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Mixed Year Ahead for UK Property

Market Update Mixed Year Ahead for UK Property 2019 OUTLOOK: Brexit uncertainty threatens returns from UK commercial and residential property. Are investors right to be concerned?

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As we count down the clock to 29 March, the date the UK officially leaves the European Union, Brexit uncertainty continues to cloud the outlook for UK investment assets. This is particularly so in the property market.

Ever since the Brexit vote 30 months ago we have heard warnings companies – particularly those in the financial sector – would abandon their London headquarters in favour of an EU-based city such as Frankfurt or Paris.

But it’s not only the commercial property market that is suffering, the capital’s residential market has slumped, too. According to investment bank UBS, 39% of all residential properties on the market have been reduced in price, nearly double the number from early-2016, before the vote to leave the EU.

The level of discount, is also increasing and the average days a property spends on the market is at a high of 128, up from an average of 77 days pre-referendum.

Meanwhile, research by estate agent Hamptons International shows overseas landlords are shunning the UK rental market. The share of new lettings accounted for by landlords based outside the UK has more than halved in eight years, falling from 14.4% in 2010 to 5.8% in the first 11 months of 2018.

In London, the number of houses rented by an overseas landlord has fallen from 26% in 2010 to 10.5% as at 30 November 2018.
Aneisha Beveridge, head of research at Hamptons International, said: “International investors are quite savvy about what’s going on in the UK housing market and their future expectations of price growth are weaker than they have been for some time.”

Brexit Uncertainty Remains

The immediate aftermath of the referendum, a number of open-end UK property funds closed temporarily, as investors rushed to exit and asset managers were unable to fulfil redemptions. In the months following, many of the funds in question sold buildings in order to build up a cash buffer against any future shocks.

“Whether we have a soft Brexit, hard Brexit or no deal Brexit will play a big role in returns for 2019,” says Chris Godding, chief investment officer at Tilney. Godding expects a mid-single digit return from UK property in 2019.

In fact, despite the uncertainty, property funds did relatively well in 2018. The Investment Association UK Direct Property sector was the best performing over the 12 months, with the average fund returning 2.86%.

As the deadline approaches, fund managers are sanguine about the impact of Brexit on their markets, or at least, want to give the impression they are.
“Brexit is having much less of an impact than the pundits predicted,” asserts Richard Shepherd-Cross, manager of Custodian REIT ( CREI ).
“There is no question that the uncertainty of the outcome of Brexit negotiations is creating some disquiet, but the day-to-day pressures of a normal property cycle are still having a much greater impact on the market.”

Calum Bruce, investment manager at Ediston Property ( EPIC ), believes the uncertain market will throw up opportunities to exploit, as investors adopt different stances on key issues.

The one fear for investors in open-end funds, as Ben Yearsley, director at Shore Financial Planning, notes, is they will run into liquidity problems once again if values fall sharply on a Brexit shock. But Adrian Lowcock, head of personal investing at Willis Owen, thinks they have learnt the lessons of two and a half years ago and gating is less likely to re-occur .

Jason Baggaley, manager of Standard Life Property Income Trust ( SLI ), agrees and cautions about panic selling. “We went to an 80% discount the day after Brexit,” he reflects. “It wasn’t a great day to sell, particularly as two days later we were back trading at a premium.”

Retail Remains Challenging

There are some clear challenges within UK property markets, with the change in consumer buying habits, from trips to the shops to online retailing, the obvious culprit. As a result, retail is not the place to be. It was, unsurprisingly, the worst-performing sub-sector in 2018, returning just 1.5%.
Baggaley says he bought retail units around four years ago before selling out swiftly two years later when it became “quite obvious which way it was going”.

Alex Ross, senior investment manager at Premier Asset Management, expects retailers to continue to shrink their physical estates and thinks we’ll see “some material write-downs in retail property valuations in the UK”. That said, the convenience retail segment could limit this impact somewhat.
Another sector that is seeing changes to rival retail are offices. Setting aside the Brexit uncertainty, which is likely to affect Central London rather than regional markets, the influence of US start-up WeWork is forcing building owners to re-think their strategies.

