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Mortgages and coronavirus: UK property market grinds to a halt amid lockdown

Coronavirus has ground the UK property market to a halt, with most mortgage lenders suspending most new mortgages, and some even suspending remortgaging. Property transactions are becoming increasingly difficult with every link in the property selling chain affected, from estate agent appointments to property evaluations and viewings.

Property sales that are at contract exchange stage are legally allowed to go ahead to the completion stage, although everyone is being strongly advised to delay completion for up to three months. Channel Four’s Kirstie Allsopp advised in an interview with the BBC that ‘what is legal and what is compassionate’ are not necessarily the same thing under the circumstances, and urged everyone who is able to do so to speak to their seller and conveyancer and delay the move.

Where does that leave prospective home owners who were hoping to find the home of their dreams this year? All may not be lost: the first thing to do is to speak to your prospective lender or intermediary as soon as possible to gauge what options currently remain open. Lloyds and Barclays have both said that they still will lend to buyers with a deposit of 40 per cent or larger, and it’s possible other lenders will follow suit.

Some evaluations and viewings may be possible to carry out via video, so phone the estate agent that’s advertising the property to see what’s currently possible. Expect everything to take much, much longer, but remember: the restrictions are temporary and even if you’re not able to go ahead with a house purchase right now, it’s still worth speaking to the estate agent about the property market in your chosen area, and to a mortgage specialist.


Source: Real Homes

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Housing market is ‘suspended’ as banks tell Government valuations are ‘impossible’

Banks are calling for the whole housing market to be suspended during the crisis and this morning The Times front page lead story said it had already happened.

It splashes with the headline: “Virus prompts No 10 to suspend housing market”.

The Times headline and story comes after mounting pressure from lenders to put the market on ice. The Times today concludes that the housing market is suspended anyway, with viewings cancelled, instructions to people to delay moving, and mortgage finance drying up.

The Daily Mail’s front page splash headline is “Don’t move home”. Its story says that the housing market is “all but frozen”, calling it a shut-down, and says banks have been lobbying for a full freeze on the property market.

Today’s Telegraph business section carries the splash: “Government suspends the housing market”. The paper says that the housing market “was halted last night by the Government after financial institutions said they could no longer operate properly”.

Today on BBC’s Radio 4 broadcast a similar report this morning, and the Financial Times is covering lenders’ concerns.

But an agent last night warned against banks trying to undermine the market rather than support it, and called on the Government to ignore lenders’ demands.

Banks pressing to freeze the market have expressed concern to ministers about the impact of the pandemic on valuations.

They have also expressed concern about giving credit when the economy is in freefall.

Lenders have told ministers that it has become impossible to survey properties.

UK Finance, the trade body for lenders, has written to its members saying it is seeking urgent clarification over the future of the market, “particularly as physical property valuations are no longer possible”.

One property lawyer, Laura Conduit at Farrers, told the Financial Times that banks will have to decide whether they can rely on valuations using videos of properties.

She said: “We haven’t got a clue what the value of anything is.”

Agent James White, of Yorkshire agent Belong, told EYE last night: “Time and time again, whenever there is a wobble in the property market, the banks can be relied on to undermine it.

“This time around, the market needs the full support of the banking system in order to avoid a collapse in confidence and house prices.

“If they implement a complete stop, who knows what will happen to house prices and repossession numbers?”

He added: “Given that the underlying fundamentals of low interest rates, steady demand and excellent employment levels created stability before the coronavirus pandemic, surely it is in everyone’s interest not to add to the woes of the economy and property market.”

Some lenders, including Lloyds and Barclays, have pulled many of their products, and some will only lend to borrowers with deposits of at least 40%.

Lenders have also said that their call centres are clogged with anxious home owners requesting mortgage holidays.

All told, tens of thousands of borrowers are said to be looking for payment breaks, but some are said to be pushing for breaks that they do not really need

Yesterday, Nationwide launched a dedicated coronavirus support page in order to free up phone lines and reduce waiting lines for customers including vulnerable people genuinely needing a payment break.

One broker, Mark Harris, chief executive of SPF Private Clients, said: “Lenders are throwing all their resources into dealing with payment holiday requests.

