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House price growth rose by 3.7% in April

Annual house price growth rose to 3.7% in April 2020, up from 3% in March, Nationwide’s House Price Index has found.

Monthly prices rose by 0.7% to £222,915, as Nationwide said the impact of the pandemic is not fully captured by the data.

Robert Gardner, Nationwide’s chief economist, said: “In the opening months of 2020, before the pandemic struck the UK, the housing market had been steadily gathering momentum. Activity levels and price growth were edging up thanks to continued robust labour market conditions, low borrowing costs and a more stable political backdrop following the general election.

“But housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the government has recommended not entering into housing transactions during this period.”

He added: “The medium-term outlook for the housing market is also highly uncertain, where much will depend on the performance of the wider economy.

“Economic activity is set to contract significantly in the near term as a direct result of the necessary measures adopted to suppress the spread of the virus.

“But the raft of policies adopted to support the economy, including to protect businesses and jobs, to support peoples’ incomes and keep borrowing costs down, should set the stage for a rebound once the shock passes, and help limit long-term damage to the economy.

“These same measures should also help ensure the impact on the housing market will ultimately be much less than would normally be associated with an economic shock of this magnitude.”

Tomer Aboody, director of property lender MT Finance, said: “Nationwide portrays a confident housing market with the fastest rate of growth in prices since February 2017. Of course, lockdown will affect sales and prices, but that is the reason – people are locked down, surveyors cannot value properties and would-be buyers can’t view them.

“There is still huge demand for property and buyers are confident about the market, which wasn’t the case in 2008. Then, the financial system was devastated; this time, lending isn’t an issue and banks remain keen to lend.

“There will be the inevitable slowdown of transactions but once lockdown has been lifted, huge pent-up demand which should take the marker back up.”

Miles Robinson, Head of Mortgages at online mortgage broker Trussle, said: “The Land Registry data released this week shows that property sales collapsed by 40% during March, which is perhaps a more representative picture of how the Coronavirus is beginning to affect the housing market.

“However, we have seen lenders that had previously hiked LTV thresholds at the beginning of lockdown begin to loosen restrictions and, with the COVID-19 exit plan due to be published next week, we could see the market start to shift back into action.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Harlow in Essex leads the way on 10-year house price growth

In the past decade Harlow in Essex has recorded the highest house price growth, CashLady analysis of Land Registry data has found.

Over the period prices have risen by 74.92% in Harlow, followed by Southend-on-Sea (74.85%), Watford (74.75%), Thurrock (73.20%) and Cambridge (73.03%).

In December 2019 prices in Harlow averaged at £290,068, up from £165,829 a decade before.

If prices continued to rise at the same rate they would reach £507,387 by 2030.

At the other end of the spectrum Aards and North Down in Northern Ireland saw prices fall by 7.73% in 10 years, followed by Aberdeen (-7.47%), Inverclyde (-5.81%) Mid and East Antrim (-5.32%) and County Durham (-5.18%).

BY RYAN BEMBRIDGE

Source: Property Wire

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Halifax: House prices up 2.8% annually

House prices increased by 2.8% in the year to February, according to Halifax’s house price index.

On a monthly basis, house prices increased by 0.3%.

Looking at the data on a quarterly basis, house prices rose by 2.9%.

Russell Galley, managing director, Halifax, said: “The UK housing market has remained steady heading into early spring.

“Much like we saw in January, the increases seen in February reflect the continued improvement of key market indicators.

“The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.

“Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy, and we wait to see how these will affect housing market sentiment later in the year.”

Ben Johnston, director of off-market property app Houso, added: “House prices are on a continued upwards trajectory, but it remains to be seen how much of an impact the unexpected hurdle of Coronavirus is going to have on the market.

“The Bank of England could feasibly follow the Federal Reserve with a rate cut to help markets and shore up the stagnating economy in an effort to prevent other businesses going the way of FlyBe.

“Next week’s Budget gives the government the chance to stimulate growth further by reducing stamp duty although this might not be enough until the Coronavirus has stabilised and the threat has diminished.

“That all-too-precious confidence, which is so important for the market, is hanging in the balance.”

Lucy Pendleton, founder director, James Pendleton, said: “It’s no surprise to see continued healthy price growth like this. Demand and supply have both been rebounding recently but, so far, the number of new buyers is definitely outpacing the return of sellers.

“Coronavirus impacted our business for the first time on Wednesday, stealing away a sale that was just days from exchanging.

