Murray Smith, Managing Director of SiteSales Property Group, a leading residential property sales and development consultancy in London and the South East, commenting on the results of the Nationwide House Price Index, said:
“A slip in growth is due to stagnation in the mid-upper market (i.e. transactions that do proceed are at a lower price point hence the annual price indications are easing) as those in a suitable home have long since packed away their aspiration along with the summer beach wear.
“Mortgage approvals are down by eight per cent – a notable turndown and one that needs keeping a close eye on. Nationwide have decided this month to publish statistics on UK household net wealth. From this we see that the entire UK housing privately owned stock is geared at just under 20%. That is why for the foreseeable future parental funding will keep the general UK market propped up with only marginal easing moving forward.
“Parental funding coupled with Help to Buy are the sturdy legs upon which the Colossus of the housing market sits. Help to Buy itself, aligned to new build as it is, generates cul-de-sac transactions that do nothing to generate movement up through the middle market, creating stagnation which in turn is reflected in reports such as this. On the ground, we are still able to maintain, even lift in some locations, values where Help to Buy is available. That doesn’t feel right. It’s good for us, good for sales, even better for the PLCs but masks the true picture. Colossus is not about to tumble but turmoil awaits should those legs begin to wobble.”