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Surveyors forecast fall in house prices as house buyers decline

A renewed decline in the number of house buyers is piling further pressure on London’s strained property market, according to a closely followed survey out today.

The Royal Institution of Chartered Surveyors (Rics) has said there was “caution” from buyers last month, as Bank of England governor Mark Carney reportedly warned prices could drop 35 per cent in the case of a no-deal Brexit.

Roughly 47 per cent more surveyors in London said they expected a fall rather than a rise in house prices in the next three months.

Brian Murphy, head of lending for Mortgage Advice Bureau, said: “As the report is based on September, it was perhaps inevitable that the leaked comments from Mark Carney with regards to the potential impact of a ‘disorderly Brexit’ would be the main focus of this month’s commentary. Whilst Mr Carney’s remarks were perhaps somewhat taken out of context – he was of course, asked to provide his views on a range of potential scenarios, not just ‘worst case’ – given the widespread coverage they received, Rics members appear to be suggesting that the impact in some areas of the country was noticeable.”

Rics also reported that roughly 51 per cent more surveyors in London saw a decrease rather than increase in house prices across the UK over the last three months – marking a significantly sharper drop than anywhere else in the country.

Among the biggest victims of London’s housing slowdown are prime expensive properties in Central London, which is likely to remain stagnant in the wake of Theresa may’s latest promise to slap a stamp duty surcharge on foreign buyers.

The survey comes a day after Telford Homes boss Jon Di Stefano told City A.M. that the Aim-listed housebuilder was expecting flat house sales within London’s high-end market over the next year, as negativity Brexit commentary weighs on buyers’ fears.

The Rics residential report also found that the volume of properties being put up for sale or rented out continued to tumble last month.

Source: City A.M.

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Mortgage approvals fall despite home owners locking in cheap deals

The number of mortgages approved by Britain’s main high street banks fell last month, ahead of the Bank of England’s rate rise, according to industry data.

New (KOSDAQ: 160550.KQ – news) house mortgages dropped by 4.3% on the year to a seasonally adjusted 39,584, UK Finance said, despite existing households locking in low rates before the Bank of England rose the cost of borrowing.

Gross mortgage lending for the total market in July rose 7.6% on the year to £24.6bn.

Credit card spending was 8.1% higher than a year ago, although annual consumer credit slowed to 3.7%, its weakest since December 2014.

Peter Tyler, director of UK Finance, said: “July saw steady growth in gross mortgage lending, driven largely by re-mortgaging as homeowners locked into attractive deals in anticipation of the recent base rate rise.

“Card spending has also strengthened, reflecting increased expenditure during the holiday period and an uplift in retail sales due to the World Cup and warm weather.

“However, the broader economic outlook remains mixed, with households continuing to see their incomes being squeezed by rising inflation. This may explain the shift towards deposits held in instant access accounts, as consumers opt to keep their money close to hand.”

The Bank of England raised interest rates above their crisis lows for the first time in nearly a decade earlier this month, pushing up the cost of repayments by around £20-£25 a month for households with a mortgage of £200,000.

Howard Archer, chief economist to the EY ITEM club, said: “July’s renewed dip in mortgage approvals reinforces our belief that the housing market is struggling to gain traction in the face of still limited consumer purchasing power, fragile consumer confidence and wariness over higher interest rates.

“The fundamentals for house buyers are likely to remain challenging – and they will not be helped by the Bank of England hiking interest rates from 0.50% to 0.75% in early-August, even though the share of outstanding mortgages on variable interest rates has fallen to a record low around 35%, which is half the peak level of 70% in 2001.

“House buyers will also likely be concerned about further interest rate hikes over the coming months – even if they are likely to be gradual and limited.”

Source: Yahoo News UK

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Property market swings back in favour of sellers as supply slides again

The property market may have swung back in favour of sellers during April, NAEA Propertymark claims.

The trade body’s latest Housing Report found demand from prospective buyers increased from 308 to 337 between March and April, while supply was down from 40 to 33 homes per branch over the same period.

This is a departure from March when the number of house-hunters on estate agents’ books fell from 309 to 308, while supply per branch hit a five-month high of 40.

The number of properties available per branch increased from 35 in February to 40 in March – the highest since October last year.

The number of sales to first-time buyers remained the same between March and April at eight per branch, while the percentage of sales to this cohort dipped to 24% from 25% at the same time last year.

Mark Hayward, chief executive of NAEA Propertymark, said: “Last month our findings indicated that we were entering what looked like a buyers’ market, but this month, the dial has swung back in the favour of sellers.

“With demand on the up, and the supply of available homes falling once again, buyers will find themselves facing stiff competition.

“This is particularly difficult for first-time buyers who traditionally have less bargaining power on price, so will struggle to enter bidding wars with second or third steppers.

“The Government is working to improve the house buying and selling process, which is music to our ears, but until more homes are built and supply catches up with demand, the process will remain difficult.”

Source: Property Industry Eye