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More properties sell for over the asking price

One in eight (13%) properties sold for more than the original asking price in August – the highest recorded since November 2015.

NAEA Propertymark’s August Housing Report found that over half (53%) of properties still sold for less than the asking price last month;

Mark Hayward, chief executive, NAEA Propertymark, said: “It’s interesting to see that one in eight properties sold for more than asking in August this year.

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“Last month, we witnessed a boom in the number of prospective buyers following the government’s announcement of a Stamp Duty holiday, and it seems this is increasing the level of competition in the property market.

“With the increase in the number of prospective buyers since this announcement, many buyers are clearly willing to pay over the asking price in order to secure their dream home.”

The average number of sales agreed per estate agent branch stood at 12 in August, a slight decrease from 13 in July.

This is the highest figure recorded for the month of August since 2007.

BY RYAN BEMBRIDGE

Source: Property Wire

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Property transactions start to rebound

There were 70,710 property transactions in July, 14.5% more than in June but still 27.4% less than in July last year, the HMRC’s seasonally adjusted figures show.

The HMRC said the stamp duty holiday announced on July 2020 is unlikely to impact transactions until late August or early September.

Anna Clare Harper, author of Strategic Property Investing, said: “The upward trend in transactions data reflects a piece of positive news for all of us: the housing market is moving again after a complex start to the year. This change reflects a release of pent-up demand and supply.

“What we’re seeing in the market, which will be reflected in August’s and September’s data, is the further influence of recent and temporary policies.

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“The temporary stamp duty land tax change is helping those home buyers and investors who are looking to buy a property worth less than £500,000 in particular.

“We don’t know for sure what will happen next: economically, or in policy. But what we can predict accurately is that two crucial factors – economic confidence and policy – will prove fundamental to the future of the UK housing market.”

Jonathan Sealey, chief executive at bridging lender Hope Capital: “Although there’s clearly a long way to go for the market as a whole to get back to where it was, at Hope Capital we are seeing stunning levels of inquiries, way up on last year.

“Covid-19 has created changing patterns of demand, as people adapt to a slightly different lifestyle, with less commuting and more working at home. This is also likely to feed through into increased transaction volumes, with many people considering a move away from large towns and cities.

“As the recovery unfolds, we’re expecting to see a lot of demand from buy-to-let landlords, taking advantage of the Stamp Duty cut to expand their portfolio and provide rented housing that meets people’s desire for somewhere quiet to work at home, and better access to the great outdoors.”

By RYAN BEMBRIDGE

Source: Property Wire

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UK mortgage approvals beat expectations as housing market reopens

UK mortgage approvals beat expectations and rocketed in June as the housing market reopened from the coronavirus lockdown, the latest figures have shown.

The number of mortgages approved by UK banks rose to 40,000 in June after May’s record crash to just 9,300, the Bank of England said today. Analysts had predicted a rise to 34,000.

However, approvals were still 46 per cent below the February level of 73,700.

“The mortgage market showed some signs of recovery in June, but remained relatively weak in comparison to pre-Covid,” the Bank of England said.

An increase in house purchases helped consumer borrowing trends take a step closer to normality in June.

UK households pay down debts as mortgage approvals rise

Households repaid £86m of debt last month. But that was lower than the repayments totalling £15.6bn over the March to May period.

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People have been paying down their debts and saving money as there has been little to spend on during lockdown. The net repayments of the last four months contrast with an average of £1.1bn of borrowing per month in the year and a half to February.

The UK government has gradually loosened the country’s coronavirus restrictions over the last two months. In May it allowed the housing market to reopen, leading to June’s uptick in mortgage approvals.

In June the government allowed “non-essential” shops to reopen. And earlier this month pubs, cafes and restaurants were allowed to serve customers again.

The Treasury has unveiled a number of policies to encourage people to part with their lockdown savings. It hopes a VAT cut for the hospitality and tourism sectors and “eat out to help out” vouchers will boost the economy.

Chancellor Rishi Sunak’s stamp duty holiday has already helped the London housing market after just two weeks, data showed yesterday. London house sales rocketed 27 per cent after the property tax was slashed, housing website Zoopla said yesterday.

