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Halifax: UK House Prices Have Hit A Record High

UK house prices have hit a record high despite rising at a slower rate than a year ago, according to the Halifax house price index this morning.

The lender said that the affordability of houses was “close to pre-financial crisis levels”, as house prices remained historically high at an average of £252,765.

The difference between the 2007 financial crash and today, is that mortgage rates are considerably lower.

Despite slowing their ascent in the first quarter of 2021, inflation has risen by 5.7 per cent, as the standard house price a year ago sat at £252,030.

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The 5.7 per cent jump was down from a nearly five year high of seven per cent last year, the lender reported.

Prices lifted only 0.3 per cent in the first quarter of this year, smaller than the 2.5 per cent jump in the final quarter of 2020.

The London property market showed slower gains in house prices over the start of this year, the “strongest” since the 2016 EU referendum, Halifax said.

The standard house price in Greater London sat at £505,359, down 2.5 per cent from the final quarter of last year, however, has edged 2.1 per cent higher in comparison to 2020.

Demand for larger properties carried through from last year, while existing houses were hit by rising inflation 6.2 per cent more than new builds.

Are we due another crash?

The outlook for the next six months appears to be bright, particularly with the help of the “ongoing government support,” CEO of property platform Twindig, Anthony Codling said.

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“There is a risk that when the extended holiday ends, the UK housing market will wake up with a hangover.”

However, Codling advised home buyers not to worry, “because at the moment mortgage supply is increasing, whereas, in the credit crunch, mortgage supply fell off a cliff edge.”

“The spring and summer selling seasons will be strong, but as the stamp duty holiday ends in September, concerns about another cliff edge will start to be voiced and this may soften house prices in the autumn.”

Financial analyst at AJ Bell, Laith Khalaf agreed that a looming financial crash is unlikely, because “the housing market has repeatedly confounded economists expectations, and it keeps going from strength to strength.”

With low-interest rates and “highly accommodative” government policy, the housing market has a strong supply and demand dynamic, Khalaf added.

“While there might be a few bumps along the way, particularly at the end of the stamp duty…the property market has proved itself to be unbelievably resilient. And in large part, that comes down to the efforts the government and the Bank of England have made to make mortgage borrowing incredibly easy and cheap.”

By Millie Turner

Source: City AM

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House prices reach new record high as property market booms

UK house prices hit a record high of £254,606 on average in March after jumping by 1.1 per cent month-on-month, according to an index.

Across the UK, the average price is around £15,000 higher since the start of the national coronavirus lockdowns in March 2020 – equating to an increase of more than £1,000 per month on average.

Values in March 2021 were 6.5 per cent higher than the same month last year, the Halifax said.

It said Government support measures and a stamp duty holiday have been key to bolstering the housing market.

Russell Galley, managing director of Halifax, said: “Following a relatively subdued start to the year, the housing market enjoyed something of a resurgence during March, with prices up by just over 1 per cent compared to February.

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“This rise – the first since November last year – means the average property is now worth £254,606, a new record high.

“A year on from the early days of the first national lockdown, March’s data shows that house prices rose by 6.5 per cent annually, or £15,430 in cash terms.

“Casting our minds back 12 months, few could have predicted quite how well the housing market would ride out the impact of the pandemic so far, let alone post growth of more than £1,000 per month on average.

“The continuation of Government support measures has been key in boosting confidence in the housing market.

“The extended stamp duty holiday has put another spring in the step of home movers, whilst for those saving hard to buy their first home, the new mortgage guarantee scheme provides an alternative route on to the property ladder.

“Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic.

“A shortage of homes for sale will also support prices in the short term, as lower availability always favours sellers.

“However, with the economy yet to feel the full effect of its biggest recession in more than 300 years, we remain cautious about the longer-term outlook.

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“Given current levels of uncertainty and the potential for higher unemployment, we still expect house price growth to slow somewhat by the end of this year.”

Mark Harris said: “The market rebounded strongly in March as buyers realised that the stamp duty holiday extension meant it was still possible to take advantage of the saving, while the continuing easing of lockdown provided further impetus.

“It is no surprise that the start of the year saw a more subdued market as lockdown and home schooling made viewings practically impossible.

“With hardly a day going by without another lender launching a high loan-to-value offering, and indeed rates coming down on these as more providers enter the fray, there is plenty on the lending front to tempt borrowers.”

