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Welsh house prices exceed £200,000

The average house price in Wales has topped £200,000 for the first time – now standing at £209,723, Principality Building Society’s Wales House Price Index for Q4 2020 has found.

Last year showed the strongest annual house price inflation in 15 years (8.2%).

Detached home prices were 11% higher than a year ago, as people search for space prompted by the pandemic.

This is compared with 5-6% growth for most other property types.

Tom Denman, chief financial officer at Principality Building Society, said: “The strength of the housing recovery in the second half of 2020 is striking, and this reflects both the stimulus provided by the Welsh government in terms of the time-limited Land Transaction Tax holiday, the pent-up demand which built up during the first lockdown, and the race for space to buy bigger properties with larger gardens.

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“In Q4, all local authority areas were reporting house prices higher than a year earlier. This increased demand has been driven by increased savings in many households during the lockdowns coupled with continued historic low mortgage rates. There has probably been some additional demand from buyers across the border with England, with house prices more affordable in Wales in relative terms.

“The recent UK HM Treasury review of independent forecasts for 2021 showed wide divergences in house price expectations for the year. With so many unknowns it is impossible to offer a forecast with any reasonable accuracy. However, once there is more clarity on the containment of the virus and on the full re-opening of the economy, it will become easier.”

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Merthyr Tydfil recorded the strongest rise on a quarterly basis of 18.2%, taking its average house price to £147,687, though this may have been exaggerated due to a modest amount of sales data.

In north Wales, Anglesey house prices rose by 16% annually to £237,782, while Conwy (£224,068) and Flintshire (£216,224) rose by 13.7% and 13.3% respectively.

In south Wales, Monmouthshire (£332,558) and Newport (£222,107) also achieved strong annual double-digit increases, rising 14.2% and 12.1% respectively.


Source: Property Wire

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ONS: Average UK house prices reach record high

Average UK house prices rose by 7.6% in the year to November to reach a record high of £250,000, according to the ONS House Price Index.

The data shows that this increase is the highest annual growth rate the UK has seen since June 2016.

In addition, this is up from the year to October, which noted a 5.9% rise.

Average house prices increased over the year in England to £267,000 (7.6%), Wales to £180,000 (7.0%), Scotland to £166,000 (8.6%) and Northern Ireland to £143,000 (2.4%).

The average house price in London surpassed £500,000 for the first time in November 2020.

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Furthermore, the North East is the final English region to surpass its pre-economic downturn average house price peak of July 2007, to now stand at £140,000.

Kevin Roberts, director of Legal & General Mortgage Club, said: “The latest ONS house price index figures will be welcomed by existing homeowners.

“The resilience of the housing market continues to shine through as people remain encouraged to move house with or without the benefit from the stamp duty relief, no doubt also encouraged by the rollout of the a COVID-19 vaccine.

“There remain challenges, however, and the government’s decision to extend the furlough scheme until the end of March, will be welcomed by many homeowners exploring their options.

“At Legal & General Mortgage Club, we saw searches for furlough friendly mortgages increase by 230% in November 2020, when compared to the previous month.”

“Buyers wanting to access the best and most suitable mortgage products should absolutely consider speaking with an independent mortgage adviser, particularly as we draw closer to the government’s stamp duty holiday deadline, which is creating very high demand.”

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Paul Stockwell, chief commercial officer of Gatehouse Bank, added: “House prices defied expectations by increasing throughout 2020 and leading to a record high in November, with the stamp duty discount driving strong demand from buyers — but there are signs from other indices that price growth has now begun to slow.

“The UK housing market is still open for business during this lockdown, but demand is likely to have started to taper off as buyers begin to concede they will not be able to complete a transaction in time to make the stamp duty deadline.

“The March 31 cut-off is looming, and although professionals across the industry are working in earnest to get applications over the line in time, fears are mounting about how many agreements could fall through.

“With property portal Rightmove predicting as many as 100,000 buyers could face an unwelcome tax bill when their sale fails to complete on time, all eyes are turning to Chancellor Rishi Sunak and whether he may extend or add a taper mechanism to the scheme or risk deals falling apart.”