“But in the same way that people are stockpiling food they don’t need, there are selfish borrowers who are asking for payment holidays when they don’t need them.

“This is blocking the phone lines for those who do. Borrowers should ask themselves: can I pay the mortgage this month? If the answer is ‘yes’, then keep off the phone to your lender and let those who do need a payment holiday get through.”

He added: “Borrowers may be worried that there is a funding crisis. There isn’t – the banks are awash with liquidity.”

However, he said that not all banks are set up for staff to work from home, and that call centres are operating on skeleton resources.


Source: Property Industry Eye

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Housing market may see spike in overseas buyers ahead of stamp duty surcharge

From April 1 2021, the Government will introduce a 2% stamp duty surcharge for non-UK residents purchasing homes in England and Northern Ireland.

A stamp duty surcharge for non-UK residents is set to come into force next year – and could spark a scramble among overseas investors to buy properties before it kicks in.

From April 1 2021, the Government will introduce a 2% stamp duty surcharge for non-UK residents purchasing homes in England and Northern Ireland.

Budget documents said the move will help to control house price inflation and to support UK residents to get on to and move up the housing ladder.

The money raised from the surcharge will be used to help tackle rough sleeping.

But some experts suggested there could be some increased activity among non-UK residents looking to snap up homes before the new rules come into force.

London, in particular, tends to attract wealthy property investors from overseas.

There will likely be some increased activity among non-UK residents looking to purchase before the new rules come into force

Richard Donnell, Zoopla

Richard Donnell, director of research and insight at Zoopla, said: “The additional 2% stamp duty surcharge for non-UK resident buyers represents the latest in a long series of tax reforms, and may have a short-term impact on demand in higher-value markets once it is introduced.

“For those who are looking at a longer-term hold, the additional up-front purchase cost will diminish in significance over time.

“In the interim, however, there will likely be some increased activity among non-UK residents looking to purchase before the new rules come into force.”

Mr Donnell said dollar-denominated buyers may find that the additional stamp duty cost is partly offset by currency movements in any case, with an effective discount of more than 20% for those buying UK property now compared with the summer of 2014 purely due to movements in the pound.

Mark Hayward, chief executive, NAEA (National Association of Estate Agents) Propertymark, said the stamp duty surcharge would allow those in the UK to have a better chance at purchasing a home.

He continued: “However, overseas buyers tend to purchase properties in prime central London which are completely unaffordable to most home buyers anyway.

“Therefore, this move will not help those that need it most. Ultimately, by energising surcharges, it is likely that purchasers will factor this additional cost into any offers they make on a property so prices may be pushed down in areas where overseas buyers are purchasing.”

Rachael Griffin, a tax and financial planning expert at Quilter, said: “This represents a crowd-pleasing policy which will win over people worried that foreign house buyers are hoovering up UK property as an investment, only to leave it empty, which further exacerbates the housing crisis gripping the nation.

“While this surcharge introduction is welcomed, increasing the UK’s housing stock will have a more important impact for domestic buyers.”

But Tom Moran, a partner at law firm Charles Russell Speechlys, said: “This imposed tax burden pushes the UK out of kilter with other European countries and will adversely impact London as a leading international city.”

The Budget documents also said the Government will explore how to improve the guidance available for self-employed people applying for a mortgage.

The Government has committed to creating at least one million new homes in England by the end of this Parliament and an average of 300,000 homes a year by the mid-2020s.

It will also look at long-term reforms to the planning system.

Source: Shropshire Star

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What’s on the table for the new housing minister?

A new housing minister has picked up the keys and it feels like Groundhog Day. Step forward Christopher Pincher, the Tory member for Tamworth. Pincher is the 10th housing minister in the last decade – a shocking statistic even by recent standards of ministerial churn.

The 50-year-old Walsall-born MP, who took up the job following Boris Johnson’s latest reshuffle, joined the Ministry of Housing, Communities & Local Government (MHCLG) from the Foreign Office, where he was minister for Europe and the Americas.

