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House Prices Rise at Fastest December Rate on Record

Average UK house prices jumped by 2.3% in December, a record for that month, according to Rightmove.

The online property website said that last month’s rise in average house prices was the biggest December jump since it started its house priced index back in 2002. Rightmove revealed that almost 65,000 properties were put onto the market in December at an average asking price of £306,810.

Miles Shipside, a director and housing market analyst at Rightmove, said the recent surge in house prices was down to the increased political stability in the UK following December’s General Election and the following easing of Brexit uncertainty.

“These statistics seem to indicate that many buyers and sellers feel that the election result gives a window of stability,” said Mr Shipside. “The housing market dislikes uncertainty and the unsettled political outlook over the last three and a half years since the EU referendum caused some potential home movers to hesitate.

“There now seems to be a release of this pent-up demand, which suggests we are in store for an active spring market, with more properties being listed by new sellers than we have seen in recent years.

“One factor behind the upwards price pressure has been the shortage of property coming to market, with 2019 numbers down by 19% on 2018 and some would-be sellers postponing their moves until they judge the outlook to be more certain. This month sees new seller numbers still down on the prior year, but by a less dramatic 10%.

“While there may well be more twists and turns to come in the Brexit saga, with London prices now rising again and not enough properties to satisfy this buyer demand, there is an opportunity for sellers to get their property on the market for spring move unaffected by Brexit deadlines.”

Tom Bill, head of London residential research at estate agent Knight Frank, said: “The reason for this uptick includes the relatively benign global economic backdrop, ultra-low mortgage rates, the currency discount and the fact prime residential markets have re-prices in response to political uncertainty and tax changes.

“In the final quarter of last year, there were 10 new buyers for every new property listed in prime central and outer London, the highest ratio in more than 15 years.”

Source: Money Expert

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Wales Continues to Experience House Price Growth

House prices in Wales have reached an all-time peak, with the average house price across the country now £193,254, despite a drop in overall sales in 2019.

The figures have been released from Principality Building Society’s Wales House Price Index for Q4 2019, which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales.

In 2019, the average house price in Wales grew by 3.3%, a £6,237 rise since December 2018 driven by first time buyers and holiday homes. Over the quarter in Wales (October – December 2019), house prices rose by 1.7%.

Despite house price growth in 2019, house sales were down by 6% in 2019 compared to the previous year. The reduction is likely to be due to the uncertainties associated with Brexit and then latterly the December General Election.

“It’s been a decent year for average house price growth in Wales, mainly supported by historically low interest rates, a shortage of housing supply and relatively high employment. First time buyers were the driving force behind housing sales, with holiday homes also performing well.

“Although Brexit uncertainty and the General Election had a greater impact on the housing market in the south of England, sales were still down by 6% in Wales in 2019 compared with 2018. Now that there is a bit more clarity politically, we will wait to see if house sales pick up in 2020, although we anticipate continued modest growth in terms of house prices as a whole.”

 Denman, Chief Financial Officer at Principality Building Society

At the end of 2019, eight local authority areas established new peak prices – Bridgend (£180,988), Denbighshire (£192,665), Gwynedd (£190,868), Merthyr Tydfil (£141,657), Monmouthshire (£298,618), Rhondda Cynon Taf (£142,733) and Swansea (£188,417).

Principality’s House Price Index figures show that the largest decrease in sales in Q4 2019 compared to Q4 2018 have been flats, down by 32.6%, followed by detached properties which were down by 12.5%. Semi-detached sales reduced by 9.6%, with terraces down by 6.5%, which supports indications that first-time buyers are now more attracted to terraced and semi-detached properties, rather than to small city centre flats.

In the past decade (December 2009-December 2019), house prices in Wales have risen by 24.5%. Over this same 10-year time span, the CPIH index for consumer price inflation has increased by some 22.6%. This means that the average house price in Wales has grown in ‘real’ terms by just 1.9% in the past decade.

Cardiff tops the list with house price growth of 41.2% for the decade, followed by Torfaen at 37.7% and Newport at 33.4%. The top nine authorities in terms of growth are all located in the south-east corner of Wales – which may indicate the extent to which Cardiff, and the Severn Bridge tolls, have had an impact on housing demand, and therefore house prices, in this area over the last 10 years.

The ‘top’ location for house price growth in the north of Wales is Denbighshire, at 23.5%.

By MARK POWNEY

Source: Business News Wales

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UK house prices: Post-election surge breaks records

The decisive result of the General Election sparked a record-breaking surge in UK house prices in December and January, in the latest sign that the UK housing market has been revitalised by a “Boris bounce”

There was a 2.3 per cent monthly surge in the average price of property coming to the market between 8 December and 11 January, the largest jump ever for that time of year since Rightmove records began in 2002.

