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Scottish housing market has fastest sell time, research says

The time needed to sell homes in Glasgow and Edinburgh is half the average for UK cities, according to a survey.

Zoopla’s UK Cities House Price index for September reveals housing market conditions are strongest north of the border despite Aberdeen being the worst performer.

Glasgow and Edinburgh properties sell within six weeks on average, compared to 12 weeks across the whole of the UK.

Aberdeen was the worst performer, with homes taking more than 15 weeks to sell and sellers discounting their homes by 9.4%.

Richard Donnell, research and insight director at Zoopla, said: “There is a continued polarisation in housing market conditions across the country set by underlying market fundamentals, albeit Brexit uncertainty has been a compounding factor for lower market activity in some areas.

“A general election seems to be a growing possibility ahead of any Brexit resolution; however, once the political outlook becomes clearer, we would expect a modest bounce-back in demand for a six–12-month period.

“Market conditions are set to remain weak in southern cities until pricing levels adjust to what buyers are willing, or can afford, to pay.

“London is three years into a re-pricing process, and we expect sales volumes to slowly improve over 2020, while house price growth remains subdued.

“There are large parts of the country where housing affordability remains attractive, fuelled by continued economic growth that supports demand for homes, resulting in reasonable sales periods and only modest gaps between sales and asking prices.”

Glasgow and Edinburgh are also the only UK cities not to register a discount from asking to selling price.

Homes in the two locations instead command an average premium of 6-7% above the asking price.

In contrast, vendors across the UK now accept offers that are on average of 3.8% or £9,800 lower than the initial asking price.

Source: Herald Scotland

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Super prime property market in London seeing resilience in the face of Brexit

Buyers spent a total of £2.06 billion on super prime properties in London in the year to May 2019.

This was marginally higher than a figure of £2.05 billion in the previous 12 months, according to super prime sales market insight report for Winter 2019 from international real estate firm Knight Frank.

The market for properties worth £10 million plus is showing a resilience in terms of demand against an uncertain political backdrop, but overall transaction volumes fell 13% to 104 from 120.

‘Political uncertainty has affected sentiment over the last five years, however, this has intensified as the UK’s intended departure from the European Union continues to be discussed, combined with the impact of wider global economic tensions,’ said Tom Bill, head of London residential research.

‘However, higher value sales are increasing, as high net worth individuals target London and take advantage of the weak pound,’ he added.

The report also shows that 73% of super prime buyers were below 50 in the year to September 2019, which was up from less than half at the start of 2015.

Some 16 transactions above £30 million took place in the year to May 2019 compared to 11 over the previous 12 months.

Meanwhile, the ratio of new prospective buyers to new sales listings above £10 million climbed to 6.5 in the third quarter of 2019, the highest figure since the first quarter of 2014.

‘Beyond Brexit, there are global trade and geopolitical tensions that mean other super prime residential markets have slowed. While there are fewer discretionary buyers in London, well-priced and good quality stock is seeing strong interest and leaves me convinced that demand will accelerate once Brexit has been resolved,’ said Rory Penn, joint head of Knight Frank’s Private Office .

According to Victoria Garrett, head of residential, Asia-Pacific at Knight Frank, there is a strong appetite for the London market from buyers in Asia. ‘A combination of the currency discount, relative political stability and a world class education system means London is the logical choice for many buyers at the super prime level,’ she said.

‘When more clarity around Brexit emerges and there is more currency stability, much of the pent-up demand will be released,’ she added.

Source: Property Wire

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Reviewing the UK housing market

The UK housing market is incredibly fluid and could never be described as a homogenous mass.

By that, I mean it’s very difficult to review a ‘UK housing market’ because, lets be honest, there are great swathes of differences, not just between individual countries, or counties, or towns, but often within very small areas. The market for one street can be very different to the next.

This can make the whole notion of property value very difficult to get right. For instance, I read research from the Principality Building Society suggesting that the average house price in Wales has reached a record high of just over £191,000, with quarterly and annual house price growth up by over 2%.

