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Million pound homes outperform the rest of the market

Sales activity in the £1m+ property market is storming ahead according to Rightmove, as wealthier buyers prioritise space and leafier locations

Houses over £1m are selling 18 days faster than this time last year – the fastest pace since 2014.

Paul Oberschneider, chief executive at Hilltop Credit Partners, said: “A common conception is that houses in the £1m+ market take longer to find buyers than the overall market because of their higher price points.

“But the latest data from Rightmove shows that UK’s million-pound homes are actually outperforming the rest of the property market in terms of the number of sales being agreed.

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“The hottest millionaire markets right now are Norfolk, Wiltshire, Cornwall, Henley, Hackney, Tooting, Stoke Newington, Balham with affluent buyers willing to part with huge sums of money to buy larger homes.

“A big reason for this market sentiment is the ongoing pandemic which is pushing many potential buyers to swap city apartments for bigger homes with more living spaces and gardens.

“With the government’s big push for work-from-home once again, many employees are also expected to spend fewer days in the office and may look to relocate to a bigger property with more outdoor space. The post-Covid market will have an increased focus on indoor and outdoor space and wealthier buyers will be the first to move to bigger homes.”

BY RYAN BEMBRIDGE

Source: Property Wire

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House prices rise as appeal of gardens and space grows

Housing market activity in the region continued to rise in August, as those looking to take advantage of the stamp duty holiday continued their search for a new home.

Sixty-three per cent of respondents reported an increase in buyer interest across the West Midlands over the month, according to the August 2020 RICS UK Residential Survey.

However, the longer-term view remains more cautious.

As buyer enquiries continued to rise, the number of new properties listed for sale also increased, with a net balance of plus 26 per cent of survey participants noting an increase in vendors listing property to sell.

Consequently, strong growth in agreed sales was cited for a third successive month, with a net balance of plus 52 per cent of contributors seeing a pick-up.

Looking ahead, near term sales expectations for the West Midlands remain positive, but 12-month sales projections are still in negative territory, with the net balance coming in at minus 12 per cent.

Anecdotal evidence suggests concerns over the broader economic climate continue to drive this subdued assessment.

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Meanwhile, the pandemic is expected to cause a lasting shift in the desirability of certain property characteristics, as eight per cent of respondents, nationally, anticipate demand increasing for homes with gardens over the next two years.

Seventy-nine per cent predict rising demand for those properties near green space, while a net balance of plus 68 per cent foresee a rise in the desirability of properties with more private/less communal outside space.

Turning to house prices, the August survey feedback points to a sharp acceleration in house price inflation.

Across the region, a net balance of plus 52 per cent of respondents reported an increase in prices, the strongest reading since September 2018.

This is up from a net balance of plus 49 per cent in July and marks a turnaround compared to the reading of minus 27 per cent registered back in May.

Simon Rubinsohn, RICS chief economist, said: “The latest RICS survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months.”

By James Pugh

Source: Shropshire Star

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Region’s house price growth at highest level in almost two years

Housing market activity in the West Midlands continued to rise in August, as those looking to take advantage of the stamp duty holiday continued their search for a new home.

A net balance of 63% of respondents reported an increase in buyer interest across the region over the month, according to the August 2020 RICS UK Residential Survey.

However, the longer-term view remains more cautious.

As buyer enquiries continued to rise, the number of new properties listed for sale also increased, with a net balance of +26% of survey participants noting an increase in vendors listing property to sell.

Strong growth in agreed sales was cited for a third successive month, with a net balance of +52% of contributors seeing a pick-up.

Looking ahead, near term sales expectations for the West Midlands remain positive, but 12 month sales projections are still in negative territory, with the net balance coming in at -12% (up from -40% last time). Anecdotal evidence suggests concerns over the broader economic climate continue to drive this subdued assessment.

