, and I mean enormous inflation in energy, food and fuel that is already baked in flying towards us like an unstoppable train unless we have large-scale government intervention, there will be a rise in homeowners in default as they choose between paying their mortgage or food and fuel bills. Karl Marx said that history repeats itself, first as tragedy, secondly as farce. We're in for both at the same time. I didn't expect a re-run of the Great Depression, Spanish flu and war in Europe in two years, but these days all bets are off.".
Star Quote
"Unsurprisingly house prices have gone up again. The market is broken, kaput. There are more buyers than houses and any increases in interest rates is merely tinkering round the edges as it doesn't solve the issue around lack of supply. The alternative to buying is renting but when rents are going up even faster, the lack of property becomes a real issue. It's all very well house prices going up if you are comfortably on the ladder but those fortunate enough to be on the property ladder are leaving a heck of a lot of people behind."
"There is an unprecedented lack of stock currently, with vendors competing intensely for whatever comes to market. It's an unsustainable situation with first-time buyers simply priced out of the market. The cost of living crisis will only exacerbate this problem, as lenders will be more careful when taking longer term affordability into account. Something somewhere will have to give and interest rate rises could turn the current property bull market into a bear."
"We have found that there still seems to be strong demand and limited supply at the higher end of the market. Clients who are buying over £1.5m have said that there are not many properties available and when they do they are either sold very quickly or put through a sealed bids process with multiple offers."
"I believe the decades long property bull run is coming to an end. It's true that chronic under supply of housing stock remains but it's only insanely cheap credit that is underpinning demand, and we're now moving to a much higher interest rate environment. The cost of living crisis means lenders are already tightening their affordability criteria. People simply won't be able to borrow as much, which means lower offers, particularly from first-time buyers. Put it all together, and I'll be surprised if prices don't start falling in a few months' time."
"House prices are still on the rise, the property market as implacable as ever. It's too early for the the current inflationary and economic pressures to dampen down house buying activity significantly, and with low numbers of available properties there are more than enough eager buyers to keep the the property market buoyant. Although we're not currently predicting any type of property market Armageddon, we do expect the market to stabilise. This will happen as the impact of higher cost of living and higher costs of borrowing filter through, mortgage lenders tighten up their affordability belts, and the market will favour those with strong secure income and larger deposits. Potential home buyers who were already stretching their finances, or those with a less than perfect credit record, might find it harder to buy a home."
"The Land Registry data looks back not forward and you cant drive a car by looking in the rear view mirror. There are so many financial challenges approaching that it is hard not to foresee some house price impact as it will be one symptom of a much wider, possibly significantly deeper problem. However, it is a time for us to focus on the humanitarian issues that are facing us and not worrying about the value of our property, which will recover from any looming stagnation or depreciation with time."
"Demand for property has increased significantly and remained consistent at this level, so it is inevitable that prices will have increased and will continue to do so, despite the fact that the market sits in a 'perfect storm'. There are, however, signs of disruption ahead and with record levels of inflation expected the number of prospective buyers will likely reduce and subsequently cool the market. That said, I still expect there to be a lack of supply, which will keep the market robust."
"Oh to actually be able to buy a property in the current atrocious market. Each time we find one the prices are £30,000 to £40,000 above the asking price but you only get to know that when meeting the agent face-to-face. The massive lack of properties for sale makes it so hard for people like me to buy. We need a house and can afford one but find ourselves competing with landlords or other people buying their fourth or fifth property. There needs to be some sort of priority for first-time buyers, otherwise it will be frankly impossible for many of us to get onto the ladder."
"Given recent Base Rate increases and the expectation of further rises, I expect there to be a continued increase in transactions both in progress and completed as both new buyers rush to complete purchases ahead of an increase in term rates, along with landlords out of their fixed periods pushing through refinance. Now it would be interesting to see the number of cases outstanding with the Land Registry as there remain delays with any documents they process. I have cases taking 9 months to effect simple title splits, which, while budgeted, does limit clients' abilities to refinance until completed. So while the market data should be buoyant it will only represent the tip of the iceberg versus the number of transactions in progress. As the credit markets continue to tighten, as a result of lenders pulling products along with cost of living increasing I expect there to generally be a drop on activity from casual landlords and those looking to get on the property ladder due to lack of ability to put together deposits or meet affordability calculations as a result of increasing unsecured debt. However for portfolio landlords with cash to spare I expect to see an increased in bridging and refurbishment as a result of fire sale activity and the ability to take advantage of the broader demographic that is forced to rent. Funnily enough, until inflation gets under control, house prices will continue to rise. Whether anyone can afford to buy anything though is another matter. So the question remains, will sellers drop their prices to sell, or can they afford to wait for a motivated buyer to come along? If the auction market is anything to go by they might as well wait, as there are always going to be buyers willing to pay the price."
"In North Somerset, we are experiencing a fairly interesting period with a continual lack of stock, yet properties that do come to the market are sold quickly, often in a matter of days, or even hours, when marketed at the right asking or guide price. I would expect the January data to show lower transaction levels than the same month in 2021, yet with values having increased by at least 10%. 79% of homeowners with a mortgage are on a fixed rate, so any rate rise won’t be instantaneous. Yet surprisingly, though the current situation in Eastern Europe, by its very nature, will bring greater UK inflation it will also probably defer the Bank of England raising interest rates much more. This means mortgage rates won’t increase as much as the bank won’t want to exacerbate any pressures to the future UK economy in 2023/24 caused by the conflict."
"There will be no surprises when house prices have increased again, the lack of stock and the threat of interest rate rises have been driving those who are wanting homes into a bidding war. We are seeing an increase in clients coming to us in preparation, but then not being able to find anything affordable, as those properties they thought they could afford are being sold above market value. Now it is going to be increasingly difficult with the cost of living increasing reducing affordability for a mortgage even further."
"Demand for property remains high while supply remains limited, a classic recipe for increasing house prices. All eyes will be on whether demand will remain frenzied, or whether the cost of living crisis and concerns over war in Europe will start to bite. Having not just survived but thrived during a 100-year global pandemic, only the bravest would bet against the UK housing market, even under these increasingly challenging circumstances."