‘Peak of turmoil is behind us’, says housing expert

As the dust settles on a challenging year for the housing market, industry leaders and experts are cautiously optimistic about the road ahead.

Nathan Emerson, CEO of Propertymark (a membership body for property agents), believes that the "peak of turmoil" has passed, but he emphasises the need for vigilance and a strategic approach to recovery.

He said:

We have seen a brutal mix of high inflation and elevated interest rates knock consumer confidence across the year.

"Propertymark are positive the peak of the turmoil is now hopefully behind us; however, we must tread with caution over the coming months.

"We are currently seeing pockets of house price growth, which is reassuring, but to be fully confident this must be universally seen across the entire UK.

With inflation having responded to the Bank of England’s efforts, and interest rates appearing to have peaked, Emerson believes positive market sentiment has started to re-emerge.

Many would call 2023 the year of both high inflation and high rates – and so prospective buyers approached the market cautiously, creating a challenging landscape for the industry.

However, figures show house prices were surprisingly resilient.

According to Nationwide figures, the property market closed the year of 2023 with houses only 1.8 per cent cheaper than they were in the year of 2022.

Despite this, Nathan Emerson remains cautious about the upcoming year, stating:

It’s important to remember aspects such as almost 1.4 million households across the UK have a fixed-rate mortgage deal which will come to an end across the next 12 months.

What he means here is that the side effects of the Bank of England raising interest rates may not have been fully felt, yet.

There may yet be downward pressure applied to the economy, as these properties come to the end of their initial fixed terms. Since borrowing had been much cheaper, these homeowners will likely have to reduce spending in order to cover the higher cost.

By contrast, in a recent survey conducted by Censuswide, 74 per cent of residential landlords are confident about property sector (read our full coverage of this report here).

Looking ahead for 2024, Nathan Emerson believes the Chancellor’s Spring Budget (on 6th March 2024) needs to put significant emphasis on housing, as this would further foster positive sentiment within the market.

He says:

Beyond all else, a robust housing plan is the underpinning of every community across the entire UK.

It is vital momentum remains switched on to ensuring the supply of quality homes always matches demand.

Albeit, leaked data of the Conservatives’ plans for first time buyers doesn’t appear to be instilling confidence, placing ever more demand on the rental sector.