Nearly 65,000 properties were put on the market during the period, meaning most were advertised for sale following the General Election on 12 December, according to the property platform’s House Price Index.

There has also been a jump in buyer demand since the Conservative election victory.

Enquiries to estate agents between 13 December and 15 January were up 15 per cent compared to the previous year, with an extra 1.3m buyer enquiries following the election.

The number of sales agreed spiked by 7.4 per cent during the same period as buyers made the most of the renewed political uncertainty offered by the election result.

Rightmove director and housing market analyst Miles Shipside: “These statistics seem to indicate that many buyers and sellers feel that the election result gives a window of stability.

“The housing market dislikes uncertainty and the unsettled political outlook over the last three and a half years since the EU referendum caused some potential home movers to hesitate.

“There now seems to be a release of this pent-up demand, which suggests we are in store for an active spring market.”

London’s property market has also benefited following the General Election, as the capital saw a sharp increase in buyer interest and sales prospects. In December, 31 per cent of chartered surveyors saw a rise rather than a fall in enquiries from new buyers, up from minus 12 in November, according to the latest Rics data.

“We have absolutely seen a post-election bounce, quite substantially actually,” Marc von Grundherr, a director at Benham & Reeves in London, said.

“Things usually quieten down before Christmas, but we had three times the number of offers in the last two weeks of December than the first two weeks.

“People have been waiting for stability, and the moment it arrived, confidence in the market has increased significantly.

“There has been a dramatic Boris bounce, so to speak, with real optimism among buyers still getting good value. But it’s also not a bad time for sellers as stock levels are still relatively low.”

By Jessica Clark

Source: City AM

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Are UK house prices really on the rebound?

UK house prices rose by 2.2% in the year to November, to an average of £235,000, according to the latest data from the Office for National Statistics (ONS).

Average prices rose by 1.7% in England (to £251,000), with a 7.8% jump in Wales (to £173,000), a 3.5% rise in Scotland (to £155,000), and a 4% rise in Northern Ireland (to £140,000). In London, prices rose by 0.2% – not much, but a big improvement on the negative readings seen for most of last year.

In all, it paints a picture of a housing market that is showing signs of rallying. Particularly if you look at it on a chart, as per the ONS one below.

Putting it bluntly, that’s not necessarily good news. As we’ve been pointing out at MoneyWeek for a couple of years now at least, it would be best if house prices continued to flatten or fall gently, to allow earnings to play catch up.

In the absence of a better solution – which would involve a lot of political finesse, long-term thinking, and the tackling of a lot of vested interests, and thus seems unlikely – this is the easiest and least painful way to return house prices across the UK to some sort of semblance of affordability.

A rebound now would jeopardise that. So how seriously should we take the figures?

One point to note is that the ONS figures, while official, are relatively new compared to other long-running surveys such as those compiled by Nationwide or Halifax. You can see that they still need to iron out aspects.

That near-8% jump in Wales does rather stand out. Apparently, it’s down to two things – there was a rise in the number of expensive properties were being bought and sold in the likes of Cardiff (in other words, the typical house sold last month was more expensive than ones in previous months), and also, the large year-on-year rise was exaggerated by a “fall in prices during the same period in 2018.”

So the figures are worth taking with a pinch of salt.

That said, there are some reasons that you might expect a rally of sorts, and it’s worth considering them. November’s figures are unlikely to show any bounce related to politics – after all, these deals were all done before the election.

However, house prices have been flat or falling for some time, and importantly, mortgages have grown cheaper over the year – according to Moneyfacts.co.uk, the cheapest five-year fix for someone with just a 5% deposit, came in at 3.37% in January, but 2.75% in November. So the availability of cheaper credit combined with a sense that it might be a buyer’s market, may be helping things.

Meanwhile, the worst of the landlord exodus may be behind us – while there are still tax changes to come, those who are still hanging on in there must surely have some idea of what it’s now costing them to do so.

If indeed, cheaper loans are helping to boost prices, then it could continue – particularly if the Bank of England does decide to cut rates again. Combine it with a sense that foreign buyers are back in the market at the top end to bag a bargain while sterling is still weak ahead of Brexit, and we could see a sustained bounce in 2020.

Frankly, we hope it doesn’t happen. And arguably, credit conditions can only slacken so much further. But that’s the key thing to watch if you want an idea of where prices will go – what price is a mortgage and how easy is it to get? If they get even cheaper and more accessible than they are now, then all else being equal, prices will go up.

By John Stepek

Source: Money Week

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UK house prices treble in the last 20 years – Halifax

The price of a home in the UK has more than trebled in the last 20 years, with London property jumping the highest, with increases of 239% from £157,453 to £533,437, according to new research.

An average home in the UK would have cost just £91,199 at the end of the last millennium, but today a home would cost £279,997, Halifax found.