By Harry Robertson

Source: City AM

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Good Move: Housing market could return to ‘normal’ by the end of the year

Despite the significant impact of COVID-19 on the UK property market, positive signs of growth suggest a return to normal could be on the cards by the end of the year, according to Good Move.

Ross Counsell, chartered surveyor and director at Good Move, said: “COVID-19 has had a detrimental effect on the British economy, and this too included the property market.

“However, we are now seeing positive signs that signal growth in the property market as we re-emerge from lockdown.

“We’ve seen asking prices increase in July, up 2.4% compared to March, which signals a ‘boom’ in the property market and is a fantastic sign for sellers and estate agents as they can expect higher offers for homes.

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“Rishi Sunak’s stamp duty holiday also saw properties in London soar in sales by 27% in the weeks following the announcement in July, although this only increased by 6% in the rest of England.”

Counsell added that the impact of COVID-19 might change the shape of the market moving forwards.

He said: “Following the impact of coronavirus, we predict buyers will be looking for homes with a garden and a home office space, in the suburbs and countryside for added outdoor space rather than in cities.

“Sellers on the other hand need to adapt to the change in buyer preference.

“As we know, space is now at the forefront of buyer’s minds and they’re going to consider every single detail of a house before putting an offer in.

“Therefore, we advise sellers to instruct a chartered surveyor to perform a property survey, so they can take steps to rectify any major issues that will put buyers off or reduce the value of their home.

“For estate agents, we expect house prices to continue to increase across the UK, as well as more and more people looking to sell their home now the housing market has re-opened.

“We’ll see many estate agents working around the clock to support their clients and find the best possible deal for them to help protect their finances long-term.

“With everything considered, we fully predict the market to be back to ‘normal’ by the close of the year.”

By Jessica Bird

Source: Mortgage Introducer

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Property asking prices jump to a record high

The average price of property coming to market in Britain is at a record high of £320,265, data from Rightmove has revealed. In addition to the rise in property asking prices, the number of people contacting estate agents about house viewings is up by 75% so far in July compared to the same period last year.

The average asking prices are 2.4% higher than in March pre-lockdown. The number of sales agreed this month is also now exceeding last year’s figures in England, Scotland and Wales. Almost half (44%) of new listings that came up for sale in the first month after the market re-opened on the 13 May have already been marked as sale agreed, compared to 34% at the equivalent time last year.

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The number of monthly sales agreed is up 15% in England on last year, and in the five days after the stamp duty announcement it jumped to 35% up on the same days a year ago. Total available stock has also reportedly recovered to being 13% down in Britain following a steep decline, with Rightmove claiming that the stamp duty holiday may encourage more sellers to the market to ensure they have ample time before the 31 March deadline.

Miles Shipside, resident property expert at Rightmove, said: “The busy until interrupted spring market has now picked up where it left off and has been accelerated by both time-limited stamp duty holidays and by homeowners reappraising their homes and lifestyles because of the lockdown.

“The strength of buyer demand has contributed to record prices, with the 3.7% annual rate of increase being the highest for over three and a half years.

“There is a window of opportunity for sellers to come to market and to find a buyer who is tempted by the stamp duty savings. Although March next year may sound like a long time away, in reality sellers need to find a buyer before Christmas, to allow a further three months for completion of the legal process to beat the deadline.

“While property is selling much faster than a year ago, it’s important not to over-price and miss this window. It’s still a price sensitive market with buyers having limits on what they are able to borrow, and the uncertain economic outlook making them more cautious.”

Source: Property Wire

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Housing market starts to reopen in Scotland as lockdown eases

From Monday 29 June, restrictions on housing moves will be eased in Scotland as part of the easing of its lockdown measures.

This will allow valuations and viewings to take place, and marks the initial stage in the reopening of the Scottish housing market.

This development in Scotland follows a similar move to ease lockdown on 19 June in Wales, which saw the government allow viewings to take place in vacant properties, and to ease restrictions on house moves where a sale has been agreed, but not yet completed.

In England, it has been more than a month since equivalent changes were made on 13 May.

First Minister Nicola Sturgeon, said: “The sacrifices that have been made – and I know how hard and at times painful they have been – have suppressed the virus.

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“They have also protected the NHS, and have undoubtedly saved a significant number of lives.