Companies are offering employees smaller desks, anticipating them spending less time sitting at them due to a growing will to work from home and a wish to sporadically work from break-out areas around the office.

More modern office buildings are also now likely to contain coffee shops, bars, showers and bicycle parks. “I’ve just put a yoga studio into one of them for a tenant,” says Baggaley.

But the Edinburgh-based manager says he’s steering clear of Central London offices, owning just one small building. Godding shares his worries here, and thinks we’ll see a softening in both office values and rental yields in the capital. In contrast, lower levels of construction have kept supply tight and vacancy rates below the 20-year average elsewhere in the country.

Following on from this, Baggaley says there’s more demand now for housing close to these offices. “Commuting is no longer favoured. If you’re a millennial, you want to be able to fall out of bed at about 10am and still be at the office on time.” Industrial Sector’s Stellar Growth Set To Slow?
The current darling of the property market is the industrial sector, which was the strongest-performing sub-sector, up around 16%. It’s the one area that’s benefitting from the decline of bricks and mortar retail, as online sellers look to build warehouses and distribution facilities.

Everyone loves industrial today, explains Baggaley. But, as any good contrarian manager will tell you, that’s never a good thing if you aren’t in the sector already. Aviva says industrial is well place, but current rates of rental growth “appear unsustainable”.

Baggaley agrees: “Pricing has got fairly eye-watering for good-quality industrial. It’s a great thing to own, but maybe not a good thing to be buying because you’re paying away your growth up front.”

Elsewhere, there are plenty of more esoteric areas in which investors can take advantage. Andrew Cowley, managing partner of Impact Health Partners, which managers Impact Healthcare REIT ( IHR ), says his trust’s space has good demand.

The number of people aged over 85 in the UK is forecast to double by 2040, he says, with around 15% of that age range in 2018 requiring the kind of care that can only be provided in a residential care home or hospital, where his fund invests.

Rogier Quirijns, portfolio manager at Cohen & Steers, agrees and says he’s bullish on retirement housing and healthcare properties, liking GP surgeries in particular.

“There is limited tenancy risk coupled with sustainable yields because the assets are funded by the UK government and demand is secular,” he explains. “At the same time, the structure of the lease contracts typically provides inflation protection.”

Where To Invest For Property Gains?
A key consideration for investors is whether to plump for an open- or closed-end fund. The illiquid nature of the asset class certainly lends itself better to the latter. The Financial Conduct Authority is currently reviewing its rules on open-end funds investing in illiquid assets.

While Lowcock, as previously mentioned, thinks suspension of open-end funds this March is unlikely, there is a risk it could happen again. He says: “Investors should think seriously about their exposure as they shouldn’t be investing in property if they might sell under a short-term issue.”

Baggaley says there’s no right or wrong, with some investors preferring the safety net of being able to cash out whenever they like. There are positives to the closed-end structure, though, he notes.

“The main one is that all I need to worry about really is shareholders’ best interests. Every decision I make is dictated towards what I think will give me the best return to meet the objectives of the company for shareholders, as opposed to being dictated in my strategy by cash flow.”

For those looking to open-end funds, Ryan Hughes, head of active portfolios at AJ Bell, suggests looking at Kames Property Income , which yields a healthy 5.2%. It was one of the few to remain open in 2016 and has delivered annualised returns of 4.9% over the past three years, he says.

Closed-end fund investors may wish to consider the Silver Rated TR Property Investment Trust (TRY) . Morningstar analyst David Holder says: ”
TR Property remains one of our highest-conviction ideas for active management within the Pan-European listed real estate sector. The management team gives significant cause for confidence.”

Source: Gooruf

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Predictions for the UK property market in 2019

We predict that house price growth will stagnate in 2019 due to property market uncertainty and the ceiling of affordability being reached in much of the South. The outcome of Brexit could have the most significant impact on prices, with a disorderly ‘no-deal’ scenario likely leading to a fall in prices. However we expect a rise, albeit at a subdued rate, of around 1% should the government form a reasonable exit deal with the EU.

