property price growth Merton Benham and Reeves Annual UK house prices UK house price growth House prices
Marketing No Comments

Scottish house prices increasing in line with rest of UK

SCOTTISH house prices are generally increasing, fitting in with a trend across the rest of the UK which has seen the average price of homes in major cities increase by nearly £90,000 over the past decade.

A Zoopla analysis found the average house price across the UK’s 20 biggest cities has increased by £89,987 across the period – or around 54%.

This is a bigger increase than the average house price uplift across the whole of the UK over the past 10 years, at £62,218.

Average Glasgow house prices have surged by £16,087 over the past decade while the figure in Edinburgh is higher at £61,693.

Average London house prices have risen by £204,400 over the past decade.

The typical house price across the cities covered by the index is now £257,200, while in London it is £479,000.

But city house price growth has varied widely over the past decade. House prices in Aberdeen are lower compared with 10 years ago, a decrease of £1164 (0.7%), while Belfast saw a fall of £4896 (3.4%).

Zoopla said Aberdeen was affected by the oil price crash post-2015, and Belfast, having registered six years of house price falls between 2007 and 2013, has been slower than other major cities to see a sustained recovery in house price growth.

Looking ahead, Zoopla expects city house prices to increase by 3% over 2020 as a level of pent-up demand returns to the market following the General Election result.

Richard Donnell, research and insight director at Zoopla, said: “The election result provides an element of certainty for households looking ahead to 2020, but the result changes very little in terms of housing market fundamentals.

“While we expect some pent-up demand to return to the market in (the first quarter of) 2020, the affordability of housing across the country will dictate the level to which prices will increase in 2020.

“Lower mortgage rates have already been reflected in higher house prices, which means house prices are set to rise at a lower rate in future – more in line with average earnings. We expect UK city house prices to increase by 3% over 2020.”

By Emer O’Toole

Source: The National

Adverse Credit Remortgage Halifax UK house prices ONS UK housing market average UK house price
Marketing No Comments

28% of estate agents predict house prices to fall next year

More than a quarter (28%) of estate agents expect house prices to fall next year, down from 43% last year when agents were asked the same question, NAEA Propertymark has found.

Over half (56%) of agents expect house prices to stay the same.

A quarter of estate agents think the number of sales made to first-time buyers will increase whilst over half (58%) expect it to stay the same.

Mark Hayward, chief executive at NAEA Propertymark, said: “The changing political landscape throughout 2019 has undoubtedly caused uncertainty in the housing market, which in turn has affected sentiment and decision-making.

“Once the current political impasse is resolved and it’s clear how and when we’ll be leaving the EU, we hope there will be a degree of certainty which may trigger a flurry of activity.

“Regardless of the colour of the new government, housing must be a priority.

“A clear strategy is needed to tackle key issues such as stamp duty costs.

“Additionally, we’d like to see the government commit to bringing regulation into the sector as soon as they can in the New Year and to consider the introduction of digital logbooks to allow for a more interactive, streamlined and transparent process for home buyers and sellers.

“The housing market needs reassurance from the government, which will in turn inject some confidence into the market for both buyers and sellers.

“Despite the difficult year, the UK property market remains a strong sector overall, and has demonstrated a huge amount of resilience in the face of political turmoil.

“We hope for a more certain outlook and some stability in 2020, which is hopefully provided sooner rather than later.”

A third (32%) expect demand to drop and a further 28% think supply will increase.

By Michael Lloyd

Source: Mortgage Introducer

buy-to-let Tax changes
Marketing No Comments

Tax changes forcing landlords into more efficient structures for their business

The increase in portfolio and complex buy-to-let business seen over the past two years is set to continue in 2020, according to Paragon’s Director of Sales, Moray Hulme.

Recent tax changes have forced landlords to look for more efficient ways to structure their business, driving an increase in demand for mortgage products for incorporated and limited liability partnerships.

Research from BVA BDRC for Q3 2019 reveals landlords expecting to purchase property in a limited company structure has almost doubled in under two years. This, alongside the Prudential Regulation Authority’s (PRA) more detailed underwriting approach for portfolio landlords, has resulted in specialist lenders like Paragon tailoring products to match more complex requirements.

Paragon also predicts intermediaries will refocus on purchase business in the buy-to-let market, following a significant increase in the popularity of longer-term fixes since 2015 reducing remortgage opportunities.

