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Covid ‘race for space’ has homemover numbers at a record high

Whether it was shifting to the countryside, out to the suburbs or back into the post-lockdown bustle of a city centre, removals vans have been criss-crossing the country to keep up with a boom in the number of homemovers.

Data out this morning from Halifax confirms the number of homemovers hit a record high in the first half of 2021, as a third lockdown forced Brits to reassess where and how they wanted to live.

London and the Southeast saw the most drastic “race for space” with homemover growth up more than 165 per cent each.

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The number of people moving more-than-doubled in the six months to 30 June to 265,070, despite the UK being locked down until Easter.

The total number of house movers in the last year is 100,000 more than at any other period in the last decade, as some city slickers opted for space and peace rather than shorter commuting times – a trend which has somewhat reversed and seen a steady stream of activity closer to city centres.

The buzz of activity, encouraged by Chancellor Rishi Sunak’s stamp duty holiday, pushed up prices for those who signed on the dotted line.

The average price paid jumped 11 per cent to £387,000.

London homemovers paid an average of £699,000 but this was the smallest price increase across the regions, up around five per cent.

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

Changing market dynamics also helped propel more first-home buyers onto the property ladder, with sales to this group up 75 per cent on the same period in 2020.

Separate data out today from Rightmove, shows the average sales price in London falling for the first time since January, down 0.4 per cent month-on-month in October to £647,800. Southwark, Hammersmith and Hackey saw the biggest dips.

On average around England the price of property coming to market drops by an average of 0.6 per cent, or £2,044, compared to last month, the largest monthly fall since January.

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Tim Bannister, Rightmove’s director of property data explained the price dip as potentially driven by seller who want to get a quick sale before Christmas: “Despite the soaring property market and consequent shortage of choice of homes for sale for prospective buyers, new sellers have given buyers an early Christmas present by dropping their average asking prices by 0.6 per cent.

” Sellers who come to market this close to the distractions of Christmas often have a pressing reason to sell, so naturally price more attractively to grab the attention of prospective buyers who may be otherwise occupied,” he said.

By JOSH MARTIN

Source: City AM

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What does the end of the stamp duty holiday mean for the market?

When the stamp duty holiday ended on 30 September, the property industry could finally breathe a sigh of relief. The market surged following the introduction of the tax break, combined with the release of pent-up demand during the height of the pandemic.

It successfully re-energised the market following its closure during the first national lockdown, keeping the economy moving. However, recent months saw many speculate on the future of the market following the stamp duty holiday deadline. Now it is time to consider what the end means for the industry.

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The stamp duty holiday cliff-edge

Fears of a cliff-edge started to be heard at the beginning of the year, as the original deadline approached. With thousands of prospective buyers at risk of not completing in time to benefit, the number of purchases with the potential of falling through was concerning.

These concerns fuelled calls from industry professionals to extend the planned deadline and taper it to avoid a hard stop. The thinking behind it was that it would give more purchases the chance to complete, which were already in progress.

When the extension and subsequent tapering were announced, the industry rejoiced. Although a minority of transactions did fall through, the completions prevented a knock-on effect for the rest of the market.

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

The imbalance of supply and demand

The shortage of properties coming to the market is now in a fifth consecutive month. Latest reports show current numbers are lower than pre-pandemic levels, with prospective buyers remaining motivated to make their purchases.

But, while demand remains high, property prices have also risen. The average house price has increased by almost £30,000 since June last year, one month before the introduction of the stamp duty holiday.

While purchasers persist to buy their next properties, house prices may be set to increase further. This inflation has raised concerns for the future of house prices, but the market has not yet run out of steam.

However, prospective sellers may still be encouraged to list their properties. At present, the market is less frantic from not being in the height of the pandemic, is more appealing to sellers.

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Now the stamp duty holiday has ended, what is in store for the market?

The seller’s market is predicted to remain for a few more months at least and could span into the new year. However, if conditions remain as they are, the buyer’s frenzy is likely to wane.

While this may not result in property prices going down, it will help achieve equilibrium in the market. Still, many uncertainties remain, such as the possibilities of potential future lockdowns.

Another lockdown could spark the same desire in people to move on from their current property and reignite the market. This could delay the hope of achieving balance in the market considerably, but only time will tell.

After a turbulent 18 months across the property industry, a sustained and stable market is something we are all eager to see.

By Peter Joseph

Source: Mortgage Introducer

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House price growth picks up pace in September

The pace of annual house price growth picked up in September, rising to 11.8% from 10.2% in August as buyers rushed to make the most of the stamp duty holiday, official figures show.

