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Annual house price growth cooling – Halifax

The latest Halifax House Price Index is showing Annual house price inflation at 7.6% compared to 8.7% in June with the average UK property price now £261,221, up 0.4% in July.

However, Wales recorded its strongest house price growth since 2005.

Russell Galley, Managing Director, Halifax, said: “House prices rose by 0.4% in July to add £1,122 to the cost of the average property, pulling back some ground lost during June (-0.6%, -£1,543). Annual price growth fell to +7.6%, its lowest level since March. This easing was somewhat expected given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown, and with activity supported by the start of the stamp duty holiday. In cash terms, typical prices now stand at just over £261,000, a little below May’s peak but still more than £18,500 higher than a year ago.

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“Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008. This has been fuelled both by the ‘race for space’ and the time-limited stamp duty break. With the latter now entering its final stages (the zero per cent rate only applies to the first £250,000 of the purchase price, before reverting to standard rates from October), buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead.

“Latest industry figures show instructions for sale are falling, and estate agents are experiencing a drop in their available stock. This general lack of supply should help to support prices in the near-term, as will the exceptionally low cost of borrowing and continued strong customer demand.

“Although there remains some uncertainty over the impact on employment from the unwinding of government support schemes, on balance the risks to the macro-environment are receding, with consumer confidence improving, the labour market recovering, and the economy expanding as restrictions are lifted. Overall, assuming a continuation of recent economic trends, we expect the housing market to remain solid over the next few months, with annual price growth continuing to slow but remaining well into positive territory by the end of the year.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Regions and nations house prices

While many regions saw annual house price growth slow somewhat in July, reflecting the broader national picture, that certainly wasn’t the case everywhere.

Once again, Wales and the North of England (specifically the North West and Yorkshire & Humberside) continue to lead the way, posting the strongest annual rates of house price inflation, whilst the South West also recorded a double-digit year-on-year rise. Notably, the 13.8% annual increase in house prices in Wales was the strongest growth recorded since March 2005, whilst for Yorkshire, the 11% gain was also the highest for over 16 years. London continues to lag all regions in terms of annual inflation (+2.5%), whilst gains in the South East and Eastern England remain amongst the lowest in the UK.

HMRC monthly property transactions data for UK home sales increased in June 2021 to the highest ever level. UK seasonally adjusted residential transactions in June 2021 were 198,240 – up by 74.1% from May (up 108.6% on a non-seasonally adjusted basis). The latest quarterly transactions (April-June 2021) were approximately 3.8% lower than the preceding three months (January 2021-March 2021). Year on year, transactions were 219.1% higher than June 2020 (216.1% higher on a non-seasonally adjusted basis). (Source: HMRC, seasonally-adjusted figures)

The latest Bank of England figures show the number of mortgages approved to finance house purchases fell in June 2021 by 6% to 81,338. Year-on-year, the June figure was 98% above June 2020. (Source: Bank of England, seasonally-adjusted figures)

Source: Property118

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Annual house price growth accelerated in June

Annual house price growth accelerated in June, and now stands at over 13 per cent, the Nationwide’s latest House Price Index suggests.

The 13.4 per cent annual rate of increase is the highest level recorded since November 2004. The month on month rate of increase was 0.7 per cent, meaning an average priced house went up by over £2k between May and June.

Strongest price growth was in Northern Ireland, weakest was in Scotland.

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While strong house price growth is partly due to ‘base effects’, with June last year unusually weak due to the first lockdown, the market continues to show significant momentum, said Nationwide chief economist Robert Gardner.

‘Indeed, June saw the third consecutive month-on-month rise, after taking account of seasonal effects. Prices in June were almost 5 per cent higher than in March.

‘Regional data for the three months to June indicates that all parts of the UK saw an acceleration in annual house price growth. Northern Ireland and Wales saw the largest gains, at 14 per cent and 13.4 per cent respectively. By contrast Scotland saw the weakest rate of annual growth, at 7.1 per cent closely followed by London at 7.3 per cent’.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Meanwhile mortgage payments are still affordable, said Gardner, but deposits remain a major hurdle for most first time buyers

‘Despite the increase in house prices to new all-time highs, the typical mortgage payment is not high by historic standards compared to take home pay, largely because mortgage rates remain close to all-time lows. In fact, on this measure affordability remains broadly in line with its long run average,.

‘However, house prices are close to a record high relative to average incomes. This is important because it makes it even harder for prospective first time buyers to raise a deposit. For example, a 10 per cent deposit is over 50 per cent of typical first time buyer’s income’.

Underlying demand is likely to remain solid in the near term as the economy unlocks, said Gardner. ‘Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices. But as we look toward the end of the year, the outlook is harder to foresee’.