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Meanwhile, the pandemic is expected to cause a lasting shift in the desirability of certain property characteristics, as 83% of respondents, nationally, anticipate demand increasing for homes with gardens over the next two years. 79% predict rising demand for those properties near green space, while a net balance of +68% foresee a rise in the desirability of properties with more private / less communal outside space.

Turning to house prices, the August survey feedback points to a sharp acceleration in house price inflation. Across the region, a net balance of +52% of respondents reported an increase in prices, the strongest reading since September 2018. This is up from a net balance of +49% in July and marks a turnaround compared to the reading of -27% registered back in May.

In the lettings market, tenant demand continued to rise sharply in the West Midlands, while landlord instructions returned to negative territory following a rebound in July. Rental growth expectations over the near term have now strengthened in each of the past three months, with a net balance of +58% of contributors now anticipating an increase.

Simon Rubinsohn, RICS chief economist, said: ‘The latest RICS survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months. More of a concern is the pick-up in prices which could intensify issues around affordability in some parts of the country. Disaggregated data shows demand generally to run ahead of supply.

“Meanwhile the results provide a further pointer to more substantive changes taking place in household behaviour in the wake of the pandemic. Increased demand for properties with garden and near green spaces has if anything increased since we tested the water in May.’

By Rachel Covill

Source: The Business Desk

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UK house prices hit record high as stamp duty cut powers market

UK house prices hit a record high in August after pent-up demand and the stamp duty holiday combined to power the market upwards, according to lender Halifax.

However, Halifax cautioned that prices were “unlikely” to continue on their current path, with rising unemployment set to catch up with the market.

Prices rose 1.6 per cent month on month despite the UK being hit by the worst recession in modern history. That meant prices were 5.2 per cent higher in August than they were a year earlier, Halifax said.

The surprising surge in prices has now been confirmed by numerous sources. Last week, building society Nationwide said UK house prices jumped two per cent in August to hit an all-time high.

“A surge in market activity has driven up house prices through the post-lockdown summer period,” said Halifax managing director Russell Galley.

He said the rise has been “fuelled by the release of pent-up demand, a strong desire amongst some buyers to move to bigger properties, and of course the temporary cut to stamp duty”.

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Tax cut has desired effect on UK house prices

The rise will please the government, which had sought to boost the property market. It increased the threshold at which buyers pay the stamp duty tax to £500,000 from £125,000 until the end of March.

Britain’s housing market was frozen in April and May. After it reopened in June, many who had scrapped plans to move put them in motion again. The market has also been helped by a rise in savings during lockdown.

The jump in prices now means the average UK house costs £245,747, according to Halifax. That is good news for property owners, but will hurt first-time buyers.

Lucy Pendleton from estate agents James Pendleton, said the figures confirm “the red hot finish to the summer suggested by the Nationwide last week”. She added: “The typically more bullish Halifax index hasn’t disappointed.”

However, Galley warned that the price surge is unlikely to be sustained in the medium.

Prices could fall three per cent by next year

“The macroeconomic picture in the UK should become clearer over the next few months as various government support measures come to an end,” he said.

Economic forecaster the EY Item Club predicted UK house prices could fall by three per cent by early 2021.

Howard Archer, chief economic adviser to the Item Club, said: “Housing market activity may well see a further pick-up in the near term providing some support to prices.”

But he added: “The current marked pick-up in activity and firming of prices will prove unsustainable before long.” He said the “upside for the housing market” will be “limited by challenging fundamentals for consumers”.

Andrew Burrell of Capital Economics said: “Pent-up demand will soon be expended.”

He added: “A weak economy, cautious lenders and the end of the stamp duty cut will weigh on prices.”

By Harry Robertson

Source: City AM

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Housing market booms since the UK lockdown

THE UK’S housing market has experienced a boom since the country went into lockdown.

The housing market is ‘incredibly busy’ across the Cumbria region with buyers seeking to find more space, says conveyancing specialist Adkirk Law.

