Welsh house prices
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Welsh house prices exceed £200,000

The average house price in Wales has topped £200,000 for the first time – now standing at £209,723, Principality Building Society’s Wales House Price Index for Q4 2020 has found.

Last year showed the strongest annual house price inflation in 15 years (8.2%).

Detached home prices were 11% higher than a year ago, as people search for space prompted by the pandemic.

This is compared with 5-6% growth for most other property types.

Tom Denman, chief financial officer at Principality Building Society, said: “The strength of the housing recovery in the second half of 2020 is striking, and this reflects both the stimulus provided by the Welsh government in terms of the time-limited Land Transaction Tax holiday, the pent-up demand which built up during the first lockdown, and the race for space to buy bigger properties with larger gardens.

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“In Q4, all local authority areas were reporting house prices higher than a year earlier. This increased demand has been driven by increased savings in many households during the lockdowns coupled with continued historic low mortgage rates. There has probably been some additional demand from buyers across the border with England, with house prices more affordable in Wales in relative terms.

“The recent UK HM Treasury review of independent forecasts for 2021 showed wide divergences in house price expectations for the year. With so many unknowns it is impossible to offer a forecast with any reasonable accuracy. However, once there is more clarity on the containment of the virus and on the full re-opening of the economy, it will become easier.”

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Merthyr Tydfil recorded the strongest rise on a quarterly basis of 18.2%, taking its average house price to £147,687, though this may have been exaggerated due to a modest amount of sales data.

In north Wales, Anglesey house prices rose by 16% annually to £237,782, while Conwy (£224,068) and Flintshire (£216,224) rose by 13.7% and 13.3% respectively.

In south Wales, Monmouthshire (£332,558) and Newport (£222,107) also achieved strong annual double-digit increases, rising 14.2% and 12.1% respectively.

BY RYAN BEMBRIDGE

Source: Property Wire

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Brits look for UK holiday homes

More than three quarters of Brits (77%) aspire to own a holiday home in the UK, a survey by Park Leisure has found.

Cornwall (21%) is the most popular holiday home location, followed by the Lake District (13%), Yorkshire Dales (9%), Scottish Highlands (8%) and London (7%).

People aged 25-34 are the most likely to aspire to own a UK holiday home (88%), while the Lake District is the most popular among that demographic.

Lisa Williams, director of marketing and holiday sales at Park Leisure, said: “We are seeing a much bigger demand for UK holiday homes, with people looking to invest in their own space, where they can tuck themselves away and escape the worries of everyday life with their families.

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“It’s fantastic to see that Cornwall has been revealed as the UK’s most desirable holiday home spot. With three of our parks situated along the stunning Cornish coastline, we have something for everyone’s taste and budget.

“The beautiful Yorkshire Dales was named the third most desirable location to own a UK holiday home, and our three Yorkshire locations are placed within the heart of the countryside, with amazing walking spots and scenery, which is truly breathtaking all year round.

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“When it’s safe to do so, we’re looking forward to being able to welcome our families, and their pets, to enjoy the wonders of their home away from home and explore all that the UK’s beauty spots have to offer.”

People living in the largest UK cities are the most likely to want to invest in a holiday home to escape the hustle and bustle, with people from London (84%), Birmingham (81%) and Manchester (78%) within the top five, alongside Norwich (80%) and Belfast (78%).

BY RYAN BEMBRIDGE

Source: Property Wire

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Brokers say COVID-19 has reshaped borrower demand

Research from Masthaven Bank has found that the COVID-19 pandemic has reshaped demand from borrowers.

The survey of 265 intermediaries found that customers’ priorities when looking for both lenders and types of property changed significantly over the course of 2020.

Flexible lending criteria is now a bigger priority for customers than before the start of the pandemic, according to 79% of brokers.

Other factors which have significantly increased in importance are customer service (63%), speed (60%) and flexible product features (55%).