Source: Landlord Knowledge

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UK housing market: annual house price growth hits 7.1% in April

House prices in the UK have soared since the easing of the first lockdown. The boom in prices shows no signs of slowing down, with April 2021 seeing the highest monthly increase in average house prices, according to new data. Here’s why the UK housing market is booming and why the trend could continue for the next few months.

What is happening to the UK housing market?

According to new data from the Nationwide building society, annual house price growth in the UK rebounded to 7.1% in April, up from 5.7% in March.

The stats show that month-on-month prices rose 2.1% in April, which is the biggest monthly rise since February 2004.

According to the BBC, this sharp increase has prompted some analysts to suggest that the UK housing market is ‘on the boil’.

The average UK home is now worth £238,831. That’s 15,916 more than it was worth a year ago.

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What is causing the boom in housing prices?

Lockdown has caused many people to reassess their living arrangements with particular emphasis on extra rooms, space and gardens.

This has increased demand in the housing market. And since there are not nearly enough houses to match the demand, prices have shot up.

The stamp duty holiday has also played a role, albeit a smaller one, in house price growth. Some people are moving forward with their planned house moves in order to benefit from the tax break.

What does the future hold for the UK housing market?

According to the BBC, there is scope for annual house price growth to continue accelerating in the next few months as housing supply still does not match the demand.

And while many industry experts originally forecast that the UK housing market would decline in 2021 due to the end of the stamp duty holiday and the economic effects of the pandemic that would reduce affordability, many have revised their forecasts upwards.

The main house price forecast for 2021 now is that house prices will go up, with Knight Frank predicting a growth of 5% by the year’s end.

The revision comes in the wake of government support measures, anticipated relaxation of coronavirus restrictions and the successful roll-out of the Covid vaccine, all of which are expected to help mitigate any adverse effects of the pandemic.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

What do changes in the housing market mean for buyers?

The continued rise in house prices is generally bad news for aspiring homeowners, especially first-time buyers.

However, many people have been able to save money during lockdown. And since a good number of first-time buyers usually get some help from their families when it comes to raising a deposit, it means that a lot of them might actually be in a good position to purchase a home even as prices rise.

There are several government schemes currently available to help first-time buyers get onto the property ladder.

These include the Help to Buy: Equity Loan scheme and the 95% mortgage scheme. Both can help buyers secure a mortgage with just a 5% deposit.

Alongside these two, there are other options to help homebuyers.

Lifetime ISA

This is available to people aged between 18 and 39. You can save up to £4,000 a year in your account to be used for buying a home. The government will top it up with a 25% bonus each year. So if you save the full £4,000, the government will top it up with an additional £1,000.

Shared ownership

This is a scheme that lets you buy a 25% to 75% share of a property and then pay rent on the rest. You’ll have the option to buy a larger share later.

First Homes

A proposed new policy that will provide homes to first-time buyers at a discount of 30% on the market value.

Taking advantage of these schemes could help reduce the initial costs of owning a home. However, it’s always best to remember that a home is a long-term investment and focus on getting the right home for your needs and financial circumstances, both now and in the future.

By Sean LaPointe

Source: The Motley Fool

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House prices recover in July

Annual house price growth has recovered to 1.5 per cent in July, according to the latest Nationwide House Price Index.

The figures, published today (July 31), also found that prices rose month-on-month by 1.7 per cent, in contrast to the fall of 1.6 per cent in June.

Robert Gardner, chief economist at Nationwide, said: “The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.

“The rebound in activity reflects a number of factors. Pent up demand is coming through, where decisions taken to move before lockdown are progressing.”

Mr Gardner added that the increased stamp duty threshold would “bring some activity forward” but also warned of a “false dawn”.

He said: “Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the aftereffects of the pandemic and as government support schemes wind down. If this comes to pass, it would likely dampen housing activity once again in the quarters ahead”.

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 Jul-20Jun-20
Monthly Index (seasonally adjusted)435.9428.8
Monthly Change (seasonally adjusted)1.7%-1.6%
Annual Change1.5%-0.1%
Average Price£220,936£216,403

Islay Robinson, group CEO of Enness Global Mortgages, said: “Buyer demand has been turbocharged via a stamp duty holiday, mortgage rates remain very favourable, and buyers and sellers are returning to the market in their droves.

“We’re also seeing a strong return to form at the top-end of the market and from foreign buyers. All things considered, the outlook is a positive one, and we’ve seen the dark clouds of market decline make away for the perfect storm of property price growth over the coming months.” 

Jeremy Leaf, principal at estate agency Jeremy Leaf & Co, said the data was “not surprising” as pent-up demand continued to be released and new listings picked up since the housing market re-opened. 

“Activity has been given added impetus by the stamp duty holiday and continued low interest rates.”