The average UK house price reached a record high of just under £270,000 which was £28,000 higher than last year, according to the latest index from the Office for National Statistics, which is based on data collected by the Land Registry.

Wales saw the highest annual growth, of any UK nation with average prices up 15.4% to £196,000, followed by Scotland where prices rose 12.3% t0 £180,000, England with growth of 11.5% to £288,000 and Northern Ireland where average prices gained 10.7% to reach £159,000.

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London was the region with the lowest annual growth for the tenth consecutive month, with prices increasing 2.8% year on year to £507,253.

Monthly growth across the UK was 2.5% between August and September on a non-seasonally adjusted basis, compared to 2.9% between July and August.

Mark Harris says: “Annual house price growth continued to edge upwards back in September and, as has been the case for a while, the North West led the way while London lagging behind.

“Lack of stock continues to inflate house prices, although in a less frenetic way perhaps, as buyers search for more space, both inside and out, in less urban locations.

“With inflation ticking up again, the pressure is back on the Bank of England to raise interest rates sooner rather than later.

“Mortgage pricing continues to be a mixed bag, with pricing rising for those requiring 60 to 75 per cent loan-to-values, while higher LTV borrowing costs continue to fall.

“The good news is that lenders continue to broaden policy with many now back at pre-Covid criteria, making it easier for a wider range of people to get a mortgage.”

Sundeep Patel says: “Low interest rates continue to remain the catalyst for surging demand for sought-after properties as prospective buyers rush to snap them up before the window of opportunity closes and mortgage rates rise.

“However, demand for new properties is still outstripping supply, resulting in inflated prices.

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“However, talk of The Bank of England increasing interest rates in the near future may deter some prospective buyers, causing house prices to fall. “Additionally, the holidays tend to be a quieter time in the property market, with many people getting ready to list their homes in the New Year.

“Regardless of continued economic uncertainty, there’s an ongoing need for specialist lenders to cater to the ever-changing financial needs of consumers as we approach the end of yet another turbulent year.”

North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf says: “On the one hand, the ONS property index is the most comprehensive of all the surveys but on the other, it is a little dated.

“Nevertheless, it provides an excellent snapshot of housing market activity at the time as most buyers struggled to take advantage of the reducing stamp duty concessions.

“Since then the market has calmed and price growth has softened as so many brought forward moving decisions.

“Prospects remain good, however, as buyers and sellers defy worries about rapidly soaring inflation and rising interest rates.”

By Leah Milner

Source: Mortgage Finance Gazette

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Scottish house price rise outpaces rest of UK

Average house prices in Scotland have increased by close to £25,000 (13.2 per cent) over the last 12 months – the highest rate of all four UK nations.

The latest monthly house price index for Scotland from Walker Fraser Steele, Chartered Surveyors also shows:

  • 30 of the 32 local authority areas continue to see prices rise over the year
  • Monthly growth rates are softening
  • The top five local authority areas by value all set new record average price levels

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Alan Penman, business development manager at Walker Fraser Steele, said: “At the end of August we reported that the average Scottish house price stood at £211,029 – at that point a new record high. This September we have seen the upward momentum continue. Scotland’s average house price at the end of September stands at £212,832, which sets yet another record, having risen by some £2,200 – or one per cent – in the month.

“Five local authority areas in September were responsible for 58 per cent of the positive movement in Scotland’s average house price. The five areas concerned, in order of influence, were South Lanarkshire, the City of Edinburgh, Glasgow City, East Dunbartonshire and Highland.

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“More generally prices rose in 19 of the 32 Local Authority areas in Scotland. The largest increase in average prices, of 6.3 per cent, was in Inverclyde. In second place on the mainland was East Dunbartonshire, with an increase in prices of 5.2 per cent. There were plenty of high-value sales in East Dunbartonshire, with a number of detached sales taking place in Bearsden – located approximately six miles to the North West of Glasgow – the most expensive being on the Roman Road, priced at £1.3 million.

“This underlines how property at the top-end continues to underpin this growth as people opt for more space and continue to embrace working from home. September often provides momentum to the market too as it is not untypical for families to reassess their needs as the new school year gets underway.”

Source: Scottish Legal

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Halifax: Homemover numbers highest since 2007

The number of people moving home more than doubled (132%) to 265,070 in the first half of 2021, compared to the same period last year, according to the latest Halifax Homemover Review.

