Halifax HPI – “2018 is not 2008” – reaction from Garrington Property Finders

Jonathan Hopper, managing director of Garrington Property Finders, comments:

“After ebbing and flowing throughout 2017, the annual rate of property price growth ended the year back at the modest level it hit during the chaotic weeks following the snap election.

“But despite the slowdown in price rises, Britain’s property market is far from seizing up. More than 100,000 homes were sold in every month of 2017, and many parts of the UK ended the year with a spring in their step – with brisk demand firing respectable, if not stellar, price growth.

“Yet it’s a different story in parts London, where a flight of equity is sucking the momentum out of price rises. On the front line we’re seeing a split between domestic buyers who are increasingly looking beyond the capital for better value elsewhere, and astute international investors who are capitalising on softening prices and the weak Pound to buy in some of the most prestigious postcodes.

“A decade on from the financial crash, there’s an uncomfortable similarity in the ratio of the average property price to the average salary – with the Halifax’s data showing the multiple is now the same as it was when the market fell apart.

“But despite the questions over affordability, 2018 is not 2008. Banks are better capitalised and continue to lend, and while the supply of homes for sale is tight in many areas, the market continues to flow relatively freely.

“As we begin the New Year, there are signs of a renewed sense of purpose among buyers, with those who have resolved to buy pressing ahead despite political and economic headwinds.

“As long as there are no unforeseen shocks – such as a change of government or the collapse of Brexit negotiations – we expect this gradual progress to continue.

“Nevertheless demand is accompanied by one overriding caveat – price sensitivity. With wages falling in real terms and rail commuters suffering inflation-busting ticket price rises, buyers face a balancing act when assessing value; and even the most determined are willing to walk away if the price isn’t right.”