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UK house prices dip as coronavirus lockdown makes sales ‘almost impossible’

UK house prices dipped during the coronavirus lockdown as experts warned the housing market was barely functioning due to the restrictions.

The latest data from Rightmove showed that the average price of property coming to market dipped 0.2 per cent to £311,950. In April last year UK house prices increased 2.1 per cent.

However, Rightmove said recent statistics were not “meaningful” as there is not currently a “functioning market” due to the lockdown. New sales were “almost impossible”, the company said.

“You do not have a functioning market when buyers can’t buy and sellers can’t sell, and so the focus needs to be on what is required to help the market recover once the lockdown can safely be eased,” Rightmove said.

The research showed that existing sellers have largely remained on the market, with total available stock for sale down 2.6 per cent since lockdown was enforced on 23 March.

Miles Shipside, Rightmove director and housing market analyst, said: “Agents report that there is good co-operation, with both buyers and sellers keen to hold deals together.

“While some buyers may express concern over the possibility of short-term dips in house prices, many are taking the longer-term view and living up to their commitments to proceed.

“This is being helped by mortgage lenders extending the life of existing mortgage offers by three months, and new legal rules on flexible completion dates.”

Former RICS residential chairman Jeremy Leaf said the survey confirmed what firms are seeing “on the ground”:

“Our offices may be closed but the market is anything but quiet. Buyers and sellers are pausing, not cancelling sales, or listings, while continuing to access websites readying themselves for when lockdown restrictions are eased.

“But the market cannot re-start in isolation. We need surveyors to work with lenders, agents, and solicitors to ensure successful transitions as well as continuation of social distancing and safe visiting”.

There has been an abrupt turnaround from the best start to a year since 2016. Pre-lockdown sales agreed in the year to 23 March were up 11 per cent on the same period last year.

However, potential buyers and sellers are still planning for the future. Visits to Rightmove dropped 40 per cent when the lockdown was announced, however the platform’s sold prices section has recovered more quickly since the restrictions were implemented.

Property firm Knight Frank said that the market would require urgent government stimulus in order to get it functioning again.

According to new research from the firm, the lockdown will result in 526,000 fewer house sales in 2020, a reduction of 38 per cent on 2019.

It also expects lenders to approve 350,000 fewer mortgages as a result of coronavirus, including 150,000 to first time buyers.

In order to get the market moving quickly, Knight Frank said the government should introduce a holiday from Stamp Duty and extend the Help to Buy scheme to boost consumer confidence.

By Jessica Clark

Source: City AM

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Housing transactions predicted to drop by 38% this year

House sales are predicted to fall by 38% this year to 734,000 transactions compared to 2019, according to global property consultancy Knight Frank.

This is based on the assumption that the current lockdown will remain in place through April and May, with a gradual lifting through June.

Knight Frank also forecasts mainstream UK house prices will fall by 3% in 2020, with prices in prime central London remaining unchanged following a 25% repricing since 2014.

The firm expects prices to recover sharply in 2021 – citing an 8% growth for prime central London prices for next year.

Liam Bailey, global head of research at Knight Frank, commented: “The underlying economic forecast we have adopted points to a contraction of GDP of 4% in 2020 and growth of 4.5% in 2021. The actual outturn will be determined by the timeframe imposed by the lockdown.

“The housing market was in a strong position in January and February. A sharp uptick in sales and price growth was seen across the UK, with even the prime central London market seeing a reversal of a five-year long price decline.

“While we expect a revival in activity to continue, with volumes next year expected to be 18% above the level seen in 2019, this expansion in sales in 2021 will not fully offset the losses seen this year. Meaning that of the nearly 526,000 sales we expect to be “lost” due to lockdown this year, less than half will be carried into 2021.

“For the government to see a full recovery of the market, with all of these “lost” sales carried forward, there will be a need for substantial incentives to ease market liquidity – including a reduction in stamp duty.”

Lettings markets

In the lettings market, considering the net impact of a phased return to more normal levels of activity, Knight Frank believes that the number of tenancies agreed in the prime markets across London and the Home Counties in 2020 will be around 25% below the five-year average.

Off the back of rental values in prime central London growing by 1.2%, and in prime outer London by 1.1%, in the year to March 2020; the firm’s view is that rental values in prime central and outer London will remain flat over the course of 2020, with some upwards pressure returning the second half the year.

Bailey continued: “Once the current crisis passes and activity begins to resume, we have to expect weaker economic activity in the first half of 2020, the dislocation in the jobs market and weakened consumer sentiment will impact on prices, however the relatively finite timespan of the crisis means declines will be limited.