There were an additional 151,040 transactions in the first six months of this year, in contrast to the same period in 2020, where 114,030 home moves took place.

In the 12 months to June 2021, 461,010 home moves took place, up by more than 50% on the previous 12 months. The total number of moves in the last year is almost 100,000 more than at any point in the last 10 years.

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This leap in property transactions comes after several years of flat or falling numbers and brought the annual total to the highest it’s been since 2007, when it hit 716,650.

First-time buyers also returned to the market in force during the first half of the year, with 210,900 transactions, an increase of 74% on the same six months last year. Those getting their first foot on the housing ladder accounted for nearly half (44%) of all sales in the period.

Across the UK there was a year-on-year doubling of the number of homemovers (132%). Every region in England and Wales saw transaction numbers double in the first half of 2021 compared to the same period last year, while Scotland saw an 86% increase.

The regions with the largest increases in home movers were the South East (169%) and London (165%). Northern Ireland has seen the greatest long-term increase, with a 182% rise over the last 10 years. In comparison, London has experienced a 64% rise over the same period.

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A ‘race for space’, as workers adjust to a future where working from home more frequently, is reflected by changes in the mix of property type bought. Detached homes were the most popular for movers (30%), slightly ahead of semi-detached properties (28%).

The largest rise in detached home purchases over the last 10 years was in the West Midlands (14%), while its neighbour, the East Midlands, experienced a fall of almost 9% in semi-detached sales.

The average price paid by homemovers rose 11% in the 12 months to September 2021, to £387,485. Wales (£276,849), East Midlands (£320,715) and Yorkshire and the Humber (£284,268) all saw prices rise by 16% over the year, whereas Greater London (£699,864) saw prices rise by just 5%, the lowest of any region.

Homemovers put down an average deposit of £134,227, equivalent to 35% of the purchase price. Average deposits were worth at least 30% of the property in all UK regions. Highest deposit levels are in the South West (38%), with the North having the lowest at 30%.

Andrew Asaam, mortgages director at Halifax, said: “The rate and scale of the growth of the homemover market is quite remarkable. After several years of flat transaction numbers then a marked fall at the start of the pandemic, we’re now at a level not seen since 2007.

“There are many factors that have driven this activity, perhaps the biggest of which is the ‘race for space’ amongst those planning to work from home in the long term. The timing of some these moves will also have been influenced by people wanting to benefit from the stamp duty holiday.

“It is important to recognize the boom in sales was not limited to movers. There were more first-time buyers in the first six months of this this year, than in the first half of any of the last 10 years.

“Those getting on to the housing ladder accounted for almost half of all mortgage-backed purchases, which is in line with the long-term average.”

By Jake Carter

Source: Mortgage Introducer

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UK house prices soar again, fuelled by dearth of sellers: RICS

House price inflation in Britain picked up last month, propelled by a shortage of sellers that suggested further price rises lie ahead, a closely watched survey showed on Thursday.

The Royal Institution of Chartered Surveyors said a net balance of 70% of its members reported an increase in house prices last month, up from a revised 69% in September.

A Reuters poll of economists had pointed to a reading of 65%.

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The October survey showed the first increase in the house price balance since May.

Other surveys have also pointed to continued house price growth since July when a year-long exemption from the stamp duty tax on house purchases was halved in scale in England and Northern Ireland and expired altogether in Wales.

Scotland ended the incentive in April and it expired in its entirety in England and Northern Ireland at the end of September.

RICS Chief Economist Simon Rubinsohn said expectations of higher Bank of England interest rates were a sideshow to the lack of supply of homes coming to the market.

Last week the BoE refrained from raising rates at its November policy decision, against the expectations of many investors, but top officials at the central bank have said borrowing costs are likely to go up soon.

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“The inventory on agents’ books appears to have slipped back towards historic lows and this seems to be underpinning both the current price trend and expectations for the next year,” Rubinsohn said.

“Meanwhile although there is likely to be some drop in activity in the immediate aftermath of the expiry of the stamp duty break, most activity indicators currently remain solid. Indeed, the main challenge for buyers looking forward may once again be a lack of choice of property on the market.”

More than two-thirds of surveyors said they expected house prices to continue rising over the next 12 months, the survey showed.

Source: Investing

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e.surv: Average house prices up 4.1%

Average house prices increased by 4.1% across England and Wales in the year to October 2021, according to e.surv Chartered Surveyors’ House Price Index.

On a monthly basis, average property prices rose by 1.4% between September and October 2021.

