House price indices have painted a confused picture of what’s happening in the property sector recently.

While Halifax reported annual gains of 1.6% in the year to March 2023, Nationwide has reported falls of 3.1% over the same period. Coincidentally, that was also the biggest fall reported in 14 years.

A further drilldown into the detail shows that the Halifax house price index reported a 0.8% monthly increase in house prices in March, while the Nationwide index reported a 0.8% monthly drop.

Most recently – at the start of May – Nationwide predicted a “modest recovery” in the housing market after witnessing house prices rise by 0.5% in April as mortgage rates start to come down.

So, what’s actually happening?

Some analysts believe that the divergence of these mortgage approval statistics could reflect the fact that buyers are shifting to different types of properties in different areas.

In other words, some purchasers are buying smaller properties in those parts of the country where their money goes further resulting in positive gains in some quarters.

At this point in time, it’s impossible to say for definite that this is the case.

Perhaps the bigger question is not where house prices are now, but what’s going to happen to them in the medium to long term.

From the conversations I’m having with lenders daily, I’m aware that the appetite to complete deals remains strong.

But they are also rightly taking an increasingly cautious approach and, given the prevailing uncertainty and confusion, there’s great wisdom in this.

Central bank interest rate rises – both in the UK and globally – will continue to cause issues by applying extra pressure on buyers.

As has been widely documented, many borrowers are now increasingly coming off low fixed rates and going onto much higher repayments.

This is happening at the same time as borrowers are experiencing tough cost of living increases.

These stringent conditions are unlikely to change anytime soon.

High levels of inflation have been prevalent throughout the first quarter of 2023 and, despite the speculation, there seems scant chance that the Bank of England will lower the base rate imminently.

In short, it remains entirely possible that house prices could continue falling in real terms for some considerable time yet.

The strain of higher interest rates combined with the increased cost of living means that there’s also a greater likelihood that the number of repossessions will continue rising.

Courts and enforcement officers are already stretched in the pandemic’s wake and this situation could be about to worsen.

The confusion that’s clearly evident in the most recent property indices means lenders would be wise to consider adopting the most proactive approach to property receivership.

For obvious reasons, default loans should be identified and actioned at the earliest opportunity.

Commercial insight into what’s currently evolving within the property market – both regionally and nationally – must also be enshrined at the heart of the receivership process.

CG&Co continues to leverage our in-house expertise to ensure our clients achieve the best possible outcome in the shortest time frame.

As these uncharted times unravel, we remain resolved to return funds to lenders as quickly as possible to ensure that they can continue lending at rates that are most favourable to them.