Agricultural land

Looking to the agricultural markets, based on the assumption that the farmland market will be back in business by the summer, Knight Frank is predicting land prices to fall during 2020 by 2%. This movement will take the average price of bare agricultural land to around £6,800.

Bailey added: “It is worth noting that Covid-19 is unlikely to be the key driver behind the agricultural land market over the next few years. The impact of Brexit in terms of the trade deal struck with the EU – delayed or not – will play a key role, as will the details of the government’s new environmental payment schemes.

“Surprisingly, the current crisis could indirectly support the land market if investors shift towards more tangible assets and greater emphasis is placed on improving food security and localising food chains.”

By Joanne Atkin

Source: Mortgage Finance Gazette

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Property market enjoys 12-year high for December prices

House sales in Scotland reached a 12-year high in December, according to the latest property figures.

The increase – recorded by estate agent Aberdein Considine’s Property Monitor report – has been linked to a strong first-time buyer and new build market.

Figures show that, across Scotland, more than 10,000 homes changed hands in December, the highest figure for the month since 2007 and the credit crunch.

This was a 15 per cent increase on November’s figure and the highest single month of sales recorded since October 2018.

In the last three months of 2020, East Dunbartonshire saw the biggest increase in transactions, up 24% on 2019, while Aberdeen and Glasgow also enjoyed boosts of 10% and 1.6% respectively.

Douglas Telfer, Property Partner at Aberdein Considine in Glasgow, said the figures suggest that the market is no longer as seasonal as it used to be.

He said: “You have to go back to December 2007, before the global credit crunch, to find a higher month of pre-Christmas property sales.

“It used to be that you didn’t get many sales close to Christmas, but now that’s no longer the case. The market is showing signs that it is no longer seasonal.”

Mr Telfer claimed that some of the sales could be down to a “Boris bounce” following the general election result on December 12.

However, Faisal Choudhry, director of residential research at Savills, said the deals being finalised in December would have been agreed months before the vote.

He said: “We’ll see the effects of the general election in the next few months, in the first quarter of 2020.”

Mr Choudhry added that the December high was not surprising given the relatively steady growth in the Scottish market over the last three years.

He said: “Scotland has remained relatively unaffected by the recent political uncertainty compared to other regions of the UK.

“In Scotland transaction numbers have steadily grown, whereas other UK regions have seen a significant drop in transactions since the EU referendum in 2016.

“Uncertainty is built into our market because we’ve been witnessing uncertainty long before the EU referendum, we’ve had the Indyref back in 2014.

“I’m not surprised that we’ve had a strong December in terms of sales, it’s been a continuing theme for the last three years, helped by growth in the new build market.”

The statistics from Aberdein Considine show that total sales in Scotland reached £18.7 billion – £550 million more than 2018.

East Dunbartonshire recorded the highest average price rise in the last quarter of 2019, with an increase of 9.5% to £263,291. making it the third most expensive place to live in Scotland.

The most expensive location was East Lothian which overtook Edinburgh by around £2000, with an average house price of £267,905.

In Glasgow, the average price increased by 1% to £163,874 and the city recorded 3290 home sales – the highest number in Scotland.

Mr Telfer said: “Glasgow continues to be hugely popular, especially with first time buyers, and with office developments going up rapidly this is likely to draw in more people who want to live and work here, and enjoy all the city has to offer.

“As we head into the spring market, there is every sign that the wider trend in Scotland will continue, thanks largely to an injection of first-time buyers using new shared equity schemes.”

Mr Choudhry also said that there has been an increase in the £200,000 to £750,000 market in Scotland due to price growth, while property sales of £1 million and over had also reached a 12-year high.

“Looking ahead what Scotland needs is more supply in the second hand market and realistic pricing has to be key,” he added.

The Property Monitor report shows that in total in Scotland, sales increased in 25 out of the country’s 32 local authority areas.

First-time buyers accounted for 50% of mortgaged property purchases last year, with up to 6,000 more are expected to take advantage of the Scottish Government’s new First Home Fund in 2020.

The shared equity scheme gives buyers up to £25,000 towards the cost of buying a home and is forecast to be a driving force in the Scottish market this year.

However, Aberdein Considine warns that new entrants will still face the same old obstacles as they step onto the property ladder for the first time –rising house prices.

By Victoria Weldon

Source: Herald Scotland

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House sales tumble over uncertainty about Brexit

HOUSE sales in parts of London have fallen more than 40 per cent since the Brexit vote, according to latest figures.

