Nick Leeming, Chairman of Jackson-Stops, comments on today’s ONS House Price Index:

“On the same day inflation reached 10.1% – the highest rate since the early 1980s – house prices in August continued to rise 13.6% year on year, 1.1% month on month, albeit these figures are on a slightly historic basis. Although London continues to have the highest average house price in England, in August it was the region with the lowest annual house price growth at 8.6%, indicative that growth is stabilising across the capital. This may be pointing towards a wider period of stability for house price values in the coming months. For now, the market is waiting with bated breath until November 3rd when the Bank of England will make its next interest rate decision. But even before this, the latest in an assembly line of Chancellors is due to address the House of Commons and outline this government’s monetary policy. While it may be taking place on the 31st October, the hope is that any announcements don’t spook the markets for the second time in Liz Truss’ premiership.

“A change in direction from the previous Chancellor, a recurring theme of Jeremy Hunt’s emergency statement this week was the need for stability and a sense that a challenging road was ahead. The need for stability is something that the property market understands only too well. After a period of accelerated house price growth on a scale unlike anything known before, we’re continuing to see consistent levels of demand and supply across the Jackson-Stops national network in September, with new instructions and sales holding firm.

“It is welcome news that tax changes to stamp duty announced in September have remained in play for those at the lower end of the market, giving a much-needed boost to first time buyers who tend to be most affected by rising interest rates and inflation. The long-term effects of rising mortgage rates and tighter lending on the wider housing market is likely to be delayed, however, with around 75% of current mortgages on a fixed rate of between two and five years. As we know, many national house price indices have a lag period from the point of sale agreed to being officially registered, so it is likely we will get a clearer picture in the months ahead.

“Our latest research shows that interest rates are a driving force for current buyers, with two thirds (61%) of active home movers admitting that rising interest rates are a top factor for putting their home on the market right now. As the sub-one percent borrowing environment comes to an end for good, many vendors are choosing to act now and lock in rates as soon as possible before further announcements from the Bank of England, even if they aren’t as competitive as they were just a few months ago. This will be a long-term adjustment to a new normal that will likely take time to settle in. Yet, we expect that the market will continue to remain most active at the top end, where cash purchases persist and are much less impacted by economic headwinds.”