Pincher, a former deputy chief whip under Theresa May, took to Twitter to express his “delight” at the new role, although he was “sad” at leaving his job at the FCO.

It’s understandable. His role at MHCLG is as hard-nosed and domestic as is imaginable.

As parliamentarians know, housing has always occupied the hearts and minds of the British public. But it has become a lightning rod for more deep-rooted problems, summed up in one word: inequality. And this is never more apparent than in the UK’s dysfunctional housing market. The housing crisis did not permeate the general election campaign as much as expected – mainly due to Brexit – but it is never far from the headlines.

So what is piling up in Pincher’s inbox?

After Theresa May’s swerve to the left on housing, the Conservatives have returned to a more recognisable focus on home ownership.

Last month MHCLG unveiled plans for a scheme dubbed ‘First Homes’, which will offer some first-time buyers discounts of 30%. The scheme has already proved controversial, however, as critics argue it will hamper the supply of affordable homes. Other prospective house buyers have also been dangled a carrot with a pledge to encourage a “new market for long-term fixed-rate mortgages”.

Social housing tenants are too being promised a chance to experience a taste of home ownership. The Conservative manifesto vowed to extend a voluntary Right to Buy scheme for housing association residents, and a shared ownership Right to Buy scheme for social housing tenants is also promised.

It’s not all about home ownership though. Renters have been promised a “better deal” through a yet-to-be-tabled Renters Reform Bill. To the annoyance of landlord groups, the Conservative manifesto retained a commitment to end so-called ‘no-fault evictions’. This means landlords will no longer be able to evict tenants without a reason when their tenancy ends. The Bill is also expected to include the concept of a ‘lifetime deposit’, designed to make it easier for tenants to move more freely.

The fact remains, however, that the UK suffers from a severe housing shortage. Prior to the general election, the Government vowed to build 300,000 homes a year. But this has been dialled down to the more muted ambition of “at least” a million new homes over the current Parliament.

Question marks also remain over what type of housing this will be. While Labour pledged to be building at least 150,000 council and social homes annually within five years, the Conservatives failed to give a breakdown. Their manifesto committed to delivering hundreds of thousands of “affordable homes”, which remains a woolly concept. Boris Johnson has vowed to publish a social housing white paper which will “empower tenants and support the continued supply of social homes” but what this will involve is unclear.

Either way, the Government wants new homes to be built to more exacting environmental standards to tackle the climate emergency. In his first announcement as housing minister, Pincher launched a competition for designers with ideas around developing low-carbon homes. This move follows proposals for a ‘Future Home Standard’, which means from 2025 all new homes must have 80% fewer carbon emissions. A ‘social housing decarbonisation fund’ was also promised in the Conservatives’ manifesto.

But it does not stop there. Ministers believe that part of the problem with new-build housing is aesthetics. Bleeding through ministerial speeches has been the concept of ‘building beautiful’. It culminated in a report, overseen by the late Roger Scruton, which has inspired MHCLG to launch a ‘national model design code’.

Bear in mind however that the vast majority of new housing is built by the UK’s giant PLC housebuilders. A string of horror stories involving substandard new-build homes has resulted in the Government launching a New Homes Ombudsman, to protect homebuyers faced with “shoddy building work”. A ban on new-build homes being sold on a leasehold basis in future is also still planned, with critics referring to the system as “fleecehold”.

The other issue is where and how new homes should be built. The Tory manifesto vowed to “protect and enhance” Britain’s precious green belt. Instead, ministers will prioritise building on brownfield sites. This idea has caught the eye of companies building homes in factories, using so-called modern methods of construction (MMC). The Government is backing this fledgling idea and working with a number of offsite manufacturers to speed up the housebuilding process.

Meanwhile a white paper has been promised on reforms to the planning system to “ensure it works better for the public and small builders”, MHCLG has said.

It’s a head-spinning list. And this is without mentioning homelessness, which falls under the remit of another MHCLG junior minister, Luke Hall.

One issue will inevitably overshadow Pincher’s term in office – the ongoing response to the cladding crisis in the wake of the Grenfell Tower fire.

