Improving confidence is encouraging buyers back into the housing market but affordability remains the biggest barrier to a sustained recovery, according to property expert Jonathan Rolande.
The founder of the National Association of Property Buyers believed the market was showing signs of stabilising following a prolonged period of economic and interest-rate uncertainty.
Recent data from Rightmove, Lloyds and Nationwide indicated that house prices had broadly plateaued rather than entered a period of significant decline.
Rolande (main picture) expected prices to remain relatively stable over the coming months, with confidence recovering gradually rather than triggering a rapid rebound in activity.
INCOME GAP RESTRICTS BUYERS
Rolande said: “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.”
He believed the underlying constraint was affordability rather than short-term market sentiment, with house prices having risen considerably faster than earnings over several years.
Rolande added: “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.”
He said the problem affected both urban and rural markets. Although property prices were generally lower outside major cities, local wage levels could leave affordability similarly stretched.
LIMITED SUPPLY SUPPORTS PRICES
A continuing shortage of available properties was helping to prevent a more significant fall in values.
Rolande said some homeowners and longstanding buy-to-let landlords were choosing not to sell, restricting supply while underlying housing demand continued to grow.
He added: “Fewer homes coming onto the market inevitably keeps pressure on prices while demand continues to grow.”
BUYERS REMAIN PRICE-SENSITIVE
Rolande warned sellers against assuming that an increase in autumn activity would automatically generate stronger offers.
Buyers could access information about comparable sales, listing periods and previous price reductions, making it easier to identify homes priced above local market conditions.
He said: “The first few weeks of marketing are usually when a property attracts the greatest attention. If buyers dismiss it because the asking price is too ambitious, sellers can lose valuable momentum.”
Rolande added: “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.”