It’s forecast those who do purchase are more likely to be larger-scale portfolio landlords, with non-portfolio landlords owning fewer than four properties far less likely to expand since the introduction of the Stamp Duty surcharge in April 2016 and subsequent tax changes. Recent research by Paragon found larger scale landlords are three times (11%) more likely to consider buying than smaller scale landlords (4%), within an overall much smaller buy-to-let market.

Despite this constrained buy-to-let market, the Private Rented Sector (PRS) continues to provide a home for one in five households, according to the 2017/18 English Housing Survey, and the demand for PRS property will continue to grow.

Following the ban on letting fees to the proposed abolition of ‘no-fault’ eviction, Paragon believes 2020 will see the introduction of more tenant-friendly regulation, as PRS landlords play an increasingly vital role in meeting the UK’s housing need.

Moray Hulme, Director of Mortgage Sales at Paragon, said:

“In recent years, landlords have had to be more strategic in their approach than ever before and the buy-to-let market has seen a significant increase in portfolio and complex business. Whilst mainstream lenders have limited their involvement to smaller-scale landlords, Paragon and other specialist lenders have been able to adapt and offer the right products to enable landlords to remain efficient – and this is a trend that we expect to continue in the long-term.”

“We also expect to see more tenant-friendly regulation in 2020, as the PRS continues to support a housing crisis caused by multiple factors, including population growth, limited investment in social housing, and tighter mortgage affordability. All of this increased complexity and growing professionalism is good news for Paragon, as we head into the new year as one of the few specialist lenders with the capability to support complex buy-to-let mortgage requirements.”

Source: Property118

Brokers number of landlords Buy to let mortgage lending mortgage stamp duty holiday
Marketing No Comments

Brokers unsatisfied with how lenders handle adverse credit

Brokers are least satisfied with how lenders handle adverse credit and commercial buy-to-let cases, Smart Money People has found.

Following broker feedback in its Mortgage Lender Benchmark, broker satisfaction with mortgage lenders’ handling of adverse credit cases is 74.6%, rising to 77.1% for commercial buy-to-let cases.

The average satisfaction across all mortgage case types is 81.1%.

Nate Harwood, co-founder of Smart Money People, said: “Brokers appreciate that adverse credit and commercial buy-to-let cases are trickier and more specialist in nature.

“That said, they’re not prepared to cut lenders operating in these areas any slack.

“And with some 1.3 million people with adverse credit expected to be looking for a mortgage in the next year, how lenders handle adverse credit cases in particular, really does matter.”

When it comes to adverse credit cases, brokers are particularly dissatisfied with the speed to process applications through to offer.

The average adverse credit lender received a 59% rating around speed, 15% lower than the average across all cases (74%).

Broker satisfaction with the ease of determining the maximum loan amount is another key weak spot, and stands at 76% which is 7% lower than the average (83%).

Meanwhile, the ease of determining product eligibility proved to be the key point for brokers leaving feedback for commercial buy-to-let lenders.

The average commercial buy-to-let lender satisfaction rating is 77%, some 4% lower than the average seen across all cases (81%) and 2% lower than residential buy-to-let cases.

The research has also identified the highest rated lenders for adverse credit and commercial buy-to-let cases.

Brokers highlighted the best adverse credit lenders as Bluestone, Pepper Money, Precise Mortgages, The Mortgage Lender and Aldermore.

Furthermore, the top commercial buy-to-let lenders according to brokers are BM Solutions, Leeds Building Society, The Mortgage Works, Kent Reliance and Precise Mortgages.

By Michael Lloyd

Source: Mortgage Introducer

Autumn statement
Marketing No Comments

GBP to EUR Forecast: Boris to Prohibit Brexit Extension

The sterling vs euro interbank exchange rate stands at 1.1715 today. This is close to its lowest in over two weeks, or since December 3rd.

The pound stands near this fortnight low versus the common currency, first because UK Prime Minister (PM) Boris Johnson will today introduce his legislation, to “legally prohibit” the UK’s future EU trade deal talks going beyond the end of 2020.

The PM will add this clause, as part of the Withdrawal Agreement Bill (WAB), Parliament’s legal name for the Brexit agreement that PM Johnson agreed with former European Commission (EC) President Jean-Claude Juncker, in October.

Following last week’s UK election, PM Johnson enjoys an 80-seat majority in the House of Commons, so it’s thought that the amendment will smoothly pass.

However, for investors, this risks the possibility that the UK might “crash out” of Europe by December 31st 2020, without new trade arrangements, thereby weakening sterling.