The Government has committed to a series of reforms around building safety. But for some, more immediate action is needed. Hundreds of residents of high-rise blocks are dealing with crippling bills to cover 24-hour fire safety surveillances and the cost of removing and fixing dangerous cladding. While the Government is providing money to fix Grenfell-style ACM cladding, it has failed to act on other types of dangerous cladding, amid a legal minefield for property freeholders and leaseholders. And with the second phase of the Grenfell Tower public inquiry having resumed this month, scheduled to run into next year, it is destined to stay high up the agenda.

Robert Jenrick, the housing secretary, has taken ownership of the Grenfell response. Whether Pincher will have vacated MHCLG and dropped off the keys by the time the inquiry concludes is anybody’s guess.

By James Wilmore

Source: Politics Home

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Property industry worried about coronavirus

Industry figures are worried public concerns about coronavirus will have an adverse effect on business, after the number of reported cases reached 115 yesterday.

The market has had a busy start to the year, but there are fears the virus will put the breaks on activity.

Jonathan Sealey, Hope Capital’s chief executive, said: “Over the past few months it has felt as though we were experiencing a real sea change in the market as the political arena became less of a focus.

“We have definitely seen the busiest start to any year so far as people started looking forward to a more stable environment.

“Unfortunately, that may well be up in the air again as nervousness surrounding the COVID-19 outbreak takes hold.”

And Richard Pike, Phoebus Software sales and marketing director, said: “We’ve started the year well but there is one black cloud that is hard to ignore, and it is one that is already having an effect on the world’s economy.

“How the coronavirus effect will translate down the line into the housing market is anyone’s guess, but it is unlikely to have no effect at all.”

One commentator speculated whether the virus fears could push the regulator towards loosening mortgage affordability rules.

Miles Robinson, head of mortgages at online mortgage broker Trussle, said: “While we’re yet to see the impact of uncertainty linked to coronavirus on the housing market, if lending continues to slow – the time might be coming for the regulator to consider a gentle easing of restrictions around affordability.”

Source: Property Wire

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Can the UK escape its housing crisis?

Last year research from the National Housing Federation found that 8.4 million people in England were living in an “unaffordable, insecure or unsuitable home”, prompting the government to say housing would be a “priority”.

Low supply, high prices and almost nonexistent real terms wage growth has made it even harder to get a foot on the property ladder.

What can be done to fix Britain’s housing crisis and what impact could that have on people on various stages on (or off) the property ladder?

The Claim

The government’s new policy to fix the housing crisis is called First Homes, which they say will have “life changing” consequences for people trying to get onto the property ladder.

First Homes will cut 30 per cent off the price of certain homes for first-time buyers, with the benefit also extending to military veterans and people coming to fill important jobs in the local area such as nurses, teachers or police personnel.

If the buyer decides to sell up and move on then they would have to sell their house with the same discount to a local resident to avoid people buying the discounted properties and quickly selling them on for a significant profit.

The government expects “tens of thousands” of people will be able to take advantage of the policy to buy a home in their local area.

The policy is going through consultation so it will be some time before the finished article can come into effect but early details suggest councils will be able to apply a “local connection” test to prospective buyers to determine whether they are eligible for the discounted properties or not.

If the government is really serious about solving the housing crisis then it also needs to build far more houses than it has done over the past decade, with affordable housing being a significant part of the new housing stock.

The UK is going through a housing crisis but schemes like First Homes could help people afford homes in their local area and building more houses will mean people actually have more places to live.

The Counter Claim

However, research from Shelter found that even with the First Homes policy 96 per cent of average earners would still not be able to afford a house.

Many people who want to get a home of their own are private renters, almost two thirds of whom have no savings and cannot afford a deposit on a property that would already be very expensive.

There are also warnings that the prospective policy would put social housing at risk and make the situation even worse.

First Homes requires housing developers to cover the costs of cutting prices for certain properties by 30 per cent, but developers already have a planning system they use with councils to ensure a certain amount of affordable housing is built and infrastructure is constructed around it, called Section 106.

Between 40 and 80 per cent of the Section 106 money is expected to go towards First Homes if it launches, meaning there’s less available for building affordable homes.

