Nationwide House Price Index April 2022

ended 28. April 2022

On Friday morning at sparrow's fart, the Nationwide is publishing its April house price index. Few Qs for you:

  • In your experience, did the property market cool down in April or was it as hectic as it has ever been?
  • Are buyers and/or sellers becoming more nervous given the cost of living crisis?
  • Is greater conservatism among mortgage lenders starting to have an impact on demand?
  • Where do you see prices going for the rest of the year? Will they fall?

As ever, no need for an essay. Quality over quantity and all that. 

13 responses from the Newspage community

"While the property market is still fairly busy, or as busy as it can be given the lack of stock, I can't help but feel a deep sense of foreboding about the economy as a whole. You just sense that 2022 could be the year the wheels really come off, and if it doesn't happen this year, then it will next. Will house prices fall? Probably not, mainly due to the lack of supply. Are mortgage lenders starting to show signs of tightening their belts and taking a more cautious approach? Yes. That will temper transaction levels in the months ahead."
Star Quote
"While demand still outstrips supply, house prices have stayed strong in April. That said, a slowdown in the housing market may well be on the cards with the huge spike in the cost of living and higher mortgage rates. Buyers and lenders are looking at affordability and for further possible rises in mortgage interest rates throughout the next 12 months. We are already seeing many borrowers coming off their fixed rate and having to pay much more to fix again. As long as supply remains so limited, I still predict a rise in the average price of a home but that rise is likely to be far more modest than we have seen in the recent past."
Star Quote
"Demand is still very strong. One client told us how a property they were interested in had over 50 enquiries this week. However, the cost of living crisis is already making it tougher for people to get a mortgage. Some lenders are trying to compensate by allowing greater borrowing multiples or easing certain criteria. What would really help buyers is lower prices, of course. Many people who speak to us are in two minds whether they should buy now or hold off until later in the year. It's a toss-up between probably lower interest rates now versus potentially lower prices later in the year. If I was a betting man, my money would be on house prices falling."
"It's still frantic out there and the data will show house prices still continuing to rise. One thing we certainly are seeing a bit more of, though, is extra demand for energy-efficient homes as utility bills become a real concern for consumers and landlords have to consider changes in legislation for rental stock to be energy efficient. I think we're seeing the start of homeowners simply not being able to bury their heads in the sand over Britain's drafty house stock."
I have not personally seen buyers or sellers becoming more nervous giving the cost of living crisis. First time buyers are still keen to get on the property ladder, and with housing market in such high demand and rent sky high, it is usually more cost effective and offers greater security for them to take out a mortgage. Saving for a deposit is likely to become more difficult for our younger generation, and we are seeing more and more parents or grandparents releasing equity from their homes to gift to their family to use for a deposit as an early inheritance. Those who own their own home, and are due to remortgage are the borrowers who I feel, are most nervous. They are concerned about interest rate rises and moving onto a higher rate should they wait to remortgage. I am encouraging all home owners to review their mortgage deal now to secure a low rate over a medium-long term period if it is suitable, whilst these low rates are still around. I have been impressed by how lenders are adapting to the changing market, yes affordability assessments will be tighter but they are providing longer term products to suit demand, and some long term deals have lower interest rates than the short term deals. This is what's needed in this period of uncertainty. I still feel the property prices will continue to grow due to the lack of supply and increased demand issue still ongoing, however inflation and interest rate rises will likely cool this towards the end of the year when consumers start to feel the effects of the increased cost of living.
In my experience the market has not slowed down yet. However, lenders are becoming cautious and this will have a knock on effect on the market. With lenders affordability checking becoming stricter than a high charging dominatrix (so I hear). I do not see prices dropping greatly as supply and demand are still imbalanced. The buyers and sellers are still confident, after all they can cut down on their latte's to keep their mortgages affordable according to a certain celebrity home expert.
"Having seen double-digit growth during a global pandemic, the UK property market has proved resilient enough to flourish during the biggest crisis the country has seen since WWII. Whilst the cost of living crisis will have a significant impact on many, it's a brave person who'd bet against property prices holding up or even increasing regardless. Logic and the property market don't go hand in hand."
"We are still seeing fairly strong demand in the housing market, as ever driven by a lack of available housing. This is also reflected in the rental sector, with rents increasing in nearly all areas. One thing we have noticed is a much greater demand for 5-year fixed rates, to protect property owners against expected further rises in the base rate. I think house price growth will slow down this year but we are unlikely to see any decreases."
"We are still seeing strong demand for mortgages from buyers, however they are struggling to find properties. The cost of living crisis and rising interest rates have caused lenders to get stricter with their lending. It is not impossible that prices will start to fall."
"It's been a slow start overall to 2022, with transactions limited by the sheer lack of stock and people staying indoors during the winter months. On top of that, the Stamp Duty holiday was in force a year ago so that will have skewed the data. However, the past few weeks have seen an increase in new instructions and buyers seem to have become more active again. As the weather improves, so does the property market by and large. There is still limited stock and that is hampering transaction levels. As ever, properties for sale at the right value sell very quickly. Despite the worrying global backdrop and inflation, coupled with a slowing economy domestically, I am not seeing as much nervousness as some would make you think. I believe the next quarter will show a strong transactional market as the spring and early summer are often a key time to buy and sell homes, and over the longer term I see the next twelve months being very active."
"With Easter and the Bank Holidays, April was a slightly quieter month on the property front but supply remains so ludicrously low that demand will topple the scales for some time yet. However, we are now seeing some real signs of a storm blowing in, as inflation and the cost of living crisis, together with the continuing war in Ukraine, start to create a nervousness among lenders that may see them cut their cloth accordingly in the second half of this year. That said, though interest rates are rising rising, they are still historically low and that will maintain a degree of demand. House prices are more likely to stabilise than fall during 2022."
"We are yet to see the real impact of inflation, the increased cost of living and tighter lender affordability criteria on the property market as there is always a lag. Though all the signs suggest house prices could be under serious pressure, the property market is unlikely to simply topple over. The laws of supply and demand will continue to prevail. Strong purchasers with good deposits and higher earnings will become buyer favourites."
House prices seem to be going one way. We have seen a number of clients being outbid with properties having offers in excess of asking price.