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UK house price growth hits a six-year low in September

House prices grew at their slowest pace since April 2013 last month, in keeping with the predominantly flat trend seen over recent months.

On a monthly basis, house prices were actually down by 0.4% in September, while prices were up 0.4% quarter-on-quarter, according to the results of the most recent house price survey from Halifax.

Versus a year ago, the mortgage lender’s House Price Index was ahead by just 1.1% to reach £232,574.

The report also included some revisions to previous months’ figures following an update to the index’s methodology, with Halifax revising August’s monthly rise down to 0.2% from 0.3%.

Halifax’s managing director Russell Galley said: “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.”

Galley added that looking forward, Halifax expects activity levels and price growth to remain subdued while the current period of economic uncertainty persists.

However, the monthly Halifax house price index was just one of many that track the UK market and has periodically been higher than others.

Nationwide building society said annual house price inflation slowed to 0.2% last month, while the Office for National Statistics, which uses data from the Land Registry, estimated it at 0.7% in July.

London estate agency Benham & Reeves’ director Marc von Grundherr said: “These most recent of statistics from one of the country’s volume mortgage lenders are the latest in a very mixed picture and one that adds to confusion as to what on earth the property market is really doing.

“The various indexes of late have not only contradicted each other but often contradict themselves month-on-month – in fact, the numbers have bounced around like a beach-ball on a bungee rope since the beginning of the year.”

Von Grundherr also said the fact that the year-on-year numbers were still positive “defies the gravity” of the current political situation.

Shares in housebuilders like Persimmon and Taylor Wimpey were down in early trade.

By Iain Gilbert

Source: Sharecast News

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North’s house prices still 30 per cent below boom height

THE average price of a house in the north is almost 30 per cent below the height reached in the 2007 property boom.

New research published today by Property Pal found the £134,200 median price of a house here is 40 per cent below the UK average. The online housing portal has produced new micro-area analysis to show the five most popular places in the north to buy a house.

Carrowreagh, just outside Dundonald topped last year’s list with 180 homes sold. It came just ahead of Windsor (171), Bloomfield (137), Connswater (126) and Central Craigavon (125).

Cultra and Malone are the most expensive areas to buy a home, with median property prices of just over £400,000.

However research found over 80 locations in the north where median property prices are under £100,000.

According to Property Pal’s new economic and housing forecast, house prices grew 3.6 per cent last year. Assuming a ‘soft Brexit’ can be secured, it anticipates prices will rise by 2.9 per cent in 2019, 3.6 per cent next year and continue to rise from 3-4 percent until 2023.

The company’s chief economist Jordan Buchanan said that the north’s economy is expected to grow by 1.2 per cent this year, 1.3 per cent next year and between 1.5-2 per cent until 2023.

“The Northern Ireland economy has been performing particularly well in recent years despite an increasingly challenging backdrop,” he said.

“Firms have been hiring at record rates, economic inactivity is falling and unemployment is exceptionally low by historical standards, and amongst the lowest of any advanced nation in the world. However, the outlook remains cautious with many forward leading indicators suggesting the local economy is close to a recession.”

Focussing on the housing market, he said the north remains amongst the most affordable places in the UK to buy a home.

“Today the median house price in Northern Ireland stands at £134,200, 29 per cent below the highs of 2007 and over 40 per cent lower than the UK average (though a more sensible comparison is 34 per cent lower that Great Britain excluding London).”

Commenting on the potential impact Brexit might have on the market’s outlook, the economist added: ‘Until a Brexit deal is secured, economic and political uncertainty will restrain buyer sentiment.

“The UK wide housing market will remain price sensitive and beyond that, depending on what deal is agreed, will have an impact on the path of interest rates, wage growth and house prices.

“Fortunately from a Northern Ireland perspective, there is a case for optimism as the fundamental drivers remain encouraging. Ongoing affordability, pent up demand, a low interest rate environment – with competitive mortgage deals – and an increasingly tight labour market, with real wage growth, should support house price growth in the coming years.”