The average across Britain was also found to be down — nine per cent — after sales in the 12 months before the vote in June 2016 were compared with the 12 months leading up to May this year by the Yorkshire Building Society.

It found the London boroughs of Brent, Kensington and Chelsea, and Westminster boroughs saw a fall of between 39 and 43 per cent.

However, it wasn’t all bad news as parts of the country saw sales increase. Torfaen, in southern Wales, for example, saw a surge of 45 per cent.

Yorkshire’s Nitesh Patel said: ‘The housing market has become more stagnant in the UK as a whole since the EU referendum. But, when we break down the analysis to a regional and local level, the picture becomes more complex.’

Drops in London could be down to investors and overseas buyers being put off by the political uncertainty, he said. High prices and low supply were also affecting the market in the south-east. The east of England and the midlands also fared badly.

However, parts of the north, Wales, Scotland and Northern Ireland saw ‘significant house sales growth’.

Mr Patel said rising wages and record full-time employment have made buying a home generally more affordable.

He added: ‘This downturn is likely to be a temporary phenomenon which will continue while uncertainty around Brexit exists.’

By Vicky Shaw

Source: Metro News

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House Sales in Wales up by 6% as Prices Fall

House sales are up by 6% in Q1 of 2019 compared to Q1 2018, with Principality Building Society suggesting first-time buyers are making the most of the opportunity of relatively affordable house prices in parts of Wales.

However, the average house price in Wales has fallen to £185,018, with the annual growth of 0.4% the lowest since August 2013.

The figures have been released from Principality Building Society’s Wales House Price Index for Q1 2019 (January – March), which shows the rise and fall of house prices in each of the 22 local authorities in Wales.

House prices across the country have fallen by an average of 0.8% in Q1 of 2019.  According to Principality’s House Price Index for Wales, the decline in quarterly prices has been caused by uncertainty surrounding Brexit, with many buyers and sellers waiting for a clear decision on the future of the country’s position in Europe before committing to the purchase or sale of a property.

Annual house price growth is low compared to the same period last year due to the sales of more expensive properties ahead of the introduction of the Land Transaction Tax in April 2018, which resulted in a rise in stamp duty for mid to high end priced homes.

Overall, there were 15 local authority areas in Wales where prices fell in the quarter.

Seven local authorities saw a rise in house prices, however, including the more affordable regions of Neath Port Talbot (1.9%), Blaenau Gwent (1.1%) and Merthyr Tydfil (0.5%), which Principality suggests has been helped by first-time buyers remaining keen to get on the property ladder in those areas.

Tom Denman, Chief Financial Officer at Principality Building Society said:

“As anticipated, we have seen a quarterly decline in house prices which is connected to the ongoing economic uncertainty caused by Brexit.

“House sales are up year on year, with Brexit seemingly not having the same negative effect on the number of sales that are taking place in the Welsh housing market as it has in southern parts of England, in particular.

“The south-east of Wales continues to see house price growth as a result of the abolition of the Severn Bridge tolls and the widening commuter belt between Bristol and Cardiff. With political uncertainty continuing, it’s difficult to gauge whether the market will bounce back in quarter two or will continue to show signs of slowing.”

Cardiff (£235,361) and Conwy (£190,125) reached new peak prices in March 2019. In Cardiff, this was driven by a rise in the prices of semi-detached properties and flats. In Conwy, detached homes – the most frequently purchased property type in the area – saw the largest rise, up by an average of £40,000 in March 2019 compared to the year previous.

By  

Source: Business News Wales

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Brexit doubts hit house sales – but Scottish prices soar

The average price of a Scottish home is bucking the UK-wide trend, with asking prices climbing as the spring selling season begins.

Asking prices north of the Border have jumped by 3.1 per cent month on month – the biggest increase in March of all Britain’s nations and regions. The surge has been in contrast to the rest of the UK where an average home price is 0.8 per cent lower than it was a year ago, property website Rightmove has found.

Across Britain, the average asking price for a home in March is £302,002. While this is lower than a year ago, prices have edged up by 0.4 per cent or £1,287 month on month.

Rightmove said this was the lowest month-on-month increase at this time of year since 2011 and “considerably lower” than the 0.9 per cent average increase seen over the past seven years.

The agency said the usual spring bounce in the housing market was, at best, being delayed by Brexit uncertainty as the 29 March withdrawal deadline approaches.

Rightmove director Miles Shipside said: “While March marks the start of spring, temperatures have yet to rise in the housing market. “Buying activity remains cooler than usual, with hesitation as some buyers await a more settled political climate.