Prices in London and the South East are likely to fall regardless of Brexit as they reach the limits of affordability. Lenders have no further capacity to stretch loan-to-income ratios, with regulation and prices having raced far ahead of income growth. However we expect many areas outside of here to experience growth should the Brexit negotiations reach a reasonable outcome.

The effect of Brexit

Since the vote on 23rd June 2016, the uncertainty surrounding Brexit has made market sentiment quite fickle. The consequence of this is a slowing in house price growth, with the future state of the economy and housing market becoming difficult to predict.

Homeowners in areas where prices are already stagnating or falling have an incentive to wait and see rather than commit now.

The critical point will come when we agree (or fail to agree) an exit deal with the EU. The market could see a recovery if the government can pull off a sensible deal.

However the outcome of a ‘no-deal’ scenario is likely to be a fall in house prices. The Bank of England’s governor predicts that in a worst case scenario, prices could fall as much as 33% over three years. We predict that a fall in prices in the wake of a ‘no-deal’ Brexit will be far less dramatic. The scarcity of supply to the market and limited choice for buyers will prop prices up and decrease likelihood of a crash.

Mortgage rates

We expect interest rates to rise, albeit at a modest rate and to a limited extent. However the effect of a ‘no-deal’ Brexit on interest rates is difficult to predict – in this scenario a devaluation of the pound could force the Bank of England to increase rates to counter inflation.

First-time buyers

Whilst the near future of the property market remains uncertain, we believe it is still a good time to be a first-time buyer. First-time buyers have been given a stamp-duty break from the government, with an effective rate of 0% on the first £300,000 of a purchase. Mortgage rates also remain low, and those wanting some shelter from potential interest rate rises in the near term are being offered very competitive rates on five-year mortgage products.

However with Brexit in the background and uncertainty surrounding the economy and housing market, it would be prudent to plan for a scenario where prices fall and consider job security before buying a property.

Source: Mortgage Introducer

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2019 ‘may be year of improving not moving’ for housing market

2019 could be the year of improving rather than moving for the housing market as various obstacles prompt home owners to stay put, experts predict.

With the fog of Brexit uncertainty still hanging over the market – and other issues such as affordability and a lack of choice for buyers – some experts believe house price growth will take a pause in 2019.

A North-South divide may also continue to open up, with house price growth in previously “booming” parts of the South proving weaker than growth further north where affordability is less stretched, according to forecasts.

Fionnuala Earley, head of market insight at SellMyHome.co.uk, expects to see a 1% dip in house prices across the UK in 2019 followed by a 1% increase in 2020 – with stronger growth of 2.5% in 2021 and 3.5% in 2022.

She said: “Looking ahead, we should expect only very modest house price growth on a national scale, but with weaker conditions in London, the East and the South.

“Housing market activity will remain broadly flat compared with recent years as uncertainty stymies decision-making and transactions costs continue to hinder movement.

“This combination has tilted the balance in favour of improving rather than moving as the choice of property to buy is limited.”

The Royal Institution of Chartered Surveyors (Rics) expects house prices to come to a standstill by mid-2019.

Rics economy Tarrant Parsons said: “Demand has tailed off over recent months, with Brexit uncertainty causing greater hesitancy as the withdrawal deadline draws closer.

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

Meanwhile, property website Rightmove predicts house-sellers’ asking prices will be unchanged at 0% across 2019.

Underlying the flat growth across the UK generally, Rightmove expects to see asking prices falling by around 2% around London’s commuter belt and decreasing by around 1% in Greater London itself.

Heading further north, where affordability is less stretched, asking prices could increase by around 2% to 4%, Rightmove predicts.

Director Miles Shipside said: “Since the property market’s recovery from the 2008 financial crisis, many parts of the northern half of the UK have seen marginal or relatively modest price increases.

“We predict that these areas will continue to see price rises, though tempered by affordability constraints.

