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House prices have doubled over the past decade

Average house prices have increased by 51% over the past 10 years, according to e.surv’s Chartered Surveyors House Price Index.

On a monthly basis, house prices across England and Wales increased by 1.4% between November and December 2020.

Throughout 2020, house prices rose by 7.8% despite the added complications of COVID-19.

This is the highest annual increase since 2016, however the majority of growth took place in the last six months of the year as pent-up demand was released by more relaxed coronavirus restrictions.

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As a result, the average house price in England and Wales was £326,762 at the end of December.

Richard Sexton, director at e.surv, said: “During 2020, large numbers of people across the UK were confined to their houses for long periods of time, as we battled the pandemic.

“Over the year many people were forced to adapt their homes to function as offices, schools and nurseries.

“This increased emphasis on where we live and where we spend so much of our lives undoubtedly helped focus many people’s minds on the property market.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“This increased focus was reflected in the types of property that were most sought after in 2020.

“Larger, typically more expensive, properties with more outdoor space became even more highly prized, which in turn increased the price of the average transaction.

“It’s important to remember that the pandemic which produced such an unusual year is very much still with us.

“Everyone involved in the property market must continue to operate in a responsible manner, making use of technology where possible to support the industry while putting safety first.”

By Jake Carter

Source: Mortgage Introducer

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House prices rose at twice the rate of flats in 2020

The rate at which the price of houses is rising is more than double that for flats as lockdown-weary Britons look for more space.

Annual property price growth for houses in the UK is currently running at 4.3%, while price growth for flats is just 1.8%, according to our latest House Price Index.

The trend is being seen across the country, with all regions reporting significantly stronger increases in the value of houses than those of flats.

Richard Donnell, our director of research and insight, said: “The search for space has been a key feature of the rebound in market activity as households re-evaluate their housing requirements.

“Demand for family homes with gardens, parking and extra space to work from home has continued to rise.”

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Why is this happening?

The coronavirus pandemic triggered a ‘once-in-a-lifetime reassessment of housing’ in 2019, as lockdowns and social distancing created a greater appetite for home offices and outdoor space.

Analysis of our advanced search property tool over the past 12 months found that ‘garden’ was the top feature buyers looked for, while ‘detached’, ‘rural’ and ‘secluded’ all also made it into the top 10.

The high level of demand for houses is putting upward pressure on prices, as demand outstrips supply.

By contrast, flats are suddenly in less demand than they were before the pandemic, leading to slower price growth.

Who does it affect?

The rise in the value of houses was strongest in Wales, followed by the North West and Yorkshire and the Humber, all regions in which affordability is less of a barrier to price growth.

By contrast, the price of flats was broadly unchanged year-on-year in the East, while they edged ahead by less than 1% in the West Midlands and the South West.

The current trend could make it harder for sellers trying to trade up the property ladder from a flat to a house. This is because they are not only likely to find their current property takes longer to sell, but they will also face increased competition for their next home and an enlarged gap between the price of the two properties, if they are staying in the same region.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

What’s the background?

The quest for more space has contributed to a shift in the demographic profile of home movers, and there has been a notable increase in sales in more affluent demographics, where house prices are typically higher.

This shift, along with a high level of transactions, has contributed to a 26% rise in the value of property that changed hands in 2020, with sales rising by £62 billion to £300 billion.

Moving into 2021, older, equity rich, long-time homeowners are expected to continue to take a growing share of sales.

Top three takeaways

  • The rate at which the price of houses is rising is more than double that for flats as lockdown-weary Britons look for more space
  • Annual property price growth for houses in the UK is currently running at 4.3%, while price growth for flats is just 1.8
  • The trend is being see across the country, with all regions reporting significantly stronger increases in the value of houses than those of flats.

By Nicky Burridge

Source: Zoopla

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House Prices At Record High But Headwinds Expected

Average UK house price reached new record high in October although the market looks set to slow in the coming months, reported Halifax in its latest House Price Index, published this week

‘The average UK house price now tops a quarter of a million pounds (£250,457) for the first time in history, as annual house price inflation rose to 7.5 per cent in October, its highest rate since mid-2016’, said Halifax, said Halifax managing director Russell Galley. ‘Underlying the pace of recent price growth in the market is the 5.3 per cent gain over the past four months, the strongest since 2006. However, month-on-month price growth slowed considerably, down to just 0.3 per cent compared to 1.5 per cent in September.

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‘Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses. Since March flat prices are up by 2.0 per cent compared to a 6.0 per cent increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses’.

Latest figures put home-buyer mortgage approvals at their highest level since 2007, ‘as transaction levels continue to be supercharged by pent-up demand’, said Galley.

