Jonathan Rolande: Why I’m not celebrating house pri...

I’ve always been a half glass full kind of person.

But I’ve got to confess I struggled to get too excited by the news that house prices are finally back on the rise.

Some newspapers and news websites championed the Nationwide data as a moment to savour and one which showed how the housing market is beginning to fight back.

Well, don't get the champagne out just yet because, as ever, the devil is in the detail.
The reality of this week’s news is that the 0.9% monthly rise in prices is most likely due to there not being enough properties to meet demand.

Supply is - and remains - a massive issue across the market, and I can see no clear signs of that changing any time soon.

Right now, everyone seems to be trying to predict what will happen to prices in 2024.

Many predictions point to them being around 10% lower by the end of next year.

If that happens it would erase half of the gains made by homeowners since the beginning of the pandemic.

This is highly possible, although if mortgage lenders cut rates next year, I suspect prices may begin to creep back up around the Spring or Summer of 2024.

But even if we were to see a 10% fall, the magnitude of this should not be equated to a “housing crash.”

The boom times of the pandemic created a market which was completely unsustainable and now we are paying the price. Politicians talked of a “new normal” during Covid: but for those working in property everything was totally abnormal.

Now, for us, the new normal is a sustained period of falling house prices and we have to cut our cloth accordingly.

One thing is for sure we can’t rely on Jeremy Hunt’s plans to throw a lifeline to first-time buyers to help improve things.

The Chancellor’s idea to extend a scheme to 95% mortgages are doomed to fail.
The scheme enables prospective homeowners to buy a property worth up to £600,000 with only a 5 per cent deposit.

But, let’s be clear, any scheme that increases the demand or buying power of purchasers without increasing the supply will fail in the long term.

The housing crisis can be best described right now as a game of musical chairs. Well, with a reduction in the number of new homes being built a chair has been taken away.

Now Hunt is trying to get more people to play.
The Government realises that they must do all they can to prop up an ailing property market.

It is too integral to our economy and way of life to fail.

But ideas that do not include hugely ambitious plans to build are no more than a sticking plaster.

And in the end, they may very well make things even worse for our young people who simply want the chance to own their own home one day.

Now, do please excuse me, I’m off to top up my glass.

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