“In contrast, regions in and around the influence of London saw prices go up in a five-year period by an average of around 40%.

“Consequently, we forecast that these previously booming areas will continue to see modest downward price re-adjustments in 2019.”

Mark Hayward, chief executive, NAEA (National Association of Estate Agents) Propertymark, said: “As we look ahead to 2019, there’s a fog of uncertainty. Brexit is undoubtedly fuelling a sense of apprehension in the housing market, which in turn affects sentiment.

“However, this slowdown presents a window of opportunity for first-time buyers who will find more affordable properties, granting them greater bargaining power.

“We usually see demand spike in the first few months of the year, but the landscape will probably be very different in 2019 as buyers sit on the fence and adopt a ‘wait and see’ strategy until the Brexit deal is complete.”

According to property analysts Hometrack, London house prices still equate to around 13 times incomes typically, despite some recent price falls in the capital – meaning affordability there is still very stretched.

During 2019, Hometrack expects house prices across the UK’s major cities to rise by 2%.

However, it forecasts house prices to see falls of up to 2% next year, while in more affordable cities such as Liverpool and Glasgow prices could rise by another 5%.

Richard Donnell, insight director at Hometrack, said: “Brexit is the greatest driver of uncertainty in the near term and the prospects are for a slow start for the housing market in 2019.”

Russell Galley, managing director, Halifax, has stronger expectations for house prices than some other commentators – and believes the UK could see house price growth as high as 4% by the end of 2019.

He said that, despite current political upheaval: “We expect annual house price growth nationally to be in the range of 2% to 4% by the end of 2019.

“This is slightly stronger than 2018, but still fairly subdued by modern comparison.

“Longer term, the most important issue for the housing market remains addressing the affordability challenge for younger generations through more dynamic housebuilding.”

Source: Yahoo Finance UK

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Londoners are now snapping up property outside the capital

Londoners have bought £30bn of property in other parts of the UK over the past year as record numbers of locals leave the capital, new figures show.

The amount spent on new homes elsewhere by the capital’s residents reached a 10-year high in 2018, according to estate agents Hamptons International.

The figures suggest Londoners may be seeking better value for money or quality of life in other parts of the UK, swapping the capital’s overheated property market for cheaper areas.

London residents do not appear keen to stray too far, with the data suggesting 7 in 10 bought their next properties in the south-east and east of England.

But the number of Londoners heading to the Midlands or northern England has also gradually increased, from just one in 14 who left the capital in 2008 to one in five today.

Yahoo Finance UK previously reported how the north-west had the highest rise in property prices last year at 4.9%, followed by Yorkshire and the Humber at 4.4%.

The British cities with the fastest-growing markets in 2018 were Newport, Glasgow, Edinburgh and Manchester.

Official figures released earlier this year showed record numbers of Londoners were deserting the capital, with the exodus most pronounced among people in their 30s and 40s with children.

More than 330,000 London left the city in the year up to June 2017, with Newham in east London recording the greatest outflows of any London borough.

So many Londoners have moved to or bought second homes in regions like Cornwall and several towns on the southern coast that they are known as Down from Londoners or DFLs, with some locals resenting the impact on property prices.

The latest Hamptons International report shows the amount spent by the average London buyer outside the capital rose in 2018 to just under £399,000.

Aneisha Beveridge, head of research at Hamptons International, said: “Historically most people moving out of London have done so because of changing priorities, such as starting a family or generally wanting a slower pace of life.

“But increasingly as affordability in the capital is stretched, more households are looking beyond the confines of London to buy their first home.”

But she said the 2018 figures were probably a peak, with a slower housing market expected to push down purchases in the year ahead.

The property market has already begun to cool in London, with the latest official statistics showing prices were down 1.7% in October on a year earlier.

Homes are now cheaper in the capital than they were two years ago, with an average purchase price of £473,600.

But the city’s average prices remain incredibly high, with the average London home still costing £206,000 more than a decade ago – a steep rise of 77%.