If there are fewer affordable homes being built and the houses available under the First Homes policy are still out of reach to 96 per cent of average earners then the people in the most need of secure housing will be harmed.

The prospective policy could help those who earn above the average wage or have enough savings to afford a deposit, but paying for it from the same pot of money which goes towards building affordable housing could make things worse for those with below average incomes and no savings.

The Facts

Affordable housing includes social homes, shared ownership schemes and affordable rent properties. Six out of 10 social homes are built using Section 106 money.

The average price of a newly built house in England is £314,000, meaning First Homes would knock £94,000 off the initial price.

The National Housing Federation report into the 8.4 million people in England living in an “unaffordable, insecure or unsuitable home” found that 3.6 million people were living in an overcrowded home while 2.5 million couldn’t afford their current rate of rent or mortgage.

A further 2.5 million people are living in “hidden households” they can’t afford to leave including house shares, living with parents or living with an ex-partner. 1.7 million are living in “unsuitable” homes, which includes the elderly in homes they can’t move around in and families in homes with no outside space.

Some 1.4 million are in poor quality homes which aren’t in a good condition for human habitation and 400,000 people are either homeless or at risk of becoming homeless as they sofa surf, sleep rough or live in temporary accommodation.

The government is now on housing minister number 10 in as many years, with Christopher Pincher replacing Esther McVey in the reshuffle last week. Long-term government plans are being hampered by the regular turnover of ministers.

A report from Shelter last year found that England would need three million new homes built over the next 20 years, while the Scottish and Welsh governments are committing more money to building new affordable houses.

One in 10 new homes built since 2013 have been constructed on land with a high risk of flooding, with over 84,000 new homes considered to be at risk from extreme weather the UK is currently experiencing with Storm Dennis.

A shortage of housing stock and a low number of new houses being built over a long period of time has contributed to the UK’s housing crisis and it will take a long time to compensate for years of issues.

By Joe Harker

Source: Kent Live

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ONS: Average UK house prices up 2.2%

The average UK house price rose by 2.2% to £235,000 in the year to December 2019, according to data collected by ONS.

Average house prices in England increased by 2.2% to £252,000.

Wales and Scotland both also recorded a 2.2% rise year-on-year, with average house prices increasing to £166,000 and £152,000 respectively.

Meanwhile, Northern Ireland noted a 2.5% uplift, boosting average house prices to £140,000.

All regions saw a rise in average property prices in the year to December 2019; the South East of England recorded the lowest average increase, up 1.2%.

Average property prices in Yorkshire and Humber noted the greatest rise over the selected timeframe, growing by 3.9%.

Franz Doerr, founder and chief executive of flatfair, said: “The continued growth of rental prices is preventing renters from accessing the homes that they want.

“As the ‘Boris bounce’ has driven up house prices, we are seeing a continuing trend of tenants opting to rent for longer than ever before.

“However, rising rents, and the need to scrape together a large lump-sum deposit when moving are huge barriers that need addressing.

“With a growing number of landlords leaving the sector leading to a reduction in the available housing stock, action needs to be taken to make the rental market work better for tenants and landlords alike.”

Hedi Zidan, founder and chief executive of Nestify, added: “Today’s figures demonstrate that the UK rental market is resilient, and that demand remains strong.

“Our landlords are increasingly meeting tenants who are seeking a range of different accommodation solutions, durations and tenancy options.

“This means that in order to maximise the current UK housing stock, it’s vital landlords have access to a range of short, medium and long-term rental options.

“These figures demonstrate how integral professional landlords are to UK housing and it is our belief that they should be supported to provide the range of tenancies that the UK rental population so clearly crave.

Marc von Grundherr, director of lettings and sales agent Benham and Reeves, stated: “Much has been made of the ‘Boris Bounce’ and there is no doubting that it spurred a huge uplift in market activity.

“While today’s figures display a slightly more muted market landscape in terms of actual sales, it is important to remember that even the most enthusiastic of buyers and sellers would struggle to get a transaction completed in the few short weeks between the election result and the end of the year.