Linda Kirk, director of conveyancing, said: “We are seeing the move to more space inside and outside of a property as a priority for many of those buying or seeking to buy. The benefits of the stamp duty holiday, added to the experience of coronavirus, seems to be fuelling the trend in all regions.

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“People are also looking for property with enough space to be able to work from home in the new way businesses are looking to the future.

“The north west market is certainly buoyant, and people are also realising how much more property and space they can buy in the region than in the south.”

Farrell Heyworth Barrow In Furness’s manager Louise Stewart said: “The market is certainly getting busier. There’s a bubble that’s been created by the lockdown. It’s happening across the board. We still have local investors, but many people who have been living with mum and dad and seem to want to move.”

By Luke Jarmyn

Source: In Cumbria

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UK housing market at decade high after COVID-19 bounce back

The UK housing market had its busiest month for a decade in July as the value of property sales reached a record £37 billion, according to Rightmove.

Agreed property sales increased by 48 per cent compared with the same month in 2019 and were 20 per cent higher than the previous record noted by Rightmove’s monthly survey in March 2017. The momentum in the market has continued this month, with the latest weekly figure revealing a 60 per cent hike in sales.

Rightmove said that the £37bn of agreed sales that it had recorded was the highest since it started tracking the data a decade ago. Its report is the latest evidence of bounce back in the UK housing market since the coronavirus lockdown measures were eased and Rishi Sunak reduced stamp duty by raising the threshold at which buyers start to pay the tax to £500,000.

Pent up demand for property is driving the soar in housing market activity, the stamp duty cut and people rethinking where they want to live because of the nature of life under lockdown and the possibility of working from home more regularly.

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However, while Rightmove and other reports have suggested that the market is enjoying a rebound, economists fear that it could come to a swift end by a rise in unemployment and further economic slowdown when government support schemes come to an end.

Furthermore, the housing market could be hit with a wave of home repossessions once banks end the mortgage holidays that they have offered during the pandemic, The Times reports.

The stamp duty holiday is also due to end at the end of March 2021. Banks across the UK are also anticipating a decline in house prices with their recent financial results revealing various plans put in place to account for losses stemming from this. Metro Bank said it expected prices to drop by 14.6 per cent.

Rightmove said that the average asking price on a property in the UK was now £319,497, slightly lower than the record high of £320,265 in its July report.

The mass city exodus has helped to push prices to record levels in Devon and Cornwall, but prices in London have fallen by 2 per cent month-on-month, with some landlords opting to put their city flats on the market in the wake of a slump in the number of tourists and students.

Nevertheless, the 0.2 per cent monthly drop in prices is lower than the average of 1.2 per cent usually recorded at this time of year as activity slows in the market.

Miles Shipside, Rightmove director and housing market analyst, said: “There have been many changes as a result of the unprecedented pandemic and these include a rewriting of the previously predictable seasonal rulebook for housing market activity and prices. Home movers are both marketing and buying more property than we have recorded in any previous month for over ten years, helping to push prices to their highest ever level in seven regions.”

Source: Scottish Legal

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Rightmove: Demand surges 50 per cent after housing market reopens

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

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

The figures

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

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

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

Rightmove did not announce an interim dividend.

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

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Why it’s interesting

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

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

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

By Jessica Clark

Source: City Am

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UK homeowners spend £4,000 on renovations during lockdown

UK homeowners have typically spent just over £4,000 on renovating their properties since the lockdown began in March, the Renovation Nation Report from money.co.uk has revealed.

Garden upgrades (34%) top a list for the most popular lockdown renovation projects, closely followed by the living room (23%), bedroom (22%) and kitchen (22%).

Almost a quarter (24%) stated they have used money originally intended for a holiday to finance their new home improvements, which is second only to general savings (26%).

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Salman Haqqi, personal finance expert at money.co.uk, said: “While many have struggled with the impact of lockdown restriction on their finances, our research found that having to spend more time at home has inspired almost two-thirds (65%) of homeowners to invest in renovations to their properties.

