The latest news from the property market strongly suggests house prices have now tailed off — but where do they go from here?
There’s a moment on every rollercoaster ride when you start to feel gravity winning the battle with momentum. After a few minutes plunging up and down like a rodeo rider, and rounding corners like an F1 car — perhaps even performing the odd loop-the-loop — there’s just that sensation of the ride coming to an end. You feel it in the pit of your stomach before your eyes and ears catch up; the carriages have begun to slow, and it’s almost time to get off.
Is that where the property market is today? The Halifax’s latest figures this week strongly suggest that prices have topped out, with a 0.1% fall in September meaning that after climbing seemingly inexorably for a couple of years, things have flattened off in the past three months. A few weeks ago, the market commentators were pulling their punches; now, they’re being clear and direct. ‘Recent economic announcements and developments are beginning to be reflected in data,’ says Tom Brown of Ingenious Real Estate, to give one example. ‘We are seeing a slowdown in the market.’
But while a rollercoaster is a trick of physics with clear, limited variables all obeying Newton’s laws of motion, the housing market is much harder to predict. The headwinds are clear: soaring mortgage rates, stagnant wages despite brutal inflation; and house prices that are, by any measure, at record highs. Against that, there’s still enormous demand, comparatively little stock listed for sale; rental prices are so high in many parts of the country that buying still looks attractive; and a political and economic situation about as steady and predictable as a radio control car being driven by a sugar-fuelled toddler.
I did have one optimistic property market survey in my inbox this week, carried out by Yopa, claiming that 78% of people are confident prices will stay solid, and 57% even foresee further rises next year. But hiding beyond the headline numbers was a different story: Yopa’s questionnaires had been filled in between September 20th and 26th, several days before the Chancellor’s now-infamous mini-budget. The country — if not the world — is already a very different place.
So where does all this leave us? Well, it’s pretty clear that the rollercoaster is indeed slowing; what we don’t know is whether it’s going to coast gently to a stop to allow the riders to change over, or if it’ll be one of those rides that lulls you into thinking it’s over before making a surprise lurch before catapulting you round once more, and this time in reverse.
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