By Ryan McAleer

Source: Irish News

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House prices in selected UK regions on the rise

House prices in Wales, Scotland and Northern Ireland are expected to continue their upward trajectory, reallymoving has predicted.

Values have been forecasted to rise by 8.7% in Wales, 3.8% in Scotland and 1.9% in Northern Ireland over the next three months.

Rob Houghton, chief executive of reallymoving, said: “Considering the current political situation, the UK housing market continues to show remarkable resilience.”

Average house prices in England and Wales are set to see an average 0.9% monthly drop over the next three months.

London is set to see a moderate increase of 1.5% overall in the three-month period from September to November.

Year-on-year, house prices are on course to remain in positive territory throughout the Autumn.

A 3% annual increase forecast for September will be the highest rate of annual house price growth for almost a year, followed by 2.7% in October and 2.1% in November 2019.

However, average house prices in England and Wales are set to see an average 0.9% monthly drop over the next three months.

Houghton added: “House prices are on course for minor monthly falls in September, October and November, but while the temptation is to attribute this to Brexit, in fact it is largely down to seasonality with the market following its usual pattern of peaking in August then tailing off steadily through Autumn.

“The London market has proved to be most vulnerable to the political situation and the data suggests buyers were more cautious in August when No Deal Brexit rhetoric peaked, prompting a 2.3% monthly fall in prices agreed which will translate to completions in November.

“Nationally, annual growth is set to remain in positive territory throughout the Autumn, indicating that people are continuing to press ahead with home moves and the underlying value of the housing market remains stable.”

By Michael Lloyd

Source: Mortgage Introducer

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House prices are going up – yet properties becoming more affordable in priciest cities

Property buyers in UK cities and major towns are having to pay up to 13 times their salaries to get a home.

London is the most expensive city in terms of the salary to house price ratio, but Cambridge, Oxford, Bournemouth and Bristol are not far behind.

Across 20 UK cities and major towns, buyers are paying a house price that is an average of 6.7 times their earnings.

In all of these cities, with the exception of Aberdeen, house prices have risen.

However Zoopla – which produced the figures – says that affordability is actually improving in 12 cities, including the most expensive four, where earnings growth is outstripping house price inflation.

Richard Donnell, research and insight director at Zoopla, said: “Housing affordability is slowly starting to improve in London as earnings growth outstrips house price inflation.

“There has been a clear downward trend in the ratio of house prices to average earnings over the last two years.

“However, the scale of improvement is relatively modest.

“While welcome news, the gap between earnings and prices needs to close further in order to make a material difference to would-be purchasers.

“The changing picture is not limited to London. There are 12 cities where the annual growth in house prices is below the growth in average earnings which is running at 3.7%.

“Lower-priced cities in northern England are actually getting less affordable than their southern counterparts when you consider that the annual percentage growth in house prices is outstripping earnings growth.”

By ROSALIND RENSHAW

Source: Property Industry Eye

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House prices would flounder in six months after no-deal Brexit – Reuters poll

Britain’s drifting property market would probably take a hit from a disorderly Brexit, with average prices slipping about 3% nationally in the ensuing six months and as much as 10% in London, a Reuters poll of housing experts found.

Roughly 85% of respondents said both UK and London house prices would fall in the six months subsequent to leaving the European Union without an agreement.

But if Britain departs the EU with a transition deal – the scheduled leave date is Oct. 31 – house prices are due a mild 1.5% lift over the following two quarters. They would rise 1.4% in the capital.

Results from the Aug. 13-20 survey show an otherwise tepid outlook for national price rises in coming years, at rates not far off an already-mild consumer price inflation rate and despite the recent sharp fall in sterling.

Indeed, the results suggest that foreign demand for property will be weaker than in previous years where declines in the pound have spurred buying, particularly in London, as it makes housing cheaper for those holding stronger currencies.

The survey also indicates in the near-term at least that housing, the bedrock of British household wealth, is not likely to give a lift to the economy, which contracted for the first time in 6-1/2 years in the second quarter.