Conversely, 56% of brokers said that low rates are no more important now than before COVID-19 and 54% said the same about low fees.

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This emphasis on the importance of flexible lending criteria could be attributed to the fact that 92% of brokers said that their customers had been negatively financially impacted by COVID-19 in the second half of 2020.

Over a quarter of brokers (26%) say they expect to see more business in 2021 from borrowers who have been financially impacted by COVID-19, whether that involved taking out a mortgage payment deferral, being furloughed or being put on the government jobs support scheme.

An additional 20% said they expected to see more business from borrowers with an impaired credit history.

The research also highlights changing attitudes among customers when looking to move home, with 57% of brokers saying that homebuyers are now prioritising bigger houses to allow space for home offices and a third saying that their customers were prioritising a move out of a city to a quieter area.

Close to a third of brokers (32%) said that more outdoor space was the priority for their customers.

Rob Barnard, director of intermediaries at Masthaven, said: “The coronavirus has affected every aspect of our lives for almost a full year now and looks likely to remain with us for a while longer.

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“It’s perhaps no surprise then that borrowers have re-evaluated what is important to them when it comes to seeking out mortgage providers and the homes that they live in.

“Clearly the fact that many people were forced to stay home for extended periods of time and adapt their houses into offices, gyms or schools, has brought into clearer perspective what they really want when it comes to property.

“This once in a lifetime event could have a long-term impact on the UK’s property industry.

“Borrowers have also been clear about what they want from lenders. With so many being impacted by the pandemic, customers are looking for lenders who have a flexible approach and can meet their needs.

“The stamp duty holiday deadline has also undoubtedly increased demand for speedier transactions, while customer service, which has always been a crucial part of any business, has taken on new importance and become an essential duty for lenders. It’s important that lenders listen to their customers and adapt accordingly.”

By Jessica Nangle

Source: Mortgage Introducer

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Bank of England
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Bank of England holds interest rate at 0.1%

The Bank of England’s Monetary Policy Committee (MPC) voted unanimously to maintain the bank rate at 0.1%.

The BoE has warned banks to be prepared for the possibility of negative interest rates within six months.

The committee confirmed that the COVID-19 vaccination programmes are improving the economic outlook, and since the MPC’s last meeting, they say financial markets have remained resilient.

UK GDP is expected to have risen slightly in Q4 2020 to a level around 8% lower than in Q4 2019, which is stronger than expected in the MPC’s November report.

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The bank suggests that there would be a “rapid” recovery in GDP towards pre-pandemic levels this year, due to the vaccination programme.

However, the BoE outlined that the outlook for the economy remains “unusually uncertain, and that it depends on the evolution of the pandemic, measures taken to protect public health and how households, businesses and financial markets respond to these developments”.

The MPC has said that it will continue to monitor the situation closely, and if the outlook for inflation weakens, the committee is ready to take any “additional action necessary to achieve its remit”.

Nick Chadbourne, chief executive of LMS, said: “It’s no great surprise that Bank Rate remains at 0.1%, and it’s good news for homeowners as it keeps mortgage rates down.

“LMS data shows that on average, borrowers taking advantage of low rates decreased their monthly payments by £236 in December.

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“Recently we’ve seen lenders prepare for a busy remortgage market in Q2 with a steady stream of high loan-to-value products returning to the market and the introduction of increasingly competitive rates.

“While product transfers can offer a great deal in terms of ease and efficiency, as competition between lenders grows, borrowers should be seeking advice to ensure they are accessing the best deals available on the market.”

Ian Warwick, managing partner at Deepbridge Capital, added: “The pace at which the vaccine rollout has progressed has been incredibly encouraging and will provide much needed hope for people and businesses alike.

“The government has worked hard in an incredibly difficult environment to create a capital lifeline to many businesses via the BBLS and CBILS, as well as long-term support for growth-focused companies via the likes of the Enterprise Investment Scheme, but now we would urge that there needs to be even greater support – both via financial and via sustainable growth initiatives.