“They have also brought us to the position where we can now look ahead with a bit more clarity to our path out of lockdown, and I hope details announced today will provide people and businesses with more certainty in their forward planning.

“But let me be clear that each step on this path depends on us continuing to beat the virus back. That is why we must do everything in our power to avoid steps being reversed.

“The central point in all of this is the virus has not – and it will not – go away of its own accord. It will pose a real and significant threat to us for some time to come.

“Maintaining our progress also means all of us abiding by public health guidance.

“Wearing face coverings in enclosed spaces, avoiding crowded places, washing our hands and cleaning surfaces regularly, maintaining physical distancing, agreeing to immediately self-isolate and get a test if we have symptoms – all of these basic protections matter now more than ever as we all get out and about a bit more.”

A statement from the Welsh First Minister, Mark Drakeford MS, said: “This package marks a significant unlocking of the regulations and, for many aspects of daily life in Wales, we are moving into the amber phase of our traffic light system.

“We have been able to do this because of the actions everyone in Wales has taken to date in complying with the stay-at-home and stay local rules.

“We need everyone to continue to take steps to protect themselves and their loved ones as we find a way to live and work alongside coronavirus.

“This means working from home wherever possible, maintaining social distancing and frequent handwashing.

“For some people it may mean wearing a face covering in certain situations, for others it will mean continuing to shield.

“I want to thank everyone for everything they have done so far. Together we can keep Wales safe.”

Mark Hayward, chief executive at NAEA Propertymark and David Cox, chief executive of ARLA Propertymark, said: “It’s great news for consumers and the industry in Scotland that the property market is reopening on Monday.

“Whilst it is not a return to normal, the new guidelines will allow members of the public to view, purchase, rent and move into new properties…reinvigorating the housing market and boosting the economy.

“Of course, safety is paramount, and we encourage all agents to follow the Propertymark guidelines on property viewings and moves closely to protect themselves and others.”

By Jessica Bird

Source: Mortgage Introducer

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Hereford sees a surge in buyer demand as housing market reopens

HEREFORD has been named as the city leading a bounce back in buyer demand following the reopening of England’s housing market, analysis has found.

Property website Rightmove based its findings on the volumes of house hunters phoning and emailing estate agents about properties for sale in the first two weeks of June, compared with before the lockdown in the first two weeks in March.

Across England generally, buyer demand was up by nearly a third (32%).

The housing market in England started to reopen from May 13, with serious buyers now able to undertake physical viewings once more.

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Hereford topped the list, with demand surging by 77% when comparing the first two weeks of March with the same period this month. The average asking price in June, according to RightMove, was £244,440.

It was followed by the North West towns of Wigan, with a 71% uplift and an average asking price of £165,448, and Rochdale, where the average asking price was £179,329, with a 66% increase.

Steven Thomas, Director of Watkins Thomas in Hereford, said: “Our market has been very busy since we were able to reopen in May.

“There’s been a shift in the type of buyer since before lockdown. We were dealing with a lot of first-time buyers with limited deposits in March, but now it’s families looking for more space.

“It’s a bit like what we see in January – families spend Christmas sitting down and talking about their next move and they get going in January. We’re now seeing people, having sat down during lockdown and reviewed what they’re looking for, jumping into action in June.

“June and July is often quieter for us because this group of buyers are usually away, so that’s why we’re seeing a surge of late spring buyers.

“There’s also a lot of real interest coming from the South East, from people in their 50s and 60s realising they can get a lot more for their money and can live in an area with acres of open countryside.”

By James Thomas

Source: Hereford Times

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UK house prices holding up as city folk flock to the country

The number of city-dwellers pursuing their dream of a rural idyll is on the rise. And despite the pandemic, UK house prices are holding up well, says Merryn Somerset Webb.

What do you want right now? Immediate freedom to go to the Italian lakes aside, I bet that near top of your list is a bigger garden. If it isn’t that, it will be a home office or two, or perhaps an intergenerational living annexe – so if lockdown ever comes again you won’t have to go three months without seeing your family.

Whatever is on the list, the odds are you want the house itself to be in the country. In an ideal world your new bigger garden comes with a pool, a tennis court and a teenage bunk house scattered around its many acres.