“All in all a resilient show from the UK property market, particularly given the backdrop of political turbulence that has been prevalent for much of the last 12 months, and a foundation that should now see a strong performance for the year ahead following on from December’s election results.”

Gráinne Gilmore, head of research at Zoopla, added: “The certainty provided by the definitive result of the General Election was a shot in the arm for the UK housing market.

“The annual level of growth for the UK according to the ONS is the highest recorded in 2019, with all regions seeing positive growth for the first time in nearly two years.

“The pick up in annual price growth reflects the trends seen in Zoopla’s UK Cities House Price Index, which recorded the highest level of house price inflation in two years for December 2019.

“Zoopla data shows an increase in buyer demand since late last year, a trend that is set to continue amid real wage growth and low interest rates.

“However, in some areas there is still a shortage of homes coming to market to meet this demand.

“The upcoming Budget is a prime opportunity for the new Chancellor to address some of the factors affecting the housing market at present.

“Any review of stamp duty charges to help the movement of homeowners up and down the property ladder would be welcome, but the extent and nature of any reform, which must be balanced against political exigencies, remains to be seen.”

By Jake Carter

Source: Mortgage Introducer

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House prices increase across whole of UK for first time in nearly two years

House prices increased annually across the UK’s nations and regions in December, for the first time in nearly two years, official figures show.

The average UK house price was £235,000 in December, £5,000 higher than December 2018, figures released by the Office for National Statistics (ONS) and Land Registry show.

For the first time since February 2018, all regions saw positive annual growth.

ONS head of inflation Mike Hardie said: “Annual house prices grew across all regions of the UK, the first time this has happened in nearly two years, with London seeing its strongest growth since October 2017.”

Average house prices increased over the year in England to £252,000 (a 2.2% rise), Wales to £166,000 (2.2%), Scotland to £152,000 (2.2%) and Northern Ireland to £140,000 (2.5%).

In England, growth ranged from 1.2% in the South East to 3.9% in Yorkshire and the Humber.

London prices increased by 2.3%, accelerating from 0.4% in November and a 1.2% fall in the year to October.

The report said the sharp rise in London may reflect a shift in the type of properties being sold, with more high value homes potentially changing hands as a result of wider considerations relating to Brexit and other financial issues.

Sales of very high value properties in London can have a knock-on effect for average prices across the capital.

Purchases of very high value properties may be particularly affected by considerations such as uncertainty, including around the effects of the UK’s withdrawal from the EU, expectations of actual or potential tax changes, and other factors, the report said.

In December, average prices were £574,800 in inner London and £429,500 in outer London.

Lawrence Bowles, senior research analyst at Savills, said: “This index measures values at the time a sale completes.

“The process of buying a home takes time, and generally the deal is agreed a month or more before the completion date.

“That means most of the transactions covered in these December figures were agreed before the general election.

“We’ll have to wait for the January figures to see if there’s real evidence of the post-election bounce in values to match the undoubted improvement in buyer sentiment across the market.”

He continued: “All eyes will be watching the London numbers, where house prices are right up against the limits of affordability and where sentiment has been particularly impacted by political and economic uncertainty.”

Howard Archer, chief economic adviser at EY ITEM Club, said housing market activity could get a further lift if the Government introduces measures aimed at it in the forthcoming Budget.

He said: “However, the economy still looks set for a pretty challenging 2020 and there will still be appreciable uncertainties, including on the UK-EU relationship front – so that the upside for house prices in 2020 is likely to be limited.”

David Westgate, chief executive at Andrews Property Group, said: “For all regions to have delivered positive annual growth for the first time in nearly two years highlights just how resilient the UK property market has been against a backdrop of extreme political uncertainty.

“There’s a definite sense that the property market has turned a corner and is shaking off its post-EU referendum anxieties.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “These figures reflect what was happening in the months leading up to the (general election) so only show a more solid resilience in activity in what was still quite a turbulent period.”

By Vicky Shaw

Source: Yahoo Finance UK

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London house prices rebound with 2.3 per cent growth after election

London house prices grew at their fastest rate in 15 months in December following Boris Johnson’s election win, official figures showed today, as UK house prices also rose.

