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UK house prices see further slowdown amid weaker growth in England and Scotland

House prices increased at their slowest annual pace in nearly six years in January as property values tumbled in London but increased relatively strongly in places including the Midlands, Wales and Northern Ireland, official figures show.

England and Scotland saw a slowdown in annual house price growth, while in Wales and Northern Ireland property values are rising relatively strongly.

In Wales, the abolition of the Severn crossing tolls is helping to drive prices up in the south-east of the country, according to the report released jointly by the Office for National Statistics (ONS), Land Registry and other bodies.

Average house prices in the UK increased by 1.7% in the year to January 2019, down from 2.2% in December and the lowest annual rate since June 2013 when it was 1.5%, the report said.

UK house price growth has been slowing for the past two-and-a-half years, driven mainly by a slowdown in the South and East of England.

In London, house prices fell by 1.6% annually, while in the East of England prices fell by 0.2% over the year.

In the East Midlands, prices increased by 4.4% in the year to January 2019, while the West Midlands saw 4.0% growth.

Across the UK, the average house price was £228,000 in January.

ONS head of inflation Mike Hardie said: “While average UK house prices increased over the year, the rate is down from last month, and is at its lowest in almost six years.

“London property prices continued to fall, seeing their steepest drop since the end of the financial crisis, with Wales, the East Midlands and the West Midlands driving the overall growth.”

House prices in England increased by 1.5% annually in January, slowing from 1.9% growth in December. The average house price in England was £245,000 in January.

House prices in Scotland grew at a slower rate than other countries in the UK, increasing by 1.3% in the year to January, down from 2.0% in the year to December, taking the average house price in Scotland at £149,000 in January.

By contrast, house prices in Wales increased by 4.6% annually in January, reaching £160,00 on average.

The report said: “This continues to be driven by strong house price growth in south-east Wales, likely linked to the abolition of the Severn Bridge tolls.”

In Northern Ireland, house prices increased by 5.5% over the year, taking the average house price to £137,000.

Howard Archer, chief economic adviser at EY Item Club said: “Most recent data and surveys have pointed to muted housing market activity, indicating that heightened economic and Brexit uncertainties are weighing down on a housing market that is already under some pressure from overall challenging conditions.”

He continued: “It should be noted that the overall national picture has been dragged down by the particularly poor performance in London and parts of the South East.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “As always, national average house prices conceal significant regional differences.

“London continues to see the largest annual price fall as those worried about the Brexit fallout err on the side of caution.

“That said, the year has got off to a remarkably good start on the lending front despite ongoing political uncertainty.”

He said several lenders have trimmed rates in an effort to encourage more business.

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said in some areas the market is patchy at best, whereas in others there is more optimism.

“This is borne out perhaps more in the numerous micro markets of London where local factors are often much more relevant than the national picture,” he said.

“Sadly, while political uncertainty remains, stronger demand is likely to remain pent up at least for a little while longer.”

By Vicky Shaw

Source: Yahoo Finance UK

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Sluggish house price growth led by Wales

House prices edged up for the third consecutive month in February, rising 0.5% to take the average value of a home in England and Wales to £302,435.

The Your Move House Price Index showed that price growth was led by Wales, where it increased by 3% annually.

There was a spike in price rises in early last year, explaining why prices are down 0.5% compared to this time last year. Overall, prices remain subdued with an estimated 59,100 sales in February 2019.

There is a distinct North/South divide. Most of the major conurbations outside London continue to see growth, led by Cardiff, up 5.3%.

Oliver Blake, managing director of Your Move and Reeds Rains estate agents said: “Whilst a challenging market it’s a mixed picture with some regions still experiencing price rises; there clearly continues to be demand for property and a need for more homes to come to market.”

As of last month, the North/South divide largely persists in the regions of England and Wales, with annual falls concentrated in the South Eastern corner of the country.

The South East region itself is seeing the fastest falls in prices, with the average house values down 1.7%, despite strong growth in the Isle of Wight (up 7.0%) and Southampton, up 4.2% annually to set a new peak average price.

The picture is complicated by modest growth in the South West (up 0.3%).

There, growth in Bournemouth (up 7.3%) and new peak average prices in Bristol (up 0.3%), Gloucestershire and Somerset (up 3.8% and 3.9%, respectively) remains enough to outweigh downward pressure from Bath and North East Somerset (down 10.2%) and North Somerset (down 5.4%).