“The buyer worked in the events industry which is being rocked by large numbers of cancellations. He was unfortunately one of the employees told his job was at risk, forcing him to pull out of the purchase completely. The hope is this will remain an isolated case, but the impact of the virus will become clearer in March.

“For now, with valuations still rising and competition for certain properties still fierce, buyers have begun to put in offers on multiple properties in a bid to secure an option before stalling over exchange of contracts in case something better comes along. This could create an unappealing log jam and put more completions at risk if Covid-19 starts to become a major factor.

“Despite the newspaper and TV screens being peppered with images of people wearing face masks and plastic bottles on their heads, there’s still a huge appetite to move, and buyers and vendors have so far refused to put their searches on hold.”

By Jake Carter

Source: Mortgage Introducer

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UK house prices are likely to continue rising in 2020, but problems remain

House prices are showing signs of recovery across the UK, with the highest house price growth in 2019 reported in December, at 1.7 per cent, pushing the average house price growth for the year as a whole to four per cent.

This puts the expected house price growth for 2020 up from the previously expected two to three per cent, and this expectation sends a clear signal to prospective home buyers to act quickly if they’re planning to take out a mortgage this year.

The latest Halifax House Price Index shows that mortgage approvals were slightly up towards the close of the year, so it’s certainly not a bad time for mortgage applicants solely in terms of getting the green light on their residential loan.

However, the current housing statistics also point to an ongoing lack of supply of suitable housing. Buyer demand showed a significant upward trend in December 2019 – up 17 per cent according to RICS, and in marked contrast to the negative trend in buyer enquiries observed in October and November 2019.

January is traditionally a much busier time for the housing market than December, and there are already indications that demand has risen yet again this month. Without a doubt, the outcome of the General Election has had a positive effect on what’s known as ‘buyer sentiment’. More people are at least willing to start making enquiries, although it’s important to remember that enquiries don’t all automatically translate into transactions, which have increased by a more modest nine per cent.

But what about the supply of houses to meet this returning buyer confidence? This is where the market is not catching up, with the overall positive narrative of a house market returning to good health. New instructions rose by nine per cent at the national level, and in London and the South East, they remained more or less flat. This means that, on average, housing supply is just about increasing at a rate that is able to satisfy the return in demand, and, in some regions, it isn’t increasing proportionally at all. Managing director of Halifax Russell Galley comments:

‘Looking ahead, we expect uncertainty in the economy to ease somewhat in 2020, which should see transaction volumes increase and further price growth made possible by an improvement in households’ real incomes.

‘Longer-term issues such as the shortage of homes for sale and low levels of house-building will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand. As a result, we expect a modest pace of gains to continue into next year.’

What does this mean for you if you are a prospective buyer? Now is not the time to hesitate: a once-again buoyant housing market that demonstrates a lack of supply will mean that competition for the best homes in the most desirable areas (especially outside London) will be tougher. So, if you’ve seen a nice property and you are in a position to buy, don’t wait.

By ANNA COTTRELL

Source: Real Homes

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House price growth picking up after sluggish 2019

Annual house price growth jumped to 1.9% in January 2020, up from 1.4% in December 2019, Nationwide’s House Price Index has revealed.

House prices jumped up by 0.5% on a monthly basis – further signs that the housing market is finally bouncing back from a sluggish 2019.

Between November 2018 and 2019 yearly house growth was below 1%.

Robert Gardner, Nationwide’s chief economist, said: “Recent data continue to paint a mixed picture. Economic growth appeared to grind to a halt as 2019 drew to a close, though business surveys point to a pickup at the start of the New Year.

“Labour market data was surprisingly upbeat in the three months to November, with the economy adding over 200,000 jobs – the largest gain since the end of 2018.

“The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years.

“Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.”

He went on to say that the economy is likely to expand at a modest pace in 2020, with house prices remaining fairly flat over the next 12 months.

Jonathan Hopper, managing director of UK property finder Garrington Property Finders, was especially upbeat.

He said: “Two months in and there’s no sign yet of the Boris bounce falling back to earth.

“With annual price growth now standing at double the rate it was at for 11 out of 12 months in 2019, things already look and feel very different on the front line of the property market.

“January is usually a busy time for estate agents as would-be buyers begin their search in earnest. But this year their numbers have been swelled by thousands of people who sat on their hands as Brexit uncertainty swirled.

