House prices in the UK are currently at an all-time high, with potential room for further growth, despite the greater cost-of-living squeeze.

House price inflation remains stuck in double-digits, as reflected by the latest Nationwide data released last week, which shows that prices are up 11.2% on average year-on-year. But the lender indicated that there are clear signs the property market is slowing down.

But despite plenty of speculation about the future of house prices, Fine & Country global CEO, Simon Leadbetter, believes that concerns over the property market are overstated, especially as no one can accurately predict what will happen to the housing market with any confidence in the near term.

He said: “It is fair to say that no-one expected a pandemic in 2020, the incredible price and volume surge from mid-2020, a European war in 2022, or the cost-of-living crisis scale. Who knows who will win a general election in 2024 and what that means for housing? In addition to all that, I think we have had 20 housing ministers since 1997. That is one per 15 months.

“While there seems to be a lot we cannot be certain of when it comes to external influences on the property market, there are two aspects we can be sure of. Firstly, there is a national shortage of housing supply with rising demand. Secondly, there is no shortage of global wealth interested in buying property in a stable, developed nation with strong law and order, a first-class education system and a high quality of life.”

He points to what he refers to as the rule one of economics, highlighting that if demand exceeds supply, prices will, in his opinion, rise “until we reach an equilibrium”.

Leadbetter continued: “We get equilibrium when price increases to such an extent that it suppresses demand. There are several factors that sadly mean that cannot happen quickly in the property market. These aspects include the fact that there will continually be rising demand because of babies being born, home leavers and the population increasing due to immigration. All these aspects push demand for property, while there is a constrained growth in supply. Successive government’s house building indecision, NIMBY’s and ‘Build Absolutely Nothing Anywhere Near Anything’ or BANANA’s will ensure it. The current difference between demand and supply is 1.8:1.”

He notes that if one looks at YouGov data for the last year, there remains solid consumer confidence that property prices will, in his opinion, increase in the next 12 months.

He added: “Both prime, which would be the £700,000-plus homeowners, as well as the mainstream are much more confident of an increase than a decrease, 11:1 and 5:1, respectively. Interestingly, the prime homeowning audience is now 2.4 times as optimistic as their mainstream peers, and there has been a sharp divergence since January. Based on the data, it seems that the wealthier you are, the more confident you are.

“So, will I predict what will happen to the property market in granular detail? No. But I can confidently say that the property market is strong, especially in the prime sector. Good agents will always succeed as they get unfair market share.”