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House prices climb 5% as movers maintain momentum

House prices grew by 5% in the year to September, the highest annual growth rate for four years, according to the latest Nationwide House Price index.

Month-on-month, house prices rose by 0.9% after a 2% rise in August that pushed up the average UK house price to £226,129.

Most UK regions saw a small rise in annual price growth in quarter three compared to the previous quarter.

The South West was the strongest performing region, with annual price growth rising from 2.3% to 5.5% and for the first time since 2017, house price growth in southern England exceeded that in northern England.

Annual house price growth in London was up 4.4% in Q3 driving the cost of the average property in the capital to a record high of £480,857. Homes are now selling for 57% more than their 2007 price tags.

In the UK, prices are 21% higher than their 2007 peak.

Scotland was one of the few areas to see a slowing in the annual rate of price growth to 2% in Q3, compared to 4% in Q2. Meanwhile, Wales saw annual growth accelerate to 3.8% from 1% in the previous quarter.

Pent up demand is one of the drivers behind price rises. Almost 20% of households surveyed by Nationwide in September, who were considering moving before the pandemic, had put their plans on hold.

Nationwide chief economist Robert Gardner said: “Housing market activity has recovered strongly in recent months. Mortgage approvals for house purchase rose from around 66,000 in July to almost 85,000 in August – the highest since 2007, well above the monthly average of 66,000 prevailing in 2019.

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“The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing.

“The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.”

Weaker economy effects

Economic forecasters expect labour market conditions to get significantly weaker as tighter restrictions on movement supress economic activity and the furlough scheme is replaced with a less comprehensive jobs support package.

Despite this, some households who were not planning on a move, have changed their minds because of the crisis.

Around 10% of those surveyed in September said they were in the process of moving as a result of the pandemic, with a further 18% considering a move for the same reason.

This sentiment was highest in London where 25% of households said there were now considering moving and close to 20% said they were actually moving.

Jeremy Leaf, former Royal Institution of Chartered Surveyors residential chairman, said: “There is little sign on the ground yet that this report and others which have emerged recently reflect the calm before the storm and a fizzling out of the mini-boom.

“Certainly increased restrictions and the unwinding of the furlough scheme will have some impact on confidence but not much at the moment.

“Of just as much concern to our buyers, and particularly those vital first-time buyers, is mortgage accessibility with lenders running the risk of reducing activity in the market at a time when it is so vital to the economy generally.”

Written by: Samantha Partington

Source: Your Money

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House price growth to reach 14% in November

Reallymoving has predicted annual house price growth to reach 14% by November 2020.

The quote service said the prediction is based on deals already agreed, as pent up demand and urgency to benefit from the temporary stamp duty holiday has driven up activity in the market.

Annual price growth is forecast to reach 4.7% in September, 11.4% in October, and finally 14% in November.

Rob Houghton, chief executive of reallymoving, said: “Buyers are determined to make their move now, despite the fact that the current spike in prices will in many cases wipe out the stamp duty savings.

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“For those higher up the ladder with secure finances, a healthy level of equity in their property and little other debt, gloomy economic forecasts are only encouraging them to press ahead with the move rather than sit tight and wait out what could be a long and painful recession.

“More than ever people’s homes are their castles and their offices – and with borrowing costs likely to be rock bottom for the foreseeable future, paying over the odds on a purchase isn’t too painful if you’re also getting over the odds on your sale and making a stamp duty saving.

“It’s a different story for first-time buyers though, who aren’t benefitting from stamp duty savings in most areas and who have seen low deposit mortgages all but wiped out. This explains why the proportion of first-time buyers in the market has dropped by 19% since May.”


Source: Property Wire

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June house prices rose 3.4% as ‘flood of buyers’ returned

UK house prices increased by 3.4% in the 12 months to June, compared to an annual rise of 1.1% in May, the UK House Price Index revealed.

Month on month, house prices rose on average 2.7% between May and June.

Regionally, the East Midlands saw the greatest annual price rise of 4.5% while the North East saw the lowest annual price growth with a rise of 1.7%.

