38% of people may move home
Housing market is upbeat with more than one third of UK people considering new property
Housing market conditions are surprisingly buoyant, with 38% of people actively moving or considering doing so, according to an index.
The pace of annual house price growth slowed slightly to 12.1% in April, slightly down from14.3%inMarch,Nationwide Building Society said.
Property values increased by 0.3% month-on-month.
Across the UK, the average house price in April was £267,620.
RobertGardner,Nationwide’s chief economist, said: “Annual house price growth slowed modestly to 12.1% in April, down from 14.3% in March – nevertheless, this is the 11th time in the past 12 months that the annual growth rate has been in double digits.
“Prices rose by 0.3% monthon-month, after taking account of seasonal effects – the ninth successive monthly increase, though this is the smallest monthly gain since September last year.
“Housing market activity has remained solid with mortgage approvals continuing to run above pre-Covid levels.
“Demand is being supported by robust labour market conditions, where employment growth has remained strong and theunemploymentratehasfallen back to pre-pandemic lows. With the stock of homes on the market still low, this has translated into continued upward pressure on house prices.
“Nevertheless, it is surprising that conditions have remained so buoyant,givenmountingpressure on household budgets which has severely dented consumer confidence.”
Mr Gardner said people’s expectations of their own personal finances over the next 12monthshave“droppedtolevels last seen during the depths of the globalfinancialcrisismorethana decade ago”.
He added: “Moreover, housing affordability has deteriorated because house price growth has beenoutstrippingincomegrowth by a wide margin over the past two years, while more recently borrowing costs have increased (though they remain low by historic standards).”
A survey of around 3,000 peopleforNationwidethismonth indicated 38% across the UK were either in the process of moving or considering a move.
Mr Gardner said the proportion was particularly high in London, where almost half said they were moving or considering a move.
EveninWales,wheretheshare was lowest, more than 25% were either moving or considering a move, he added.
These figures are high considering that only around 5% of the housing stock is turned over in a typical year in the UK, he added.
Mr Gardner said: “For most movers and potential movers, the majority of those surveyed are looking to trade up – the exception being amongst those aged 55 and above, where nearly 40% are looking to move to a smaller property compared to just7%lookingtomovetoalarger property.”
The research also found 17% of those moving or considering amovesaidtheyweredoingsoat least in part to reduce spending on housing, either by moving to adifferentareaand/orbymoving to a smaller property.
Mr Gardner added: “We continue to expect the housing market to slow in the quarters ahead.
“The squeeze on household incomes is set to intensify with inflationexpectedtorisefurther, perhaps reaching double digits in the quarters ahead if global energy prices remain high.”
Nicky Stevenson, managing director at estate agent group Fine&Countrysaid:“Thegrowth environment is certainly being challenged by a cost of living crisis,risingborrowingcostsand war in Ukraine.
“Offsetting this has been a supply crunch which has led to bidding wars and a sense of desperation among buyers.”
Martin Beck, chief economic advisortotheEYITEMClub,said: “The squeeze on real incomes from high inflation means fewer people will be able to afford to borrow the necessary amount they need to buy at higher mortgage rates.
“Consumer confidence – including households’ expectations of their own personal finances – fell to a near record low in April. And next week’s MPC (Bank of England Monetary Policy Committee) meeting is likely to deliver another rise in interest rates, which will push up mortgage costs.
“But just as during the pandemic,thehousingmarketis likelytoproverelativelyimmune to economic challenges.”