Source: Yahoo Finance UK

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Asking prices for UK homes show biggest two-month fall in six years: Rightmove

Asking prices for properties being put up for sale in Britain have suffered their biggest fall over a two-month period since 2012, property website Rightmove said, the latest sign of a slowdown in the housing market ahead of Brexit.

Average asking prices for new sellers were down by a monthly 1.5 percent in the four weeks to Dec. 8 after a fall of 1.7 percent in the previous month, Rightmove said on Monday.

On an annual basis, asking prices across the country rose by 0.7 percent but fell in London by 1.1 percent.

Before the Brexit referendum in June 2016, asking prices as measured by Rightmove were rising by around 7 percent a year.

Rightmove director Miles Shipside said sellers typically priced properties lower before Christmas to get buyers’ attention.

“However, these falls have been larger than usual, making this the largest fall over two months for six years, showing that there are more than just seasonal forces at play,” he said.

The weakness in Britain’s housing market has appeared in other measures of house prices, something surveyors say reflects the uncertainty about the country’s exit from the European Union in March.

Rightmove said a relatively small fall in the number of sales suggested the lower prices were tempting some buyers into the market at a time of year which usually sees few transactions.

Source: City A.M.

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Lethargic, but there’s life yet in the housing market

The national housing market is running out of puff. But there are still plenty of regional bright spots.

“Lethargy is replacing energy” in the property market. These were the cheery words of a former chairman of the Royal Institution of Chartered Surveyors (Rics) in reaction to Halifax’s latest house-price index. In the three months to November, house prices were 0.3% higher than in the same three months a year earlier, with the average cost of a home now £224,578. This is down from the 1.5% annual growth recorded in October, and the lowest rate of growth since December 2012.

But while this isn’t exactly a ringing endorsement of the state of the UK housing market, it’s important to look beyond the inevitably gloomy headlines. In the 12 months to September, the parts of the UK that saw the biggest drops in house prices were both in London – in Kensington & Chelsea and Westminster, with annual drops of 9.9% and 6.3% respectively.

The areas with the strongest growth were the Forest of Dean and Burnley. In both places, house prices rose by approximately 10.5%, according to figures from estate agent Savills. They were followed closely by Stirling, with a 10% increase.

London leads the decline

With house-price growth at its lowest rate in six years, the overall market as a whole is certainly sluggish. In cities and major towns across Britain, properties are taking longer to sell, sitting on the market for 102 days, which is six days longer than in 2017, according to the Centre for Economics and Business Research.

Moreover, the average number of sales per surveyor has fallen fallen to 14.1 across a three-month period, the lowest it has been since 2009, says Savills, drawing on data from Rics. However, it’s useful to acknowledge the extent to which the wider market can be brought down by price falls in the southeast, which has been overvalued for a long time.

Of the 20 cities monitored by the Hometrack UK Cities House Price index, prices fell year-on-year by 0.4% in London and 1.1% in Cambridge. Yet prices were up 7.7% in Leicester, 7.4% in Edinburgh, and around 6% in Manchester, Birmingham, Nottingham and Liverpool.

Leave Brexit out of this

There’s also been a lot of discussion of the idea that the UK market is struggling because people looking to buy are biding their time on Brexit. Yet there’s actually “little evidence that Brexit uncertainty has led to pent-up demand in the housing market”, says consultancy Capital Economics. If it has dampened transactions, the effect has been “minor”. Since the referendum, housing transactions have averaged 100,000 per month. That’s down only a little, relative to the average of 102,000 seen over 2014 and 2015.

There is obviously a case for suggesting transactions might have gone up if we hadn’t voted to leave the EU, acknowledges Capital Economics. But “a multitude of non-Brexit related factors have been weighing on activity in recent years”.

These include higher stamp duty for second homes, lower mortgage interest tax relief, and rising interest rates driving up the cost of borrowing. “So even if a Brexit deal is struck, we see little prospect of a rise in housing transactions next year.” Now is not the ideal time to sell your London home. And the stagnant number of transactions is hardly encouraging for estate agents and surveyors. But for most of the UK, the housing market is actually holding up reasonably well.