Overall, e.surv found that the average price of a house in England and Wales was £335,325 at the end of October.

Wales had the highest rate of annual price growth at 10.8%, while at the other end of the scale, Greater London is the sole area with growth rates below 3.0%.

The North East reported 3.3% of annual price growth, with the South East and the East of England both seeing a 3.8% increase.

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The South West, and Yorkshire and the Humber have similar rates at 4.5% and 4.9% respectively, with the East and West Midlands at 5.8% and 5.7% apiece.

Finally, the North West retains its title as having the highest rate of growth of all the English regions at 6.9%.

Richard Sexton, director at e.surv, said: “The complexity of the UK residential property market is evident in the varying regional performance.

It aptly illustrates why talk of national average house prices can be unhelpful at a micro-level. While Wales continues its strong performance annually, regional annual house price performance in England has revealed that the north-west, and within it specifically Blackpool at a staggering 16.9%, has comfortably out-performed the rest of the country.

“This means that for five of the last eight months the North West has been at the top of our regional league table in terms of having the highest rates of annual house price growth and it continues to have the highest rate of growth of the nine regions in England.

“The factors that have spurred the growth seen in Blackpool also affect other areas in the region. Warrington and Merseyside had the second- and third-highest growth in the North West over the year.

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“All property types in these areas saw an increase in values over the year, but especially the prices of semi-detached homes which were up by £25,000 and £16,000 respectively.

“At a macro-level, the decision this month to hold interest rates will support buyers considering a home-move imminently and with a voting margin of five-two to hold, there is speculation that it is unlikely we will see any rise before the first quarter of 2022.

“The Bank of England is clear that it expects inflationary pressures to lessen – National Insurance tax rises due in April next year may already be having a desired effect.

“The Office for Budget Responsibility is now forecasting low but positive rates in 2022 and into 2023, with a steady increase in subsequent years which means borrowers should feel confident about buying – particularly with continued government support for 95% loan-to-value (LTV) lending which will support prices.”

By Jake Carter

Source: Mortgage Introducer

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Zoopla sets out its top predictions for the UK housing market in 2022

After the events of 2020, 2021 was a difficult year to predict in the housing market. Now more stability is returning to the country, we look at Zoopla’s forecast for the year ahead.

More than a fifth (22%) of households plan to move over the next 18 months as a direct result of the pandemic, it has emerged. In a survey by Zoopla, those most likely to move were younger people who live in cities, suburbs or large towns, and those whose working patterns have permanently changed. Many plan to move to other cities and towns, while some hope to switch to a more rural lifestyle.

The report shows a continuing shift in attitudes towards what people expect from their homes, and could influence housing activity over the course of 2022. In fact, according to Zoopla, the main drivers for the sector will be “an ongoing re-evaluation of housing needs, increased housing equity and moves in parts of the labour force to more hybrid working.”

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Price predictions across the housing market

The property portal’s research forecasts a +3% increase in UK house prices over the course of 2022. This is across a predicted 1.2 million housing transactions.

The firm expects the house price gains seen over the past year to bring more sellers to the market in the coming months. However, a continued low supply will support price inflation. It points out that housing remains affordable in many markets, and competition among mortgage lenders will also keep rates low, leading to continued strong appetite in the sector next year.

Zoopla notes that the “artificial” rush caused by the stamp duty holiday this year will also mean we see activity continue to taper off. This factor will also not repeat itself in 2022, which is why there could be up to 20% less transactions across the housing market next year, albeit still at a strong level historically.

North-west versus London

As always, there will be polarisation across the country, with the biggest price hikes expected to continue in the north-west‘s burgeoning housing market at +4%. London remains the slowest part of the country, with rises forecast to be around +2% over the year. These increases forecast overall are more sustainable, says the report.

Delving deeper into regional variations, the report says: “We believe there is headroom for further, above average house price inflation in regions outside southern England. However, while affordability levels have improved by 10% in London since 2016, affordability remains well above the long run average – this will continue to limit level of price rises in the highest value areas of London and southern England in 2022 and beyond.”

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Right now, towns such as Blackburn and Rochdale in the north-west are seeing price growth of more than 10%, says Zoopla. And in Zoopla’s city index for house prices this month, looking at September, the likes of Liverpool and Manchester are leading the way for the whole of the UK with annual house price rises of 10.4% and 8.7% respectively.

Will borrowing costs increase?

The Bank of England base rate remains at a record low of 0.1%, but most experts expect this to rise in the relatively near future. This is likely to have a knock-on effect on mortgage rates, and is one of the reasons buyers who are on the fence might want to invest sooner rather than later to secure cheap borrowing.

