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UK house price growth eases, London a drag

UK house price growth slowed in May, while all but two London boroughs saw a decline, according to the latest survey from Rightmove.

House prices rose 0.9% on the month in May compared to a 1.1% increase in April. On the year, prices were 0.1% higher, versus a 0.1% drop the month before.

Rightmove said four out of 11 regions were “bucking the Brexit blues”, with Wales, the West and East Midlands and the North West all setting new asking price records for newly-marketed property.

However, in the capital, just two of the 32 boroughs – Barking and Dagenham and Bexley – saw prices increase.

Mile Shipside, Rightmove director and housing market analyst, said: “Price increases are the norm at this time of year, with only one fall in the last ten years, as new to -the-market sellers’ price aspirations are under pinned by the higher buyer demand that is a feature of the spring market.

“Indeed the 0.9% monthly rise is consistent with the previous two years’ average rise of 1.0% over the same period. What will seem inconsistent to some, given the ongoing uncertainty of the Brexit outcome, is that four out of eleven regions have hit record highs for new seller asking prices.”

North London estate agent and former RICS residential chairman, Jeremy Leaf, said: “Asking prices are not selling prices, which explains why some of these figures do not match results from other recent housing surveys. Overall, although there has been little change, that masks some considerable regional differences. For instance, London is acting as a drag on the rest of the UK housing market and prices don’t include inflation so have risen or fallen further in real terms.

“The spring bounce is taking place but not reaching to the heights we would have expected and certainly not in the capital.

“Looking forward, we are not expecting significant changes one way or the other, at least until Brexit is clarified.”

By Michele Maatouk

Source: ShareCast

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House Prices Recover in April

House prices in the UK grew 1.1% in April after a fall in March, according to the latest figures from Halifax.

The Halifax house price index revealed in March that house prices fell 1.3% over the month. However, prices rebounded in April with a 1.1% monthly rise, pointing to the volatility in the country’s housing market. House prices had been expected to fall by 1.6% over the month. The average price of a home in the UK now stands at £236,619, according to the country’s largest mortgage lender.

Average property prices were also up compared to last year. In the three months to March 2019, UK house prices grew sharply by 5% compared to last year, while a growth of only 4.5% was expected. This annual growth rate was almost double that seen in the previous month, when house prices grew 2.6% year-on-year in the three months to March. It is also higher than the average annual house price growth seen over the last decade. For the last ten years, the average price of a home in the UK has risen by £81,956, or an average of 4.3% each year.

However, surveys from other lenders show differing results than those from Halifax. According to the Nationwide Building Society, for example, annual house price growth in the UK has been below 1% for the last five months in a row.

“The blistering volatility of this index has returned as the Halifax house price weather vane spins itself into a frenzy once more,” said Lucy Pendleton, founder and director of estate agents James Pendleton. “The index has already come under scrutiny this year after months of erratic monthly growth figures. These can be more sprightly than the smoothed annual and quarterly numbers, but even so, they’ve been turning heads with the extremes with which they have been moving.

“One explanation for ricocheting growth figures like this is persistently low stock levels. In sought after areas, this can lead to demand being supercharged one minute and gone the next, with price rises coming in waves as brief competitions for limited numbers of homes come and go.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Less volatile measures point a far more subdued picture. For instance, Rightmove’s measure of online asking prices fell by 0.1% year-over-year in April, while Nationwide’s measure rose by a mere 0.9%. That said, we doubt that house price growth at the national level is about to turn negative for a sustained period.

“Mortgage rates have held steady for low LTV loans and have fallen steadily over the last year for high LTV products, offsetting some of the impact of Brexit uncertainty on high demand. In addition, maximum mortgage terms have continued to lengthen, pushing down monthly repayments and thereby making home ownership initially appear more attractive.

“Meanwhile, year-over-year growth in households’ real incomes remains on track to pick-up this year to about 2.5%, from 2.2% in 2018, thanks to lower inflation and more supportive fiscal policy. Accordingly, we still think that year-over-year growth in the official measure of house prices will pick up to around 1.5% by the end of 2019, from 0.6% in February.”

Source: Money Expert

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UK house prices gather a bit more speed in April – Nationwide

Growth in UK house prices picked up slightly in April, data from mortgage lender Nationwide showed on Wednesday, adding to other signs that a slowdown in the housing market ahead of Brexit might have bottomed out.

Prices rose by 0.9 percent in annual terms, speeding up from a rise of 0.7 percent in March.