“There’s greater resilience the further away you get from the London market and there’s a sound bedrock of demand for the right property at the right price, reinforced by ongoing housing needs combined with cheap mortgage borrowing.”

The north-west of England has also defied the wider British trend, with a 2.2 per cent increase in asking prices. The average house price in London is down 1.1 per cent on the previous month.

Rightmove said the number of sales agreed by estate agents last month was 7 per cent below the same period in 2018, compared with a year-on-year fall of 4 per cent recorded in January.

But search activity on Rightmove remains steady, with the number of visits to the website staying level.

Mr Shipside said: “The closer you get to the wire without the clarity of an agreed way forward, the greater the propensity for buyers to wait and see, rather than acting now. “This could be a temporary pause and indeed market slowdowns at election time and around the original referendum result bounced back pretty quickly.”

Source: Scotsman

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House sales to continue declining in 2019 as Brexit uncertainty and lack of supply hinder activity

House sales are to continue stagnating next year amid Brexit uncertainty and lack of supply, according to the Royal Institution of Chartered Surveyors (RICS).

In its forecast for the year, the trade body said the UK housing market is unlikely to see much change in 2019, with sales volumes to weaken by around five per cent and house price growth to reach a standstill.

The report said 2019 would be the third straight year of decline, with annual completed transactions staying significantly below the 1.7m high in 2006.

Tarrant Parsons, RICS economist, said Brexit uncertainty had caused “greater hesitancy”.

That said, the current political environment is far from the only obstacle hindering activity with a shortage of stock continuing to present buyers with limited choice, while stretched affordability is pricing many people out” he said.

“For the year ahead, this mixture of headwinds is unlikely to dissipate, meaning sales volumes may edge a little lower.

“On the back of this, house price growth at a UK level seems set to lose further momentum, although the lack of supply and a still solid labour market backdrop will likely prevent negative trends.”

Source: City A.M.

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House sales fall in ‘flat’ market as all regions in UK see a decline in transactions

Transactions fell in July, HMRC has revealed.

All regions saw a decline on a monthly basis, the smallest of which was in England at 4.2%, while Scotland and Wales were down 18.4% and 20.2% respectively.

The taxman’s latest property transactions data shows 105,940 UK sales last month. Despite the monthly decline, the figure was up 0.3% annually.

This was helped by a 15.2% annual boost in Northern Ireland to 2,340, while England experienced a barely-there 0.95% increase to 90,780.

However, annual figures in Scotland and Wales were down 1% and 15.9% respectively on an annual basis.

All regions saw a decline on a monthly basis, the smallest of which was in England at 4.2%, while Scotland and Wales were down 18.4% and 20.2% respectively.

Northern Ireland had a 14.2% monthly decline in transactions for July.

This led to a 6.5% monthly reduction in sales across the UK on a non-adjusted basis.

The seasonally adjusted estimate showed transactions decreased by 0.8% between June and July and was down 3.2% annually to 99,270.

Commenting on the figures, Kevin Roberts, director at the Legal & General Mortgage Club, said: “Despite increased innovation in the property industry and assistance from Government schemes such as Help to Buy and Shared Ownership, property transactions remain stagnant.

“A fundamental imbalance between supply and demand continues to stifle movement within the market, and until this issue is properly addressed, homeowners will find it difficult to downsize or upsize into better suited properties. The lack of availability of appropriate housing at all stages of home ownership is restricting movement in the market and creating bottlenecks.

“It’s therefore crucial that the industry continues to take whatever steps it can to ease this block and make the UK housing market accessible for all.”

Guy Bradshaw, director of central London sales and lettings at UK Sotheby’s International Realty, said: “The number of property transactions is always a much clearer picture of the market’s health than house prices as this shows what is genuinely happening on the ground.

“Undeniably recent economic and political uncertainty is being reflected in these lower figures but what is important is that these lower figures are less extreme than what we were seeing earlier in the year.

“Rather than a market in decline we are seeing simply a flat market.

“We must also remember that the average transaction time is three months so these deals would have taken place in April when vendors were just recovering from an unseasonably cold spring.

“We don’t expect to see the market to change dramatically in the next six months, but we have seen more listings, viewings and offers in the past two months.

“Whether there will be a peak in transactions later in the year will be determined by whether agents sensibly price properties.”

Source: Property Industry Eye

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Rise in house sales and mortgage approvals to home-buyers in June

The number of mortgage approvals made to home-buyers jumped to a five-month high in June, Bank of England figures show.

Some 65,619 mortgages got the green light for house purchase – the highest monthly total since January.

Re-mortgage approvals fell by 7.3% month on month, with 47,895 loans approved in June.

