Nationwide House Price Index March 2021

ended 31. March 2022

Tomorrow morning while you're eating your Shreddies (or screaming into the mirror at the pointlessness of it all, surrounded by empty bottles of whisky), the Nationwide will be issuing its March House Price Index. So the usual questions:

  • What happened to the property market in March?
  • What's going to happen to it during the rest of 2022?
  • Are people becoming more nervous about buying?
  • Are lenders becoming more nervous about lending?
  • Is the lack of stock/supply going to keep prices up despite the fact many people are one gas bill away from eating their neighbours?

7 responses from the Newspage community

"The major concern in the market at present is affordability and whether that will impact house prices later in the year. With the increases in National Insurance and energy prices, plus increases in food costs and other essentials all feeding into the ONS data sets that most lenders use in their affordability models, we are expecting a reduction in the size of mortgage people will be able to secure for a given income over the coming months. While no one is expecting this to be a stake through the heart of the housing market, many are forecasting a slowing of the rampaging growth that we have almost become used to."
"As interest rates start their inexorable march upwards, we'll likely see a cooling of the property market. However, anyone sitting on their hands thinking they'll pick up a bargain will be disappointed. Prices will be kept high because of the shortage of homes. We don't have enough stock as it is, we're not building homes fast enough, and now we're not approving new plans fast enough for additional homes to be built, further baking in a shortage that will keep prices high. Even with the cost of living crisis about to hit like a freight train, mortgage lenders seem happy to keep calm and carry on, for now at least. But there are storm clouds ahead and lenders could soon start battening down the hatches. As with any rising interest rate cycle, like Sisyphus pushing the boulder up the mountain, one must imagine homeowners as happy."
"The property market is crazy right now, especially for first-time buyers like myself. I struggled to secure a property last year and this year it is becoming impossible. Not because we can't afford one but because there's not enough stock. I am also becoming more nervous and thinking twice whether I want to buy or wait and see if the market cools down. It's a mission impossible for first-time buyers and aspiring homeowners."
"While supply remains low, the housing market has remained buoyant throughout March and will continue to do so in 2022. That said, we are unlikely to see double digit increases as we have experienced in 2021. There are, of course, growing affordability challenges with inflation, particularly when it comes to ever-spiralling energy and fuel costs. Lenders are now factoring these rises, as well as the upcoming National Insurance hike, into their calculations and that will temper what people are able to borrow. "The result is a cooling in the rate of price growth. We have also seen the Bank of England once again raising its base rate to the pre-pandemic level of 0.75%. In reality, the recent rises have meant disproportionately larger costs in mortgage borrowing. For example, one mortgage that was fixed at 0.99% a few months ago is now available at more than double that and many predict further BoE base rate rises ahead."
"We saw robust demand in March. People who want to buy a property are trying to get a fixed rate mortgage before they increase further. But affordability remains a big issue, not just with all the various cost of living rises, but high property prices themselves. There's such a shortage of housing stock that people who can afford to are paying top dollar. Sometimes over the asking price. This housing market madness can't go on much longer. I think prices will fall in the second half of the year, as rates increase and the harsh economic reality kicks in."
"We are seeing more purchase transactions fall through for reasons that indicate an increasing general nervousness. A buyer recently pulled out of a seven-figure purchase for a non-specific reason of "something's come up in the legals". People have been pulling out of transactions at late stages because they've simply changed their minds. Down valuations are also an increasing problem, and buyers are not prepared to shrug them off and complete anyway as they were likely to do last year. While such incidents are a trickle rather than a flood at the moment, they indicate a market coming off the peaks of sky-high confidence as concerns over the cost of living, war in Europe and record-high property prices start to bite."
"The property market in March 2022 did exactly that, and kept marching on, with property hunters strangely undeterred by spiralling inflation and increased interest rates. Key to this, of course, is the lack of availability of housing stock, and as long as supply is low, we will have to see more elevated levels of economic misery before demand, and the spirit of the UK property market, are finally quashed."