However Shaun Church, director at Private Finance, said: “Although economic activity is slowly recovering, lenders remain cautious. Cuts to rates on lower loan-to-value products suggest lenders are keen to reduce their risk appetite to offset high uncertainty in the housing market.

“This is likely to create a barrier to entry for first-time buyers, adding to the heavy financial burden the pandemic has placed on many people in this age group.”

By Chloe Cheung

Source: FT Adviser

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Annual price growth at three year-high as supply lags demand – Zoopla

House prices across all English cities have risen above their 2007 pre-crisis peaks for the first time but Zoopla is warning sellers not to get over-excited when pricing their properties.

Figures from the portal – based on Land Registry price paid data and mortgage valuations – found annual price growth among the UK’s largest cities last month hit a three-year high of 3.9%.

All cities, except for Aberdeen, where prices fell 4.3% annually, recorded annual house price inflation of at least 2% last month for the first time since February 2017.

The highest growth was in Edinburgh, up 5.9%, while Nottingham and Leicester each recorded growth rates of 5.3%.

Zoopla highlighted that stock is also up 2.6% annually, but is lagging behind demand which is up 26%.

Stock levels in nine cities are lower than a year ago by as much as 6%, Zoopla said, with most of the shortages in areas where prices are rising fastest.

Richard Donnell, research and insight director at Zoopla, said: “It has taken 12 years for house prices in all English cities to return to their previous pre-crisis levels.

“Some cities returned to 2007 levels within four years, as the economy and job growth rebounded. In others, it has taken much longer as the mismatch between demand and supply has been less pronounced.

“An imbalance between supply and demand is supporting the current rate of house price growth – a trend we expect to remain in place over the first half of 2020.

“We do not expect a material acceleration in the rate of growth in the foreseeable future, as affordability pressures will limit the scale of price growth, especially across southern England.

“There is a risk that, in some markets, sellers may become unrealistic about the expected sales price for their home. This is more likely in London and southern England where the market has been weak, and supply remains constrained. Housing demand is up, but there remains a price sensitivity amongst buyers, especially in the highest value markets.”

By MARC SHOFFMAN

Source: Property Industry Eye

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Annual house price growth ‘running at below 5% across all UK’s biggest cities’

None of the UK’s biggest cities saw annual property growth hitting 5% or more in August – marking the first time this has happened since 2012 as the market adjusts to more realistic pricing, according to an index.

Zoopla’s index, which covers house price movements in the UK’s 20 biggest cities, found that the fastest rate of year-on-year house price growth in August was in Leicester, at 4.8%, according to Zoopla.

It was the first time since December 2012 that the city with the fastest house price growth had an annual rate of price inflation below 5%.

Leicester was followed by Liverpool, where average house prices increased by 4.6% compared with a year earlier, and Manchester with a 4.5% uplift.

The biggest house price fall in August was in Aberdeen, where house prices were 4% lower than a year earlier, according to the cities index.

Oxford also saw house prices edge downwards, with property values there falling by 0.4% annually.

In London, house prices increased by just 0.2% annually, while in Cambridge they lifted by 0.3%.

Year-on-year house price growth was 4.0% in Edinburgh, 4.1% in Cardiff and 3.6% in Belfast.

Richard Donnell, research and insight director at Zoopla, said the housing market is “throwing off mixed signals”.

He said: “This is at a time when Brexit is dominating the headlines again and further complicating the outlook”.

He said southern cities in particular have seen a reduction in cash buyers – “and we believe this is down to a decline in investment-buying across high value cities”.

Mr Donnell continued: “This has compounded the slowdown in price rises, which we see as a return to a more sustainable pace of price growth rather than an impending re-correction.

“The London market continues to see greater realism in pricing and there are signs of a modest increase in market activity.

“This isn’t a precursor to price rises, but we do expect sales volumes to start rising once again.”

By Vicky Shaw

Source: Yahoo Finance UK

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Annual house price growth stagnates in January

Annual house price growth almost ground to a complete halt in January, with prices just 0.1% higher than the same time last year, Nationwide’s House Price Index has found.

This follows a subdued December when price growth slowed to 0.5%. There was a modest 0.3% increase month-on-month after taking account of seasonal factors.

Robert Gardner, Nationwide’s chief economist, said: “Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but forward-looking indicators had suggested some softening was likely.

“In particular, measures of consumer confidence weakened in December and surveyors reported a further fall in new buyer enquiries towards the end of 2018.

“While the number of properties coming onto the market also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months. Uncertainty exerting a drag on the market.”

Gardner added: “It is likely that the recent slowdown is attributable to the impact of the uncertain economic outlook on buyer sentiment, given that it has occurred against a backdrop of solid employment growth, stronger wage growth and continued low borrowing costs.

“Near term prospects will be heavily dependent on how quickly this uncertainty lifts, but ultimately the outlook for the housing market and house prices will be determined by the performance of the wider economy – especially the labour market.