UK Retail Sales Fall in November as BoE Holds Rates at 0.75%

UK retail sales fell by -0.6% in November, said the Office for National Statistics (ONS) on Thursday, below forecasts for a 0.3% rise.
The Bank of England held UK interest rates at 0.75%, as predicted, yet maintained open the possibility of a cut next year, if UK economic growth and inflation don’t pick up.

This morning, we’ll learn the UK’s revised GDP (Gross Domestic Product) growth figures for Q3, from July to September, which is forecast to remain at 0.3%.

This is the last major UK economic release of 2019. If the data surprises above or below this figure, it could affect the pound.

Eurozone Consumer Confidence Data Due as Lagarde May Surprise in 2020

Today the euro bloc’s consumer confidence figures for December are released by the EC at 15.00 GMT, and forecast at -7.0, from November’s -7.2.
However, this is a relatively minor release, so looks unlikely to earn the financial markets’ attention, unless the results arrive significant above or below forecasts.

This is the Eurozone’s last economic release of 2019, although turning to 2020, we’ll see what steps new European Central Bank (ECB) President Christine Lagarde takes, to prop up the bloc’s economic growth and inflation. If Ms. Lagarde surprises next year, this might impact the euro.

By James Lovick

Source: Pound Sterling Forecast

Brexit crisis Scottish economy
Marketing No Comments

Scotland returns to growth despite impact of Brexit woe

THE Scottish economy returned to growth in the third quarter, matching UK-wide expansion of 0.3 per cent, official figures show.

Business services and finance was a key driver of growth during the three months to September, according to the data published yesterday by the Scottish Government, but manufacturing contracted by 0.2% and construction output was flat.

The Scottish economy had contracted by 0.2% in the second quarter, matching the UK-wide performance in that period, having expanded by 0.5% during the opening three months of this year.

Comparing the year to September with the preceding 12 months, Scottish gross domestic product grew only 1%.

The dampening impact of Brexit-related uncertainty on economic growth in Scotland and the rest of the UK has been highlighted in a raft of surveys, and by economists.

CBI Scotland director Tracy Black said: “While it’s good to see that Scottish GDP growth recovered following a contraction in the second quarter, underlying momentum remains weak.”

Andrew McRae, the Federation of Small Businesses’ Scotland policy chair, highlighted the resilience of consumers and firms amid weak confidence, cost increases and political turmoil.

He said: “It’d be easy to dismiss these uninspiring growth figures, but they show that many people and firms have been getting on with business despite shaky confidence, rising overheads and political upheaval.”

In spite of manufacturing weakness, the broader Scottish production sector achieved a 0.9% quarter-on-quarter rise in output in the three months to September on the back of a 5.9% jump in electricity and gas supply. The services sector in Scotland grew by 0.2% quarter-on-quarter in the three months to September.

Comparing the third quarter with the same period of 2018, Scottish GDP was up 0.7%. This was adrift of a corresponding rise of 1% for the UK as a whole.

Scottish manufacturing output in the third quarter was down by 0.8% on the same period of last year. UK manufacturing output was flat quarter-on-quarter in the three months to September. However, third-quarter UK manufacturing output was down by 1.4% on the same period of last year.

Mr McRae called for politicians at Holyrood and Westminster to pay heed to the needs of smaller businesses.

He said: ”If in 2020 we want smaller firms to drive stronger local growth, MPs and MSPs must find time to think about their needs. Across the UK, we must see a new drive to end the late-payment crisis. And at Holyrood, we must see MSPs dismiss a half-baked effort to hand councils sweeping new tax powers.”

The FSB noted yesterday that earlier this year at the Scottish Parliament’s local government committee, opposition MSPs had united to force through a stage-two amendment to the Non-Domestic Rates (Scotland) Bill that it observed “could see councils take full control of the Scottish rates system and may end Scotland-wide small business rate relief”.

Scottish Finance Secretary Derek Mackay said: “While it is good news the economy has grown in the last quarter, it is unsurprising the overall pace of growth has slowed as a result of the continued uncertainty around Brexit.”

Sterling has come under pressure this week, with Prime Minister Boris Johnson spooking markets with proposed legislation to prevent extension of the Brexit transition period beyond the end of next year.

The pound was, at 5pm in London yesterday, trading around $1.3076, down nearly 0.4 cents on its previous close. It had tumbled by more than two cents on Tuesday, and is now below levels at which it was trading last Thursday as voters went to the polls.

Sterling had spiked above $1.35 in the wake of an exit poll published immediately after the polls closed at 10pm, which showed a clear Conservative majority.