Likewise, the North East refuses to conform to the pattern. Prices there are down 1.6, with significant falls in Redcar and Cleveland (falling 7.3%) and Middlesbrough (down 6.5%).

Outside these areas, though, growth continues and the majority of local authorities (59 out of 108) saw averages prices rise. For the most part the increases are modest.

In England, the North West sees the strong growth with average prices up 1.3% annually. This is supported by strong performance in Manchester, which set a new peak average price in the month and where values have increased 3.1% in the last year.

The West Midlands also performs well, with growth of 1.7%, but in the East Midlands and Yorks & Humber regions growth is under 1.0%. The strongest performing region by far, however, remains Wales, where growth of 3.0% remains comfortably ahead of inflation.

Its performance is strengthened by strong growth in the capital Cardiff, where prices are up 5.3% annually at a new peak average of £241,036, benefiting in part from the abolition of the toll on the Severn Bridge.

The same is probably true for Wales’ third city, Newport, another new peak (one of five in Wales), with prices up 6.7% annually.

In London, prices have risen for the last five months, leaving the average price in the capital at £622,494.

By Michael Lloyd

Source: Mortgage Introducer

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Challenging market continues as house price growth stalls

House price growth slowed for a second consecutive month in February, with just one region beating the rate of inflation.

Data from Your Move shows average prices fell by 0.5% annually last month to £302,435.

This was the same level of annual decline recorded in January.

Prices grew by 0.5% on a monthly basis after two months of zero movement previously.

The fastest growing region in February was Wales, which saw prices grow 3% annually to £188,077.

This compares with the inflation rate of 1.8%.

All other regions either posted annual growth below this rate or registered a decline.

The next fastest growing region was the west midlands, up 1.7% to £227,032.

The largest annual fall was in the south-east of England where prices fell 1.7% to £371,791.

London remained the region with the highest house prices at £622,494, which was down 1.5% annually.

Oliver Blake, managing director of Your Move, said: “Whilst a challenging market, it’s a mixed picture with some regions still experiencing price rises.

“There clearly continues to be demand for property and a need for more homes to come to market.”


Source: Property Industry Eye

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House price growth slows to six-year low

House price inflation slowed to 2.5 per cent during December, according to the Office for National Statistics.

This was the lowest annual rate of house price inflation since July 2013 and continued the slowdown seen in the housing market over the past two years.

The average UK house price was £231,000 in December 2018 – £6,000 higher than a year previously.

On a month-on-month basis, house prices only rose by 0.2 per cent between November and December.

Dilpreet Bhagrath, mortgage expert at Trussle, said: “Even with the slight increase in prices, it’s clear that Brexit nerves and uncertainty is still affecting the market. Not to mention the ongoing lack of supply, with more risk-adverse sellers staying put until the economic picture becomes clearer.

“That said, for new buyers, the current low interest rate climate coupled with the government’s commitment and extension of the help-to-buy scheme will offer further support for those hoping to get a foot on the ladder.

“For the slightly more cautious first-time buyers, opting for fixed rate mortgage deals might be favourable, giving complete clarity over how much your mortgage costs each month so that you can plan ahead.”

Steve Seal, director of sales and marketing at Bluestone Mortgages, added: “Slower house price growth is no doubt a reflection of potential buyers choosing to adopt a ‘wait and see’ approach before committing to the biggest purchase of their life – a home.

“To tackle this, lenders are offering near record low deals to reassure borrowers that there is still plenty of opportunity to lend.”

The lowest annual growth was in the North East, where prices fell by 1 per cent over the year to December 2018, followed by London where prices fell 0.6 per cent over the year.

House prices in London have now fallen from a peak of £488,527 in July 2017 to £473,822 in December.

Meanwhile house price growth was strongest in Northern Ireland, where prices increased by 5.5 per cent, and Wales, where house prices increased by 5.2 per cent.

The ONS said the increase in house prices in Wales was driven by strong growth in the south east of the nation, likely linked to the abolition of tolls on the Severn Bridge.

Despite the strong house price growth in Northern Ireland, it remains the cheapest area of the UK for property, with the average home costing £136,669 compared to £247,886 in England.

Source: FT Adviser

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House price inflation slows to 2.7% across UK cities

House price growth across UK cities has reduced steadily across 2018 and currently stands at +2.7% when comparing December 2018 with December 2017, Zoopla’s UK Cities House Price Index has found.

The slowdown has been driven by price falls in London (-0.2%) and Cambridge, which has seen prices drop 3.8% annually while the rate of growth has slowed across Southern cities.