“Sellers too are returning to the fold, meaning the market is seeing a simultaneous uplift in both demand and supply. Only when the dust settles will we know for certain how that double stimulus affects prices.”

But Josef Wasinski, co-founder of Wayhome said: “Although this rise may be welcomed by those looking to sell their home, it does nothing to ease the frustrations of those reluctant renters hoping to buy their first home.

“For many, there is little choice but to remain part of ‘generation rent’ amid an increasing struggle to raise the typical standard 10% deposit in order to get on the ladder.

“The truth is that we need real innovation in the property market to level the playing field and help those hardworking, credit-worthy people who want to own their own home. The government needs to remember its manifesto promises and provide support to those aiming to make the next step.”

BY RYAN BEMBRIDGE

Source: Property Wire

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House Prices Rise at Fastest December Rate on Record

Average UK house prices jumped by 2.3% in December, a record for that month, according to Rightmove.

The online property website said that last month’s rise in average house prices was the biggest December jump since it started its house priced index back in 2002. Rightmove revealed that almost 65,000 properties were put onto the market in December at an average asking price of £306,810.

Miles Shipside, a director and housing market analyst at Rightmove, said the recent surge in house prices was down to the increased political stability in the UK following December’s General Election and the following easing of Brexit uncertainty.

“These statistics seem to indicate that many buyers and sellers feel that the election result gives a window of stability,” said Mr Shipside. “The housing market dislikes uncertainty and the unsettled political outlook over the last three and a half years since the EU referendum caused some potential home movers to hesitate.

“There now seems to be a release of this pent-up demand, which suggests we are in store for an active spring market, with more properties being listed by new sellers than we have seen in recent years.

“One factor behind the upwards price pressure has been the shortage of property coming to market, with 2019 numbers down by 19% on 2018 and some would-be sellers postponing their moves until they judge the outlook to be more certain. This month sees new seller numbers still down on the prior year, but by a less dramatic 10%.

“While there may well be more twists and turns to come in the Brexit saga, with London prices now rising again and not enough properties to satisfy this buyer demand, there is an opportunity for sellers to get their property on the market for spring move unaffected by Brexit deadlines.”

Tom Bill, head of London residential research at estate agent Knight Frank, said: “The reason for this uptick includes the relatively benign global economic backdrop, ultra-low mortgage rates, the currency discount and the fact prime residential markets have re-prices in response to political uncertainty and tax changes.

“In the final quarter of last year, there were 10 new buyers for every new property listed in prime central and outer London, the highest ratio in more than 15 years.”

Source: Money Expert

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Forecast Predicts House Prices in Wales will Grow by 18% in 5 Years

Global real estate firm, Savills has forecast strong house price growth of 18% in Wales over the next five years, which would make it one of the fastest-growing markets in the UK.

While housing supply is almost meeting need, there is still a shortfall in the provision of affordable homes in Wales. The predicted house price rises are expected to put further pressure on the sector.

Caroline Jones is an associate director in Savills development team in Cardiff, specialising in residential development.

She comments:

“The value of residential property in Wales is fast catching up with the rest of the UK. The removal of the Severn Bridge tolls this time last year has already had an impact on prices in the south east of the country and this is likely to ripple out further in coming years. While this is good news for home owners, it will push the limits of affordability for more households, making the requirement for affordable provision increasingly urgent.”

2,592 new affordable homes were delivered in 2018/19, up from 2,316 in 2017/18, while the Welsh Government expects to have completed 3,569 during 2019/20. Despite the improvement in delivery rates, it currently still falls 33% short of the requirement of 3,895 more affordable homes per year over the five years[1] to March 2024, as set out by the Government earlier this year.

The average annual requirement of 3,895 affordable homes over the next five years, set out by Government earlier this year, equates to 47% of new homes built between 2019 and 2024. However, Savills figures show that only 34% of new homes completed since 2010 were affordable.

Commenting on the research, Caroline said:

“Welsh Government is aiming to build 20,000 new affordable homes over the next five years, an ambitious target in the current climate. Not only does it mean upping annual delivery to 4,000, there is already an accrued shortfall to address.

“Whilst the target to develop is welcomed, as it should contribute to addressing the affordability issue, it undoubtedly puts pressure on providers to deliver. This new drive is also an opportunity for those in the sector to innovate and ultimately to provide the quality, as well as the volume of affordable stock we need.”

