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
Last month, annual house prices bucked the trend, with a price rise of .5% month on month. This slight uptick follows seven consecutive months of decline. But even though prices were up from March, they are still down 2.7% year on year and down a staggering 4% from the peak last August. The average house price was up slightly from £257,122 in March to £260,441 in April.
Despite these numbers continuing the trend we’ve seen recently, there were tentative signs of recovery.
Data from the Bank of England supports the notion that housing market activity continues to remain subdued with the number of mortgages approved for house purchases in February, nearly 40% below the level from 2022, and about a third lower than pre-pandemic levels. There is some good news though, as new data rolls in, suggesting that mortgage applications are picking up again.
This coincides with a bit of an increase in consumer confidence. While still low by historical standards, it seems individuals are slightly more optimistic about their own financial position as well as the general economy over the next year.
However, this confidence relies heavily on inflation and if it falls sharply in the later half of the year as experts predict, we can only expect for consumer confidence to grow, especially if labour market conditions remain strong.
Looking ahead
If all goes according to plan, then we can expect a modest recovery in housing market activity. It’s important to temper expectations though, as it will take time for household finances to recover, especially since wages are not staying consistent with inflation and the gap is only widening.
However, high mortgage interest rates will likely prevent a full blown comeback in activity. Though not quite as high as they were after the mini-budget announcement last autumn, they are still more than double compared to the level last year.
Despite all this, if nominal incomes remain on par with current performance, combined with weak or declining house prices then homes will become more affordable in 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 – April 2023.
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