Source: Money Week

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Pound falls to 20-month low – time for UK property investors to act?

Following the postponement of a crucial Brexit deal vote by the UK government, the pound has fallen close to its lowest value against the US dollar since April 2017 – and this creates a significant opportunity for international investors to buy UK real estate.

What’s happened?

On Monday 10th December, UK Prime Minister Theresa May cancelled a key vote in the House of Commons on the details of a Brexit deal, outlining the current terms of the country’s withdrawal from the European Union (EU).

The decision was taken after Mrs May admitted that the current deal on offer, one negotiated between her cabinet and EU leaders, “would be rejected by a significant margin” by MPs in Westminster. It means that she must now decide the best of course of action to take, with the UK scheduled to formally leave the EU on March 30th 2019.

Following this decision to postpone the vote, the pound fell to its lowest level against the US dollar for 20 months:

  • After markets closed, sterling was down almost two cents against the greenback, with the exchange rate hitting £1/$1.2562, close to its lowest level since April 2017
  • At £1/€1.059, the pound also fell 1% against the euro and reached its lowest rate since August 2018

What do international investors need to know?

Firstly, it’s important to consider the fundamental reasons for investing in real estate:

  • Long-term growth
  • A regular income from rental returns
  • Decisions based on supply and demand levels in key markets

Then, international investors looking at the UK property market should also remember:

  • Ongoing Brexit discussions does not change the fact that UK property is one of the strongest investments one can make globally
  • 340,000 new homes are needed each year until 2031 just to meet current demand
  • Demand for rental property will reach six million by 2025 – but just 100,000 purpose-built rental properties are currently in the delivery pipeline nationwide
  • Until this shortfall is addressed, property demand will remain extremely high in a sector of low supply

An immediate opportunity to buy UK property

With the pound experiencing a significant degree of volatility, it presents an unmissable opportunity for international investors to buy UK property now.

At Select Property Group, we’ve seen a number of investors in recent years use fluctuations in exchange rates to buy multiple properties, taking advantage of greater levels of affordability.

Strategically choosing to invest and enter the market now means investors give themselves the best opportunity to achieve higher returns in the long-term.

Source: Select Property

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Some Of The Best And Worst Places To Buy Property In The UK

Every investor wants to be sure they’re making the right decision with their next investment, and location plays a big part in the success of any property venture. Certain areas of the UK are more prosperous than others when it comes to the housing market, with more opportunities and potential found up North compared to in the South. This guide takes a look at some of the UK cities with the most worthwhile prospects for investors, along with details on where to avoid.


The best: Liverpool

Liverpool has come a long way since decades ago, when the city was faced with economic struggles and little hope for the future. Today, Liverpool is one of the best cities in the UK, with a reported population of around 489,541 in 2017 and the fastest growing city centre population. The appeal of Liverpool for buy-to-let investments lies heavily on the affordability of property in the city, along with attractive rental yields reaching as high as 11.79 per cent in some postcodes. Those investing in Liverpool property can expect the best value for money compared to a lot of other UK cities like London, along with a rich culture and attractions, and lots of potential for capital growth.

The worst: London

For those seeking investment opportunities in the UK that are worthwhile, profitable, and affordable, London should generally be avoided. Though London has plenty to offer in terms of tourism, attractions, business ventures and education, the property market in London is one of the least lucrative in the UK as of late. High property prices and decreasing rental costs have resulted in some low rental yields of 3.7 per cent on average when it comes to buy-to-let. Not only this, but the type of property that normally provides investors with the best returns is less in demand than in the past. London property demand has diminished in recent years, with demand for more high-end properties having decreased since the time of the Brexit vote. The most in-demand type of properties in London are now reported to be based in the more affordable neighbourhoods and boroughs of the city.

The best: Manchester

Another thriving North West city, Manchester is proving itself to be a great area for property investors to get on board with. With plenty going on when it comes to nightlife and attractions, paired with a growing business scene, it’s no surprise that more students and young professionals are heading to the city to live, work and learn.