Shaun Church, director of Private Finance, said: “These latest figures reveal the scale of the impact that the sudden burst in pent-up demand had on house prices following the reopening of the property market.

“Price rises were driven by a flood of buyers resuming purchases put on hold during lockdown immediately after restrictions were eased. Initial strong demand has been boosted by the higher stamp duty threshold coming into effect in July.”

Around 150,000 housing transactions were put on hold in March and restarted again in June, according to the Centre for Economics and Business Research (CEBR).

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However, Church expects the strong market activity to be short lived.

“An uptick in infections and mounting concern over the reintroduction of national and local lockdowns is weighing on consumer confidence,” he said. “This could cause buyer activity to dip, resulting in the market readjusting to a new economic environment.

“Lenders are taking a risk-averse position in response to high uncertainty levels in the UK economy. Mortgage providers are increasing rates on higher loan-to-value products to reduce exposure to riskier borrowing propositions. Unfortunately, this will create barriers to entry for first-time buyers, the group of people that have been hardest hit financially by the pandemic.”

It is widely expected that the property market will experience a downturn next year.

CEBR forecast a 14% drop in house prices in 2021. In its latest report, the Intermediary Mortgage Lenders Association said the policy decisions lenders made now about loan-to-value restrictions would affect the severity of a downturn next year.

However, estate agents said they are no signs yet of the market slowing down.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Although a little historic, these figures highlight the resilience of the property market and the strength of pent-up demand even as we were recovering from lockdown and before the announcement of the stamp duty holiday.

“This comprehensive survey reflects prices paid for property and so is an indicator of some optimism. We are being told repeatedly that this mini-boom will not continue as the job retention scheme unwinds and unemployment rises but we not seeing many signs of that on the ground. If anything, the market is being more restrained by lender caution and lack of capacity to deal with the number of enquiries rather than demand fizzling out.”

Written by: Samantha Partington

Source: Your Money

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Region’s house price growth at highest level in almost two years

Housing market activity in the West Midlands continued to rise in August, as those looking to take advantage of the stamp duty holiday continued their search for a new home.

A net balance of 63% of respondents reported an increase in buyer interest across the region over the month, according to the August 2020 RICS UK Residential Survey.

However, the longer-term view remains more cautious.

As buyer enquiries continued to rise, the number of new properties listed for sale also increased, with a net balance of +26% of survey participants noting an increase in vendors listing property to sell.

Strong growth in agreed sales was cited for a third successive month, with a net balance of +52% of contributors seeing a pick-up.

Looking ahead, near term sales expectations for the West Midlands remain positive, but 12 month sales projections are still in negative territory, with the net balance coming in at -12% (up from -40% last time). Anecdotal evidence suggests concerns over the broader economic climate continue to drive this subdued assessment.

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Meanwhile, the pandemic is expected to cause a lasting shift in the desirability of certain property characteristics, as 83% of respondents, nationally, anticipate demand increasing for homes with gardens over the next two years. 79% predict rising demand for those properties near green space, while a net balance of +68% foresee a rise in the desirability of properties with more private / less communal outside space.

Turning to house prices, the August survey feedback points to a sharp acceleration in house price inflation. Across the region, a net balance of +52% of respondents reported an increase in prices, the strongest reading since September 2018. This is up from a net balance of +49% in July and marks a turnaround compared to the reading of -27% registered back in May.

In the lettings market, tenant demand continued to rise sharply in the West Midlands, while landlord instructions returned to negative territory following a rebound in July. Rental growth expectations over the near term have now strengthened in each of the past three months, with a net balance of +58% of contributors now anticipating an increase.

Simon Rubinsohn, RICS chief economist, said: ‘The latest RICS survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months. More of a concern is the pick-up in prices which could intensify issues around affordability in some parts of the country. Disaggregated data shows demand generally to run ahead of supply.

“Meanwhile the results provide a further pointer to more substantive changes taking place in household behaviour in the wake of the pandemic. Increased demand for properties with garden and near green spaces has if anything increased since we tested the water in May.’

By Rachel Covill

Source: The Business Desk

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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.”


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%).


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.


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.”


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