Professor Joe Nellis is the co-creator of the Halifax House Price index and is economic adviser at MHA, the accountancy and advisory firm.
The Halifax House Price Index has recorded a surprising 0.4% dip in UK house prices in May. However, year-on-year growth remains strong, with the annual growth rate coming in at 2.5%. This comes as rising wages is pushing affordability up and greater competition in the mortgage market is leading to more favourable rates.
This growth is set to continue as huge demand for houses persists in the UK. This is something that the Government has recognised, setting an ambitious target to build 1.5 million new homes by 2029, but recent estimates suggest that this is looking overly optimistic.
One thing to consider over the next year is the Renters’ Rights Bill introduced to Parliament by Angela Rayner in her role as Secretary of State for Housing. Expected to pass in the Autumn, this Bill will provide greater protection for tenants and impose new restrictions on landlords, including ending ‘no fault’ evictions.
These new restrictions could disincentivise landlordism, encouraging the sale of rental properties and increasing supply, or discouraging potential landlords from buying properties and reducing demand. Both scenarios would apply downward pressure on prices and provide some respite for would-be homeowners.