Government support measures have helped to delay an expected downturn in the housing market but ‘they will not continue indefinitely’.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

The macroeconomic landscape in the UK remains highly uncertain, said Galley. ‘With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021’.

Halifax figures mirror those of Nationwide which put October house price growth at 5.8 per cent, and monthly rises of 0.8 per cent.

The annual rate of increase was the highest recorded by Nationwide since January 2015, said its chief economist Robert Gardner.

But, he added, ‘data suggests that the economic recovery has lost momentum in recent months with economic growth slowing sharply to 2.1 per cent in August, down from 6.4 per cent in July.

‘The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy’.

Source: Residential Landlord

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House price inflation surges to 7.5% in October

House prices rose by 7.5% year-on-year in October due to strong demand for higher value homes, Halifax’s House Price Index has found.

Quarterly prices increased by a substantial 4.0%, bringing the average price to £250,457 across the UK.

However, month-on-month price growth slowed considerably, down to 0.3% compared to 1.5% in September.

Russell Galley, managing director, Halifax, said: “Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses.

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“Since March flat prices are up by 2.0% compared to a 6.0% increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses.

“This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the Chancellor’s waiver on stamp duty for properties up to £500,000.

“While government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain.

“Though the renewed lockdown is set to be less restrictive than earlier this year, it bears out that the country’s struggle with COVID-19 is far from over.

“With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”

Jamie Johnson, chief executive of FJP Investment, said: “The property market is moving from strength to strength. Amidst the uncertainty, buyer demand for bricks and mortar is pushing prices to record highs.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“Yet with the country now in a second lockdown, is this momentum about to suddenly run out? I don’t believe so. After all, the stamp duty holiday is still in play and the government has confirmed buyers and renters can still move houses throughout November. Clearly, it understands the importance of the property market in supporting the economy.

“I anticipate the rate of house price growth to slow down in November, however it will no doubt continue to remain in positive territory. People are clearly looking to invest in safe and secure assets during in this uncertain climate, and real estate has a proven track record of being resilient and quickly recovering from period of market volatility.”

BY RYAN BEMBRIDGE

Source: Property Wire

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House Price Trend Continues Upwards

House prices increased by 2 per cent in September, according to the latest Nationwide index. This pushed up the annual rate of house price growth to 5.0 per cent, the highest rate since Sep 2016

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

‘Housing market activity has recovered strongly in recent months’, said Nationwide chief economist Robert Gardner. ‘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.

‘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’.

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Nationwide said its recent research indicated that, of the people who had been considering a move before the Coronavirus Crisis, a fifth had put their plans on hold – a quarter of these saying they had concerns about the property market.

‘Younger people were much more likely to have put off plans than older people, which may reflect concerns about employment prospects’, said Gardner.

‘Indeed, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as tighter restrictions dampen economic activity and the furlough scheme winds down. While the recently announced jobs support scheme will provide some assistance, it is not as comprehensive as the furlough scheme it replaces’.

Of those moving or considering a move, around a third were looking to move to a different area, while nearly 30 per cent were doing so to access a garden or outdoor space more easily.

‘As you might expect, the majority of people are looking to move to less urban areas, with this trend becoming increasingly evident among older age cohorts’, said Gardner.

Source: Residential Landlord

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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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UK house price growth strongest for 16 years

UK house prices recorded the fastest monthly increase for 16 years in August.

House prices rose 2% in August compared to July, according to the Nationwide House Price Index. This was the fastest month-on-month rise since 2004.

And over the year, house prices increased by 3.7% to £224,123 compared to August 2019.

“House prices reversed losses recorded in May and June to reach a new all-time high,” said Robert Gardner, chief economist at Nationwide.

“The bounce back reflects an unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions,” Gardner said.

He said the rebound was driven by factors including pent-up demand and people reassessing their housing needs as a result of life in lockdown.

“Our research indicates that 15% of people were considering moving owing to lockdown,” said Gardner.

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Economic uncertainty

Nationwide expected the trend to continue in the short-term, helped by the stamp duty holiday. But Gardner said: “Most forecasters expect labour market conditions to weaken significantly in the quarters ahead. This would likely dampen housing activity once again.”

Chris Sykes, mortgage consultant at brokers Private Finance, agreed: “Uncertainty over the strength of the UK’s economic recovery is persisting, while concerns about reintroducing a national lockdown are mounting.

“This could cause the market to readjust to a new economic reality.”

Sykes added that lifting the government ban on evictions in September could lead to an upsurge in evictions and negative publicity for landlords, potentially suppressing appetite in the buy-to-let market.

