Atom Bank - ONS house prices reactive comment

22 May 2024

Richard Harrison, Head of Mortgages at Atom bank, comments:

“The increase in house prices reported today brings to an end a long run of falls, and marks a clear turnaround in confidence among buyers. While inflation has fallen by less than expected today, denting hopes of an imminent reduction in base rate, the reality is that cuts are coming and that is bringing would-be purchasers back to the market.

“Asking prices at a record high is a signal of pent-up demand, with the number of sales agreed in the first four months up by 17% on the same period last year. This is borne out by figures from Propertymark showing that estate agents are seeing increases in the number of would-be buyers registering with them. This growing demand has already translated into house price increases reported by the Halifax and Nationwide indices, and it was only a matter of time before this was reflected in ONS reports given the lag in the data.

“It’s important to note that this increased appetite is coming not only from those with spotless credit histories, but also ‘near prime’ borrowers, those who may have had the odd payment blip in their past but who want to push on now with a purchase. Given the current cost of living crisis it’s crucial that lenders look beyond the black and white of a credit score in order to better support such buyers, and offer them a path onto the property ladder.”