Guy Gittins, managing director of Chestertons, said: “The second lockdown no doubt encouraged some people to put their property search on hold, but we didn’t notice a big difference and activity levels were still a lot higher than we anticipated for this time of year.

“Part of this was driven by the incentive of the stamp duty saving, but we believe the main driver was that people just wanted to move as quickly as possible while conditions were favourable.”

By Jake Carter

Source: Mortgage Introducer

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UK house prices end 2020 on record high but growth slows

UK house prices ended 2020 on a record high, but the pace of growth slowed towards the end of the year, the latest figures showed.

House prices in the UK were 0.2 per cent higher in December than the previous month, reaching an average value of £253,374.

On an annual basis, property prices jumped six per cent compared to December the previous year due to the release of pent-up demand following the first Covid-19 lockdown in March, according to analysis by Halifax.

The rate of growth recorded last month slowed from the one per cent rise reported in November.

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Analysts warned that the end of Help to Buy and the stamp duty holiday, combined with escalating unemployment, could have a downward impact on prices this year.

Russell Galley, managing director at Halifax, said 2020 had been a “tale of two distinct halves for the housing market.”

“Following a strong start, the first half was dominated by the restrictions on movement due to Covid-19, and prices were subsequently down 0.5 per cent at mid-year as the market effectively ground to a halt,” Galley said.

“However, when the market reopened, prices soared as a result of pent-up demand, a desire amongst buyers for greater space and the time-limited incentive of the stamp duty holiday.”

He added: “With the pace of the UK’s economic recovery expected to be constrained by the renewed national lockdown, and unemployment widely predicted to rise in the coming months, downward pressure on house prices remains likely as we move through 2021.”

Howard Archer, chief economic adviser to the EY Item Club, predicted that UK house prices could be five per cent below current levels by the end of the year.

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“The EY Item Club suspects elevated housing market activity and robust prices will prove unsustainable sooner rather than later – although, in the immediate future, activity may still benefit from buyers keen to take advantage of the Stamp Duty threshold increase before it ends,” he said.

“There is always the possibility that the chancellor could extend the threshold increase in the March Budget.”

He added that the housing market is “likely to come under mounting near-term pressure as the economy continues to be affected by restrictions in most areas”.

“There is also likely to be a fading of the pent-up demand effect on housing market activity,” he said.

By Jessica Clark

Source: City AM

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Manchester and Leeds see strongest UK house price growth

Throughout the past year, Manchester and Leeds has led UK house price growth. The north of England is expected to continue performing the strongest during 2021 as well.

The north of England is dominating UK house price growth. The latest house price index from Zoopla revealed Manchester saw the largest increase in average house prices during the past year, rising by 5.7%. Leeds followed closely behind with 5.6% growth. Then, Nottingham and Liverpool had a rise of 5.4% and 5.3%, respectively.

The index also revealed the north-west of England led the way regionally in UK house price growth with a 5% increase year-on-year. Yorkshire and the Humber and Wales followed jointly with 4.9%. As a whole, UK house price growth was 3.9%. This is the strongest growth seen since August 2017 and is up from 1.3% last year.

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The north continues to be in high demand

There has been strong demand across the UK as the property market has defied the traditional seasonal slowdown. According to Zoopla, buyer demand soared by 40% across the whole of 2020. And the north of England has seen a particularly strong level of demand.

Even though property prices are on the rise in the north, prices are still much more affordable, especially when compared to much of the south. Because of the savings buyers can achieve there, demand is expected to continue even after the stamp duty holiday comes to an end.

Many people have reprioritised their housing needs due to the COVID-19 pandemic and successive lockdowns. This is expected to continue impacting demand. People are in search for larger properties and locations closer to public parks.

Because of this, more buyers, tenants and investors will likely look to the north to be able to get more space for their money. Demand and property prices in the north, especially the north-west, will likely continue to increase in 2021 and the coming years as well.