Mr Mackay said: “Brexit remains the biggest threat to our economy. Just this week the Prime Minister has put the risk of a ‘no-deal’ Brexit back on the table by ruling out any extension to the transition period. This would be catastrophic for Scotland’s economy. Scotland did not vote for Brexit and the people of Scotland have the right to determine their own future free from Brexit as an independent member of the European Union.”

By Ian McConnell

Source: Herald Scotland

London's commercial property market Bank of England Philip Hammond
Marketing No Comments

London’s commercial property market bounces back in fourth quarter

Investment in London’s commercial property market rebounded in the fourth quarter as the capital’s risk profile began to improve, strengthened by Boris Johnson securing a majority in last week’s General Election.

Investment jumped 15 per cent compared to the previous quarter, rising to almost £2.8bn, according to preliminary figures.

Property experts at estate agents Knight Frank have forecast that the boom will continue next year, driven by the result of the General Election and the increased certainty surrounding Brexit going forward.

Knight Frank head of capital markets Nick Braybrook said: “Investors have been circling the market in increasing numbers over the last few months, with international capital drawn in by attractive yields and the currency discount compared to other global cities.

“London’s perceived risk profile has improved tremendously through the second half of 2019 whilst geopolitical tensions in markets from Asia to the Middle East have eroded their relative attractiveness boosting the appeal of London.”

Faisal Durrani, head of London commercial research added: “The political uncertainty certainly dampened activity for most of 2019, but a shortage of assets for sale exacerbated this.

“With the decisive Conservative majority secured in the General Election last week, confidence is expected to rapidly return into the market, something investors have been hankering for.”

Figures published by CBRE earlier this week also painted a positive picture for London’s commercial property market.

The data showed that central London office take-up soared 31 per cent between October and November, driven by a growth in the capital’s fintech sector.

Office take-up jumped to 900,000 sq ft, while the year on year increase was five per cent.

By Jessica Clark

Source: City AM

Average UK house price growth UK House Prices UK property prices UK house price inflation
Marketing No Comments

House price growth slowed to seven-year low in October before ‘Boris bounce’

The Land Registry has revealed that house price growth slowed to its lowest rate since September 2012 during October in an index that is now said to be “catching up with history”.

The figures relate to a period before the General Election results and the so-called Boris bounce, where agents have since reported a resurgence in activity.

Land Registry figures show house prices increased by 0.7% annually during October, down from 1.3% a month before and the lowest rate of growth in seven years.

Prices also fell 0.7% on a monthly basis, suggesting an average UK house price of £232,944.

House price growth was strongest in Northern Ireland where prices increased by 4% annually, while the lowest was in London with a 1.6% decline.

Provisional estimates for sales in August suggested transactions fell by 5.5% across the UK, dropping by 4.1% in England, 4% in Scotland and 2.5% in Wales but increased by 4.9% in Northern Ireland.

However, Lucy Pendleton, founder director of independent estate agents James Pendleton, suggested the market now looks very different since the election outcome.

She said: “The spinning compass of uncertainty and doubt have been dislodged by the north star of a new PM, and the market has reacted immediately.

“As a result, the tired and frustrated reality that is still faintly visible in this Land Registry report reflects a status quo that is already a distant memory.

“Not yet visible is the Boris bounce in house prices we all sense is already well under way. The UK house price index has well and truly been overtaken by events.

“The index will now spend the next two months going through the motions while it catches up with history. Meanwhile, there’s every sign on the high street that buyers and sellers are returning to the fold.

“The UK is certainly experiencing a resurgence in activity but we won’t know for a couple of months whether, on balance, this will begin to push prices higher or whether greater supply will have a moderating influence while brokers and agents enjoy a pick-up in volumes.

“New enquiries for property picked up the day of the election result and foreign buyers are matching their domestic counterparts for renewed enthusiasm.”

Mike Scott, chief property analyst for Yopa, said: “The figures are based on completions in October, where the purchase price will have been agreed around June, and other indicators have already shown that there was a slowdown over the summer.

“We expect that the rate of increase will recover in future releases, though with another brief slowdown in the figures during the first quarter of next year as the political uncertainty of October and November works its way into this report.

“For the year as a whole, we expect a return to slow but steady house price growth, roughly in line with wage increases and general inflation.”

By MARC SHOFFMAN

Source: Property Industry Eye

Marketing No Comments

Halifax: UK housing market outlook for 2020

According to the Halifax, the housing market performed in line with expectations over the past year, at the lower end of its 2% to 4% growth forecast.