“Almost three quarters (73%) of the property owners we spoke to said they will continue to stay home as much as possible even with lockdown easing, it looks like the trend for investing in homes looks set to continue.

“For those looking to renovate or improve their homes, they will need to balance short term wishes with long term gain. The financial impact of investing in your home should always be a concern and ensuring you add value to your home through the work you do to the property is essential.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Recovery: Mortgage market activity in July branded ‘astonishing’

Mortgage searches for loans of more than £500,000 increased in July but buy-to-let demand dropped off as the month ended.

That’s according to the latest data from mortgage technology provider Twenty7Tec which has described the market recovery seen in July as ‘astonishing’.

In its monthly report on supply and demand it revealed there were three times as many broker searches for purchase mortgages in July than in May.

The largest rise, it found, was in the £500,000 to £1 million region – an increase driven by the stamp duty savings buyers could make on these properties.

However, there was also an increase in first-time buyer queries, with searches rising from 13% in May to 19% in July. Searches were regularly hitting 10,000 per day and the top ten busiest days for first-time buyer mortgage searches this year were all in July.

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However, there was some concern over buy-to-let. Although searches for this sector were up by nearly 30% at the end of the month the seven-day rolling average fell to levels seen at the beginning of the month.

James Tucker, CEO of Twenty7Tec suggested this could be ‘blip’ following the prime ministers tightening of rules nationwide. But he said it would be interesting to watch what happens over the next few days as it could also be a pre-cursor to what we might expect over the coming months.

Product demand and supply

Product availability also dropped off slightly in July compared to June, despite the increasing demand.

At the maximum loan-to-value points of 70% and 75% Twenty7Tec noticed product volumes drop by 14% and 10% respectively.

Discussing the report in general, Tucker added: “July has been the busiest month of 2020 for mortgage searches.

“This is not a sentence that I was expecting to write less than a month ago. For our business, and indeed for our customers, the speed of the recovery of activity in the mortgage market has been truly astonishing.

“This is not a time to be complacent however – the positive momentum that we have all found both in business volumes and in the speed of technological change should not be lost.”

By Kate Saines

Source: Mortgage Finance Gazette

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Pent-up demand pushes up competition for property despite coronavirus

Years of pent-up demand are driving up competition for UK properties despite the coronavirus pandemic, a new survey from estate agent Knight Frank has found.

The firm found that discounts are still being negotiated due to the ongoing downturn caused by the pandemic, but sellers are fast hardening their resolve as demand grows more quickly than supply.

The number of new prospective buyers registering was 94 per cent higher than the five-year average in the week ending 25 July, compared to a 54 per cent increase in property listings.

According to the survey, the imbalance is the same in London and in the rest of the UK, suggesting that competition is growing all around the country.

Knight Frank’s head of UK residential research said that a number of factors meant that prices were now “firmer” than they were a year ago.

“What’s happening is the release of pent-up demand that has been building for years against the backdrop of Brexit, tax changes and tighter lending rules”, he said.

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“This is putting upwards pressure on prices. In fact, prices are firmer now than they were a year ago, based on the level of offers made and accepted.”

In July the average offer was accepted at 98 per cent of the asking price, one per cent higher than in the same month last year.

Similarly, offers made have gone from 94 per cent to 95 per cent over the last 12 months. Indeed, there have been numerous instances where agreed prices have exceeded the asking price in recent weeks.

Bill added: “I would expect the market to eventually self-correct as there is probably only so far prices can climb against the backdrop of a global pandemic.

“What should simultaneously begin to emerge is what the new longer-term normal looks like. The property market will be no different from many other sectors of the economy in that respect.

“It will ultimately depend on issues outside of its control including vaccine development and the government furlough scheme but for now, prices are heading in one direction.”

By Edward Thicknesse

Source: City AM