Homes in the capital enjoyed a 2.3 per cent rise to £484,000 after a 2019 full of falls, according to the Office for National Statistics (ONS).

The south east also posted growth of 1.2 per cent, the UK’s lowest rate of growth.

London house prices jump

“London has languished at the depths of the house price rankings for months on end but has… shifted through the standings considerably,” said Marc von Grundherr, director of lettings at Benham and Reeves estate agent.

“If ever there were a sign that the tides are turning, this is it, and it won’t be long before London starts to lead from the front once again.”

Jamie Durham, an economist at PwC, hailed London’s post-election jump after the capital’s rate of growth sank compared to the north’s.

“Price growth in London in particular has rebounded,” he said. “This may suggest an end to North-South divide in house price growth that has been evident over the last couple of years.

“Price growth rates have been trending upwards since the middle of 2019. It appears that greater certainty in the economy, particularly related to the Brexit agreement and General Election result, has unlocked pent-up demand and helped push up prices.

“Assuming everything goes smoothly during the transition period, and the economic environment remains resilient, we expect continued positive house price growth in 2020.”

All regions climb in house price bounce

UK house prices climbed 2.2 per cent on an annual basis in December to beat November 2019’s 1.7 per cent growth rate. But they only rose 0.3 per cent on a month by month basis.

The average UK house price stood at £252,000 in December 2019, according to the ONS.

It is the first month since February 2018 that all UK regions posted a growth in house prices.

Yorkshire and the Humber experienced the highest rate of growth at 3.9 per cent. The east Midlands enjoyed growth of 2.8 per cent, and the West Midlands rose 1.4 per cent.

“In particular London has returned to strong growth,” said Yopa property analyst Mike Scott. He hailed the 2.3 per cent rise as London’s best since September 2017.

“London’s average price of £482,842 is also a new record, beating the previous high of £479,942 from February 2018,” he added.

“We anticipate that it will continue to strengthen over the next few months as the renewed market confidence following the decisive election result feeds through into completed sales.”

‘Normal service resumed’

“Normal service has most definitely been resumed,” added Jonathan Hopper, managing director Garrington Property Finders.

“Such a resounding return to normality at the end of 2019 shows just how far the housing market has come since the dark days of a year ago.

“London, for so long the fallen idol of the national property landscape, has powered back not just to growth, but to become the fourth best performing English region in 2019.

“Both buyers and sellers appear to have a renewed sense of clarity and purpose, and in many areas prices are playing catch up.”

‘Nationwide revival’ underway

Sam Mitchell, CEO at online estate agent Housesimple, added that today’s figures amount to a “nationwide revival”.

“This positive sentiment has continued into 2020,” Mitchell said. “Buyers have flocked to the property market with more gusto thanks to the so-called Boris boom and greater clarity on Brexit.

“The months of March to June are typically when we see a real boost in buyer activity, though this spring awakening appears to be starting a little earlier this year.”

UK house prices rise at end of 2019

UK house prices have bounced back since the turn of the year after a subdued 2019.

Prime Minister Boris Johnson’s General Election victory has been credited as a major driver behind a 4.1 per cent rise in house prices recorded by Halifax for January.

That increase led accounts EY to raise their forecast for housing market growth in 2020 from two per cent to 2.8 per cent.

But major factors like the Brexit trade deal talks, which must conclude by the end of 2020, are still putting downward pressure on UK house prices.

And Howard Archer, chief economic adviser at EY, today sounded a note of caution on 2020 house price growth.

“However, the economy still looks set for a pretty challenging 2020 and there will still be appreciable uncertainties,” he said.

“The upside for house prices in 2020 is likely to be limited. Additionally while the fundamentals for consumers should still be pretty decent in 2020, we suspect that earnings growth will be below the peak levels seen around mid-2019 and that employment growth will be slower overall.”

Today’s UK house prices data arrives after Rightmove predicted a spring bounce that could set new house price records from March.

Rightmove director and housing market analyst Miles Shipside said: “There is a boom in buyer activity outstripping the rise in the number of new sellers, which we expect to lead to a series of new price records starting next month.”

By Joe Curtis

Source: City AM

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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