Manchester has a population of around 99,000 students, boasting the largest single-site university in the country. Records show that more people are choosing to leave London and move to Manchester as of late, which is certainly good news for investors who want to buy property in a city with demand coming from students and young professional tenants keen to stay in a high-quality city centre apartment. Property investment companies like RW Invest offer Manchester property investments with rental yields as high as 9 per cent, in prime city centre locations perfect for professional tenants.

Source: ShoutOutUK

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Early signs of “distress” in housing market?

According to a recent report released by Moore Stephens, there has been a 58% jump in the value of mortgages written off by UK banks in the last year. This rapid rise could be an early sign of distress in the housing market, the firm has stated.

This jump in the value of residential mortgages written off by UK banks and building societies from £77m to £122m in the year ending 30 June 2018 marks the first increase in the value of write-offs since 2013-14.

In recent months, house price growth has stalled across the UK; Moore Stephens has also warned that “further interest rate rises could increase write-offs even more.” For example, house prices have fallen across two-thirds of London.

Jeremy Willmont, head of restructuring and insolvency at Moore Stephens, said: “The interest rate cycle has turned. The unfortunate collateral damage of interest rate rises is more financial pain amongst mortgage holders and more personal insolvency.”

“This year’s increase in mortgage write-offs comes after a steady downward trend in the value of mortgage write-offs over the last decade,” Moore Stephens has stated.

Shortly after the financial crisis, in 2009 UK banks were forced to write-off £984m against residential mortgages – there is of the course the concern that this could happen again.

It has been over a year since the Bank of England started to hike interest rates from its historic low of 0.25%. Now, interest rates sit at 0.75%; this rate rise has already impacted the floating-rate and tracker mortgages. They are increasing from a very low base, but they will be catching out homeowners who are already struggling with their finances, the firm has warned.

Furthermore, according to Insolvency Service data, there has been a 10% rise in the number of individuals going bankrupt in the last year. In 2017, the number totaled 96,940, but, in the year ending 30 September 2018, this had risen to 106,570.

Willmont concluded: “Increasing mortgage write-offs could suggest the economy is beginning to display signs of slowing down.

“The run of good luck that the economy has had since the Brexit vote looks like it could be coming to an end. We may see the number of write-offs rise in the coming months as a result.

“Whatever type of Brexit we end up with, concerns have been raised about the potential impact on the economy. We could see more unemployment and more security for these mortgages has held up.”

Source: Accountancy Age

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House prices rise as market shakes off Brexit uncertainty

House prices in Britain’s cities increased by 3.2% annually in October, as the ongoing Brexit political saga failed to dent market activity, according to data analysis.

The biggest value growth is in Leicester, where prices have jumped by 7.7% year-on-year, property company Hometrack found.

At the other end of the scale, values fell by 2.8% annually in Aberdeen.

In London house prices dropped by 0.4%, which is a result of “weaker market fundamentals”, with Brexit uncertainty acting as a compounding factor, Hometrack said.

Brexit impact limited so far
However, the impact of the UK’s withdrawal from the European Union (EU) has so far had a limited impact on the market, the firm’s analysis suggested.

The near-term outlook for UK city house prices is down to projections for the economy and mortgage rates, as well as households’ expectations for employment.

If the government gets the proposed withdrawal deal, and transition period, approved by parliament, the outlook for city housing markets in 2019 could mirror 2018, Hometrack predicted.

Richard Donnell, insight director at Hometrack said: “Two and a half years on from the Brexit vote, our analysis reveals a limited direct impact from Brexit uncertainty on the housing market thus far.

“Large regional cities continue to register above average house price inflation with the discount between asking and sales prices narrowing on rising sales volumes.

“In the very near term we expect market trends to continue until the outlook becomes clearer.

“Housing markets in regional cities certainly appear to be in more of a business as usual mode while the London market continues to adjust though modest price falls.

“Our lead housing indicators suggest no imminent deterioration in the outlook for prices or levels of market activity.”

Source: Your Money