Prospects for 2020 look brighter but house price inflation is expected to remain relatively weak, at between 1% and 3%.

A shortage of homes for sale, low levels of house building and challenges facing first-time buyers will continue to support high prices and constrain demand in the short-term

Russell Galley, managing director at Halifax, commented: “The housing market in 2019 followed a similar path to recent years. Modest price growth was supported by falling mortgage rates and a low volume of houses for sale, factors which can in part be attributed to elevated uncertainty. This helped to underpin a degree of resilience in the market.

“Prospects for 2020 look a bit brighter, with uncertainty in the economy falling back somewhat, transactions volumes anticipated to pick up and further price increases made possible by growth in households’ real incomes. However the shortage of homes for sale and low levels of house building will continue to support high prices, while the challenges faced by prospective buyers in raising the necessary deposits may continue to constrain demand.

“As a result, our forecast for house price growth in 2020 is in the range of 1% to 3%, consistent with the pattern of weaker growth seen since 2017.

“Longer-term, a renewed focus on housing policy and increased infrastructure investment aimed outside the South East, for example, could help rebalance regional house prices. However, it’s important to note that any policy changes would be unlikely to impact the market in 2020.

“Although prices will be supported in the near-term by insufficient new building and low interest rates, a sustained period of price growth below income growth as a result of policy action would help to address first-time buyer difficulties.”

By Joanne Atkin

Source: Mortgage Finance Gazette

UK rate cut Brexit Bank of England BoE Higher interest rates UK inflation
Marketing No Comments

Bank of England holds interest rate at 0.75 per cent

The Bank of England has decided to hold interest rates at 0.75 per cent in its last meeting of 2019 as it warned there was little chance of significant economic growth this quarter.

The Bank’s Monetary Policy Committee (MPC) voted 7-2 in favour of maintaining the rate, as it did at its previous meeting in November.

Sterling lost roughly half a per cent against the dollar after the announcement.

UK GDP increased by 0.3 per cent in the third quarter and is expected to rise only marginally in the year’s final quarter.

The monetary policymakers did point out that both sterling and the FTSE had rallied in the last month, with the pound’s exchange rate appreciating by around two per cent.

Minutes from the three-day meeting showed that Jonathan Haskel and Michael Saunders had voted to cut rates by 0.25 per cent.

The two argued: “The economy had been a little softer than expected, and there was a modest but rising amount of spare capacity.

“Core inflation was subdued. Employment growth was slowing and seemed likely to weaken further given trends in vacancies and firms’ hiring intentions.”

However, the MPC said it was yet unclear whether Boris Johnson’s victory would lift the uncertainty hanging over the UK economy.

The MPC said: “If global growth fails to stabilise or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in UK GDP growth and inflation.”

It added: “Further ahead, provided these risks do not materialise and the economy recovers broadly in line with the MPC’s latest projections, some modest tightening of policy, at a gradual pace and to a limited extent, may be needed to maintain inflation sustainably at the target.”

Analysts said that the Bank’s wait-and-see approach was “perfectly appropriate for some time yet”, due to the reduction in political risks from the result of the General Election.

Dr Kerstin Braun, president of Stenn Group, said: “Boris Johnson’s win provides the much-needed solidity the UK has been craving.

“Businesses can begin to see their future and now Brexit is confirmed to go ahead, The Bank of England needs to keep the economy steady as we navigate Britain’s exit from the EU.

“But a prolonged period of low growth, low inflation, and low interest rates will limit the Bank’s ability to create stimulus when needed.”

There had been speculation that the MPC would commit to a rates cut. In the Bank’s November meeting, two of the nine-member committee voted for a cut.

The decision comes after inflation data showed that the Consumer Prices Index stood at 1.5 per cent in November, flat on October and half a per cent below the Bank’s target of two per cent.

Earlier this month the US Federal Reserve left interest rates on hold, bringing to an end the cutting cycle instigated in July.

The European Central Bank also held rates in Christine Lagarde’s first meeting as president, downgrading its 2020 growth forecast in the process.

The announcement comes after the Bank said it had referred the hacking of its market-sensitive press conferences to the financial watchdog, after it emerged that an audio feed was supplied to high-speed traders before they were officially broadcast.

The Bank confirmed what it called a “wholly unacceptable” use of a back-up audio feed by a third-party supplier, and said it had reported the matter to the Financial Conduct Authority (FCA).

By Edward Thicknesse

Source: City AM