“The economic outlook remains unusually uncertain. However, if the economy continues to grow at a modest pace, with the unemployment rate and borrowing costs remaining close to current levels, we would expect UK house prices to rise at a low single-digit pace in 2019.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, thought these figures confirmed a market struggling to weather the Brexit storm but not collapsing.

He added: “The fall in December has been replaced by a modest rise in January but this is probably just as much to do with shortage of stock as release of some inevitable pent-up demand in the post-Christmas period.

“Looking ahead, there are probably too many potential bumps on the road to give a clear steer as to the future direction of prices and activity but what is apparent is that there remains a determination among a good number of serious buyers and sellers to find a way of moving on.”

Similarly, Mark Harris, chief executive of mortgage broker SPF Private Clients, said that uncertainty is the main issue affecting the housing market with potential buyers and sellers sitting on their hands and waiting to see what happens with Brexit.

He said: “However, lenders won’t be put off. They have started this year the way they finished the last one – keen to lend and offering some competitive products to encourage borrowers to take the plunge. Those who are in the market for a new mortgage or remortgage will find plenty of attractive deals, with many lenders cutting rates in the past couple of weeks or tweaking criteria.

“We expect pricing to remain low in the coming weeks as lenders compete for somewhat limited business in very uncertain times.”

Source: Mortgage Introducer

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Annual house price growth slowest since March 2013

Annual house price growth has fallen back to its lowest rate in more than five years, according to an index.

Across the UK, house prices increased by 1.5% annually in October, following a 2.5% annual increase in September, Halifax said.

Property values increased by 0.7% month on month in October, taking the average house price to £227,869.

Russell Galley, managing director, Halifax, said: “The annual rate of house price growth has fallen from 2.5% in September to 1.5% in October, which is the lowest rate of annual growth since March 2013.

“However, this remains within our forecast annual growth range of 0% to 3% for 2018.

“House prices continue to be supported by the fact that the supply of new homes and existing properties available for sale remains low.

“Further house price support comes from an already high and improving employment rate and historically low mortgage rates which are creating higher rates of relative affordability.

“We see this continuing to be the case over the coming months and we remain supportive of our 0% to 3% forecast range.”

Howard Archer, chief economic adviser, EY Item Club, said the 0.7% month-on-month house price increase in October, was likely to be a correction after a particularly sharp 1.3% month-on-month price dip in September, which had been the second fall in a row following a 0.2% month-on-month decrease in August.

Mr Archer said house prices are typically expensive relative to incomes – standing at around five-and-a-half times earnings in October – well above the long-term average of just over four times earnings seen since 1983.

He said: “It is evident that the housing market is struggling for traction in the face of still limited consumer purchasing power, fragile consumer confidence and wariness over higher interest rates. Brexit uncertainty may also be having some dampening impact on activity.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that while mortgage rates have not increased significantly, Bank of England base rate hikes have made households nervous of taking out mortgages with high loan-to-income ratios.

“In addition, would-be buyers are deferring purchases until the risk of a no-deal Brexit lifts,” he said.

“The housing market looks set to be dormant throughout the winter.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “On the ground, realism is hitting home to many sellers who are starting to appreciate that the first offer they receive could very well be their only one, however unpalatable it may be.”

Source: Yahoo Finance UK

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House prices recover from April slump, but annual growth slows again

The rate of annual house price growth has slowed for the second month in a row as Halifax reports a “subdued” property market.

The lender’s May House Price Index showed average prices were up 1.9% annually, slower than the 2.2% yearly growth recorded in April, to £224,439.

House prices returned to growth on a monthly basis, up 1.5% during May after a 3.1% decline in April.

Russell Galley, managing director of Halifax, suggested house prices were mainly being supported by a strong labour market.

He said: “These latest price changes reflect a relatively subdued UK housing market.

“After a sharp rise in January, mortgage approvals have softened in the past three months. Both newly agreed sales and new buyer enquiries are showing signs of stabilisation having fallen in recent months.

“The continuing strength of the labour market is supporting house prices. In the three months to March the number of full-time employees increased by 202,000, the biggest rise in three years.

“We are also seeing pay growth edging up and consumer price inflation falling, and as a result the squeeze on real earnings has started to ease.

“With interest rates still very low we see mortgage affordability at very manageable levels providing a further underpinning to prices.”

Commenting on the figures, Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “At first glance, these figures look disappointing with Halifax reporting annual house price growth softening in May.

“Once again we are seeing the rather topsy turvy pattern to the housing market – up one month, down the next. It is the same on the ground – no real pattern, with buyers and sellers negotiating hard but not always successfully.

“Looking forward, we expect more of the same and possibly slightly better as we await figures reflecting the crucial spring market period.”

Source: Property Industry Eye