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Rents grow as housing market slows

The average rent in the UK is now £967, up by 2.5% on the same time last year.

When London is excluded, the average rent in the UK is now £797, this is up by 2.2% on last year.

Average rents in London are now £1,694, up by 3.3% on last year.

Nationwide’s House Price Index reported that house prices rose by just 0.2% in September, down from 0.6% in August and marking the 10th month in a row that the annual house price growth was recorded as under 1%.

All 12 of the regions monitored by HomeLet showed an increase in rental values between September 2018 and September 2019.

Five of the regions monitored by HomeLet showed an annual increase of over 3%, the North West, the East Midlands, the South West, Greater London and the North East.

The region with the largest year-on-year increase is the North West, showing a 4.4% increase between September 2018 and September 2019

As the UK’s largest tenant referencing firm, HomeLet references over 500,000 tenants every year. The HomeLet Rental Index provides the most comprehensive and up-to-date data on rental values in the UK.

The trends reported within the HomeLet Rental Index are brand new tenancies, which were arranged in the most recent period, providing an in-depth insight into the lettings market.

RegionSep-19Sep-18Annual VariationAug-19Monthly Variation
North West£739£7084.40%£741-0.30%
East Midlands£653£6293.80%£655-0.30%
South West£846£8183.40%£852-0.70%
Greater London£1,694£1,6403.30%£1,6890.30%
North East£535£5193.10%£5310.80%
West Midlands£718£7012.40%£720-0.30%
Yorkshire & Humberside£657£6442.00%£6550.30%
East of England£927£9151.30%£930-0.30%
Northern Ireland£673£6641.40%£6641.40%
South East£1,045£1,0430.20%£1,064-1.80%
UK excluding Greater London£797£7802.20%£802-0.60%

Source: Property118

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UK house prices grow at slowest rate for six years

UK house prices grew at their slowest annual rate in six years in September, a closely-watched gauge has revealed, as Brexit uncertainty continues to smother activity in the sector.

House prices grew by just 1.1 per cent over the last year, undershooting economists’ expectations of a rise of 1.6 per cent, Halifax’s house price index showed today. Prices rose at an annual rate of 1.8 per cent in August.

Month on month, UK house prices fell by 0.4 per cent in September, down from 0.2 per cent growth in August. The monthly figure also dropped below economists’ expectations of a 0.1 per cent rise.

Russell Galley, managing director of Halifax, said that although the 1.1 per cent annual growth is the lowest since April 2013, it “remains in keeping with the predominantly flat trend we’ve seen in recent months”.

“Underlying market indicators, including completed sales and mortgages approvals, continue to be broadly stable. Meanwhile for buyers, important affordability measures – such as wage growth and interest rates – still look favourable.”

“Looking ahead, we expect activity levels and price growth to remain subdued while the current period of economic uncertainty persists.”

Housing is just one market that has been subdued by political uncertainty in Britain. Potential buyers and sellers are putting off their decisions until there is more clarity over Brexit.

Halifax said today that recent surveys show a flatter trend in demand and lower mortgage approvals in recent months.

The UK housing market has also been hit by a global economic slowdown that has weighed on asset prices. First-time buyers will be cheered by the news that houses are not rocketing in price, however.

Andrew Montlake, managing director of UK-wide mortgage broker Coreco, said: “As we approach Halloween and the Brexit endgame it’s no surprise price growth is slowing, but the horror show many predicted hasn’t played out.”

“Extremely low borrowing costs continue to make property affordable while the strength of the jobs market is giving people confidence amid the chaos.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said low levels of activity was forcing mortgage lenders to “work incredibly hard to generate business and stand out from the competition”.

“This is excellent news for borrowers and once buyers return to the market, when the uncertainty is removed from the equation, there are some extremely competitive products for them to take advantage of.”

By Harry Robertson

Source: City AM

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House price growth turns negative over the month – but just remains positive year-to-year

House price growth –just – crept into reverse last month. However, annual house price inflation – just – remained in positive territory.

According to Nationwide the average house price was £216,352, down just 0.2% from an average of £216,096 in August.

Annual house price inflation was up by the same amount, 0.2%.

September was the tenth month in a row where Nationwide has recorded annual house price growth of under 1%.

London was the weakest performing region in the third quarter of this year, Nationwide also reported, with prices down 1.7% compared with the same period a year ago.

The lender said that UK house prices are now “only” around 17% higher than their 2007 peak.

Mike Scott, of Yopa, said: “It now seems likely that year-on-year house price growth will dip into negative territory in the last quarter of this year as the Brxit uncertainty continues to subdue market activity.”

Separately, the latest Bank of England lending figures show that in August there were 65,000 mortgage approvals for house purchase, down from the 18-month high of 67,000 in July.