I don’t want to spend another lockdown in a city (I don’t actually want to spend another day in my city) and around the world, an awful lot of people seem to feel the same. The New York Post reported this week that “frantic” Manhattanites were spilling out of the city into the suburbs, snapping up houses real estate agents had begun to think they would never sell – sometimes sight unseen. Want a five-bedroom colonial style home in Connecticut for $1m? You’d better rush.

You can see the same feeling in the data in the UK. Listings of properties to let in London have surged. Estate agents working within a few hours of London are telling stories of buyers flooding to the countryside, willing to pay almost anything for big houses they wouldn’t mind getting stuck in (Cornwall has gone nuts too). Rightmove reports that searches for houses with gardens were up 42% last month compared with last May.

People who used to care for nothing but kitchen islands and central London postcodes are now obsessing over online photos of raised vegetable beds and croquet lawns. The interest in the market isn’t just anecdotal. Savills saw agreed deals rise 108% on the week last week and exchanges up 53%. Wider market data from TwentyCi shows a 54% increase in the number of properties marked “sold subject to contract” across the market in the past week – and a 99% increase over £1m. If you live in London now and thought that a Surrey Hills house was beyond you before, it almost certainly is now. The rich move fast.

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No real risk of a house price crash

And prices? You’d think that in the wake of a global pandemic you’d already be seeing a bit of a slump. It isn’t necessarily so. Nationwide reported prices down 1.7% in May. That’s a nasty number if you annualise it. But there were so few transactions last month that this number is all but meaningless. Of more interest should be the fact that prices now appear to be more or less flat on where they were a year ago.

So what next? In the short term at least, it seems clear that there is to be a rebalancing of city and non-city prices. What of UK house prices as a whole? Here, things are a little less obvious. House prices are about sentiment, of course. But they are more about the availability and the price of credit and would-be buyers’ incomes.

When prices fall properly it is usually when unemployment rises fast and those who can’t meet their mortgage payments become forced sellers.

Unemployment is likely to rise fast as the furlough scheme comes to an end: ask around and you will hear company after company reluctantly starting redundancy consultations. However, not only could the bounceback be stronger than expected, but a good many households are in considerably better shape than they were pre-lockdown.

Numbers from the Office for National Statistics suggest that the lack of spending opportunities should have allowed the average household to save £182 a week for the past nine weeks, while analysis from Wagestream suggests that 52.5% of those who still have jobs “feel better off than usual.” Demand for payday loans fell 61% in the first three months of this year and in March alone UK consumers paid down a whopping £3.8bn of debt.

Add to this the fact that the banks are keen to not be the baddies in this crisis. They have offered easy access to the mortgage holidays mandated by the government, taken up so far by 1.8 million people, says UK Finance. It’s a reasonably safe bet that they will be firmly encouraged to show exceptional forbearance to those who can’t pay in full when the holiday period is up, too.

At the same time, while rates on very high loan-to-value mortgages have crept up a tiny bit – and some lenders have pulled out of this part of the market – rates overall are low and likely to stay low for now (at some point the levels of stimulus we are seeing will cause inflation, but not quite yet). This week Skipton Building Society reintroduced 85% loan-to-value mortgages and cut rates on lots of products. How does a five-year fix at 1.35% sound to you? Sounds good to me. Skipton is also accepting mortgage applications from furloughed workers, which has to help.

We might also see new government schemes put in place to support prices (there’s a scheme for everything else). This is not the kind of environment in which forced sellers cause a crash.

But prices have become more affordable

The final point to note is that UK house prices aren’t as stupidly expensive as usual at the moment. They have been fairly flat in real terms for a couple of years now and have gradually become more affordable as a result. Those who think that this crisis will spell the end for prime London property (a mistake I often make) might also note that by the end of last year prime central London prices were already down more than 20% from their 2016-2017 peak. That’s not a place collapses usually begin from. They might also note that while 2020 is not 2008, prime central London prices rose an astounding 26% between March 2009 and January 2010.

You will think from all this that I am predicting rising house prices. Buy, buy, buy! I’m absolutely not (that would be out of character, for starters) and nor is anyone else. Savills sees prices down at least 5% this year and Capital Economics sees them down 4%.

