“People more interested in packing suitcases than boxes”, as house prices fall in August
![“People more interested in packing suitcases than boxes”, as house prices fall in August “People more interested in packing suitcases than boxes”, as house prices fall in August](https://i1.wp.com/www.propertywire.com/wp-content/uploads/2020/02/shutterstock_1098582308.jpg?w=780&resize=780,470&ssl=1)
House prices fell by 0.2% in August – while they’re still 3% below the all-time peak of the summer of 2022, Nationwide’s house price index has revealed.
The average house price is £265,375, while prices are still up 2.4% year-on-year.
Sarah Coles, head of personal finance, Hargreaves Lansdown, said: “Buyers went away in August – but only as far as the sun lounger – and they’ll be back. Slight improvements in affordability should help tempt them back into the fray. And while concerns about what the Budget has in store will weigh a little on sentiment, you can still expect house prices to trend gently up from here.
“In August people are always more interested in packing suitcases than boxes, so buyers tend to be thin on the ground. A slower market this month meant prices fell very slightly. However, they’re still positive over the year, and the market can expect a reasonable September, thanks to small improvements in affordability.”
Rob Morgan, chief investment analyst at Charles Stanley, said: “Although activity looks set to be brisk this autumn there is now more inventory around and therefore more competition. Buyers will also still be constrained by budgets.
“Although wages have been rising, the post-Covid cost of living squeeze has yet to fade dramatically and the cost of debt continues to ramp up for a cohort of homeowners remortgaging.
“What’s more, the prospect of more significant falls in interest rates are reliant on inflation coming more sustainably under control, which is far from a given.
“With ultra-low interest rates now a distant memory, and a regime of bank rates in the region of 4% in the medium term, a period of stagnation for the UK housing market appears the most likely outcome as affordability gradually catches up.”
Positive sentiment
Despite house price reductions, most commentators seemed upbeat about the state of the market in August, after the Bank of England cut interest rates by 0.25% to 5.0% at the start of the month.
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “One small interest rate reduction and the market responded instantly, even though it was August. It’s been a very successful month, with a large number of sales agreed in all price ranges at a time when agents usually complain it is quiet.
“As the rate reduction was widely expected, we were ready – encouraging sellers to reduce their price, or launch their properties at the end of July/beginning of August, rather than wait until September as most would usually choose to do.”
Tomer Aboody, director of specialist lender MT Finance, said: “Any concerns or uncertainty there may have been pre-election dissipated in August as property market sentiment picked up, buoyed by the rate cut.
“High borrowing costs have been an issue for a while so with lenders trimming their mortgage rates and promise of more reductions from the Bank of England to come, this should lead to an increase in activity in the autumn.
“While there are concerns about what the Budget will have in store, the Chancellor has an opportunity to tackle stamp duty reforms to assist buyers and boost all-important transaction levels. Let’s hope she takes it, benefiting not only the housing market but the wider economy.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman says: “On the ground, activity remains stronger than it was a few months ago, particularly due to increased political certainty.
“Despite falls in base rate and inflation, confidence is a little fragile and won’t be helped by the Prime Minister’s recent announcement for us to expect a painful Budget at the end of October.
“Nationwide’s figures are of course only based on their own customers’ buying activity but have proved a reliable indicator of market activity for many years. Their figures on energy efficiency are interesting but we haven’t seen this reflected yet in buying activity and are unlikely to do so unless energy prices rise considerably higher.”