Monitoring the housing market is very important for many, particularly those doctors and dentists who are looking to purchase their first home or who are investing in buy-to-let properties. Our monthly Property Price Update gives you a summary of what the experts are saying.

This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

UK Property Market Update

In April, there were small, tentative signs of improvement in the market, but annual house price growth took a turn in May, falling again after the prior month’s 2.7% decline, down 3.4%. But with seasonal effects taken into consideration, prices are pretty much flat over the month. But average prices still remain 4% below their peak in August 2022. The average house price was up ever so slightly from £260,441 in April to £260,736.

Data from the Bank of England suggests that recovery in housing market activity might be on the horizon, despite the number of mortgage approvals still around 20% below pre-pandemic levels.

Additionally, there are some factors within the market that will likely strengthen it in the near term. Even though the decline in consumer price inflation was smaller than expected, it did slow in April and as a result, investors’ expectations for the BoE bank rate increased substantially in May. Experts predict a possible peak of 5.5%, an entire percentage point above March’s 4.5% peak. Rates are expected to remain higher for quite some time.

Looking ahead

If the rate stays at this level, it is likely that mortgage rates will continue to climb, making for a short respite after the spike post-mini budget last autumn.

However, since labour market conditions remain stable and household budgets are in relatively good shape, considering the current climate, it’s possible that a soft landing for the market is what we can expect.

Despite the fact that activity is likely to remain subdued in the near future, if mortgage rates moderate at the peak of the Bank Rate, nominal income grows at a healthy rate, and house prices remain moderately lower, then housing affordability should improve over time.

Stay in the know

If you’re planning to buy or sell property this year, check back monthly for our regular update on the nation’s property prices and contact one of our advisers for personalised advice.

Figures quoted from Nationwide House Price index – May 2023.

Mortgages for Doctors and Dentists

If you’re planning to buy or sell property this year, contact an advisor for personalised mortgage advice.

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At Dental & Medical Financial Services, our experts are dedicated to helping our clients select the right mortgage deal for your needs. If you’re ready to take the first step toward home-buying, contact us today.

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