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House price predictions moving forward

While property price growth across the UK is expected to be more subdued in 2021, many experts feel property prices will still rise next year. Zoopla is forecasting a particularly strong start to 2021. This is due to buyers and investors rushing to beat the stamp duty holiday deadline in the spring. Additionally, buyers who have reassessed their home priorities are still itching to move.

In the house price index, Zoopla states: “Stamp duty is a factor supporting demand, but we have questioned the scale of the importance. A recent consumer survey by Zoopla found that 44% of movers’ plans were not influenced by the stamp duty holiday – they remain focused on the need to relocate and find more space and a better location.”

Despite the uncertainty surrounding COVID-19 and Brexit, the UK property market is expected to remain resilient throughout 2021. Savills recently revised its future property price predictions. The north-west is expected to see the strongest growth in 2021 with home values forecast to increase by 8.5%. Additionally, across five years, prices are predicted to rise by 24.1% in the north-west. This is the largest increase predicted out of any UK region.

The north will likely continue leading the way in house price growth. It’s an attractive area to buy property for both homebuyers and buy-to-let landlords. And 2021 could prove to be a good time to lock in lower mortgage rates.

Source: Buy Association

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House Prices At Record High But Headwinds Expected

Average UK house price reached new record high in October although the market looks set to slow in the coming months, reported Halifax in its latest House Price Index, published this week

‘The average UK house price now tops a quarter of a million pounds (£250,457) for the first time in history, as annual house price inflation rose to 7.5 per cent in October, its highest rate since mid-2016’, said Halifax, said Halifax managing director Russell Galley. ‘Underlying the pace of recent price growth in the market is the 5.3 per cent gain over the past four months, the strongest since 2006. However, month-on-month price growth slowed considerably, down to just 0.3 per cent compared to 1.5 per cent in September.

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‘Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses. Since March flat prices are up by 2.0 per cent compared to a 6.0 per cent increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses’.

Latest figures put home-buyer mortgage approvals at their highest level since 2007, ‘as transaction levels continue to be supercharged by pent-up demand’, said Galley.

Government support measures have helped to delay an expected downturn in the housing market but ‘they will not continue indefinitely’.

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The macroeconomic landscape in the UK remains highly uncertain, said Galley. ‘With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021’.

Halifax figures mirror those of Nationwide which put October house price growth at 5.8 per cent, and monthly rises of 0.8 per cent.

The annual rate of increase was the highest recorded by Nationwide since January 2015, said its chief economist Robert Gardner.

But, he added, ‘data suggests that the economic recovery has lost momentum in recent months with economic growth slowing sharply to 2.1 per cent in August, down from 6.4 per cent in July.

‘The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy’.

Source: Residential Landlord

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House price growth to reach 17.5% by year end

Annual house price growth will reach 17.5% by the end of the year, according to quote service Reallymoving.

Such is the urgency for home sales to be completed before the end of the stamp duty holiday, prices are expected to rise by 8.8% over the next three months alone, including a 6.1% increase between September and October.

If Reallymoving is accurate in its predictions, which are based on deals already agreed, then the typical price agreed will rise to just shy of £342,000 in December.

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Rob Houghton, chief executive of reallymoving, said: “Our data indicates continued strong price increases in the run up to Christmas but the slowdown in the rate of growth in November and December could be an early sign that the post-lockdown spike in activity is beginning to run out of steam.

“For the remainder of the year the stamp duty holiday will continue to support demand but the real test will be the start of 2021, when the window for offering on a property and completing before the March 31st deadline begins to close. This is likely to be in the context of rising unemployment and continued lockdowns, impeding economic activity and denting consumer confidence.

“Increasing numbers of first-time buyers have been locked out of the market in recent months due to competition for homes and the withdrawal of high Loan to Value mortgages.

“But if the government presses ahead with the launch of its proposed 95% loans in spring 2021, that would help overcome the biggest barrier to home ownership for thousands of first-time buyers, boosting demand at the lower end of the market at a crucial time.”


Source: Property Wire

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UK house prices increase by 2.5%

UK house prices rose by 2.5% over the year to August elevating the average property in the UK to £239,000, data from the Land Registry has revealed.