Indeed, an overwhelming majority of respondents who answered an additional question in the first Reuters UK housing market survey since Boris Johnson took over as prime minister said risks to the housing market were skewed to the downside.

“Despite the new PM and team in government there are big icebergs ahead, not least the apparent willingness to leave the EU without a deal,” said property market consultant Henry Pryor. “This is likely to spook the markets before it reassures them.”

At the same time, there are fundamentals cushioning the market from falls. Hansen Lu, analyst at consultancy Capital Economics, notes the ongoing shortage of homes, which nearly always underpins British house prices.

Mortgage rates are also very low and not set to rise any time soon despite hawkish rhetoric in past months from Bank of England policymakers, and recent wage gains have lifted household spending power somewhat.

“Both factors are helping to prevent the current slump in house price growth from developing into an outright fall in prices. Yet on the other hand, Brexit uncertainty, as well as the high level of house prices relative to incomes, continues to weigh on buyer demand,” said Lu.

Others, like Tony Williams of Building Value, are more sanguine about the overall housing market’s prospects following Britain’s impending departure from the EU, no matter how rough.

“With no-deal, there will be a knee jerk action in which demand will fall followed by prices over the first six months of the UK’s new status,” notes Williams. “That said, life after a no-deal Brexit will revert to type.”

Average UK house prices are forecast to rise 1.0% this year, 1.8% next and 2.7% in 2021, little changed from 1.2%, 2.0% and 2.5% in a survey taken in May.

London house prices, already down 5% from their recent peak, are due to fall 2.0%. They are not due to rise at all next year, followed by a 2.0% lift in 2021, a slightly weaker view than what was predicted a few months ago.

Capital Economics’ Lu notes that with these recent falls and some recent wage gains outstripping inflation, London’s average house-price-to-earnings ratio has slipped to 12 times from a recent peak of 13.4.

“That adjustment, while welcome, is still small relative to past house price gains. With Brexit uncertainty set to bite further and mortgage interest rates at their floor, we think London’s fall in house prices has further to run.”

Polling by Manjul Paul and Richa Rebello

Source: UK Reuters

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House prices up but region is still popular

The West Midlands is predicted to see the highest house price inflation over the next two years of all UK regions, behind only Wales.

PwC’s latest UK Economic Outlook projects the region will see average house price growth of 3.4 per cent in 2019 and 4.2 per cent in 2020, compared to the UK average of 1.2 per cent and 2.1 per cent.

The average house price in the West Midlands is estimated to rise from £194,000 in 2018 to around £223,000 by 2022, according to PwC’s projections.

This comes at a time when the cost of private renting is proving to be a significant challenge for tenants, with those working in certain key public sector professions increasingly unable to afford rent.

PwC’s report warns that this will potentially lead to a shortage of employees, such as NHS workers, teachers and police officers in these regions, impeding both economic and social mobility.

Using the conventional benchmark that renting must cost less than 30 per cent of gross annual income for it to be considered affordable, the report finds an employee would need an annual salary of £23,800 to afford the median private rent in the UK, up £400 from 2017/18.

This means that the country’s median private rent has just crossed over the 30 per cent rental affordability threshold.

Currently, workers in the West Midlands between 22 and 29 years of age are spending 27 per cent of their monthly earnings on rent, just below the 30 per cent threshold generally considered affordable.

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Matthew Hammond, Midlands region chairman for PwC, said: “House price inflation in the 12 months to April 2019 was strong in both the East and West Midlands at 2.9 per cent and 2.2 per cent respectively.

“The Midlands was in the top five of the UK regions for the underlying house price growth. Growth rates are forecast to continue strongly through 2019 and 2020 at between 3.1 per cent and 4.1 per cent, with the medium term average for 2021 and 2022 settling at the lower end of this range at 3.2 per cent.

“Whilst average house prices are higher across London, the South East and South West, by 2022, if the growth is as forecast, average house prices will break through the £200,000 threshold, reaching £223,000 in the West Midlands and £214,000 in the East Midlands by 2022.

“By comparison the average London house price could reach £508,000 by 2022 and £344,000 across the South East, making affordability of rented property a disproportionate cost of almost 40 per cent of the median salary for 22-29 year olds in the South East and more than 50 per cent in London.