Source: Property Industry Eye

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House Price Growth at a Standstill

Annual house price growth in fell to 0.2% in September, the tenth month in a row that growth has been below 1%.

The latest house price index from Nationwide revealed that month-on-month, house prices fell in September by 0.2%. Compared to September 2018, average house prices have grown by just 0.2%, down from the 0.6% annual growth seen in August. This is the lowest yearly growth recorded for eight months, and only slightly higher than the six-year low of 0.1% seen in January. The average price of a home in the UK now stands at £215,352, down from £216,096 in August.

“Indicators of UK economic activity have been fairly volatile in recent quarters, but the underlying pace of growth appears to have slowed as a result of weaker global growth and an intensification of Brexit uncertainty,” said Robert Gardner, chief economist at Nationwide. “However, the slowdown has centred on business investment – household spending has been more resilient, supported by steady gains in employment and real earnings.

“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.”

Regionally, the biggest fall in prices last month was seen in London and the South East, where average prices dropped annually by 1.7%. In other parts of the country, house prices are still rising but slowly. The most significant gains were seen in Northern Ireland, where house prices grew 3.4% year-on-year in September.

“With the economy largely struggling and the outlook highly uncertain, we suspect that house prices will remain soft in the near term at least,” said Howard Archer, chief economic adviser to the EY Item Club.

“Should the UK leave the EU with a deal at the end of October – or early in 2020 – we believe reduced uncertainty and gradually improving economic activity as the year progresses could see house prices rise by around 2% over 2020.

“Housing market activity – and possible to a lesser extent prices – could be given a lift in 2020 if the government cuts stamp duty significantly in the budget later this year.”

Jeremy Leaf, former residential chairman of RICS, said: “What these figures tell us is that there hasn’t been much change in the market. On the ground, we have seen more serious buyers and sellers determined to find some middle ground and particularly for longer-term purchases such as larger flats and family houses where short-term uncertainties seem to be less relevant.”

Source: Money Expert

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UK housing market stuck in slow gear as Brexit weighs – Nationwide

British house price growth remained weak in June as uncertainty about Brexit hung over the market, mortgage lender Nationwide said on Tuesday.

House prices increased by 0.5% compared with a year ago, slowing slightly after a 0.6% rise in May but in line with the median forecast in a Reuters poll of economists.

At the time of the Brexit referendum in 2016, house prices were growing by about 5 percent a year, according to Nationwide’s measure.

In monthly terms, house prices in June edged up by 0.1%, a slightly smaller increase than the median forecast in the Reuters poll for a rise of 0.2%.

Nationwide’s data chimed with other housing indicators which have suggested that a weakening of the market seen in 2018 might have bottomed out as investors wait for Britain to resolve its Brexit crisis.

“While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity,” Robert Gardner, Nationwide’s chief economist, said.

Price growth and transaction levels were likely to be little changed over the coming months, he said.

Britain is waiting for the ruling Conservative Party to choose its new leader who, as next prime minister, will attempt to strike a new Brexit deal with the European Union before an Oct. 31 deadline for the country’s departure from the bloc.

Nationwide’s data showed that prices in London fell for an eighth quarter in a row in the April-June period although the pace of decline moderated to 0.7% in annual terms from 3.8% in the previous quarter.

Prices in the capital were around 5% below the all-time highs seen in early 2017 and were about 50% above their levels in 2007, before the global financial crisis, Nationwide said.

Prices in Britain as a whole were only around 17% higher over the same period.

House prices in the second quarter rose most strongly in Northern Ireland and Wales, up by an annual 5.2 and 4.2% respectively.

Source: Yahoo News

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UK Housing Market Subdued in May

Month on month house prices in the UK fell slightly in May, according to the latest Nationwide house price index.

UK house prices fell by 0.2% in May compared to the previous month, with the market falling back after experiencing positive growth in April. Annual house price growth also slowed down in May, with a 0.6% annual rise compared to 0.9% annual growth in April. It is now the sixth month in a row that annual house price growth has been below 1%.

The average price of a property bought in May was £214,946, compared to £214,920 a month earlier. And despite the subdued growth, the average price of a home in the UK is at its highest level since July 2018 when the average was just above £217,000. Nationwide also said in its report that the number of transactions and mortgage approvals was stable during March, although it fell slightly from the 0.3% monthly growth seen in April.

“Survey data suggests that new buyer inquiries and consumer confidence have remained subdued in recent months,” said Robert Gardner, chief economist at Nationwide. “Nevertheless, 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. Housing market trends are likely to continue to mirror developments in the broader economy.”