The latest index, which is based on completed transactions and is published by the Office for National Statistics, offers a picture of the market in the month after the stamp duty holiday was introduced.

It shows average prices were £6,000 higher in August than at the same time in 2019 and highlights the East Midlands as the English region which experienced the highest annual growth with prices rising by 3.6%.

Nicky Stevenson, managing director at estate agents Fine & Country, said: “Here is official confirmation that the market did indeed get up to a canter over the summer months.

“The annual rate of growth soared as buyers frustrated by lockdown and lack of space crammed into the market in search of larger properties. That alone explains this year’s sudden rally, as the stamp duty holiday was only introduced in July.”

Stevenson explained the lag in this data being released would mean any extra demand the stamp duty relief created would not be seen in the Land Registry figures before the end of the year.

The data also showed UK house prices have risen 0.7% since July 2020. In London prices were still on the rise, increasing by 0.9% since July 2020 and by 3.5% annually taking the average property value to £489,159.

Transactions level with 2019

HMRC data also published today revealed UK residential transactions in September 2020 were at 98,010, which were similar to the September 2019 figures. They were just 0.7% lower than the same month last year and 21.3% higher than August 2020.

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Anna Clare Harper, CEO of asset manager SPI Capital and author of Strategic Property Investing, explained transaction data was of interest because it represented a more complete picture than comparable indices.

“What’s interesting about the September 2020 data is that transaction volumes are on a par with transactions in September 2019,” she said.

“This suggests that the temporary changes to stamp duty designed to boost confidence in the housing market have worked well to achieve this goal. There are very few sectors where buyers and sellers feel as confident as they did in September 2019.

“What happens next will be a reflection of policy and economics. Trade bodies such as RICS, as well as government policy makers, will play a significant role in the future of the housing market, as they have in the story that has played out so far in 2020.

“For potential home buyers and investors, the key will be not taking on too much credit, despite the relatively cheap cost of debt at present, as it is very difficult to forecast what will happen next.”

By Kate Saines

Source: Mortgage Finance Gazette

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UK house prices stage rapid recovery in third quarter

UK house prices enjoyed their strongest quarterly increase since before the financial crisis in the third quarter as lockdown restrictions eased.

Prices rebounded quickly in the third quarter after the broadbased closure of the market during the previous quarter.

Prices rose 3.3 per cent in the three months to September, according to the Halifax Property Index, the strongest increase recorded since the end of 2006. On an annual basis prices were 5.5 per cent higher, the sharpest rate of inflation since the final quarter of 2016.

The housing market has been buoyed by government interventions such as the stamp duty holiday introduced over the summer.

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And last week Boris Johnson announced plans to turn “generation rent” into “generation buy” by allowing people to purchase homes with a five per cent deposit.

Paul Smith, economics director at IHS suggested the resurgence in prices was also due to “strong demand driven by a desire for more space – either as a reaction of the lockdown or the structural economic effects of increasing home working”.

The upturn in prices meant the standardised house price edged close to the £250,000 mark during the third quarter. Price inflation has picked up across all buyer and property types, with existing property inflation – 5.8 per cent – outstripping that of new houses – +4.1 per cent.

Properties in greater London remain comfortably the most expensive, with the typical house now costing more than £500,000 and around 1.5 times higher than in the South East.

Wider economic issues, particularly the rise in unemployment due to coronavirus, suggest activity and the rapidly rising prices are unlikely to be sustained.

The recent rise in prices has led to a tightening of affordability constraints, with the house price-to-earnings ratio reaching a record high level of 6.5 by the end of the third quarter.

It surpassed the previous records of 6.4 set prior to the financial crisis.

Unsurprisingly London has the highest ratio of close to 9, and the immediate regions surrounding the capital, with ratios all above 7, where affordability remains a key issue.

By Angharad Carrick

Source: City AM

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UK house prices jump again in September as market defies gravity

UK house prices rose at the fastest pace in four years in September despite the raging coronavirus pandemic as people working from home sought more space, according to the Halifax house price index.