“Affordability remains key in rented segments of the market. In the Midlands with its young population in major cities, for our 22-29 year olds, rental costs are estimated to account for between 23 per cent and 27 per cent of median salary.

“The relative affordability compared with London and the South East, alongside growth across key strategic sectors of the economy, is driving the increasingly popular choice of locating and developing careers across the Midlands. Medium and longer term infrastructure investment is creating conditions for good growth for the Midlands’ cities, fuelling investment.”

By James Pugh

Source: Shropshire Star

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House prices rise monthly but fall yearly

House prices across England and Wales rose by 0.6% on the month but fell by 2.7% on the year, with the average house price now sitting at £219,060, estate agent haart has found.

New buyer registrations have risen by 2.5% on the month and by 3.8% annually. The number of properties coming onto the market this month fell by 1.1% and by 5.9% on the year.

Paul Smith, chief executive of estate agent haart, said: “Brits’ appetite to move home remained very health in May, as buyer registrations continued to creep up by 4% across England and Wales, and by a very significant 9% in London.

“At the same time, housing stock continues to diminish, and as a result, there are now 28 buyers chasing every instruction across London, and 12 across England and Wales.

“While we normally see the market cool down after a spring bounce, vast pent up demand will ensure momentum continues into June and July.

“In particular, families looking to be in their new home for the new school year are having to scramble to find a suitable property in time. A lack of larger homes on the market means that families paid £9,085 more for detached homes last month, than they did the year before.

“A lack of new homes to move into is also forcing large numbers into rental accommodation. In fact, we have seen a 30% increase in tenant demand on the year in London. Landlords who are considering selling up should bear this in mind.

“The reality is that tenant demand will always outstrip rental supply, and the yields to be gained are still far more favourable and a safer bet than the majority of other investment opportunities available.”

Haart said that hopefully, the result of the Conservative Party leadership contest will provide the country with the reassurance to move forward.

Smuth added: “Despite political uncertainty, the need to move home will always be there. But the reality is that the UK housing market thrives under positivity.

“If the new Prime Minister can provide a strong vision of the UK’s post-Brexit future, greater stability and confidence will follow, which should lead to an uptick in transactions.”

In May, there were 12 buyers chasing every property across England and Wales. The market has become less efficient this month, as the number of transactions fell by 4.5% on the month, while the number of viewings has increased by 1.9%.

The average purchase price for first-time buyers has risen by 1.4% on the month and by 4.4% on the year. This comes as the number of first-time buyers registering onto the market has risen by 5.2% on the month but fallen by 18.1% on the year.

The average amount first-time buyers are paying for a deposit has fallen by 1%, while also falling by 3.7% on the year.

The average property price in London has risen by 2.2% on the month but has fallen by 1.1% year-on-year. Meanwhile the number of new buyers entering the market has risen by 3.5% from the previous month and by 8.7% from the same time last year.

The number of tenants entering the market across England and Wales has risen by 6.7% on the month and by 5.5% on the year.

The average rent is down 1.5% month-on-month and 3.8% year-on-year and now sits at £1,261 pcm across England and Wales.

Tenant demand in London has increased by 8.8% on the month, and has risen by 30.6% on the year. London rents are down 0.3% month-on-month but have risen by 7.1% year-on-year.

By Michael Lloyd

Source: Mortgage Introducer

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House prices jump in Telford as ‘Brexit leads to lack of supply’

House prices have jumped in Telford, and an industry expert has said the rises are partly due to the Brexit referendum.

Figures for April show that Telford & Wrekin has seen average house prices rise by 6.4 per cent on the previous year, to £170,358 – well above the UK average increase of 1.4 per cent.

Shropshire prices matched the national increase at 1.4 per cent, rising to £210,194. Powys’ has also seen a significant hike, with a 5.1 per cent rise to an average of £189,043.

