Industry reaction:
Nathan Emerson, CEO of Propertymark: “While it is encouraging to see growth within the housing market, we sit in a phase where the forthcoming months are more difficult to foretell from an affordability viewpoint.
“With the wider picture regarding inflation being very complex to fully envisage, the Bank of England will likely choose to approach the situation with extreme caution, as they make their next base rate decision at the end of the month.
“Worst case scenario, some people may find additional pressures being placed on their household finances across the coming months from three distinct angles. Inflation may push up prices on key household purchases, such as the weekly shop. Base rates could also see increases, affecting those with tracker products, as well as those taking on new mortgage deals, and we could see potential fluctuation in energy prices as well.
“We may see an increased need for a cautious and thoughtful approach to household budgeting, particularly if the effects of global unrest continue to have an influence on our economy domestically.”
“Rising rental prices continue to reflect the chronic imbalance between supply and demand in the private rented sector. Letting agents across the UK are consistently reporting high tenant demand alongside a shortage of available properties, which is inevitably placing upward pressure on rents.
“Propertymark’s latest member data shows that an average of seven applicants are registering per available property. This is not a short-term trend; it reflects years of underinvestment in the sector and growing regulatory pressures, which are discouraging landlords from entering or remaining in the market.
“If rents are to stabilise, measures that support supply must be prioritised, including support for landlords and a regulatory environment that encourages long-term investment. Without this, affordability challenges for tenants will likely only intensify.”
“Rental inflation has slowed and this will be welcome news for renters. For landlords, rents rising at over 3% is positive but for some this may not be enough to offset the extra costs and regulation from the Renters Rights Act which starts from 1 May. Low investment in growing the stock of rented homes is supporting rents rising faster than house prices. Policies to grow the supply of rented homes are needed to moderate rental inflation and ease cost of living pressure on renters.”
James Evans, CEO at Douglas & Gordon: “The latest ONS House Price Index data shows a small rise in values, which tallies with what we’ve been seeing across London. The market is broadly steady, with modest growth focused on pockets where supply is tight and correctly priced homes still attract competition.
“Yet, with these figures reflecting house prices until February, they largely predate the escalation of the Middle East conflict and the recent changes in mortgage pricing. As such, this trend may prove harder to build on in the months ahead, particularly if higher borrowing costs persist.
“Even so, this uplift is a sign that demand hasn’t vanished. With hopes of relief via rate cuts or stamp duty changes fading, more movers are accepting that waiting for perfect conditions also means putting life on hold. For many, decisions are being driven by jobs and family needs, and buyers with competitive mortgage offers will be keen to proceed while those deals still work.
“The encouraging point is that this is starting to look like a market that rewards good preparation and sensible pricing. Even amid wider uncertainty, there are still buyers ready to act when the right home comes along.”
Jeremy Leaf, north London estate agent: “The most comprehensive of all the rental market surveys shows that rents are still rising but not as quickly as previously, partly due to worries about inflation having an impact on affordability.
“However, rents may have dropped further if they weren’t supported by a shortage of stock, exacerbated by landlords leaving the sector ahead of the introduction of the new Renters’ Rights Act at the beginning of May.”
Verona Frankish, CEO of Yopa: “Whilst the rate of house price growth remains fairly modest, the fact that prices are still moving in the right direction demonstrates that the market continues to hold firm despite a tougher economic backdrop.
“Buyers have spent the last year adapting to a world of higher borrowing costs and greater uncertainty and, as a result, we’re now seeing a far more stable and sustainable market emerge, built on realism rather than rapid price inflation.”
Marc von Grundherr, director of Benham and Reeves: “The latest figures show that the UK housing market remains remarkably resilient, with house prices holding firm despite renewed pressure on mortgage affordability and wider economic uncertainty.
“London continues to lag the rest of the UK, with values down 3.3% year-on-year, but the capital remains a market of huge value and importance as a destination of choice for both domestic and international homebuyers.”
Tom Bill, head of UK residential research at Knight Frank: “As a result of the Middle East conflict, mortgage rates have climbed, sentiment has been dented and there is speculation about how the government will respond to the economic shock. This hat-trick of headwinds means house prices will come under pressure this year. The overall impact will depend on how long the conflict lasts and to what extent it escalates. Affordability remains the biggest drag on house prices, which is why London and south-east England lag the rest of the country.”
“Although rental value growth has been declining, the Renters’ Rights Act could increase upwards pressure on rents as landlords mitigate higher risks around repossessing their property or guaranteeing rental income. Any further reduction in supply as landlords sell up could also increase the financial squeeze on tenants.”
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