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House sales slump 63% but cheap mortgages bolster appetite

House sales slumped by almost two thirds (63 per cent) in July, after a record month for property transactions in June.

According to the latest HM Revenue & Customs figures July saw just 73,740 property transactions, compared with 213,120 in June, the last month of the stamp duty holiday.

But despite transaction figures dropping, housing market experts are certain the increasing number of lenders offering cheap mortgages will ensure 2021 doesn’t fall flat.

“The fact that lenders are offering record low mortgage rates is enough, it appears, to ensure appetite in the housing market remains on a par with that in 2020,” said Adam Oldfield.

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“While these rates are available it is likely to provide enough impetus to keep the market growing, even if it is at a reduced rate.”

Interest rates on mortgages have tumbled in recent months. Earlier this month, Halifax introduced the UK’s lowest two-year fixed rate at 0.83 per cent for large deposit holders, alongside a record five-year fixed rate at 0.98 per cent for large deposit holders.

But Oldfield reckons with rising inflation remaining “a spectre on the horizon”, the Bank of England could be poised to increase the base rate, and with it mortgage rates “will rise”.

“The term ‘make hay while the sun shines’ is undoubtedly apt for those looking to move or remortgage in the near future.”

Mark Harris said cheap mortgages have already “played a significant part in the uptick in transactions”, and “will continue to do so going forwards, even as the stamp duty holiday tapers off”.

He added: “Mortgage pricing continues to trend downwards, with a growing number of sub-1 per cent products.

“But it is not just the deposit-rich who are benefiting from cheaper rates – those borrowing at higher loan-to-values are also seeing rates fall, with even 95 per cent loan-to-value deals now to be had at sub-3 per cent.”

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Experts have already predicted these rates will fall further in the coming months, as lenders balance their position of wanting the business with the risk of lower loan-to-value deals.

Paul Stockwell, chief commercial officer at Gatehouse Bank, said “transactions may creep up again in August” as a result, before “another flurry of activity in September as buyers try to complete house sales before the final stamp duty savings are removed”.

He added: “This wave is unlikely to match June’s in scale but the effect of the cliff-edge will still be in attendance.”

Low supply were likely the only thing that could hold transaction levels back, Stockwell said, pointing to the fact mortgage approvals, as published by the Bank of England, were still surpassing pre-pandemic levels.

Adam Forshaw, managing director of conveyancing firm O’Neill Patient, said there was still a “strong return to the remortgage market despite it being the holiday period”.

He expects this resurgence to continue over the coming months.

Forshaw’s predictions echo those of others in the market. Jeremy Duncombe, director of mortgages at Yorkshire Building Society, told FTAdviser back in July: “The real opportunity is in remortgages.”

He explained: “There are some big maturities coming up as fixed rate mortgages come to an end. This means customers will need to remortgage.

“For brokers, this is where the opportunity is. They need to start proactively reaching out to customers about their options. That way, they’ll create capacity.”

By Ruby Hinchliffe

Source: FT Adviser

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Where UK Homes Sell the Quickest – New research from GetAgent

New research from GetAgent, the estate agent comparison website, has revealed which areas of the property market in England and Wales are seeing homes sell the quickest, as well as the areas with the slowest time to sell taking 13 months longer.

GetAgent.co.uk keeps a comprehensive record of property sales across the nation, using data from all of the major online portals to record the point at which a home is listed for sale online. GetAgent then cross-references this sale with the Land Registry using proprietary algorithms to see when the sale completes, revealing what is selling, where, for how much and how long it’s taking.

GetAgent analysed the time it’s taking to sell a home since the start of this year, to find the quickest home selling hotspots offering the best chance of avoiding lengthy market delays caused by the stamp duty holiday.

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Time to sell by region

On a regional level, homes take the least time to sell in Yorkshire & Humber, and the West Midlands, with homes in both regions taking an average of 253 days to sell.

In contrast, sales are taking the longest time to complete in the East of England (297 days), followed by the North East (288 days).

Time to sell by local authority

Digging deeper into the data, nowhere are homes selling faster than in the town of Selby, North Yorkshire where the average time to sell is just 118 days.

Second on the list is Cotswold, South West England, where homes take 148 days to sell.

Both of these places are located in regions of outstanding natural beauty, as is the third-placed location on the list, the town of Bolsover in the Peak District where homes are taking 175 days to sell.

At the opposite end of the spectrum, homes are taking the longest time to sell in North West Leicestershire where the average is 528 days. This means transactions in the area are taking a remarkable 410 days, or roughly 13 months, longer than top of the table, Selby.