The slowdown in the UK housing market in recent months has been partly attributed to the ongoing uncertainty surrounding Brexit. Many industry analysts have suggested that both buyers and sellers are being put off the market until a solution is apparent, with many adopting a ‘wait and see’ approach. But with the trade association UK Finance recently revealing that the 42,989 mortgage approvals in April was the highest number since February 2017, there are signs that the postponement of Brexit in March has helped to pick up the housing market.

“It is possible that the avoidance of a no-deal Brexit at the end of March has provided some support to housing market activity through easing some of the immediate uncertainty and concerns,” said Howard Archer, chief economic adviser at the EY Item Club. “However, we suspect any boost to the housing market from the avoidance of a disruptive Brexit at the end of March will prove limited in both size and length. Certainly, latest survey evidence on the housing market remains largely downbeat.”

Nationwide’s data also revealed that the number of first-time buyers has been steadily growing in recent months, with a total of 359,000 in the year up to March 2019, just 10% below record levels seen in 2006. This increase is partly due to falling interest rates for mortgages with small deposits, although saving for a deposit is still one of the main barriers preventing people getting on the housing ladder. In London, where house prices are roughly double the national average, it takes around 15 years for an average earner to save for a 20% deposit on their first home.

Source: Money Expert

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Why now is the perfect time to be a first-time buyer

It argues that first-time buyers can take advantage of cheap mortgage rates and stalling house prices as well as the Help to Buy ISA scheme, which ends later this year.

Rates on high loan-to-value (LTV) mortgages, which require borrowers to have a small deposit so are popular with first-time purchasers, are at a record low.

The average interest rate on a two-year fixed 95% LTV mortgage has fallen from 3.95% a year ago to 3.23% today, Defaqto data shows.

First-time buyers can also benefit from a weakening housing market.

Nationwide, the UK’s largest building society, last week reported that annual house price growth was just 0.9% in April, marking the fifth straight month of weak house price inflation.

Figures from The Royal Institution of Chartered Surveyors in March show that the number of properties coming onto the market has fallen for the past eight consecutive months.

But Defaqto warns first-time buyers need to hurry if they want to take advantage of the government’s Help to Buy ISA scheme, which closes to new entrants on 30 November 2019.

The scheme, which was specifically designed to help people get on the property ladder, lets savers put away up to £1,200 in the first month and then £200 a month after that, and the government will add 25% tax-free up to a maximum of £3,000 (or £6,000 if two people are buying together).

Savers can continue to save into a Help to Buy ISA until 1 December 2030.

Katie Brain, insight analyst at Defaqto, said: “Buying a home is an expensive undertaking and for many years we have seen that first rung of the property ladder move further out of the reach of first time buyers.

“Now, with stalling house prices and cheaper borrowing, we are entering a period of opportunity for buyers looking to make their first home purchase.

“For those looking to get a mortgage, it is important to do your sums and check exactly what you can afford to borrow. While interest rates are low, an increase of just 1% can add hundreds of pounds to a monthly repayment and thousands to the overall cost of a home.”

first-time buyers

Written by: Joanna Faith

Source: Your Money

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First Time Buyers Helped by Weak House Price Growth

House price growth in the UK remained subdued for the fifth month in a row in April, according to the latest figures from Nationwide.

House prices in the country grew 0.9% in April compared to the same time last year – a slight rise from the 0.7% annual growth seen in March. Annual house price growth has in fact been below 1% every month since December 2018. However, house prices actually fell month-on-month in April, dropping by 0.4% in April. According to the Nationwide House Price Index, the average price of a home in the UK is now £214,920.

Before the Brexit referendum in 2016, house prices in the UK were growing by around 5% each year. But as many market analysts have mentioned Brexit uncertainty as a cause of the subdued growth seen recently, the stagnating prices have helped to attract a growing number of first-time buyers to the market.

The number of mortgages being taken out by first-time buyers today is approaching the levels seen before the global financial crisis in 2008. As well as the slow growth of property prices, first-time buyers are also being attracted to the housing market due to high employment rates, real wage growth and low mortgage rates.

“While the number of properties coming onto the market has also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of supply and demand in favour of buyers in recent months,” said Robert Gardner, chief economist at Nationwide.

“While the ongoing economic uncertainties have clearly been weighing on consumer sentiment, this hasn’t prevented further steady gains in the number of first-time buyers entering the housing market in recent quarters. Indeed, the number of mortgages being taken out by first-time buyers has continued to approach pre-financial crisis levels in recent months.”

While low mortgage rates, the strength of the labour market and projects such as the government’s Help to Buy scheme are helping first-time buyers get onto the property ladder, the biggest obstacle remains raising a large enough deposit.

