Agents try to shore up investor confidence after house price fall

Trade bodies have been trying to shore up investor confidence after the latest house price index, by the Nationwide, showing another fall.

Prices saw their steepest fall in over a decade in March, down 3.1 per cent annually - this is the largest annual decline since July 2009. The decline has sharply accelerated from the 1.1 per cent fall recorded in February.

Nationwide chief economist Robert Gardner says: “The housing market reached a turning point last year as a result of the financial market turbulence which followed the mini-Budget. Since then, activity has remained subdued – the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40 per cent below the level prevailing a year ago.

But agents’ bodies are putting a brave face on the news.

Nathan Emerson, chief executive of Propertymark, comments: “Our member agents are reporting transaction levels year on year to be stable and listings of new properties coming to the market also being steady. 

"With a stream of serious buyers still keen to move, and prices still higher compared to this time last year, sellers are still in a strong position to sell, however they can no longer test the market at higher prices and align with those achieved last year. Instead, they will need to reduce or be open to offers in order to get a more realistic and efficient sale.”

And Emerson’s counterpart at the Guild of Property Professionals - Iain McKenzie - adds: “With the largest annual decline in house prices since the depths of the financial crisis, homeowners may be worried about what this means for them. Unlike the financial crisis, we haven’t seen an aggressive drop-off in transactions, so the slowdown in prices has hardly been the crash that was expected.

“Sellers are becoming more open to negotiating with buyers on the asking price and that has the potential to skew the data. While we are forecasting an overall decrease of around eight per cent this year, this would only bring house prices in line with levels back in 2021.

“Confidence is returning to the property market following the fallout of the mini-Budget last September and we should expect further improvements, so long as inflation is brought under control this year. First-time buyers are being reassured by lenders, as the number of mortgage approvals recently saw the first monthly increase since August last year. 

“The high cost of living remains the greatest barrier to home ownership in this country. Inflation levels continue to squeeze households and prospective buyers will need to tighten their purse strings even tighter from next month, as government support on energy bills is withdrawn.”

Jason Tebb, CEO of OnTheMarket, sees it this way: “The adjusting and rebalancing of the market continues.

“Rising interest rates, combined with a higher cost of living have contributed to a slowdown in activity, inevitably impacting the confidence of the average property-seeking consumer in the short term. Pressure on household budgets has been considerable and is not yet easing, although many believe inflation and interest rates are close to their peak.

“Despite these challenging conditions, there are those buyers and sellers who simply have to move and are getting on with it. Higher rates and inflation mean buyers have less buying power, so sellers need to ensure properties are priced correctly by taking advice from an experienced local agent in order to achieve a successful outcome.”