“Agile companies, which have survived 2020 and provide a product or service which has a genuine medium to long-term solution to a recognised problem, will continue to develop and grow but require capital to do so.”

Frances Haque, chief economist at Santander UK, said: “The MPC’s decision to leave bank rate unchanged at 0.1% was expected this month given rapid rollout of the COVID-19 vaccines, which will help boost confidence and support growth in the UK economy.

“However, the Bank of England remains committed to intervening should the financial markets and the UK economy need additional support measures as we move through 2021.“

By Jessica Nangle

Source: Mortgage Introducer

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Prime property remains robust throughout pandemic

The UK’s prime property market is evolving rather than suffering through the pandemic according to new data from wealth manager and private bank Coutts.

The bank’s client-data demonstrated a rise in buying activity in main homes, second homes and investment properties when compared to previous years.

Outside of London, which remains the UK’s largest prime market, the south east was the most popular area for new mortgages for main homes, particularly Kingston upon Thames, Guildford and Oxford.

Coutts’ data also suggests a renewed interest in the staycation with more people looking to secure a ‘home away from home’ to provide a change of scenery during lockdown.

The biggest increase in purchases during 2020 was of holiday homes, which increased by 43% in 2020 compared with the year before.

The most popular locations being the south east and south west of England, with Guildford and Tunbridge Wells proving popular in as well as West Cornwall and Gloucester.

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Peter Flavel, chief executive at Coutts, said: “I know from my conversations with our clients over the last six to eight months that many are reassessing how they live and work.

“A lot of them are looking at their homes thinking about whether they match up to their lives today.

“Our clients have found that their homes have increasingly had to become school rooms, workplaces and social spaces. It’s not surprising that they’ve been looking for more space.”

“Schools will go back, and restaurant and pubs will re-open.

“But working from home could be here to stay, and the home cinema could be about to take the place of the multi-plex in many people’s lives.

“This could make smaller properties less attractive.”

The government plans to introduce a 2% stamp duty surcharge for foreign buyers of UK residential property from 1 April, which Coutts suggests will provide added impetus for overseas investors to transact in Q1.

The stamp duty holiday deadline will also prompt strong demand in Q1 as investors rush to beat the deadline, according to the bank.

Across prime London, there are 16.2% more properties under offer now compared to a year ago, and Coutts believes a lot of this demand is being driven by buyers looking to transact before the SDLT holiday ends.

Alan Higgins, chief investment officer at Coutts, added: “The market will need time to adjust to these changes and we could see a softening in demand in the second quarter as a result.”

But long-term, the bank believes the momentum seen towards the end of 2020 continue throughout the year ahead, largely down to social changes and a favourable macroeconomic environment.

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Higgins added: “Firstly, the uncertainty with respect to Brexit is largely in the past.

“Secondly, we expect a V-shaped economic recovery as the vaccine distribution progresses.

“And thirdly, we should the release of pent-up demand from buyers and sellers who put plans aside during lockdown.

“In the meantime, low interest rates make financing cheap, and returns attractive compared to other assets for investors.

“We expect close to zero rates in the UK for the next few years at least.

“The Bank of England’s Monetary Policy Committee is likely to ignore any rise in inflation and focus on reflation, and this is the main positive factor for residential property.”

By Jessica Nangle

Source: Mortgage Introducer

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BTL mortgage availability Almost half One in 10 North West Stamp Duty holiday Buy-to-let 5-year fixed BTL mortgages buy to let investment areas UK property investment locations buy-to-let lenders BTL properties buy-to-let landlords Number of UK buy-to-let landlords buy-to-let limited companies
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These 10 UK cities are the most profitable for buy to let landlords

CIA Landlord has revealed its annual ranking of the best UK cities to buy to let for 2021, with some areas proving to be more profitable than others. The analysis is based on the average property price, mortgage cost, average rent income, and the monthly costs of being a landlord to calculate the monthly profit. Listed are the 10 cities with the highest monthly earnings for landlords.