In that regard, different regions across the country appear to be bucking the London/South East trend – I’ve heard a large amount of anecdotal evidence from brokers active in these regions that prices over the last 12-18 months have taken a serious hit, due to a number of factors, not least the impact that increased stamp duty charges are having on the sale and purchase of £1m-plus houses.

Indeed Rory Joseph of JLM Mortgage Services, recently talked about some of their clients who three years ago saw their neighbours selling their homes for £1.5m, and now when they are being put on the market, estate agents are advising a sale price of nearer to £1m.

You can therefore see how things can change in a relatively short space of time, plus when you add in the potential impact of Brexit negotiations during that period and look at what might happen next, who is to say how house prices might move?

Regionally, however, we appear to be seeing greater growth in prices in areas outside the South East of the country, and some might say this has been long overdue.

The gap between these regions has often been incredibly large, but perhaps not so now, and it’s perhaps therefore no surprise to see landlords much more inclined now to purchase in areas beyond the South East because of the perception they can get more for their money and can also secure a greater rental yield.

This decision obviously requires a large degree of due diligence on the part of the landlord, especially if they are unfamiliar with a locale.

The fast-changing nature of house prices however also needs to be reviewed and analysed by all housing market stakeholders in terms of the valuation of properties.

We’ve certainly seen a growing number of down-valuations coming back from our own valuers when it comes to properties which we are being asked to lend against, and clearly if that initial valuation, either by landlord, adviser, or agent, is off the mark, then this can cause some significant issues when it comes to making the lending decision in a positive way.

We understand that ‘down valuations’ are incredibly frustrating for all, but there is a reason why we use independent valuers in this market, and we are not simply working off estate agent estimates. In that sense, we would ask advisers and their clients to be aware of what might happen during the valuation process and pre-empt that by being realistic about what the property’s real value might be.

Some might believe that valuers are ‘making it up as they go along’ or ‘the house down the street went for more than this just a few months ago’, but let’s not forget that the valuation we require has to be evidenced-based.

This is not just a case of sticking a finger in the air because there is a large degree of liability for that valuer should it be judged, for instance, that they have over-valued a property.

As RICS have been at pains to point out: ‘The market value is based on comparable market evidence, which is usually confirmation of a minimum of three sales transaction of similar types of properties in the local area, and also the professional’s knowledge of the local market including supply and demand dynamics.’

Now, I fully understand that agents may well argue that their knowledge of the local market is second to none, however it’s their job to get the best price for their client, whereas the valuer works on behalf of the lender or provider, and therefore that agent ‘asking price’ might not be accepted as proof positive of the value by anyone else.

Plus, as mentioned above, prices can change quite sharply in different areas and, what might have seemed realistic a few weeks or a month ago, might no longer be the case.

The point is that if there is a healthy degree of realism at the outset, then there’s less likelihood of the valuation coming back as a shock.

As a lender active in this space we always want to make the deal work, but it has to work for everyone, and that means following the result of our independent valuation.

We would like to keep those down valuations to a minimum, but it will require an understanding from all concerned of how valuations work, how their view of the market might be different to others, and an acceptance that we have to accept the valuers’ view.

By Jeff Knight

Source: Mortgage Introducer

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Number of new home registrations slowed in third quarter, figures show

The number of new homes being registered slowed down in the third quarter of this year, according to industry figures.

There were 39,364 registrations – down by 9% compared with the same period a year earlier, the National House Building Council (NHBC) said.

The NHBC is a warranty and insurance provider, covering around 80% of new homes built in the UK.

Builders register homes to be built in the coming weeks or months – so the figures are an indicator of the level of new housing supply in the pipeline.

The year-on-year fall in registrations was driven by home registrations in the private sector.

In the private sector, 27,916 homes were registered, 16% down on a year earlier.

The number of affordable homes being registered increased by 11% annually, with 11,448 registrations.