As Zoopla notes, buyers have become accustomed to low mortgage rates. The portal predicts rates will reach an average 3% by the end of 2022. This would be the highest since 2015, but still historically low.

However, the prediction is that this will not have a major impact on the price buyers could pay for homes. It could deter certain would-be buyers and impact sales, though, says the report. But for existing borrowers, a large number of which have secured long-term fixed rates, there will be some protection from rate rises.

By Eleanor Harvey

Source: Buy Association

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UK house prices hit new highs with typical home topping £250k

House prices have hit record highs, with the average property hiking more than £30k since the pandemic struck.

Nationwide’s House Price Index was published against a backdrop of the Bank of England being anticipated to raise interest rates in response to rising inflation.

The typical UK home has topped a quarter of a million pounds for the first time.

The lender has reported that the price of the average house rose by 0.7 per cent in October, up from 0.2 per cent in September.

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The annual growth rate remained elevated at 9.9 per cent in October, slightly lower than 10 per cent in September.

Demand had remained strong, despite the end of the stamp duty holiday at the end of September.

There were 72,645 mortgage applications in September, more than 10 per cent above the monthly average recorded in 2019.

“Combined with a lack of homes on the market, this helps to explain why price growth has remained robust,” Robert Gardner, Nationwide’s chief economist, said.

The outlook was “extremely uncertain,” as a sharp increase in the cost of living had slowed consumer confidence, Gardner added.

“Even if wider economic conditions continue to improve, rising interest rates may exert a cooling influence on the market, though the impact on existing borrowers is likely to be modest,” he added.

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The economist said a 0.4 percentage point interest rate increase in rates to 0.5 per cent “is likely to have a modest impact on most borrowers who are on variable rates”.

“For example, on the average mortgage, an interest rate increase of 0.4 per cent would raise monthly payments by £28 to £625 (or around £335 extra per year), though a rise of bank rate to 1 per cent would see typical payments go up by a more substantial £64 to £660 (more than £760 per year approximately).”

He added: “It’s important to note that a small proportion of households already have a relatively high debt service burden.

Jonathan Hopper, CEO of Garrington Property Finders said the market still showed no signs of slowing:

“A boom that many predicted would burn itself out is still in full flow despite the end of the stamp duty holiday.

“While on the front line we’re seeing some asking prices being reduced as the market begins to normalise, monthly price growth in October actually accelerated, doing the exact opposite of what might have been expected after the end of the Chancellor’s tax incentives.

He added: “The white heat of price inflation seen for much of this year is still creating sleepless nights in Threadneedle Street.”

By Emily Hawkins

Source: City AM

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Scotland most affordable nation for new-builds

Within Britain, Scotland has the most affordable new-build housing market based on price data in relation to gross earnings, according to the latest research from Warwick Estates.

In Britain, the average new-build house price was found to be £354,811 while the average gross salary is £31,770, creating a new-build affordability ratio of 11.2.

At a national level, England was home to the highest ratio at 11.3, falling to 10.0 in Wales and 8.6 in Scotland, making it the most affordable new-build nation in Britain.

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The North East is home to the lowest affordability ratio of all regions of England at 8.4, followed by Yorkshire & Humber (9.2), and then the North West (9.8).

At a local authority level, the most affordable new-build market in England is Hyndburn, Lancashire, where an average new-build price of £115,420 and average salary of £25,539 make an affordability ratio of 4.5.

This is followed by Burnley, Lancashire (5.5), Copeland, Cumbria (5.5), Stockton-on-Tees (6.1), Barrow-in-Furness (6.6), and County Durham (6.6).

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The least affordable local authority areas in England are Rochford, Essex (23.4), South Hams, Devon (21.3), Harlow, Essex (21.1), Cotswold, Gloucestershire (20.3), Gravesham, Kent (20.1), and North Devon (18.6).

Bethan Griffiths, chief operating officer of Warwick Estates, said: “While new-build homes tend to carry a house price premium versus the wider market this doesn’t necessarily mean they’re less obtainable to the average homebuyer.

“As with the regular market, this affordability is largely dependent on location which influences both the value of property as well as the average earnings on offer.

“The good news is that the nation’s housebuilders recognise this and so in areas with lower levels of income, you will also find values are far lower.

“In fact, these areas account for some of the most affordable when it comes to the average new-build house price to income ratio.”

By Jake Carter

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