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Strong demand ahead of a potential base rate rise – Rightmove

Every region of Britain saw residential property asking price records broken in October, as the national average increased almost £5,000.

It was the first time that every region broke asking price records since March 2007, according to Rightmove’s monthly house price index.

The typical asking price for a home has jumped in all regions of Britain, and now sits at a national average of £344,445, up 1.8% month-on-month, which is the biggest increase at this time of year since October 2015.

The North West and Wales both saw especially strong growth in asking prices amounting to 2.3%. They reached £232,639 and £237,830 respectively.

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The South West and London both saw a 1.9% monthly increase, with prices reaching £359,906 and £650,683.

The number of sales being agreed was up more than 15%, compared to the same time in 2019.

Rightmove put the increase down to property purchasers wanting to secure their new homes ahead of a potential base rate rise, which is looking increasingly likely for later this year.

Tim Bannister, Rightmove’s director of property data, said:“Although more properties are coming to market, the level is still not enough to replenish the stock that’s being snapped up. Consequently, new price records have been set across the board, with every region of Great Britain and all of the three market sectors of first-time buyer, second-stepper and top of the ladder hitting all-time highs.

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“This ‘full house’ is an extremely rare event, happening for the first time since March 2007. The stock shortages started after the first lockdown, and they look set to continue with the underlying housing market fundamentals remaining strong, and an additional incentive to buy and fix your mortgage interest rate before a widely expected rate rise.

“Mortgage interest rates are lower than they have ever been before and lenders are keen to lend in a competitive market, with employment and wage growth also robust. The number of sales agreed continue to be strong despite the end of the stamp duty incentives.”

By MARC DA SILVA

Source: Property Industry Eye

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Gap between housing demand and supply is widest in years

THE gap between the number of house hunters coming to market and the choice of properties for sale is at its widest since 2013, according to surveyors.

And the mis-match between buyers and sellers is putting an upward pressure on house prices, with every single Northern Ireland respondent to the latest Rics/Ulster Bank residential market survey saying prices rose in the last month.

A net balance of 75 per cent of property professionals noted an increase in new buyer inquiries during May, according to the survey (more than double the overall UK rate).

But the supply of homes fell further, with a net balance of 21 per cent of surveyors reporting a fall in the number of new property listings.

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In terms of the outlook, Northern Ireland surveyors remain confident for sales activity, with a 74 per cent of respondents expecting the number of homes sold to increase over the next three months.

And nearly two thirds (63 per cent) expects rising prices between June and August, though this is down from 77 per cent last month.

Rics’ regional residential property spokesman Samuel Dickey says: “We’re seeing more properties coming on to the market, but again this isn’t at a sufficient rate to meet buyer demand, and that mismatch is leading to the increase in house prices we are currently seeing.

“Some of the factors at play continue to be people wanting more space and also professionals living elsewhere seeking to move back to Northern Ireland, which is leading to very strong demand for detached properties in sought after areas.”

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Growth in property sales may soften a little in the coming three months once the stamp duty holiday is tapered from July to September.

Simon Rubinsohn, Rics chief economist, said: “Ending a tax break always has the potential to be a little disruptive for a market but with the economy performing better than could have been expected even a short while ago and the cost of money still at rock bottom levels, the principal drivers supporting demand will remain in place even after the expiry of the stamp duty holiday.”

Terry Robb, head of personal banking at Ulster Bank, said: “House prices in Northern Ireland rose at their fastest annual rate since 2016 during the first quarter of this year, and this latest survey suggests that price inflation has continued into the second quarter.”

By Gary McDonald

Source: Irish News

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RICS: Stamp duty holiday helping to lift demand

The stamp duty holiday introduced from the 8th July is helping to lift demand, The RICS UK Residential Market Survey suggests.

In July a net 75% of surveyors saw a rise in new buyer enquiries, the second month in a row that demand has rebounded significantly. A net 59% also saw instructions rise, up from 41% in June.

RICS noted that the stamp duty holiday is having a big impact on demand based on anecdotal evidence.

Ross Counsell, chartered surveyor and director at property buyers, Good Move, said: “Today’s RICS statistics reveal the UK housing market gained further momentum last month which showcases the ongoing recovery – something we’re all happy to hear after a turbulent few months.

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“We have seen an increase in new buyer queries, as well as a rise in new listings and sales. The measurements employed by the government such as the stamp duty holiday has positively impacted this spike.

“These latest statistics should hopefully help reassure buyers and sellers in the UK that the property market is starting to return to “normal”.

“However, we must not forget that we are now in a recession, therefore we advise buyers who are looking to purchase a home during the recession to thoroughly check out the property before they commit, and ask important questions such as how much work the property may need to ensure they’re protecting their finances and getting the best possible deal.

“Buyers must not get swept away in a low house price or jump at the first-rate a mortgage lender offers. Purchasing a home during this time is a big decision and one that needs to be thought about carefully.”

A net 26% of surveyors expect an increase in sales, however a net -10% expect sales to tail off over the course of the next 12 months – likely due to the stamp duty holiday expiring in March 2021.

Tomer Aboody, director of property lender MT Finance, said: “With the stamp duty holiday in place at least until March and hopefully longer, this should help support the housing market to a degree.