Jo Culley, managing director at DB Roberts, which has offices across the region, including at Shrewsbury, Shifnal, and Telford, said: “Certainly in the last 12 months there has been a lack of general supply of property onto the market. If you have more buyers than sellers then it forces prices up.

“That is probably the simple reason for any price increase the market might have seen.”

Reluctant

Mrs Culley said that there had been a reduction in the number of people looking to sell their homes in the wake of the EU referendum.

She said: “I think we have been a little reluctant, in a Brexit landscape, to move for the sake of moving.

“Most of the people instructing us to sell since Brexit have been doing so because they have to move, not because they want to.”

Tony Morris-Eyton, head of office for Savills in the West Midlands, said he believed part of the increase was down to natural correction in the market.

He said: “House values in the South rose significantly greater than our part of the world and part of this is a catching up process. The differential between us and particularly the South is beginning to narrow.”

In the West Midlands the rise was ahead of the national average at 2.2 per cent with the average house price in the region reaching £195,498.

The average UK house price was £229,000 in April, according to the figures released jointly by the Office for National Statistics, Land Registry and other bodies.

Nationally property values increased by 0.7 per cent month on month.

Strengthened

The weakest annual growth was in London, where prices fell by 1.2 per cent over the year. In the South East, prices fell by 0.8 per cent.

House prices increased annually by 1.1 per cent in England, 1.6 per cent in Scotland and 3.5 per cent in Northern Ireland.

In England, the East Midlands saw the strongest annual house price growth in April, with a 2.9 per cent increase.

ONS head of inflation Mike Hardie said: “Annual house price growth remained subdued but was strong in Wales, which showed a pronounced increase on the month.

“In London, house prices continued to fall over the year but rental price growth there strengthened.”

Challenging

Jamie Durham, an economist at PwC, said: “The house price growth story is split between the South East and the rest of the country… While prices are falling in the South East, prices elsewhere are growing.”

Howard Archer, chief economic adviser at the EY Item Club, said: “The ONS data do little to change the overall impression that the housing market is still finding life challenging as buyer caution amid still relatively challenging conditions is being reinforced by Brexit, political and economic uncertainties – although there are significant variations across regions with the overall picture being dragged down by the weakness in London and the South East.”

Jonathan Harris, director of mortgage broker Anderson Harris, said: “There is still a significant premium to pay to buy property in London and the South East, with first-time buyers increasingly having to call upon the ‘Bank of Mum and Dad’ for help with the deposit.”

Gareth Lewis, commercial director of property lender MT Finance, said: “House price growth is picking up outside of London and the South East, which is encouraging as it creates more balance to the country as a whole, although London prices still remain at a premium.

“Hotspots for investors include Middlesbrough, Nottingham, Newcastle and university areas, where the transactional flow has greatly increased as investors chase yield.

“Values are therefore creeping up in response to greater demand for property in those areas.”

By Dominic Robertson

Source: Shropshire Star

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Removing Brexit uncertainty won’t resolve housing market issues

Released today, the BSA’s quarterly Property Tracker survey reveals that house prices are of greater importance than Brexit when it comes to housing market sentiment.

Respondents who disagreed that ‘now is a good time to buy’ were asked what would change their mind: over a third (34%) said a correction in house prices.

Comparatively, 27% said ‘the UK reaching an agreement with the EU’ would make them more positive, and just 11% said a ‘no deal’ scenario would make them more positive.

Sentiment towards the housing market has been negative for over two-years, but improved in June.

When asked ‘is now a good time to buy a property in the UK’, those who disagree has outnumbered those who agree in every quarter since June 2017.

Today’s results show that 23% agreed that now is a good time to buy, 28% disagreed. This is slightly less negative than in March when a third (33%) disagreed.

Almost a third (31%) of people expect house prices to increase in the next year. Less than a quarter (24%) think prices will fall. This could be due to fewer properties coming onto the market following the EU referendum, adding support to prices.

Higher property prices will make saving for a deposit even more difficult for aspiring first-time buyers. ‘Raising a deposit’ has been the single biggest barrier to home ownership for nearly a decade. In today’s results 64% of people said raising a deposit was the biggest barrier.