“We are seeing action within the public sector, with councils gearing up to develop stock and strategic initiatives by Housing Association involving private sale to cross-subsidise the affordable housing provision.

“The challenges are significant. Availability of land is an issue, which is resulting in private and public sector housebuilders competing for the same sites. A shortage of skills and labour is another key barrier to overcome in order to upscale to this level.”

Help to Buy has been a major factor in the new build market, accounting for 20% of all new home sales since 2015 and this reached 25% of housing supply in 2018. During 2019, the number of Help to Buy sales fell back slightly to 20% of all new homes to September 2019, however it remains a key contributor to new homes delivery.

Welsh Government has yet to make a decision on whether to follow England in extending Help to Buy beyond 2021. This creates uncertainty for housebuilders, who will currently be buying land to develop after this date. Focus will also turn to affordable housing providers, who will try and address this issue by creating alternative low cost home ownership style products.

By MARK POWNEY

Source: Business News Wales

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Prospects looking brighter for housing market in 2020, say experts

The housing market should start 2020 with a new mood of confidence – but continued political uncertainties will keep a lid on property prices, economists predict.

Several predictions for house price growth across 2020 are clustered around the 2% mark.

Experts said the Conservatives’ recent general election win could help to bring more certainty to the market and unleash some pent-up buyer demand.

An abundance of low-rate and low-deposit mortgage deals should also support activity.

Some estate agents are even sensing there may be a “Boris bounce” for the housing market, which could in the coming months have an effect on house prices.

Lucy Pendleton, founder director of estate agent James Pendleton. said: “Not yet visible is the Boris bounce in house prices we all sense is already well under way.”

However, Brexit concerns could also pick up as 2020 progresses, making people behave more cautiously, and affordability constraints will also cap price growth in some parts of the UK, economists said.

Howard Archer, chief economic adviser at EY Item Club, said the Conservatives’ strong election win could ease some uncertainties and help house prices rise by around 2% in 2020.

But he said the economy still looks set for a “challenging 2020”.

Mr Archer said: “There will still be appreciable uncertainties, including on the Brexit front – so that the upside for house prices in 2020 is likely to be limited.”

Rightmove also predicts that the price of property coming to market will increase by 2% in 2020.

It said there is now an opportunity to release some pent-up buyer demand that had been building before the general election.

House sellers’ pricing power will be boosted by a lack of other options for potential buyers, Rightmove suggests.

Lawrence Bowles, senior research analyst at Savills, said: “At the top end of the market in particular, we’ve seen a strong build-up of new buyer demand.

“Greater political certainty will unlock some of that demand, but with less than a year to agree a Brexit deal, there are still many unknowns.

“As a result, we expect average house prices to rise by just 1.0% in 2020, and a higher 4.5% in 2021, as improving certainty translates into higher growth in wages and GDP.”

Looking further ahead, Savills predicts the North West of England and Yorkshire and the Humber will have the fastest house price growth over the next five years.

House prices in these areas were slower than those in southern England to recover after the financial crisis – meaning there is still more room for growth.

Mr Bowles continued: “Affordability constraints in London and the South East will cap potential price growth over the next few years.

“By contrast, prime central London – the most expensive core of the capital – now looks relatively good value on a world stage. We expect to see five-year growth totalling around 20%.”

The Royal Institution of Chartered Surveyors (Rics) has also pencilled in house growth of 2% for 2020 – but it believes rents will increase at a faster rate of 2.5% as the rental sector struggles with a lack of housing supply.

Meanwhile, Nitesh Patel, Yorkshire Building Society’s strategic economist, believes the number of house sales will hold steady at around 1.2 million annually – the total generally seen in recent years.

He said: “Sales to first-time buyers are buoyant and now account for around half of all house purchases.

“A strong jobs market and low mortgage rates are likely to support the market, but concerns around affordability may limit the number of people wanting to move home.

“Mortgage lenders are helping to maximise affordability by lending on 40-year mortgage terms, to help borrowers lower their monthly repayments.

“We’re seeing more and more lenders giving access to 5% deposit mortgages, which can be useful for those looking to buy their first home.”

David Hollingworth, associate director, communications at broker London and Country Mortgages, said that in the uncertain climate, mortgage borrowers have been locking into the low fixed-rate deals currently available, giving them certainty over their monthly repayments.

The range of longer-term fixed-rate mortgages has also been growing, he said, including deals which will lock borrowers into a single rate for 10 or even 15 years.