Richard Donnell, research and insight director at Zoopla, said: “Weaker growth in London, Cambridge and Aberdeen has been a large drag on the headline rate of house price growth across the UK cities index over the last year.

“House prices in London have been falling for almost 12 months while the rate of growth has slowed across cities in southern England, a result of growing affordability pressures, higher transaction costs and increased uncertainty.

“The strongest performing cities are outside south eastern England where affordability remains attractive and employment levels are rising.

“We expect current trends in price growth to continue across the rest of this year, with prices rising in line with earnings for much of the UK but lower growth and some house prices falls in London and the South.

“London will continue to register price falls, concentrated in inner London where prices have grown the most over the last decade. Prices continue to increase slowly in the more affordable outer and commuter areas of London.”

Northern, Midlands, Scottish and Welsh cities all lead the way for annual growth with Edinburgh’s average price up 6.8% annually; Liverpool up 6.3% and Birmingham, Nottingham and Cardiff all seeing prices increase by 5.9%.

There’s a clear North-South divide when it comes to house price growth. The 13 cities in its ‘20 cities index’ posting the highest growth are all located in the North, Scotland, the Midlands or Wales with Bristol in the South West the exception.

Other than Aberdeen, where the housing market has suffered due to oil prices, the ‘bottom seven’ cities are all in the South or East of England.

Some 10 cities have posted double digit growth since the 2016 vote, with Birmingham (pictured) (+16%) and Manchester (+15%) leading the charge.

In a reversal of fortunes, leaders in the broad recovery phase (London, Oxford and Cambridge) are now amongst the very poorest market performers post-Brexit vote.

Southern cities that outperformed during the broad recovery phase are now experiencing significantly decelerated growth, as economic and political uncertainty is more acutely felt here.

Source: Mortgage Introducer

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House price growth at lowest level since 2012

Annual house price growth has hit its lowest level since 2012, figures from Your Move found.

At the same time, Rightmove’s January House Price Index revealed only a 0.4% increase in asking prices – the slowest monthly rise since January 2012.

Asking prices fell to £298,734 from £297,527 in December 2018.

The national average has been dragged down by new to the market sellers who realise they have less pricing power than usual given the current market backdrop, especially in the South, according to Rightmove.

The number of properties coming to market in the first two weeks in 2019 is broadly the same as a year ago, with owners in more northerly regions showing greatest propensity to move.

However, visits to Rightmove rose by five per cent in the first two weeks of 2019, compared to a year ago, with an average of over 4.5m visits each day.

Miles Shipside, Rightmove director and housing market analyst, said: “Agents report that activity is now picking up, though when you dig underneath the national averages, the first snapshot of 2019 shows a somewhat patchy and variable picture depending on where you are in the country.

“Given the current market backdrop and ongoing political turmoil, it’s not surprising that the more challenging conditions in London and its nearby regions mean that they appear to have had a slower start to the year.

“Traditionally this is the time of year when more movers look at a wider choice of fresh property supply and kick-start the market, and this year’s buyers have the added spur of the slowest rate of new year price increases for five years.”

House price growth falls

Separate research from Your Move showed annual price growth continued to slow standing at its lowest level since April 2012 at 0.6%.

Average house prices are up by £1,690 over the last 12 months, meaning the average property price in England and Wales at the end of the year stood at £306,647.

Overall the market continues to flatline, but regional and local variations are becoming increasingly marked.

Annual growth in the North West and East and West Midlands is outpacing inflation, while the South East, East and Greater London are all struggling to maintain growth at all.

While the market is still seeing nominal price growth, the number of transactions has fallen – down 2.4% in 2018 on the previous year.

The slowdown in house price growth has, however, made house prices more affordable in real terms over the last year, and the mortgage market remains highly favourable for buyers.

Oliver Blake, managing director of Your Move and Reeds Rains estate agents, said that due to current political and economic unrest it is understandable why buyers and sellers may be taking a ‘wait and see’ approach to the property market.

He added: “In turn, as demand waivers, it means that property may become more affordable to more people. This should help buyers, and first-time buyers in particular, when they are ready to act.”

Source: Your Money

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There’s only one way to fix the housing crisis: build more

From free marketeers on the right to proponents of central planning on the left, cries to fix Britain’s broken housing market have become deafening.

The solutions, of course, differ greatly depending on where along the political spectrum you stand.