Every region saw houses at least double in value, although residents in Northern Ireland experienced the least dramatic increase at 139%, or £97,056.

A renewed focus on housing policy and increased infrastructure investment aimed outside the South East, for example, may go some way to rebalance the differences.

Russell Galley, Halifax

Scotland and the North of England saw the smallest increases over the period, up 172% and 185% respectively.

Russell Galley, Managing Director, Halifax, said: “The rise in house prices in London since the turn of the century is well documented, and a sharp decrease in affordability just shows how quickly the market has moved.

“Conversely, there are bargains to be had elsewhere such as in the North, Scotland and Northern Ireland where prices have been slightly more subdued and properties compared to earnings are comparatively affordable.

“A renewed focus on housing policy and increased infrastructure investment aimed outside the South East, for example, may go some way to rebalance the differences.”

First-time buyers will face tough times getting onto the housing ladder, with the cost of a first home outstripping the increases seen in the average UK home.

Source: Shropshire Star

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Thurrock records highest UK house price rise this decade

Thurrock in Essex has seen the largest increase in house prices this decade outside London, analysis of Land Registry data by modular housing developer Project Etopia shows.

Prices have increased by 78.2% in the past decade from £156,741 to £276,164, compared to an average rise of 38.8% across the UK, excluding London.

Joseph Daniels, chief executive of Project Etopia, said: “The staggering extremes of some of these house price increases this decade, topping 76% in 10 years, means owning a home remains an unachievable dream for many.

“In Three Rivers, for instance, buyers would now need mortgages of close to half a million pounds to buy an average home, leaving many properties out of reach for average earners.

“Healthy appreciation will be welcomed by many homeowners but for the wider country this is a totally unsustainable situation.

“The UK must accelerate house building to increase supply over the next decade and temper Britain’s affordability problems.

“Only Modern Methods of Construction can deliver new homes fast enough to meet the demand and ensure ordinary hard-working people can afford to buy property right across the UK.”

House prices fell in just three parts of the country in the last 10 years — Blackpool (-7.8%), Redcar and Cleveland (-1.0%) and Hartlepool (-0.4%).

BY RYAN BEMBRIDGE

Source: Property Wire

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Brexit and house prices: ‘Boris bounce’ will not lift the stagnant housing market

Brexit and house prices: many home owners are continuing to worry about the state of the property market following the Brexit vote and the continuing uncertainty about what kind of a deal we’ll have when we do leave the European Union.

Although Boris Johnson’s landslide victory in the recent General Election has spiked hopes of a ‘Boris bounce’ for the UK’s housing market, property experts continue to predict a flat housing market constrained by a lack of supply of new properties. The latest housing forecast by Halifax predicts a two per cent growth countrywide – a better situation for sellers than in 2019, but hardly a surge.

Finding a good mortgage deal might be easier than ever historically, with interest rates remaining low, but sellers remain wary of what 2020 will hold in terms of Brexit negotiations and are holding off putting their properties up for sale.

Simultaneously, first-time buyers continue to be stymied by their inability to put together a deposit. Moreover, the number of rental properties coming onto the market has reduced too, which will mean higher prices for renters, with a three per cent rise predicted in London.

It is clear at this point that the government will need to come up with both short-term and long-term solutions to the housing crisis come the new year – not after Brexit, but as soon as possible.

Managing Director of Halifax Russell Galley points out that something must be done to increase housing affordability, regardless of the outcome of the Brexit negotiations, ‘Prospects for 2020 look a bit brighter, with uncertainty in the economy falling back somewhat, transactions volumes anticipated to pick up and further price increases made possible by growth in households’ real incomes. However, the challenges faced by prospective buyers in raising the necessary deposits may continue to constrain demand.’

RICS also emphasise the need for the government to take housing reform seriously. Head of UK Government Relations & City Strategy Hew Edgar suggests that elevating the Housing Minister to Cabinet level would signal an appropriate level of commitment to fixing the housing crisis – a burning issue that continues to unfold alongside Brexit, ‘For too long, domestic issues – particularly housing – have been side-lined by the Brexit debate, and this has negatively impacted investment and growth in land, property and construction.’

BY ANNA COTTRELL

Source: Real Homes

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Scottish house prices increasing in line with rest of UK

SCOTTISH house prices are generally increasing, fitting in with a trend across the rest of the UK which has seen the average price of homes in major cities increase by nearly £90,000 over the past decade.

A Zoopla analysis found the average house price across the UK’s 20 biggest cities has increased by £89,987 across the period – or around 54%.

This is a bigger increase than the average house price uplift across the whole of the UK over the past 10 years, at £62,218.

Average Glasgow house prices have surged by £16,087 over the past decade while the figure in Edinburgh is higher at £61,693.

Average London house prices have risen by £204,400 over the past decade.