Russell Galley, managing director, Halifax, said housing market prospects for 2020 look “a bit brighter” than in 2019.

He continued: “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.”

Separate consumer research from Lloyds Bank found 43% of people think the biggest challenge for first-time buyers in 2020 will be raising a deposit, while 27% think it will be high property prices.

A quarter (25%) think the biggest challenge for existing home owners looking to move will also be expensive property prices, while 23% cited high moving costs.

Here is a round-up of house price predictions for 2020:

– EY Item Club – 2% average house price increase
– Rightmove – 2% average asking price increase
– Savills – 1% average house price increase
– Yorkshire Building Society – 0% to 2% house price increase
– Royal Institution of Chartered Surveyors – 2% average house price increase and 2.5% average increase in rents
– Halifax – House price inflation of between 1% and 3%.

By Vicky Shaw

Source: Yahoo Finance UK

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Thurrock records highest UK house price rise this decade

Thurrock in Essex has seen the largest increase in house prices this decade outside London, analysis of Land Registry data by modular housing developer Project Etopia shows.

Prices have increased by 78.2% in the past decade from £156,741 to £276,164, compared to an average rise of 38.8% across the UK, excluding London.

Joseph Daniels, chief executive of Project Etopia, said: “The staggering extremes of some of these house price increases this decade, topping 76% in 10 years, means owning a home remains an unachievable dream for many.

“In Three Rivers, for instance, buyers would now need mortgages of close to half a million pounds to buy an average home, leaving many properties out of reach for average earners.

“Healthy appreciation will be welcomed by many homeowners but for the wider country this is a totally unsustainable situation.

“The UK must accelerate house building to increase supply over the next decade and temper Britain’s affordability problems.

“Only Modern Methods of Construction can deliver new homes fast enough to meet the demand and ensure ordinary hard-working people can afford to buy property right across the UK.”

House prices fell in just three parts of the country in the last 10 years — Blackpool (-7.8%), Redcar and Cleveland (-1.0%) and Hartlepool (-0.4%).

BY RYAN BEMBRIDGE

Source: Property Wire

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Zoopla says lower house price growth is ‘the new normal’

Lower house price growth is “set to be the new normal,” according to analysis by property site Zoopla.

It said in a report published on Monday the average home in UK cities had increased by 54% over the past decade, up £90,000 in value.

But it predicted lower average growth of 3% in cities in the year ahead, compared to an average of 4.4% a year over the past decade.

The past three years have seen a slowdown in the property market, particularly in London, the south and east of England as Brexit uncertainty, tax reforms, and a weaker economy have dampened growth.

Growth in London has edged upwards recently to 1.7%, with a lower number of homeowners willing to sell fuelling increased competition. But that still marked a growth rate just a third of the 5.4% average for the past 10 years.

Zoopla predicts only a limited level of pent-up demand to increase sales and prices in the wake of the election result, with average city price growth of 3% forecast in 2020.

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.

He said affordability was key, and would “dictate the level to which prices will increase” in the year ahead.

Donnell said falling prices and rising wages had given only a “modest” boost to affordability in southern cities such as London, Oxford, and Cambridge.

The price-to-earnings ratio, a key measure of affordability, has dropped by 10% in London from a 20-year high of 14 times average incomes in 2017. But prices remain 12.7 times higher than average pay in the capital, with many Londoners’ chances of getting on the property ladder still slim.

Zoopla’s analysis suggests the boost to prices from lower interest rates has run its course, “which means house prices are set to rise at a lower rate in future,” closer to average earnings.

But the picture varies significantly by region, with cities where property is cheapest typically recording the highest recent, current, and predicted future growth.

Zoopla said the most affordable cities, such as Glasgow, Liverpool, and Belfast, had seen growth twice as fast as the UK average over the past decade.

While the property site’s analysts expect the affordability problem to hold down growth to 2% across London in 2020, they expect growth of up to 4% in the most affordable cities.

The figures also show Edinburgh, where the average home costs around £21,000 more than the UK average at around £241,000, has seen the fastest growth over the past year. Prices rose 5.4% in the year to November 2019.

Donnell added: “As we start the next decade in housing, a top priority for the new Government is to ensure we look to remove the barriers to households moving home, with housing policy catering to the different market conditions across the country, while increasing housing choice across all tenures.”

By Tom Belger

Source: Yahoo Finance UK