"The recent increase to the Bank of England Base Rate may cause some potential purchasers to review their finances but it’s unlikely to cause them to change their mind"
The survey of over 140 intermediaries, carried out in October, asked brokers for their views following Nationwide’s assertion that London was the weakest performing region of the UK for house price growth in Q3.
63% of brokers expected London house prices to fall further, 30% expected prices to stabilise and an optimistic 7% thought London prices would show an increase in the last quarter of 2017.
Brokers were then asked for their views on the outlook for UK house prices and again, most brokers thought there would be more downward pressure on prices, a view reflected in the most recent report from RICS.
56% believe prices across the rest of the UK will weaken compared to 35% who believe they will increase.
However 9% believe the UK will see the start of a UK house price crash in Q4.
Noel Meredith, Executive Director – United Trust Bank, commented: “Although there’s a general consensus that house prices in prime areas of London have seen a drop, the picture for the rest of the UK is less clear. According to RICS it’s a mixed bag with some regions still seeing good levels of activity whilst others are experiencing fewer buyers and sellers.
“However, Nationwide and Halifax figures indicate that on the whole UK house prices rose again in October by 2.5% and 4.5% respectively. The fact is that indices based on averages rarely give a true representation of what’s happening in local markets and we know from talking to developers that in most areas there are still strong levels of activity. A lack of supply and a strong demand for good value FTB and family homes together with assistance from initiatives like the Help to Buy scheme continue to underpin property values in most parts of the country and our view remains positive.
“The recent increase to the Bank of England Base Rate may cause some potential purchasers to review their finances but it’s unlikely to cause them to change their mind about buying for the first time or to halt a house move altogether. Furthermore, although this may be the first of several small increases over time, the cost of borrowing for house purchase is likely to remain low. There is no shortage of mortgage lenders offering rates from around 1% to customers with good sized deposits."