Miles Robinson, head of mortgages at Trussle, added: “There is a chance we’re experiencing a mini-boom ahead of the real after-effects of the pandemic.”

He urged the government and lenders to “think of ways to ensure the market remains accessible to all.”

Written by: Liz Bury

Source: Your Money

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House prices boom across West Midlands as lockdown eases

Homes in the West Midlands are going for as much as £30,000 more than their asking prices as the housing market in the region booms after the coronavirus lockdown.

Nationally, the cost of a house in the UK rose by a little over £3,000 last month as the property market hit new highs – with one estate agent believing it was down to homeowners ‘reassessed their housing needs’ while spending more time in their home during the lockdown.

House-buyers have shrugged off continued uncertainty in the economy and social distancing to send the average price of a UK home to £224,123 as restrictions ease.

The two per cent rise in August of £3,188 wiped out the losses made earlier this year as the pandemic tore through the country, according to data from building society Nationwide.

It is also the highest rise in a single month since February 2004, when prices jumped by 2.7 per cent.

Nick Berriman, a director of Berriman Eaton which has offices in Tettenhall and Wombourne, as well as Bridgnorth, said: “It is the strongest market we have seen since 2006.

“Some properties are selling for in excess of the asking price – in one case by £30,000 more. We are getting very strong prices on lots of houses. The £300,000-to-£500,000 sector is seeing the bulk of interest.”

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Mr Berriman said their Tettenhall office alone had managed 50 sales last month, which was double the average for August of 20-to-25.

He said Weighbridge Cottage, Patshull, went on the market at offers around £550,000 and was under offer within 24 hours, while Elm Gables, on Springhill Park, Lower Penn, was also on the market at offers around £525,000 and saw a sale agreed in excess of the guide price.

“June was our busiest ever month and July was significantly stronger and broke the record again,” he added. “August was slightly down on that level with holidays coming into play.

“During lockdowm a lot of people spent more time in their homes than they would normally spend and re-assessed their requirements for a home. Some now want to downsize, some upsize and others want a garden. People had the chance to see exactly what their house offers and found it does not meet requirements any more.

“The supply of houses is not drying up. In July we had more than 50 new instructions at the Tettenhall office – significantly higher than normal.”

Significant hike

Barrows and Forrester has branches in Lichfield and Birmingham and its managing director James Forrester said the latest Nationwide house price index showed a significant hike in house prices.

“Those questioning the resilience of the UK property market should be well and truly silenced by now, as the largest rate of monthly price growth in 16-and-a-half years is far from a coincidence or a one-off set of freak results,” he said.

“In fact, it’s the latest in a long line of data-based reports that shows the market has turned quicker than a pint of milk in the mid-day sun, rebounding from the depths of pandemic decline seen early in the year to return to very good health, all things considered.”

Speaking about the new report, Nationwide’s chief economist Robert Gardner said: “The bounce-back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.

“This rebound reflects a number of factors. Pent-up demand is coming through, where decisions taken to move before lockdown are progressing.

“Behavioural shifts may also be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown.

“Our own research, conducted in May, indicated that around 15 per cent of people surveyed were considering moving as a result of lockdown.”

The holiday in stamp duty means that the trend of rising prices is likely to continue in the near term, but Mr Gardner warned that a massive rise in unemployment, which is forecast by most experts, would probably send the housing market back into a slump.

Meanwhile, official figures from the Office for National Statistics showed house prices increased by 0.2 per cent in May compared with the month before.

The ONS and the Land Registry said the average price at which a home was sold was up 2.9 per cent on the year to reached £236,000 during the month, after decreasing 0.2 per cent in April.

It is a £7,000 rise on the same month last year.

Chris Sykes, at mortgage broker Private Finance, added that as Government protections for renters come to an end, more properties could start hitting the market.

“The ending of the Government’s eviction ban in September could lead to a surge in landlords trying to remove tenants from properties,” he said.

“This may cause a great deal of negative publicity, possibly suppressing appetite for new buy-to-let purchases. Landlords may even sell some of their properties to avoid potential difficulties moving forward.”

By John Corser

Source: Express & Star

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Britain’s housing market may avoid a nasty crash

There is a general presumption that the reopening of the UK housing market following the pandemic freeze must be negative for house prices. But it is too early to be sure. Lucian Cook, the head of residential research at Savills, warns against jumping to any conclusions until data on transactions is available.