“First time buyer numbers have been supported by the strength of the labour market conditions, with employment rising at a healthy rate, and earnings growth slowly gathering momentum,” said Gardner. “While house prices remain high relative to average earnings, low mortgage rates have helped to support mortgage affordability. Indeed, raising a deposit appears to be the major barrier for prospective first-time buyers.”

Jeremy Leaf, former residential chairman at RICS, said: “Soft growth in the last set of figures from Nationwide is continuing and confirmed on the high street. Clearly, Brexit uncertainty in the minds of homebuyers is still outweighing almost record low mortgage rates and employment numbers as well as improved affordability. A glimmer of good news is that first-time buyers are taking advantage, particularly of help to buy and deposits from the bank of mum and dad, not forgetting reduced competition from landlords.”

Source: Money Expert

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UK wage growth finally outstrips house price growth

Despite the continuing uncertainty about the UK’s exit from the European Union, there are signs of optimism, at least where the UK’s job market is concerned. UK employers are continuing to hire, and wages are growing at a higher rate than house prices, giving potential homeowners some hope of catching up with the high UK housing prices and at least narrowing the property affordability gap.

According to the latest Rightmove Property Index, UK wage growth currently stands at 3.4 per cent, as opposed to house price growth of two per cent. Of course, these figures have different implications at different regional levels, with prospective home buyers in some parts of the country in a particularly strong position.

While asking house prices are lower this year than last  year in three out of four regions in southern England, the higher (and rising) costs of living there means that not all potential homeowners will have benefited from the wage increase rates. This is particularly true of rail commuters, since the costs of rail travel went up by 3.1 per cent in January.

The people who are likely to benefit the most from wage growth outstripping house price growth are those in areas with a generally better income to living costs ratio, notably the North West of England, which remains a property hot spot for both buyers and investors.

House prices in Manchester are growing at Brexit-defying rates, but, with the average price of £195,000, property there is still highly affordable in comparison with the South East, especially in conjunction with the lower costs of living in this city compared to London. Manchester is being constantly redeveloped, too, making it an attractive city for investor buyers. For instance, Manchester’s already iconic MediaCity UK development in Salford is entering its second, £1 billion stage that will see the site double in size.

Jonathan Stephens, MD, of  specialist property investment agency  Surrenden Invest, comments, ‘Such vast developments bring a wealth of opportunities, both for those who live in the city and for those looking to invest there. They can also trigger fundamental shifts in demand in the local housing market, with sudden increases in the need for rental accommodation meaning that the private sector has to rapidly up its game in terms of the number of properties on offer.’


Source: Real Homes

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Number of homes ‘earning’ more than their owners shrinks amid property cooldown

The proportion of homes which are “earning” more than their owners is shrinking as house price growth continues to slow, analysis has found.

The average rise in house prices over the last two years has outstripped post-tax earnings in less than one in 10 (8%) local authority districts, Halifax said.

This proportion is dwindling compared with nearly one in five (18%) in 2017 and nearly a third (31%) in 2016.

Across the UK, the average house price has increased by £14,975 over the past two years, while the average take-home pay over two years has been £46,225 – £31,250 more than house price growth.

Earnings exceeded house price growth consistently at a national and regional level across the UK – from £19,649 in London up to £35,250 in Scotland.

Leafy London borough Richmond-upon-Thames was identified as the local authority area where house price growth outpaces take-home pay the most.

The average house price there has increased by £55,483 more than typical net earnings over the past two years – equating to £2,312 per month – Halifax said.

The next biggest gap was found in Winchester, home to much of the South Downs National Park, in the South East of England – where average house price growth has outpaced average net wages over the past two years by £45,016 according to the research which used the Halifax house price database and Office for National Statistics (ONS) earnings figures.

Russell Galley, managing director, Halifax, said: “The majority of areas where house price inflation outpaced owners’ take-home pay are still to be found in London and the South East.”

Here are the top 10 areas where house price growth has outpaced wages over the past two years, according to Halifax, with the two-year increase in house prices followed by net average earnings over the two years and the difference:

1. Richmond-upon-Thames, London, £119,075, £63,592, £55,483
2. Winchester, South East, £103,196, £58,180, £45,016
3. South Buckinghamshire, South East, £97,806, £56,430, £41,376
4. West Devon, South West, £75,659, £40,198, £35,460
5. Windsor and Maidenhead, South East, £88,437, £60,153, £28,284
6. Wandsworth, London, £90,482, £62,247, £28,234
7. Bromsgrove, West Midlands, £77,621, £52,317, £25,303
8. Chichester, South East, £73,769, £48,778, £24,991
9. North Dorset, South West, £58,289, £43,158, £15,131
10. Harborough, East Midlands, £69,604, £55,167, £14,437

By Vicky Shaw

Source: Yahoo Finance UK