Tomer Aboody, director of property lender MT Finance, said: “What we are seeing is a real lack of stock which in turn increases competition and house prices.”

Source: Irish News

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West Midlands house prices up 7.6pc in a year

Across the UK, the average house price was £232,134, Nationwide Building Society said. This was a 5.7 per cent increase compared with a year earlier. The West Midlands saw the second highest rise of any region in England at 7.6 per cent to £208,806.

Robert Gardner, Nationwide’s chief economist, said: “The slowdown in March probably reflects a softening of demand ahead of the original end of the stamp duty holiday before the Chancellor announced the extension in the Budget.”

The stamp duty holiday had been due to end on March 31, but was extended in the recent Budget.

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Mr Gardner continued: “The longer-term outlook remains highly uncertain. It may be that the recovery continues to gather momentum and that shifts in housing demand resulting from the pandemic continue to lift the market.

“However, if the labour market weakens towards the end of the year as policy support is withdrawn, as most analysts expect, then activity is likely to slow nearer the end of 2021, perhaps sharply.”

Nationwide also released figures showing house price growth across the UK’s nations and regions in the first quarter of 2021.

Mr Gardner said: “The North West was the strongest-performing region, with prices up 8.2 per cent year on year. This is the strongest price growth seen in the region since 2005 and average prices reached a record high of £181,999.”

London was the weakest-performing region in the first quarter of 2021, with house prices increasing by 4.8 per cent, softening from 6.2 per cent annual growth in the previous quarter.

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Mr Gardner added: “The South West was the only southern region to see an acceleration in annual price growth, which picked up to 7.2 per cent in quarter one, from 6.6 per cent in quarter four of 2020.”

Tomer Aboody, director of property lender MT Finance, said: “The continued shift in buyers’ demands for more space meant London saw the slowest growth, with prices still very high compared to the rest of the country and space more limited.

“Gardens, communities, green spaces and easy commutes are increasing demand for the outer regions, with prices continuing to rise to reflect this.”

By John Corser

Source: Express & Star

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Average UK house price hit new record high in February

The average UK house price hit a new record high of £231,068 in February, according to an index.

Property values climbed by 6.9% annually, up from 6.4% in January, in what the Nationwide Building Society House Price Index described as a “surprise” acceleration.

A stamp duty holiday is due to end on March 31, but there have been reports that it could possibly be extended for another three months.

Robert Gardner, Nationwide’s chief economist, said: “February saw the annual rate of house price growth rebound to 6.9%, from 6.4% in January. House prices rose by 0.7% month-on-month, after taking account of seasonal effects, more than reversing the 0.2% monthly decline recorded in January.

“This increase is a surprise. It seemed more likely that annual price growth would soften further ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase.”

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Mr Gardner added: “Many people’s housing needs have changed as a direct result of the pandemic, with many opting to move to less densely populated locations or property types, despite the sharp economic slowdown and the uncertain outlook.”

Howard Archer, chief economic adviser to the EY ITEM Club said house prices are predicted to fall by around 3% over 2021.

He said: “This had been revised from an expected decline of 5% given the housing market measures expected in the Budget.

“The EY ITEM Club expects housing market activity to gradually improve late on in 2021 allowing prices to stabilise as the UK’s economy establishes a sustained firmer footing and the labour market comes off its lows.

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

Tomer Aboody, director of property lender MT Finance, said: “An increase in house prices in February further confirms that even though the stamp duty holiday was earmarked to end shortly, buyer demand and desire for more space – both inside and out – outweighs any potential saving.”

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Tom Bill, head of UK residential research at Knight Frank, said: “Price growth strengthened in February due to a relative imbalance between supply and demand.

“While it is a relatively straightforward process to register as a buyer, sellers have held back, which has led to a shortage of supply that has put upwards pressure on prices.

“Sellers who are home-schooling or simply concerned about opening their home to viewings due to new Covid variants have hesitated in the first two months of the year.

“With the return of schools and Covid cases falling, more sellers are now gearing up to list their property, which will put downwards pressure on prices from this month.

“Any extension of the stamp duty holiday in the Budget will exacerbate this trend as more owners believe they will be able to complete before the end of June. While we expect downwards pressure in the second quarter of the year, we expect flat prices over the course of 2021 as more seasonality and balance between supply and demand returns from the summer.”

Source: Express & Star

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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.

BY RYAN BEMBRIDGE

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.”

BY RYAN BEMBRIDGE

Source: Property Wire

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