Despite the drop-off, the Bank said “re-mortgaging approvals remain broadly in line with the average over 2018 so far”.

The figures were released as a separate report from estate agents found that the number of house sales taking place edged up in June – although transaction numbers were still lower than a year earlier.

The average number of sales agreed per estate agency branch increased from eight in May to nine in June, NAEA Propertymark said.

In June last year there had been an average of 11 sales agreed per estate agency branch.

It also said that the proportion of sales made to first-time buyers increased to 29% in June this year – the highest proportion recorded since February.

Mark Hayward, chief executive of NAEA Propertymark, said: “We have seen a rise in the number of sales which is typical of this time of year as buyers and sellers seek to complete their property transactions ahead of the quieter holiday period.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “We are certainly not seeing any fireworks on the high street but more activity away from the centre of London, in particular, which is offering better value for money.”

He continued: “Looking forward, there is no great expectation of radical change as we move into the traditionally quieter summer period, although we do anticipate the usual upturn in September/October, particularly if the outlook for Brexit is more settled.”

The Bank of England’s Money and Credit report also said that, excluding mortgages, households’ annual growth in borrowing “remained stable” at 8.8% in June.

It said: “Credit cards have been accounting for an increasing share of consumer credit growth over the past couple of years and the growth rate of credit card lending has exceeded that of other loans and advances (which includes personal loans, overdrafts and car finance) since January 2018.”

Annual credit card growth stood at 9.5% in June, compared with 8.5% annual growth in other loans and advances.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the continued strength in non-mortgage borrowing “is symptomatic of the pressure on consumers’ finances, rather than rising confidence about the outlook for their incomes”.

Source: Yahoo Finance UK

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Sales volumes decline across the whole of the UK

Sales volumes fell across all UK regions, with the biggest declines in London and the midlands, the latest Land Registry data shows.

The Land Registry’s latest House Price Index reveals that volumes in London were down 21% annually in September to 6,494 sales, bigger than the 15.8% recorded a month before.

Transactions in the east midlands declined further, falling 17% year-on-year in September to 6,099 compared with a 15% annual drop recorded in August.

Sales in the east of England dropped 17% to 7,701.

Figures for transactions up to August – the latest month for which sales volumes are available – show double digit declines everywhere except the north-west and east of England.

Activity in London fell the most annually in August, when 7,186 sales were recorded. This is down 15.8% on the same period last year.

Across the UK, the number of property transactions was down 12.9% annually during September 2017 to 83,374.

The biggest drop was in England, where volumes were down 14.8% to 64,812 compared with a year before.

House price growth also slowed during November, the index shows, dropping to 5.4% from 5.1% in October.

Prices were also down on a monthly basis, slipping 0.1% to give an average of £226,071 for the month.

On a regional basis, London and the north-east are now tied as the slowest growing regions with rates of 2.4% annually. There is a big difference in prices, though, with averages in the capital at £481,731 on average and buyers in the north-east paying £127,737.

Commenting on the figures, Jonathan Hopper, managing director of Garrington Property Finders, said: “London’s once all-conquering property market can console itself with one meagre statistic – it is no longer outright last, just joint last.

“Despite the gradual slowdown in the national rate of price growth, demand remains solid in many areas – albeit with one fundamental caveat.

“Even committed buyers are deeply price sensitive, and despite today’s fall in consumer price inflation, many would-be home owners are seeing their wages shrink in real terms, causing them to watch every penny and walk away from any property they feel to be overpriced.

“The market continues to flow broadly as it should, and the stand-off between limited supply and cautious demand should nudge up prices further throughout 2018. But it will be steady progress at best.”

Meanwhile, private rental prices in Great Britain rose at their lowest rate since the Government began recording them six years ago.

The latest figures from the Office of National Statistics showed that prices were up 1.2% in the 12 months to December 2017.

The rate of growth in London was particularly sluggish, with prices growing by 0.4% in the 12 months to December 2017.

In England, private rental prices slowed slightly to 1.3%, down from 1.4% in November 2017.

Wales saw growth of 1.7% in December, while Scotland saw rental prices increase by 0.4% in the 12 months to December 2017.

In the English regions, the largest annual rental price increase was in the east midlands (2.6%), down from 2.7% in November 2017.

This was followed by the east of England (2.2%), up from 2.1% in November 2017, the south-west (2.1%), unchanged from November 2017 and the south-east (2%), down from 2.3% in November 2017.

The lowest annual rental price increases were in the north-east (0.1%), up from 0% in November 2017, and London (0.4%), down from 0.6% in November 2017.

Source: Property Industry Eye