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  1. Brighton
    Average property price: £410,541. Average rent: £2,044. Monthly mortgage cost: £1,411. Monthly profit: £571.85
  2. Bangor
    Average property price: £185,833. Average rent: £1,193. Monthly mortgage cost: £639. Monthly profit: £500.53.
  3. Portsmouth
    Average property price: £243,945.. Average rent: £1,379. Monthly mortgage cost: £838. Monthly profit: £479.27.
  4. Leeds
    Average property price: £228,424. Average rent: £1,323. Monthly mortgage cost: £785. Monthly profit: £477.60.
  5. Lancaster
    Average property price: £210,979. Average rent: £873. Monthly mortgage cost: £725. Monthly profit: £474.54.
  6. Bristol
    Average property price: £344,667. Average rent: £1,699. Monthly mortgage cost: £1,184. Monthly profit: £453.20.
  7. Coventry
    Average property price: £209,309. Average rent: £1,213. Monthly mortgage cost: £719. Monthly profit: £432.27.
  8. Manchester
    Average property price: £200,517. Average rent: £1,176. Monthly mortgage cost: £689. Monthly profit: £425.48.
  9. Nottingham
    Average property price: £225,917. Average rent: £1,248. Monthly mortgage cost: £776. Monthly profit: £410.21.
  10. Salford
    Average property price: £172,622. Average rent: £1,048. Monthly mortgage cost: £593. Monthly profit: £393.33.

By Claire Schofield

Source: The Scotsman

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Landlords Buy-to-let
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Landlords optimistic about 2021 house price growth

The majority (66%) of landlords expect house prices to rise in 2021 as the world starts to return to a new normal, research from Accommodation.co.uk has found.

Three quarters (76%) are still keen to seek urban opportunities over rural ones, despite reports of people leaving cities due to the pandemic.

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Aaron Short, founder and chief executive at Accommodation.co.uk, said: “We are always listening to our landlords and tenants to ensure our proposition remains current and reflects the needs of the market and this is why the National Landlord Index remains so important.

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“Understanding how landlords perceive the market and what impact COVID and Brexit are having will determine the shape of the future lettings market.

“It is great to see landlords positive about the market this year and this certainly mirrors the growth we have seen.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Annual house price growth remortgage completions Asking prices Annual house price growth But to let Investment UK property prices UK mortgage approvals
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UK mortgage approvals reach highest level since 2007

The number of mortgage approvals reached their highest level since 2007 last year as buyers took advantage of the stamp duty holiday.

The housing market remained resilient in the face of volatility and essential closure of the market during the first lockdown.

There were 818,500 mortgage approvals over 2020, up from 789,100 the previous year, according to Bank of England data released today.

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There was a significant uptick in lending in the second half of the year after a record low of 9,400 approvals in May. Borrowers rushed to take advantage of the stamp duty holiday introduced over the summer.

Although approvals fell back to 103,400 in December, down from 105,300 in November, it was still the highest level since August 2007.

Former RICS residential chairman Jeremy Leaf is not complacent: “While these figures are always a good indicator of direction of travel for the market, we won’t be getting carried away, not least because the year’s lower for these approvals appeared a couple of months after the first lockdown.”

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Additionally this level of momentum is unlikely to be sustained as the stamp duty holiday winds down at the end of next month.

Samuel Tombs, Pantheon’s chief UK economist predicts the vaccine rollout will also mean “people will be content again with their pre-pandemic housing choices by the summer.”

The BoE’s data also showed that consumers paid down a record £16.6bn in debt last year as spending options became limited during lockdown.

“An overall reduction in consumer debt, combined with high levels of cash savings, and pent up demand for holidays, meals out and other leisure activities, could prove to be an explosive powder keg that will help drive the economy when it finally opens up again,” AJ Bell financial analyst Laith Khalaf says.