The typical house price across the cities covered by the index is now £257,200, while in London it is £479,000.

But city house price growth has varied widely over the past decade. House prices in Aberdeen are lower compared with 10 years ago, a decrease of £1164 (0.7%), while Belfast saw a fall of £4896 (3.4%).

Zoopla said Aberdeen was affected by the oil price crash post-2015, and Belfast, having registered six years of house price falls between 2007 and 2013, has been slower than other major cities to see a sustained recovery in house price growth.

Looking ahead, Zoopla expects city house prices to increase by 3% over 2020 as a level of pent-up demand returns to the market following the General Election result.

Richard Donnell, research and insight director at Zoopla, said: “The election result provides an element of certainty for households looking ahead to 2020, but the result changes very little in terms of housing market fundamentals.

“While we expect some pent-up demand to return to the market in (the first quarter of) 2020, the affordability of housing across the country will dictate the level to which prices will increase in 2020.

“Lower mortgage rates have already been reflected in higher house prices, which means house prices are set to rise at a lower rate in future – more in line with average earnings. We expect UK city house prices to increase by 3% over 2020.”

By Emer O’Toole

Source: The National

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House price growth slowed to seven-year low in October before ‘Boris bounce’

The Land Registry has revealed that house price growth slowed to its lowest rate since September 2012 during October in an index that is now said to be “catching up with history”.

The figures relate to a period before the General Election results and the so-called Boris bounce, where agents have since reported a resurgence in activity.

Land Registry figures show house prices increased by 0.7% annually during October, down from 1.3% a month before and the lowest rate of growth in seven years.

Prices also fell 0.7% on a monthly basis, suggesting an average UK house price of £232,944.

House price growth was strongest in Northern Ireland where prices increased by 4% annually, while the lowest was in London with a 1.6% decline.

Provisional estimates for sales in August suggested transactions fell by 5.5% across the UK, dropping by 4.1% in England, 4% in Scotland and 2.5% in Wales but increased by 4.9% in Northern Ireland.

However, Lucy Pendleton, founder director of independent estate agents James Pendleton, suggested the market now looks very different since the election outcome.

She said: “The spinning compass of uncertainty and doubt have been dislodged by the north star of a new PM, and the market has reacted immediately.

“As a result, the tired and frustrated reality that is still faintly visible in this Land Registry report reflects a status quo that is already a distant memory.

“Not yet visible is the Boris bounce in house prices we all sense is already well under way. The UK house price index has well and truly been overtaken by events.

“The index will now spend the next two months going through the motions while it catches up with history. Meanwhile, there’s every sign on the high street that buyers and sellers are returning to the fold.

“The UK is certainly experiencing a resurgence in activity but we won’t know for a couple of months whether, on balance, this will begin to push prices higher or whether greater supply will have a moderating influence while brokers and agents enjoy a pick-up in volumes.

“New enquiries for property picked up the day of the election result and foreign buyers are matching their domestic counterparts for renewed enthusiasm.”

Mike Scott, chief property analyst for Yopa, said: “The figures are based on completions in October, where the purchase price will have been agreed around June, and other indicators have already shown that there was a slowdown over the summer.

“We expect that the rate of increase will recover in future releases, though with another brief slowdown in the figures during the first quarter of next year as the political uncertainty of October and November works its way into this report.

“For the year as a whole, we expect a return to slow but steady house price growth, roughly in line with wage increases and general inflation.”

By MARC SHOFFMAN

Source: Property Industry Eye

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UK house prices fall at fastest rate in seven months – RICS

UK house prices dropped last month by the most since April, as uncertainty about Brexit and the election weighed on the property market, the Royal Institution of Chartered Surveyors (RICS) said on Thursday.

The RICS survey – released on the day Britain votes in a national election intended to break a parliamentary deadlock over Brexit – showed home-buyers and sellers stuck on the sidelines.

The monthly house price balance declined to -12 in November, its lowest since April, from -5 in October.

The number of new buyers and sellers continued to fall – though the drop in sales seemed to be bottoming out and the proportion of surveyors who expected a rebound in activity over the next year rose to its highest since February 2017.

“Whatever happens in the general election today, it is important that the new government provides reassurance both over the stewardship of the economy and the ongoing challenges around Brexit,” RICS chief economist Simon Rubinsohn said.

Britain’s housing market has slowed since June 2016’s Brexit referendum. Prices have fallen in London and surrounding areas, where a rise in property purchase taxes bit hardest and concerns about Brexit were high.

Official data has shown that British house prices rose by 1.3% in the year to September and a Reuters poll of economists has forecast a 1.5% rise for 2020.

Prime Minister Boris Johnson intends to take Britain out of the European Union by Jan. 31, if he wins Thursday’s election. Most opposition parties have said they want a second referendum.

Reporting by David Milliken

Source: UK Reuters