Paul Broadhead, Head of Mortgages and Housing Policy at the BSA comments:

“It’s no surprise that the UK views the housing market in a negative light. We are in the midst of a housing crisis and the political landscape is in undoubtable turmoil. Naturally, these combined forces are unsettling homeowners and making them less likely to want to move. Fewer homes on the market means intensified competition, which consequentially push house prices up. Unfortunately, this has a knock-on effect on first-time buyers, who are already struggling to pull together a deposit.

“This cocktail of existing homeowners staying put, and would-be first-time buyers failing to get on the ladder at all, means we risk stagnating the housing market further. To aid this, financial service providers could help educate people of the benefits of saving little and often.

“Consumers are encouraged to take advantage of Government initiatives such as the Help to Buy ISA and the Lifetime ISA, which are designed to maximise savings for a house deposit. The former is closing to new accounts at the end of November.”

Source: Politics Home

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The property market set for a bounceback in the summer

The property market is on track for an upturn in house sale prices this summer, with a 9% surge in average prices in the three months between May and August, reallymoving has predicted in its House Price Forecast.

As homebuyers register for quotes for homemove services on the site typically 12 weeks before their purchase completes, providing data on the purchase price agreed, reallymoving said it can provide an accurate three-month property price forecast before those deals complete three months later.

Rob Houghton, chief executive of reallymoving, said: “Prices agreed this spring will show in Land Registry data in the summer, yet our customers registering for home move services as soon as their deal is agreed are giving us unique insight into what lies ahead for the housing market.

“Our forecasts suggest that sellers are growing tired of the ‘wait and see’ approach and once the Brexit deadline passed at the end of March, with no further clarification, sellers decided to press ahead with their move.

“This new buyer demand and a continued shortage of quality housing stock is on course to drive strong price growth between May and August, with particular surges in regions benefiting from strong demand such as the North East and the South West, where affordability remains attractive and wages are rising.

“Annually, average UK prices have been falling since the start of the year but in June we can expect prices to see a return to positive growth with a rise of 1% year-on-year, followed by 0% change in July.

“This suggests that a strong market performance over the spring will see prices make up the value lost in the first part of 2019 and are set to recover to 2018 levels this summer.

“There is considerable pent up demand in the market following three years of uncertainty and with many doubting that Brexit will be resolved any time soon, people are increasingly making the decision to move on regardless.”

Historically, reallymoving’s data has closely tracked the Land Registry’s Price Paid data, published retrospectively.

Average UK property prices fell steadily between January and April 2019 as Brexit uncertainty gripped the market, held-back consumer confidence and curtailed transaction levels.

But despite a slow start, the spring market has shown a good deal of resilience, with prices agreed during the past few weeks forecast to deliver a surge in average values of 6% between May and June 2019, followed by a further 3% increase in August.

The market is following a similar pattern to spring/summer 2018, when the Land Registry recorded price rises of 4.4% between May and August 2018.

But this year, the report said greater pent up demand and growing impatience with the Brexit process has resulted in a more pronounced increase in house prices during the summer period.

Annually, prices have been consistently lower than the previous year between January and May 2019. A notable annual drop of 6% in value in May showed this year the spring market has accelerated later than in 2018, as the traditionally busy spring sales window was delayed by Brexit uncertainty.

However, an increase in market activity later in the spring means annual price changes are forecast to stabilise, with 1% growth expected in June, followed by no change in July and -1% in August 2019.

Of the 12 regions of the UK analysed, 11 are forecast to see prices rise during the three months to August, with the strongest gains in the North East (20%), the East of England and the South West (12%).

The capital is no exception and although growth is more subdued than in other parts of the country, London is still forecast to see prices rise by 3% over the summer period.

Meanwhile, Scotland is the only region of the UK expected to see property price falls, with a 3% drop anticipated between May and August.

In the South West prices have been fairly flat since the start of the year but are on course for a 8% increase in June, followed by a further 4% rise in August, as a burst in market activity in the spring translates to summer completions.

By Michael Lloyd

Source: Mortgage Introducer