There are lots of brakes on this market. The pent-up demand that is running our poor country agents off their feet will slow. The implosion of the buy-to-let sector will bump up supply. There may well be wealth taxes on the way (any liability added to a house cuts its value) and if inflation does kick off, interest rates will have to rise.

My best guess (and my hope) is that house prices will stay flattish in nominal terms and perhaps fall in real terms, a situation that will suit almost everyone. My only worry? That I am on the wrong side of the city-country trade.

By Merryn Somerset Webb

Source: Money Week

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Reopening of housing market ‘not so smooth but welcome’, says Wellington estate agent

The reopening of the property market is a ‘truly wonderfully cautious first important step in the right direction’, a Shropshire estate agent has said.

Dean Millington, business proprietor of Harwood The Estate Agents, Wellington, said the Government’s green light for agents to return to work had been akin to ‘dropping the bombshell onto the property world’.

“Nothing like a little advance notice whilst also forgetting to mention the finer details to the public and the agents,” said Mr Millington.

“They have since released the really important reality about viewing restrictions, guidelines and practices agents must implement and put into practice sharpish before being able to commence safely.

“The Government and the National Association of Estate Agents have now given strict guidelines on how things are to be handled and the safety measures that should be implemented.

“I have noticed that the media language is now a little less gunhoe and more subtle, such as ‘the property market has been released from some elements of the lockdown’.

“I believe it truly would have been all round a more common sense approach to have distributed the guidelines of the return to agents in advance, then made a more timely announcement of a forwarding date to enable agents to fully prepare correctly and safely.

“That all said, it truly is a wonderfully cautious first important step in the right direction, although the property world has been slightly thrown into a little turmoil.”

He added: “I have been in live webinars, client calls, emails, texts and a constantly non-stop avalanche of communications since the announcement explaining the finer details and I am pleased to say we are now ready.

“At the end of the day we truly wholeheartedly support the Government in their amazing efforts during these incredibly testing times and will continue to play our small part in ensuring the safety of our clients, staff and the public.

“We are so proud and in awe of all the key workers and our NHS and we pray, hope and plan for brighter days ahead.

“We must keep faith, things will always get better – and they will.”

By Lisa O’Brien

Source: Shropshire Star

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House Prices Set For Short-Term Hit

Coronavirus-hit buyer confidence will translate into short term house price falls of between 5 and 10 per cent, said researchers at international property agents Savills.

But such a drop would be smaller than the price falls experienced in the early 1990s recession or in the Global Financial Crisis, suggested authors of the firm’s May UK Housing Market Update, Ed Hampton and Chris Buckle.

The pace of recovery in prices after the initial falls will depend on the state of the wider economy, although the signs are not too encouraging. The May forecast from Oxford Economics anticipates the UK’s Gross Domestic Product 0.7 per cent lower by the end of 2024 than it expected in April, says the Update. ‘This will have a knock-on effect on household incomes’.

On the plus side, interest rates are also now expected to be lower for longer. ‘Our November forecast for 15 per cent UK house price growth over the five years to 2024 included an assumption that the Bank of England base rate would rise to 2 per cent by the end of that period. Oxford Economics’ current forecast is for it to be 1 per cent’, say Hampton and Buckle.

‘The trade-off between borrowing costs and income rises will determine the medium term outlook for house prices, once the initial crisis has passed’.

But at least the market is moving again. And ‘short term activity will be supported by a degree of pent up demand and some buyers may now have a greater inclination to move following lockdown. There is now particular emphasis on moving for more space, and to the countryside.

It is also possible that the new homes market may recover faster, due to it being easier to perform virtual and socially distanced viewings in new build homes.

‘While this bodes well for an increase in activity, it is starting from the exceptionally low levels observed during lockdown. Data from the main property search portals suggests that sales agreed and new listings were at around 10 to 20 per cent of the levels seen immediately before the lockdown, although buyer browsing levels have been higher’.

Low activity levels are also reflected in mortgage lending data. New mortgage approvals fell to their lowest level in March since early 2013. The drop was particularly sharp as it followed an exceptionally strong February, which had been the strongest month since early 2014, said Savills.

Source: Residential Landlord