“No doubt there will be some negativity and a potential fall in confidence after government schemes such as furlough have ended but a possible downward trend should be eased by banks already preparing a loss buffer (HSBC), allowing them to work more closely with borrowers who might be struggling with repayments.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Rightmove: Demand surges 50 per cent after housing market reopens

Property platform Rightmove said demand was up 50 per cent in June and July as potential buyers sought new homes after months spent in lockdown.

Rightmove’s share price jumped 8.93 per cent to 629.4p this morning after the company reported a bounce in activity after the housing market reopened.

The figures

In the six months to 30 June revenue fell 34 per cent to £94.8m, after Rightmove offered a 75 per cent discount to customers between April and June.

Operating profit plunged 43 per cent, from £108.2m to £61.7m.

Basic earnings per share also fell 42 per cent, to 5.7p, and the average revenue per advertiser dropped 34 per cent to £712.

Rightmove did not announce an interim dividend.

However, between 1 June and 31 July demand for sales properties has been 50 per cent higher than the same period in 2019. Rental demand is up 20 per cent.

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Why it’s interesting

Rightmove said the jump in activity is partially due to pent up demand as the UK emerged from its coronavirus lockdown.

However, it also said that some buyers have decided to move following months at home during lockdown. Seperate research has previously suggested that more buyers are searching for properties with gardens and outside of city centres.

“Rightmove data suggests that the significant increase in activity is being driven not only from the pent up demand from the period of lock down, but an increased number of home hunters who have decided to move following the experience of lock down,” the company said.

By Jessica Clark

Source: City Am

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Northern Ireland dealing with pent up demand after reopening

Northern Ireland dealing with pent up demand after reopening – The Northern Ireland housing market is dealing with a flurry of activity after reopening on Monday 15th June.

The Guild of Property Professionals said a significant number of enquiries usually occur at this time of year – and losing March to June to the lockdown is only exacerbating this process.

Art O’Hagan, managing director of CPS Property, said: “As expected from the enquiries we received over the past few months, we are currently dealing with the pent-up demand that has built up over the lockdown period.

“With demand for houses is currently at a premium, there is no time like the present for vendors to get their homes valued and get their home listed.”

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O’Hagan saw over 140 viewers booked in for the first week of trading as a result of the pent-up demand.

Similarly, Daniel Henry, partner at Bensons, said: “When we returned on the 15th we had to deal with a surge of pent up demand. There were a large number of viewings needing to be organised and a significant number of new listings to be measured and inspected.”

Henry added that the office has been adapted to facilitate social distancing, while access is currently by invitation only.

BY RYAN BEMBRIDGE

Source: Property Wire

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Lockdown Easing Releases Burst In Housing Demand

Re-opening of the housing market in England following the coronavirus lockdown, led to a burst of enthusiasm from would–be buyers and a small increase in sales agreed. But, reported online property portal Zoopla, the starting point for renewed activity is a market bumping along at sales levels 90 per cent down on this time last year.

The firm’s latest UK Cities House Price Index found buyer demand across England shooting up by 88 per cent after the market reopened, exceeding pre-lockdown levels. But, said Zoopla, this jump in demand ‘is temporary and expected to moderate in the coming weeks’.

There was less of a bounce in cities in Scotland, Wales and Northern Ireland registered where housing markets remain closed.

Continued Government support for the economy and the availability of higher loan-to-value mortgages will shape the market outlook for the second half of the year, Zoopla concluded.

Although 60 per cent of would-be home movers across Britain said they plan to go ahead with their property plans, 40 per cent have put their plans on hold.

‘After the market was suspended for 15 per cent of the year at one of the busiest times for market activity, a return of pent-up demand was to be expected, especially given the strong start to the year.

‘The scale of the bounce back in demand over the last week (to 17 May) varies across cities depending upon the country in which they are located. Despite a large rise in demand, London’s recovery is lagging behind, alongside cities in countries where the housing market is yet to reopen. Scotland, Wales and Northern Ireland have not recorded any major rebound in demand like that seen across English cities. Demand for homes in London has been partly diluted as would-be buyers look to commuter towns outside the capital in response to COVID’.

Zoopla’s latest data shows that demand has rebounded faster in cities along the south coast and in northern England. Portsmouth and Southampton are registering demand some 40 per cent higher than in February this year with strong growth also recorded in Newcastle and Leeds’.

Zoopla estimates there are currently 373,000 pre-lockdown house sales in progress. By reopening the market, the Government has improved the chances of a higher proportion of these stalled transactions completing.

‘That said, latest data suggests a small pick-up in the rate of fall-throughs since 12 May, but at levels well below the average for this time of year’, said Zoopla.

‘We currently expect a significant proportion of agreed sales to continue, but increased uncertainty over the economic outlook will see housing chains tested in the coming weeks’.

The coronavirus lockdown has created an unexpected boost to housing demand, said Zoopla director of research and insight, Richard Donnell.

‘The economic impacts of COVID will grow in the coming months and uncertainty is building. The majority of would-be movers plan to continue their search, encouraged by low mortgage rates and continued Government support for the economy.

‘However, we expect the latest rebound in demand to moderate in the coming weeks as buyers and sellers start to exert greater caution. Further support from the Government can’t be discounted and would help limit the scale of the downside risks’.

Source: Residential Landlord