In the West Midlands, registrations jumped by 52% annually, which the NHBC said was boosted by plots registered in Birmingham for the 2022 Commonwealth Games athletes’ village.

NHBC chief executive Steve Wood said: “It is great to see the strength of the affordable and rental sectors whilst we would hope that the slowdown in private sector registrations is transient, and a function of short-term Brexit uncertainties.

“In any event, NHBC will continue to work with builders to raise standards and improve quality for home owners.”

Here are the number of new home registrations between July and September 2019, followed by the same period in 2018 and the percentage change, according to the NHBC:

– North East, 1,849, 2,168, minus 15%
– North West and Merseyside, 3,161, 4,273, minus 26%
– Yorkshire and Humberside, 2,284, 2,901, minus 21%
– West Midlands, 4,760, 3,136, 52%
– East Midlands, 3,232, 3,073, 5%
– Eastern England, 4,143, 3,808, 9%
– South West England, 3,055, 4,604, minus 34%
– London, 5,143, 6,005, minus 14%
– South East England, 6,735, 7,006, minus 4%
– Total England, 34,362, 36,974, minus 7%
– Scotland, 2,820, 3,681, minus 23%
– Wales, 1,045, 1,473, minus 29%
– Northern Ireland and Isle of Man, 1,137, 1,275, minus 11%

By Vicky Shaw

Source: Yahoo Finance UK

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Market slows as Brexit uncertainty continues

The UK property market has continued to slow in the face of Brexit uncertainty – except for an 8% increase in first-time buyers exchanges – the TwentyCi Property & Homemover Report for Q3 2019 has shown.

The report found that whilst property exchange volumes held up with 966,464 homes exchanged in Q3 (marking a 2.2% growth year-on-year) there was a decline of new properties coming on the market.

Q3 saw a total of 1,715,395 new instructions, 212,319 fall throughs and 801,013 withdrawals in the market, to change agent, or withdraw in this quarter.

Properties valued at £300k and below sold best in Q3, with exchanges up across all property price bands to this value compared to the same period last year.

More properties were also exchanging from lower income household bands from £15,000 upwards. Overall households with income bands of £20,000-£50,000 were proportionally buying and selling more properties covering a total of 126,941 exchanges.

Colin Bradshaw, chief customer officer at TwentyCi, said: “Consistent to our previous reports, this last quarter has again shown an overall slower moving market, reflecting the current unpredictable trading environment.

“Consumers are showing caution when it comes to both buying and selling property. With the likely outcome of Brexit still unclear, the uncertainty over both the economy, consumer confidence and the housing market will persist at least in the short-term.”

Nationwide, there is a clear North-South divide with any growth in average asking prices across the North of the UK and the Midlands, while London and the south show a small percentage reduction in average asking prices.

The figures reveal a 7% growth in Scotland, 5% in North East, 4% in Yorkshire and the Humber and 2% in the North West and East Midlands.

However there was a fall in asking prices of -3% in London, -2% in South East and -1% in South West.

But across the UK’s major cities average asking prices have been more resilient overall with more major cities reporting an increase for example, Leeds (7%) and Nottingham (5%) or holding steady – with the exceptions being Birmingham (-1%), London (-3%) and Southampton (-3%).

By Ryan Fowler

Source: Mortgage Introducer

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Rents grow as housing market slows

The average rent in the UK is now £967, up by 2.5% on the same time last year.

When London is excluded, the average rent in the UK is now £797, this is up by 2.2% on last year.

Average rents in London are now £1,694, up by 3.3% on last year.

Nationwide’s House Price Index reported that house prices rose by just 0.2% in September, down from 0.6% in August and marking the 10th month in a row that the annual house price growth was recorded as under 1%.

All 12 of the regions monitored by HomeLet showed an increase in rental values between September 2018 and September 2019.

Five of the regions monitored by HomeLet showed an annual increase of over 3%, the North West, the East Midlands, the South West, Greater London and the North East.