Yet the lender said it is “unlikely” that the British housing market will “remain immune” to the historic economic slowdown.

House prices grew 1.6 per cent month on month in September, Halifax said, after climbing by the same amount in August. The rise took the average price to a new record high of £249,870.

Properties were worth 7.3 per cent more on average than they were a year earlier, the biggest year-on-year rise since June 2016.

However, Halifax said the annualised figure was flattering because the property market was subdued a year ago due to worries over Brexit.

Russell Galley, managing director at Halifax, said the housing market had been “extremely strong” since restrictions on it were lifted in May.

“There has been a fundamental shift in demand from buyers brought about by the structural effects of increased home working and a desire for more space,” Galley said.

He added that “the stamp duty holiday is incentivising vendors and buyers to close deals at pace before the break ends next March”.

Rising house prices are the UK’s ‘iron lung’

Chancellor Rishi Sunak in July raised the threshold at which stamp duty is paid to £500,000 until the end of March 2021. Analysts say the policy has combined with demand that built up during lockdown to fuel buying.

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North London estate agent Jeremy Leaf said: “These figures very clearly show the impact of pent-up demand, the stamp duty holiday and low interest rates on the market post lockdown.”

Lucy Pendleton of estate agents James Pendleton said: “The often frothy Halifax index has lived up to its reputation and is pushing the bounds of credibility here.

“However, it underlines just how much the housing market has become the economy’s iron lung of late, while its other vital signs flash amber at best.”

Yet Leaf said that “demand has lost a little momentum over the past few weeks”. He put this down to “the resurgence in Covid-19 and new restrictions on businesses… making some buyers a little more nervous”.

Coronavirus cases have risen sharply in the UK in recent weeks. It has caused the government to put vast swaths of the country in local lockdowns.

Sunak produced a new package of economic support in September. But he confirmed that the furlough scheme – which has supported around 10m jobs – would end this month.

Economists say rising Covid cases and unwinding government support are likely to weigh on UK house prices towards the end of the year.

House prices could fall by five per cent

Halifax’s Galley said: “It is highly unlikely that the housing market will continue to remain immune to the economic impact of the pandemic.”

Howard Archer, chief economic advisor to the EY Item Club, said the housing market “will come under increasing pressure over late-2020 and the early months of 2021”.

He said there is likely to be “a significant rise in unemployment and waning pent-up demand”.

Archer said UK house prices could be around five per cent lower by mid-2021 than they are now.

“The EY Item Club expects housing market activity to gradually improve over the second half of 2021,” Archer said.

“Very low borrowing costs should also help matters with the Bank of England unlikely to lift interest rates from 0.10% during 2021.”

Source: City AM

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House Price Trend Continues Upwards

House prices increased by 2 per cent in September, according to the latest Nationwide index. This pushed up the annual rate of house price growth to 5.0 per cent, the highest rate since Sep 2016

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

‘Housing market activity has recovered strongly in recent months’, said Nationwide chief economist Robert Gardner. ‘Mortgage approvals for house purchase rose from around 66,000 in July to almost 85,000 in August – the highest since 2007, well above the monthly average of 66,000 prevailing in 2019.

‘The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing. The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown’.

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Nationwide said its recent research indicated that, of the people who had been considering a move before the Coronavirus Crisis, a fifth had put their plans on hold – a quarter of these saying they had concerns about the property market.

‘Younger people were much more likely to have put off plans than older people, which may reflect concerns about employment prospects’, said Gardner.

‘Indeed, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as tighter restrictions dampen economic activity and the furlough scheme winds down. While the recently announced jobs support scheme will provide some assistance, it is not as comprehensive as the furlough scheme it replaces’.

Of those moving or considering a move, around a third were looking to move to a different area, while nearly 30 per cent were doing so to access a garden or outdoor space more easily.

‘As you might expect, the majority of people are looking to move to less urban areas, with this trend becoming increasingly evident among older age cohorts’, said Gardner.

Source: Residential Landlord