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House Prices Recover in April

House prices in the UK grew 1.1% in April after a fall in March, according to the latest figures from Halifax.

The Halifax house price index revealed in March that house prices fell 1.3% over the month. However, prices rebounded in April with a 1.1% monthly rise, pointing to the volatility in the country’s housing market. House prices had been expected to fall by 1.6% over the month. The average price of a home in the UK now stands at £236,619, according to the country’s largest mortgage lender.

Average property prices were also up compared to last year. In the three months to March 2019, UK house prices grew sharply by 5% compared to last year, while a growth of only 4.5% was expected. This annual growth rate was almost double that seen in the previous month, when house prices grew 2.6% year-on-year in the three months to March. It is also higher than the average annual house price growth seen over the last decade. For the last ten years, the average price of a home in the UK has risen by £81,956, or an average of 4.3% each year.

However, surveys from other lenders show differing results than those from Halifax. According to the Nationwide Building Society, for example, annual house price growth in the UK has been below 1% for the last five months in a row.

“The blistering volatility of this index has returned as the Halifax house price weather vane spins itself into a frenzy once more,” said Lucy Pendleton, founder and director of estate agents James Pendleton. “The index has already come under scrutiny this year after months of erratic monthly growth figures. These can be more sprightly than the smoothed annual and quarterly numbers, but even so, they’ve been turning heads with the extremes with which they have been moving.

“One explanation for ricocheting growth figures like this is persistently low stock levels. In sought after areas, this can lead to demand being supercharged one minute and gone the next, with price rises coming in waves as brief competitions for limited numbers of homes come and go.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Less volatile measures point a far more subdued picture. For instance, Rightmove’s measure of online asking prices fell by 0.1% year-over-year in April, while Nationwide’s measure rose by a mere 0.9%. That said, we doubt that house price growth at the national level is about to turn negative for a sustained period.

“Mortgage rates have held steady for low LTV loans and have fallen steadily over the last year for high LTV products, offsetting some of the impact of Brexit uncertainty on high demand. In addition, maximum mortgage terms have continued to lengthen, pushing down monthly repayments and thereby making home ownership initially appear more attractive.

“Meanwhile, year-over-year growth in households’ real incomes remains on track to pick-up this year to about 2.5%, from 2.2% in 2018, thanks to lower inflation and more supportive fiscal policy. Accordingly, we still think that year-over-year growth in the official measure of house prices will pick up to around 1.5% by the end of 2019, from 0.6% in February.”

Source: Money Expert

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House Prices Down 2.9%, Halifax Reports

House prices in the UK fell by 2.9% last month, according to Halifax’ latest report.

The January decrease comes after 2.5% growth in December 2018. House prices grew by 0.8% in the year to January, down from the 1.3% annual rise seen in December. This is the second time in the last three years that house prices have seen a monthly drop in the first month of the year. The average house price in the UK now stands at £223,691 by Halifax’ calculation.

“Attention will no doubt be drawn towards the monthly fall of -2.9% from December to January, the second time in three years that we have seen a drop as a new year starts,” said Russel Galley, managing director at Halifax.

“However,” he added, “the bigger picture is actually that house prices have seen next to no movement over the last year, with annual growth of just 0.8%.

“This could either be viewed as a story of resilience, as prices have held up well in the face of significant economic uncertainty, or as a continuation of the slow growth we’ve witnessed over recent years.”

Analysts have suggested the uncertainty surrounding Brexit is putting off potential buyers, and that the outlook of the UK’s housing market in 2019 will depend on the transition the country faces after we leave the EU on March 29.

“January is often a tough month, in which sellers who have failed to shift their home in the previous year typically cut the price in order to drum up interest,” said Jonathan Hopper, managing director of Garrington Property Finders. “But the confidence-sapping uncertainty of Brexit is getting worse, not better, and the next few months will be decisive.”

The significant role of Brexit in the slowdown of the housing market was reiterated by Mark Harris, chief executive of mortgage brokers SPF Private Clients. “Flat growth is probably the best we can hope for, given the current tricky political situation we find ourselves in,” said Harris. “Brexit has caused a slowdown in purchase activity as would-be buyers sit on their hands, waiting for the outcome before committing to something as major as buying a new home.”

Russell Galley said: “There’s no doubt that the next year will be important for the housing market with much of the immediate focus on what impact Brexit may have. However, more fundamentally it is key underlying factors of supply and demand that will ultimately shape the market.

“On the supply side the most constraining factor to the health of the market is the shortage of stock for sale, although this does support price levels. On the demand side we see very high employment levels, improving real wage growth, low inflation and low mortgage rates. All positive drivers tempered by the challenges of raising deposits. On balance therefore we expect price growth to remain subdued in the near term.”

However, some analysts are holding out hope that the housing market could yet see an upturn after the initial impact of Brexit.

Andy Soloman, founder and CEO of business growth advisers Yomdel, said: “The coming months are likely to bring some small green shoots of price stability and once we emerge from our Brexit blanket in to the cold light of day having reached an agreement, further stability and upward growth should return to the market.”

Source: Money Expert