The region with the largest year-on-year increase is the North West, showing a 4.4% increase between September 2018 and September 2019

As the UK’s largest tenant referencing firm, HomeLet references over 500,000 tenants every year. The HomeLet Rental Index provides the most comprehensive and up-to-date data on rental values in the UK.

The trends reported within the HomeLet Rental Index are brand new tenancies, which were arranged in the most recent period, providing an in-depth insight into the lettings market.

RegionSep-19Sep-18Annual VariationAug-19Monthly Variation
North West£739£7084.40%£741-0.30%
East Midlands£653£6293.80%£655-0.30%
South West£846£8183.40%£852-0.70%
Greater London£1,694£1,6403.30%£1,6890.30%
North East£535£5193.10%£5310.80%
West Midlands£718£7012.40%£720-0.30%
Yorkshire & Humberside£657£6442.00%£6550.30%
Wales£634£6212.10%£636-0.30%
Scotland£676£6632.00%£6710.70%
East of England£927£9151.30%£930-0.30%
Northern Ireland£673£6641.40%£6641.40%
South East£1,045£1,0430.20%£1,064-1.80%
UK£967£9432.50%£970-0.30%
UK excluding Greater London£797£7802.20%£802-0.60%

Source: Property118

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Removing stamp duty would boost last time buyers

Nearly half of over 55s would consider moving if they didn’t face stamp duty, with a change therefore boosting sales to so-called last time buyers, new research suggests.

The nationwide study from independent equity release adviser Key found widespread support for scrapping stamp duty for last time buyers to encourage older home owners to downsize.

Around 15% of home owners aged 55 and over, the equivalent of 1.2 million people, say they would definitely consider moving if stamp duty was abolished for last time buyers while another 30% say not having to pay stamp duty would influence their decision to move.

Separate research among financial advisers found overwhelming support for scrapping the charge with 77% saying that they would back the move subject to terms and conditions.

‘While downsizing is an emotive issue, increasingly people are looking at how they find a suitable property to support their later life living needs. Whether it is adapting their current property or downsizing to something smaller and more convenience for family and services, all of these choices have financial implications,’ said Will Hale, Key’s chief executive officer.

‘Scrapping stamp duty for last time buyers would mean that those people who want to move would have one less barrier to overcome as due to the lack of suitable properties finding something in the right location can be costly. Indeed, we find that increasingly customers are using equity release to raise additional capital to buy their dream retirement home,’ he pointed out.

‘For wider society, this move would arguably not only mean more families could move into larger homes appropriate to their needs and the property market would receive a boost but would ideally be cost neutral as the increased number of transactions should cover any deficit,’ he added.

He also pointed out that stamp duty on residential transactions fell by 10% in the 2018/2019 tax year to £8.37 billion with part of the decrease due to stamp duty relief for first time buyers with around 218,900 first time buyers benefiting.

House owners buying again pay no stamp duty up to £125,000 but then pay 2% on the portion of the house price between £125,001 and £250,000 rising to 5% on the sum up to £925,000 and then to 10% on prices up to £1.5 million.

Source: Property Wire

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UK house price growth hits a six-year low in September

House prices grew at their slowest pace since April 2013 last month, in keeping with the predominantly flat trend seen over recent months.

On a monthly basis, house prices were actually down by 0.4% in September, while prices were up 0.4% quarter-on-quarter, according to the results of the most recent house price survey from Halifax.

Versus a year ago, the mortgage lender’s House Price Index was ahead by just 1.1% to reach £232,574.

The report also included some revisions to previous months’ figures following an update to the index’s methodology, with Halifax revising August’s monthly rise down to 0.2% from 0.3%.

Halifax’s managing director Russell Galley said: “Underlying market indicators, including completed sales and mortgages approvals, continue to be broadly stable.

“Meanwhile for buyers, important affordability measures – such as wage growth and interest rates – still look favourable.”

Galley added that looking forward, Halifax expects activity levels and price growth to remain subdued while the current period of economic uncertainty persists.

