Twindig housing Market Index (HMI) - 8 Oct 2022
Liz Truss, Kwasi Kwarteng and the rest of the cabinet did little to calm the nerves of residential investors this week. The messages of 'growth growth and growth' and 'movin on up' did not have the desired effect, more a case of 'nothing can start me' rather than 'nothing can stop me' as the Twindig Housing Market Index nudged up by the tiniest of margins, rising 0.2% to 61.7.
It seems that first impressions are important and those first impressions last, after all, you never get a second chance to make a first impression. Following a clumsy start, the new Prime Minister and Chancellor have a mountain to climb to win back the confidence of residential investors. We had further confirmation this week that mortgage rates are on the rise, and the Nationwide and Halifax house price indices reported house prices fell in September (for the avoidance of doubt, investors prefer those metrics to move in the opposite direction). This is not the start the 'new' Government had hoped for.
However, in our view, house prices are plateauing rather than falling, holding their breath until the political (and economic) uncertainty subsides. The last four months have seen house prices rise twice and fall twice, seemingly making as many u-turns as the Liz Truss Government.
Whilst the UK housing market appears to be all at sea, if the Truss Government has taught us anything it is that markets can change direction quickly and although the glass currently seems half empty, it might very soon start to look half full.