Prices decline as new build surges

The latest research shows a fall in house prices but a surge in new builds.

Chief executive of Alliance Fund, Iain Crawford, said: “It’s certainly a tale of two markets at present, with uncertainty shrouding the existing market and driving a top line month on month house price decline, while the new-build market continues to move at a rate of knots.

The average price of a new-build property increased by 6.7% in January alone, up 22.3% annually and this demonstrates the continued strength of the new homes sector when compared to the wider market.

This bodes well for the year ahead and will provide many housebuilders with the confidence to bring current stock to market, while also pushing forward with their plans for the year ahead, delivering the new housing stock that the nation desperately needs.”

First-time Buyers
Co-founder and chef executive of Wayhome, Nigel Purves, said: “The average price paid for a first home has fallen at a sharper rate than the wider market, while the annual rate of growth also remains lower, and this will be welcome news for the nation’s first-time buyers who face the toughest task when climbing the ladder.

However, the average price of a first home remains 6.1% higher than it was just a year ago, which demonstrates the growing pressure being placed on the nation’s first-time buyers when it comes to the cost of homeownership.

Unfortunately it doesn’t appear as though they will be offered a helping hand anytime soon, with the government choosing to ignore first-time buyers in last week’s spring statement. With the final Help to Buy deadline also expiring this month, they are left with no other choice but to go it alone and we expect this task will become all the greater with another increase in interest rates on the cards tomorrow.”

Increasing Mortgage Costs
Chief executive of Octane Capital, Jonathan Samuels, said: “With the cost of borrowing continuing to increase, it’s no surprise that the purchasing power of the nation’s homebuyers has taken a hit and this has resulted in a string of small but consistent monthly house price reductions since last September’s mini budget.

The general consensus is that we will see yet another base rate increase tomorrow, albeit a potentially smaller jump than previous hikes, and so the cost of climbing the property ladder looks set to get that little bit more expensive.

However, the topline is that the housing market is yet to buckle under the pressure of the wider economic landscape and while buyers are acting in a more reserved manner, the wheels continue to turn and house prices remain substantially higher than they were a year ago.”

The London Market
Director of Benham and Reeves, Marc von Grundherr, said: “The current decline in house price growth was widely anticipated and perhaps exacerbated due to the seasonality of the market. But we don’t expect that this trend is here to stay, with 2023 already showing far more promise for the housing market.

The London market is currently waiting in the wings, with a mid-table performance both month to month and on an annual basis. However, the pandemic induced trend of buyers looking from the inside out is now well and truly in reverse and, with the addition of returning interest from foreign buyers, we expect the capital to push forward in 2023.”

Wider Market Commentary
Managing Director of House Buyer Bureau, Chris Hodgkinson, said: “We’re now seeing the monthly rate of house price decline seen since September of last year start to accelerate and this demonstrates the increasingly difficult landscape that buyers are negotiating when looking to purchase. “

 

Picture: Pixabay/manfredrichter