Yesterday, for example, Shelter issued its latest call to action, proposing three million new social homes to be built over the next 20 years. The housing charity points to the high costs and levels of insecurity among renters, and makes a link between “insecure unaffordable private rentals” and the rise of homelessness across Britain.

Shelter has correctly identified two key problems: that home ownership is becoming increasingly unaffordable, and that the rental market is not set up for long-term, stable tenancies, as seen in other countries.

It is also correct that other government policies to fix the problem, such as the Help-to-Buy scheme, are not an effective use of taxpayer money and actually distort the market by tinkering on the demand-side.

Building more social houses, however, is only one small part of a solution that must go far further. After all, the UK is already in the top three European countries in terms of social housing stock.

It’s not the lack of building social houses that is the key problem, but the lack of building full stop. This is set to be the worst decade for UK house-building since the Second World War, continuing a downward trend that has lasted half a century.

The result is that, even with the recent slowdown in house price growth, one in three millennials will never own their own home.

Unfortunately, this is where politics comes in, with endless arguments over who should build what kind of homes where and with what funding. For too long, stringent planning restrictions have prevented building in places where people actually want to live.

This needs to change – and in some cases it finally is, with a cross-party plan to redesignate areas of the so-called green belt within 10 minutes’ walk of a station to build a million extra homes around London.

There are other things we could do, from exploring high-tech construction methods like modular homes to repurposing disused retail and warehouse space to building new commuter towns with cutting-edge transport links, as well as looking into reforming the rental sector.

However, without more building – and lots of it – the housing crisis is only going to get worse, and is set to throw a spanner in the works of any government, from any party, that hopes to improve business competitiveness, social mobility, and standards of living in the UK.

Source: City A.M.

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House-price growth slows to six-year low amid weak confidence

House price growth slowed sharply as 2018 drew to a close, with the UK recording its weakest annual growth in nearly six years.

Annual house price growth slowed from 1.9 per cent in November to 0.5 per cent in December, Nationwide Building Society has said.

But Scotland fared slightly better, with house prices in 2018’s fourth quarter 0.9 per cent higher annually, at £147,856 on average.

The 0.5 per cent increase in December was the weakest since February 2013. House prices were down by 0.7 per cent month-on-month in December.

Across the UK, the average house price in December was £212,281. London and some commuter belt areas surrounding the capital have seen house prices dip year-on-year.

In London, the average house price in the fourth quarter of 2018 was £466,988 – 0.8 per cent lower than the same period in 2017.

Northern Ireland was the strongest performer, with house prices in the fourth quarter of 2018 up by 5.8 per cent annually to reach £139,599 on average, followed by the East Midlands and Wales, where house prices lifted by 4 per cent annually.

Nationwide’s chief economist Robert Gardner said: “UK house price growth slowed noticeably as 2018 drew to a close, with prices just 0.5 per cent higher than December 2017.

“This marks a noticeable slowdown from previous months.” He said there have been indications a softening in the housing market was likely, including weakened consumer confidence.

Mr Gardner said: “The economic outlook is 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.”

Source: Scotsman

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North records highest annual house price growth in the UK

THE north recorded the high annual house price increase in the UK at the end of 2018, according to new figures.

Northern Ireland was the strongest performer in the latest Nationwide Building Society index, with average house prices in the final quarter of the year up 5.8 per cent annually to £139,599.

The unparalleled growth in the north was in contrast to the overall picture in the UK, where the weakest annual growth was recorded in almost six years.

The 0.5 per cent increase to an average of £212,281 in December was the weakest since February 2013. That figure was also down 0.7 per cent month-on-month.

In London, the average house price in the fourth quarter of 2018 was £466,988 – 0.8 per cent lower than the same period in 2017.

The strong growth in Northern Ireland was followed by Wales and the east midlands, where prices lifted by 4 per cent annually to £156,891 and £184,283 respectively.

In Scotland prices grew by 0.9 per cent over the same period to an average of £147,856

Robert Gardner, Nationwide’s chief economist said UK house price growth slowed noticeably as 2018 drew to a close.

“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,” he said.

“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 is 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,” Mr Gardner added.

Howard Archer, chief economic adviser at EY ITEM Club believes the housing market ended 2018 “very much on the back foot”.

“Brexit and economic uncertainty may well have an increased dampening on housing market activity in the near term at least.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics) said the figures are a wake-up call for the housing market.

“After steady progress, without much change one way or the other, prices have experienced a nasty bump.”

“Looking forward, this is always a fairly quiet time anyway for the market so the reasonable start we have had to business won’t be seen in the figures for at least the next month or so,” he added.

