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Economic Opinion - House Price Data

On Wednesday at 09:30, the Land Registry is publishing the latest house price data for January. This is data based on completed sales as opposed to "asking prices".

Given recent Base Rate increases and the expectation of further rises, I expect there to be a continued increase in transactions both in progress and completed as both new buyers rush to complete purchases ahead of an increase in term rates, along with landlords out of their fixed periods pushing through refinance.

Now it would be interesting to see the number of cases outstanding with the Land Registry as there remain delays with any documents they process. I have cases taking 9 months to effect simple title splits, which, while budgeted, does limit clients' abilities to refinance until completed.

So while the market data should be buoyant it will only represent the tip of the iceberg versus the number of transactions in progress. As the credit markets continue to tighten, as a result of lenders pulling products along with cost of living increasing I expect there to generally be a drop on activity from casual landlords and those looking to get on the property ladder due to lack of ability to put together deposits or meet affordability calculations as a result of increasing unsecured debt.

However for portfolio landlords with cash to spare I expect to see an increase in bridging and refurbishment as a result of 'fire sale' activity and the ability to take advantage of the broader demographic that is forced to rent.

Funnily enough, until inflation gets under control, house prices will continue to rise. Whether anyone can afford to buy anything though is another matter.

So the question remains, will sellers drop their prices to sell, or can they afford to wait for a motivated buyer to come along? If the auction market is anything to go by they might as well wait, as there are always going to be buyers willing to pay the price." -- Alastair Hoyne, Managing Director, Finanze®

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