Improving confidence is encouraging buyers back into the housing market, but affordability remains the principal barrier to a sustained recovery according to property expert Jonathan Rolande.
The founder of the National Association of Property Buyers believes the market is stabilising after an extended period of economic and interest-rate uncertainty.
Recent house price indices indicate that property values have broadly plateaued rather than suffered a significant correction, while buyer demand remains measured.
Rolande (main picture) expects prices to remain broadly stable over the coming months, with confidence recovering gradually rather than triggering a rapid rebound in activity.
INCOME GAP RESTRICTS BUYERS
Rolande says house prices have outpaced wage growth over several years, making it increasingly difficult for prospective buyers to bridge the affordability gap.
He says: “Many first-time buyers are now looking at homes costing close to 10 times their annual income, compared with four or five times income a generation ago.”
The challenge is not limited to expensive urban markets. While homes may cost less in rural areas, corresponding wage levels can leave affordability similarly stretched.
Rolande adds: “The market has cooled, but it certainly hasn’t collapsed. Prices have flattened and transactions are taking longer because buyers are being much more cautious, but people are still moving for work, family, schools and lifestyle changes.”
SUPPLY SUPPORTS PRICES
A continuing shortage of available properties is also helping to prevent a more significant fall in prices.
Rolande says some homeowners and longstanding buy-to-let landlords are choosing not to sell, restricting stock while underlying housing demand continues to grow.
He warns that greater autumn activity will not necessarily translate into stronger offers because buyers can access more information about comparable sales, listing periods and price reductions.
OVERPRICING RISKS LOST MOMENTUM
Rolande says unrealistic asking prices remain one of the biggest risks for sellers, particularly during the first few weeks of marketing when a property generally attracts the most attention.
However, he stresses that well-presented homes in desirable locations can still perform strongly when priced in line with local conditions.
He adds: “I wouldn’t describe the market as booming or even fully recovering, but confidence is improving.
“My expectation is for a period of stability rather than dramatic change. Confidence should continue to improve gradually, but affordability remains the issue that needs solving before the market can move from stability to genuine recovery.”