Source: Irish News

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UK house prices 2019: What experts say will happen after Brexit

Has there ever been a more difficult time to predict the future of UK house prices? Political uncertainty looms large over the UK’s property market, but experts have nonetheless given their expectations for the year to come.

Bank of England governor Mark Carney showed how dangerous the numbers game can be in November, when he had to clarify that he was not suggesting the property market would crashin the wake of a no-deal Brexit, despite warning that in a worst-case scenario house prices could fall by up to 35 per cent.

Subdued activity in parts of London, particularly at the higher end of the market, has dominated the headlines in recent months.

However, outside the M25 house prices have largely continued to grow modestly, with the fastest rises in the north west of the UK. According to the Nationwide House Price Index, in November UK house prices bucked expectations after growing by more than many economists had forecasted, edging up 0.3 per cent.

Industry voices such as the Royal Institution of Chartered Surveyors worry that uncertainty over Brexit and squeezes on household budgets are likely to dent demand in the year ahead, although many are predicting a rise in prices beyond 2019.

Here is what the experts predict will happen in 2019, whether you’re planning to buy or sell:


2019 UK house price growth prediction: 0.5 per cent

2019 London house price growth prediction: 1.5 per cent

Corporate property giant JLL said that it predicts a bright future for the UK housing market. The property consultant is projecting a return in confidence and a new phase of affordability if a Brexit deal is agreed.

Although it says that housing starts will remain subdued in 2019-20 at 175,000 – 180,000, they will gain traction from 2021 onwards. Providing a deal with the EU is reached, JLL predicts house prices across the UK are forecasted to grow by 11.4 per cent in the next five years.


2019 UK house price growth prediction: 1.5 per cent

2019 London house price growth prediction: -2 per cent

Savills says that it is affordability, rather than Brexit, which is the major factor for the UK housing market. The property giant is forecasting that UK house prices will rise 14.8 per cent from 2019-2023, although there will be significant regional variation.

While London is projected to see growth of 4.5 per cent over this period, it will dip by two per cent in 2019, while the north west is expected to see a 21.6 per cent rise over the period. London’s prime market will also see double digit growth at 12.4 per cent, according to Savills.


2019 UK house price growth predictions: 0 per cent

2019 London house price growth predictions: -1 per cent

The UK’s largest online real estate portal and property website is forecasting a flat 2019 for house prices, while they will continue to dip in London.

Rightmove’s prediction for parts of the more buoyant northern half of the UK are set to rise by two to four per cent, though this will be offset by new sellers adjusting their prices downwards in parts of the south.

Miles Shipside, Rightmove director and housing market analyst, says: “While buyer affordability is stretched in some parts of the UK due to house price rises having outstripped wage rises, the underlying fundamentals supporting the housing market are currently sound. Positive employment data and affordable mortgage interest rates at high loan-to-value ratios are key to keeping property prices broadly in line with current levels.


2019 London house price growth prediction: 10 per cent fall in next 18 months

Cluttons, the London-based firm of chartered surveyors and property consultants, predicts that the London residential property market will fall a further 10 per cent before prices begin to recover in a year to 18 months’ time.

Recent Cluttons data found that average house prices have fallen 6.8 per cent and 4.6 per cent in prime central London and core central London respectively over the past 12 months, with no areas registering any increases. Head of residential James Hyman said that the London market “still faces significant challenges in terms of affordability, buy-to-let investors and outdated infrastructure”.

The Royal Institution of Chartered Surveyors (Rics)

2019 UK house price growth prediction: 1 per cent

Rics estimates that prices will rise by one per cent in 2019, although surveyors believe that uncertainty about Brexit is likely to hit the UK housing market well into next year.

The group is expecting the number of homes being sold, as well as the prices that they are being sold for, to edge down over the next three months. Residential properties are taking an average of four months to sell, the longest period since records began in 2016.

“It is evident from the feedback to the latest Rics survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market,” said Rics’ chief economist, Simon Rubinsohn.

“Indeed, I can’t recall a previous survey when a single issue has been highlighted by quite so many contributors.”


2019 house price growth predictions in London: 0 per cent

In CBRE’s predictions for the coming years, London house prices are set to be flat in 2019, but picking up by 1.6 per cent in 2020 and by 3.5 per cent in 2021. Between 2019 and 2023, the real estate adviser is expecting growth of roughly 10.5 per cent in the capital’s house prices.

Source: City AM