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The London borough of Barnet is also home to one of the longest times to sell at an average of 510 days, as is Cannock Chase, Staffordshire, where the current time to sell sits at 491 days.

Beating the stamp duty holiday deadline

When this time to sell data is measured against the time remaining before the stamp duty (SDLT) holiday deadline, it suggests that time has now run out to commence a new sale and complete before the deadline, a rule of thumb that applies to almost every region of England and Wales.

With less than a month remaining until Phase One of the SDLT holiday ends on 30th June, nowhere in England and Wales can we be confident that there is enough time to commence and complete a sale. With the end of Phase 2 of the SDLT holiday coming on 30th September, only in Selby does the average time to sell comfortably beat the deadline.

BY PETE CARVILL

Source: Property Wire

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Scottish home sales record 119% rebound

The volume of Scottish home sales surged at the end of 2020, analysis of ONS data from property firm Apropos by DJ Alexander has found.

Between September and November there were 35,610 property transactions, up from 16,220 between June and August.

The 119% increase was much greater than the volume of transactions across the rest of the UK. The UK figure was 48% up; in England it rose 44%; in Wales it increased 66%; while in Northern Ireland it was up 77%.

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David Alexander, joint chief executive officer of apropos by DJ Alexander, said: “These figures highlight just how successful the stamp duty holiday has been across the whole of the UK with each nation recording substantial increases in the volume of sales coupled with rising prices.”

“However, it is clear that Scotland has been enjoying a greater boom in house sales than the rest of the UK with more than double the volume in the latest three months compared with the previous three-month period.

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“Given that the relaxation of the threshold for land and buildings transaction tax (LBTT) in July is clearly the source of this housing boom it would seem questionable to let this suddenly end on the 31st March.”

Alexander added: “With the Scottish budget happening next week it would be the ideal opportunity for the Scottish Government to signal its intent on preserving the growth in the property market by announcing a continuation of the stamp duty holiday beyond March to ensure there is no sudden decline in activity.”

BY RYAN BEMBRIDGE

Source: Property Wire

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London saw greatest number of homes bought in 2020

London was noted as recording the greatest number of property purchases across the UK in 2020, according to reallymoving.

The data shows that the capital saw 13.7% of all completions, followed by Leeds at 1.7% and Birmingham at 1.6%.

Between July and December 2020, the proportion of first-time buyers in the market fell by 12% compared to the same period last year.

Over 2020, FTBs made up 51% of all buyers in the market, compared to 56% in 2019.

While 16% of FTBs opted for a new build home over an older property, almost half of those (46%) used a Help to Buy equity loan enabling them to buy with a deposit of just 5%.

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The average house price in England and Wales increased by from £293,819 in January 2020 to £352,239 in December 2020.

However, reallymoving predict that prices will fall by 1.2% in January and 2.5% in February 2021.

Home movers sold their homes for an average price of £313,149 and bought for an average price of £379,191.

Meanwhile, FTBs paid an average price of £262,180 for their first home.

Furthermore, the proportion of FTBs in England liable to pay stamp duty fell from 25% to just 5%, following the announcement of a stamp duty holiday.

Nine out of ten (91%) transactions by all homebuyers, including FTBs, have avoided the tax since July, prompting a surge in market activity and prices.

The data also shows that the cost of moving home dropped by 39% in 2020 from an average of £10,911 before the stamp duty holiday came into effect to £6,669 after.

According to reallymoving, costs such as legal fees rose however, as a consequence of being directly tied to rising house prices.

Those buying and selling a home typically paid £1,682 in legal fees, while FTBs paid £1,100, up 15% and 11%, respectively.

This data is based on 910,000 quotes generated on the reallymoving site throughout the year.

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

Rob Houghton, chief executive of reallymoving, said: “The property market took us on a rollercoaster in 2020, from shock and despair when thousands of home movers were forced to press pause back in March, to the extraordinary resurgence in demand that began in the early summer and continued right through to the end of the year.

“Most concerning however, has been the decline in the proportion of FTBs in the market. They largely didn’t benefit from the stamp duty holiday and faced huge challenges securing finance as higher loan-to-value mortgages disappeared overnight and several high street lenders banned gifted deposits.

“Yet there are reasons to be optimistic that 2021 could see a reversal in fortunes for FTBs as lenders return to the market, competition for homes is reduced and price inflation readjusts downwards.

“Reallymoving is on a mission over the coming year to help homebuyers upskill with a series of live webinars and content designed to help inform and educate about the process, ensuring buyers have everything they need to navigate a successful home purchase.”

By Jake Carter

Source: Mortgage Introducer

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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  MARK POWNEY

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