However, the monthly Halifax house price index was just one of many that track the UK market and has periodically been higher than others.

Nationwide building society said annual house price inflation slowed to 0.2% last month, while the Office for National Statistics, which uses data from the Land Registry, estimated it at 0.7% in July.

London estate agency Benham & Reeves’ director Marc von Grundherr said: “These most recent of statistics from one of the country’s volume mortgage lenders are the latest in a very mixed picture and one that adds to confusion as to what on earth the property market is really doing.

“The various indexes of late have not only contradicted each other but often contradict themselves month-on-month – in fact, the numbers have bounced around like a beach-ball on a bungee rope since the beginning of the year.”

Von Grundherr also said the fact that the year-on-year numbers were still positive “defies the gravity” of the current political situation.

Shares in housebuilders like Persimmon and Taylor Wimpey were down in early trade.

By Iain Gilbert

Source: Sharecast News

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UK house prices grow at slowest rate for six years

UK house prices grew at their slowest annual rate in six years in September, a closely-watched gauge has revealed, as Brexit uncertainty continues to smother activity in the sector.

House prices grew by just 1.1 per cent over the last year, undershooting economists’ expectations of a rise of 1.6 per cent, Halifax’s house price index showed today. Prices rose at an annual rate of 1.8 per cent in August.

Month on month, UK house prices fell by 0.4 per cent in September, down from 0.2 per cent growth in August. The monthly figure also dropped below economists’ expectations of a 0.1 per cent rise.

Russell Galley, managing director of Halifax, said that although the 1.1 per cent annual growth is the lowest since April 2013, it “remains in keeping with the predominantly flat trend we’ve seen in recent months”.

“Underlying market indicators, including completed sales and mortgages approvals, continue to be broadly stable. Meanwhile for buyers, important affordability measures – such as wage growth and interest rates – still look favourable.”

“Looking ahead, we expect activity levels and price growth to remain subdued while the current period of economic uncertainty persists.”

Housing is just one market that has been subdued by political uncertainty in Britain. Potential buyers and sellers are putting off their decisions until there is more clarity over Brexit.

Halifax said today that recent surveys show a flatter trend in demand and lower mortgage approvals in recent months.

The UK housing market has also been hit by a global economic slowdown that has weighed on asset prices. First-time buyers will be cheered by the news that houses are not rocketing in price, however.

Andrew Montlake, managing director of UK-wide mortgage broker Coreco, said: “As we approach Halloween and the Brexit endgame it’s no surprise price growth is slowing, but the horror show many predicted hasn’t played out.”

“Extremely low borrowing costs continue to make property affordable while the strength of the jobs market is giving people confidence amid the chaos.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said low levels of activity was forcing mortgage lenders to “work incredibly hard to generate business and stand out from the competition”.

“This is excellent news for borrowers and once buyers return to the market, when the uncertainty is removed from the equation, there are some extremely competitive products for them to take advantage of.”

By Harry Robertson

Source: City AM

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House price growth turns negative over the month – but just remains positive year-to-year

House price growth –just – crept into reverse last month. However, annual house price inflation – just – remained in positive territory.

According to Nationwide the average house price was £216,352, down just 0.2% from an average of £216,096 in August.

Annual house price inflation was up by the same amount, 0.2%.

September was the tenth month in a row where Nationwide has recorded annual house price growth of under 1%.

London was the weakest performing region in the third quarter of this year, Nationwide also reported, with prices down 1.7% compared with the same period a year ago.

The lender said that UK house prices are now “only” around 17% higher than their 2007 peak.

Mike Scott, of Yopa, said: “It now seems likely that year-on-year house price growth will dip into negative territory in the last quarter of this year as the Brxit uncertainty continues to subdue market activity.”

Separately, the latest Bank of England lending figures show that in August there were 65,000 mortgage approvals for house purchase, down from the 18-month high of 67,000 in July.

By ROSALIND RENSHAW

Source: Property Industry Eye