By Angharad Carrick

Source: City AM

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Mortgage lenders 5% deposit mortgage scheme Bank of England Mortgage payment holidays house prices Investors
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New research suggests house prices could rise 17% in next decade

House prices in the UK are expected to rise by 17% in the next 10 years, according to data collected by Good Move.

The firm looked to the rise in property prices over the last 40 years to predict future prices.

According to data from the government website, average house prices in the UK rose from £19,273 in 1980 to £239,927 in 2020, representing a 1145% increase.

Looking to 2030, the data shows that average property prices are predicted to reach £279,641.

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Furthermore, Good Move expects average house prices to reach £392,301 in 2050.

Nima Ghasri, director at Good Move, said: “This year, house prices in the UK have increased at an unprecedented rate, increasing by 26% compared to 2015 and 7% compared to 2019.

“House prices have been a huge talking point in the industry this past year, and we wanted to see what we could come to expect if they continue to rise at the same rate as they have since 1980. That’s why we conducted this research.

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“If our predictions are correct, we can expect house prices to soar in the future, nearly reaching an eyewatering £400,000 by 2025.

“However, many things impact house prices, and nobody can predict for certain what the economy and property market might look like in the future, so this doesn’t mean that our predictions are correct.

“Still, it’s interesting to see what we could expect in the UK if house prices follow in the footsteps of the past.”

By Jake Carter

Source: Mortgage Introducer

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First-time buyer market share ‘stable’ despite rising prices

The proportion of first-time buyers taking out a mortgage has remained stable year-on-year despite increases in the average price and deposit, according to research by Halifax.

The bank’s analysis of UK Finance data estimated first-time buyers made up 50 per cent of all home purchase loans last year, compared to 51 per cent in 2019.

The proportion of first-time buyers purchasing with a mortgage remained stable despite the average price they paid reaching £256,057 last year, an increase of 10 per cent from 2019.

The average deposit paid by a first-time buyer also increased by almost a quarter (23 per cent) to £57,278 last year, compared to £46,449 in 2019.

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However, with the housing market effectively closed during the first national lockdown, the overall number of first-time buyers fell to 304,657 in 2020, down 13 per cent compared to the previous year.

YearNumber of first-time buyersAnnual changeFTBs as percentage of all home purchase loans
2015298,080-4%46%
2016328,51010%48%
2017345,9205%49%
2018353,1202%50%
2019351,260-1%51%
2020*304,657-13%50%
Sources: UK Finance and *Halifax estimate for 2020

The property market re-opened in the second half of 2020 but first-time buyer transactions were also down during that period, but only by 2 per cent when compared to 2019.

Halifax noted that first-time buyer transactions had bounced back “strongly” in the second half of last year by 52 per cent, from 121,050 in H1 to 183,607 in H2, following the reopening of the housing market from May.

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Russell Galley, managing director at Halifax, said: “Whilst these figures confirm the almost inevitable fall in the overall number of first-time buyers in 2020 – with the entire housing market effectively shuttered during the first national lockdown – they also underline just how strong the bounce back was in the second half of the year.

“Despite the obvious challenges presented by soaring house prices, not least the need to raise an even bigger deposit, first-time buyers still accounted for half of all home purchases, a reassuring statistic given their overall importance to the market.”

Luke Spellman, financial adviser at Spellman Financial Services, said it was unsurprising that the average first-time buyer deposit had increased.

He said: “This will mainly be down to mortgage lenders hiking the minimum deposit required from 5 per cent to 10-15 per cent for the best part of last year.”

The number of 95 per cent LTV mortgages has dropped dramatically during the pandemic.

Data from Moneyfacts showed there were eight products available at 95 per cent LTV at the start of December, around 2 per cent of the number available at the beginning of March (391) before the first national lockdown.

By Chloe Cheung

Source: FT Adviser

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