In March, new buyers’ enquiries and new instructions collapsed “like never before”, making it “difficult to get an indication of the impact on prices for a while”. Generally, economic downturns coincide with falling house prices. In recent years, however, house prices have been falling in inflation-adjusted terms. The absence of a run-up in house prices before the virus “should insulate the market from significant house-price falls”, reckons Cook. In the short term, sentiment will be a factor, but “in the long term, it will come back to economic fundamentals”.

The first of those is affordability. With interest rates at 0.1%, the cost of mortgage debt is very low, despite more limited availability. Unemployment, however, could be a more serious problem, bringing some forced sales and making people cautious about moving up the housing ladder. Savills uses the forecasts of Oxford Economics. It predicts a 15% drop in GDP in the second quarter followed by an 8% rebound in the third and slowing growth thereafter. A downside scenario has a further 2.5% drop in the third quarter, but higher subsequent growth. The baseline forecast results in unemployment rising from 4% to 6%, not enough to have a significant lasting impact on the housing market, but the downside scenario has unemployment reaching 10%.

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These factors, together with government action to support jobs and a benevolent approach to arrears by lenders should temper the impact on housing. Nonetheless, the number of transactions will take several years to recover to the pre-pandemic level of 300,000 a quarter, owing to a lack of confidence by both buyers and sellers. Savills’ central expectation is that prices will rise 15% over the next five years, with a 5% decline this year followed by steady increases in subsequent years. Its more pessimistic scenario sees a 10% fall this year, but faster growth thereafter.

Will the southeast keep lagging?

Savills expects a continuation of the recent trend – perhaps interrupted by an uptick in regional unemployment in the short term – of London and the southeast underperforming the Midlands and north, given how extended house prices relative to the national average became, particularly in London. Prime central London prices, however, are 20% below 2014 levels, while prime London properties and those in other regions worth more than £2m are 5% below, having been heavily affected by tax changes and political uncertainty. So these markets “were looking pretty good value” going into the downturn. Savills reports higher unprompted web traffic than before the pandemic, while new buyer registrations, both from British and overseas buyers, have risen strongly.

In a survey of 600 clients, 37% of respondents have become less committed to moving over the next six months, but 27% more inclined to do so. Over 12 and 24 months, that negative balance reverses to +9% and +29% more committed to moving. “Spending much more time at home has made the quirks and idiosyncrasies of home more apparent, which may act as a spur to moving.” Covid-19 has also made rural properties much more appealing, especially for those with school-age children, offering the prospect of a renaissance for those locations. This preference extends to suburban London; people want larger houses with gardens.

This is not necessarily negative for central London or other urban locations. For international buyers, total buy, sell and hold costs are competitive with other major cities worldwide and they will have noted the comparative leniency of the UK’s lockdown. Younger people will still want to live in cities and those now hankering for village and country life may come to miss the vast array of restaurants and entertainment facilities. The cost and convenience of travel will favour city living, especially as roads become more congested and public transport returns to normal. “Further price softening in London will offer a compelling buying opportunity,” says Savills.

Undoubtedly, there will be more working from home. This will increase the space requirement at home, favouring houses over flats and properties with even modest gardens to those without. Demand for second homes will probably increase; the government’s advice to stay away from them in the lockdown was widely ignored. Price expectations in the Savills survey show nearly half expecting no change and half expecting price falls. But buyers are more negative than sellers, so may have to adjust their expectations. Though Cook didn’t give explicit advice to those thinking of moving, the message between-the-lines was “get on with it and don’t expect any bargains”.

By Max King

Source: Money Week

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House Prices Fall But Signs Of New Interest

Amid mixed messages about the current state of the housing market, Nationwide has reported a sharp fall in house prices.

Its latest house price index fell by 1.7 per cent in May, the largest monthly fall since February 2009. As a result, the annual rate of house price growth slowed to 1.8 per cent, down from 3.7 per cent in April.

This put the current average price of a house at just under £219,000, £4,000 down on April.

‘Housing market activity has slowed sharply as a result of the measures implemented to control the spread of the virus’, commented Nationwide’s chief economist Robert Gardner.

‘Our recent market research survey suggested that around 12 per cent of the population had put off moving as a result of the lockdown. Most viewed the current situation as a temporary pause in the market, with would-be buyers now planning to wait six months on average before looking to enter the market’.

House buyers’ housing preferences may also have been changed by the lockdown, noted Gardner. Around 15 per cent of people surveyed said they were considering moving as a result of life in lockdown, with a third saying they thought differently about their home as result of the Covid-19 outbreak, especially the importance of a garden and the need for more indoor space.

Meanwhile online property companies such as Zoopla have reported a surge in online house searches, with growing demand for rural properties offering additional garden space.

Source: Residential Landlord