He further highlighted how deposit requirements continue to present significant challenges, with a 10% deposit now equivalent to 55% of gross annual average income, further dampening the housing market activity. There were 86,000 completed housing transactions in June, 15% below the same time last year.
Marc von Grundherr, Director of Benham and Reeves, acknowledged the challenges but doesn’t foresee any notable correction: “Interest rates and the resulting cost of borrowing remain high, continuing to dampen buyer appetites, impacting house prices. We expect these lethargic market conditions to remain in the short-term.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, shed light on the buyer’s perspective: “Affordability pressures are weakening house price growth, but demand remains undimmed, especially for properties that are sensibly priced. The key for sellers is to price their property right from the outset.”
James Forrester, Managing Director of Barrows and Forrester, offered a more optimistic outlook: “A gloomy market outlook on the face of it, but rather than entering a deep freeze, it’s fair to say the market is thawing. As interest rates begin to reduce, this growing market momentum will start to snowball and this will reverse the downward house price trends of recent months.”
Similarly, Jonathan Samuels, CEO of Octane Capital, noted the early signs of recovery: “The current market outlook isn’t quite as turbulent as today’s house price figures may suggest, and we’ve seen a boost to market sentiment in the form of mortgage approval activity outperforming wider expectations.”
Despite the economic turbulence, Nathan Emerson, CEO of Propertymark, reported stability in the market, with buyers now in the driver’s seat, able to negotiate and secure properties at reasonable prices, playing a part in combatting the rise in mortgage rates.
The combination of volatile interest rates, high deposit requirements, and stretched housing affordability presents a complex and challenging picture for the UK housing market. While some experts see a potential uplift just around the corner, others expect the stagnant conditions to persist in the short term. Regardless of differing perspectives, the consensus among industry leaders points to a market far from a crash but facing significant challenges and opportunities in the months ahead.