That was the biggest increase since November although it was still weak compared with recent trends in the often surging UK housing market – prices were rising by about 5 percent a year at the time of the Brexit referendum in 2016, according to Nationwide.

In monthly terms, prices rose by 0.4 percent after rising by 0.2 percent in March, also the biggest increase since November.

Economists polled by Reuters had expected prices to increase by 0.7 percent in annual terms and to rise by 0.2 percent compared with March.

Robert Gardner, an economist with Nationwide, said first-time buyers appeared to be defying the jitters around Britain’s still uncertain departure from the European Union, helped by low interest rates and the lowest unemployment rate in more than 40 years.

“While the ongoing economic uncertainties have clearly been weighing on consumer sentiment, this hasn’t prevented further steady gains in the number of first time buyers entering the housing market in recent quarters,” he said.

The number of mortgages taken out by first-time buyers was approaching pre-financial crisis levels, the data showed.

While prices have been rising across the country as a whole, prices in London have fallen according to various measures of the market, hit by a combination of unaffordable prices for many buyers, tax changes affecting the buy-to-let market and the Brexit uncertainty which has weighed heavily on the capital’s financial services industry.

British Prime Minister Theresa May last month secured an extension to the Brexit deadline until Oct. 31, avoiding the potential shock of a no-deal Brexit for now but leaving the world’s fifth-biggest economy still deep in uncertainty about how it will leave the EU.

Writing by William Schomberg; Editing by Andrew MacAskill

Source: UK Reuters

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Property prices must drop to save market

We should all be worried about a number of conversations regarding the property market that are going on in the corridors of power.

These concern whether buy-to-let investments should be allowed in pensions, and whether savers should be allow to dip into their pensions to pay for a house deposit.

Separately, the lobby group for equity wants personal housing wealth to be included on a new database that will show every individual’s total pension savings.

Finally, there is a suggestion from a former adviser to George Osborne that mortgage lending caps should now be lifted.

For each case there is a compelling argument, but together they threaten to undermine the great progress made in pension saving. And, once you strip away the rhetoric, they are all just about keeping the property gravy train going.

We have such a crackpot relationship with housing in this country.

Doing well in the property market wins praise, even though the vast majority of us have done nothing to earn it.

It is one of the most dysfunctional markets, and is constantly propped up by government-backed incentives, from right-to-buy and mortgage interest relief under Margaret Thatcher, to Gordon Brown’s HomeBuy Direct and Help to Buy, introduced when Mr Osborne was chancellor.

Every decade or so we have an affordability crunch, when prices climb so fast that banks and building societies begin to overlook lending constraints to maintain the number of loans – all under the pretence of helping first-time buyers.

In 2007, we had lenders offer seven times income and 125 per cent loans; today, we have 40-year mortgage terms and the rise of the guarantor loan. Anything, but anything, to avoid a fall in house prices.

Meanwhile, despite widespread pensions mis-selling in the 1990s, the death of final salary schemes, and the chronic mismanagement and recent collapse of some company plans, retirement saving is in robust health – largely because each of us has been put in control of our future.

Automatic-enrolment into a pension will turn out to be one of the greatest political strategies of recent times, bringing retirement savings to more than 10m who had none previously.

Figures from the OECD group of developed nations show that Britain’s pension fund assets add up to more than the size of the economy, at 105.5 per cent of gross domestic product.

Only Australia, Iceland, Switzerland, Holland and Denmark do better, the latter with a spectacular 204 per cent. Pensions have their problems, not least the confusion over taxation, but private saving is doing pretty well in Britain.

Given the vast wealth in our retirement funds – about £2.9tn – it is little wonder those in the housing sector who are worried about the market stagnating should view this as a pot to be tapped.

But that is short-termism in the extreme, swapping investment for debt.

These high-level conversations have to stop now. The answer to unaffordable homes is not to let people borrow ever greater sums, nor to allow savers to spend their retirement funds on them.

If we care about helping people buy a home, we are all going to have to accept that a fall in prices is the best medicine.

Channel blocked

Goodness me, Neil Woodford keeps getting himself in a right old pickle at the moment. Just a few weeks ago he was busy shuffling three unlisted stocks from his portfolio onto the Channel Islands Stock Exchange.

The idea was that his holdings in each of these firms would be then counted as listed. This is not the first time someone has done this – but it is highly unorthodox. Of course, the stocks are not really proper listed stocks, no one is buying and selling, so they are not being traded.

And then, what is this? It turns out that the Channel Islands Stock Exchange was not quite so happy with that arrangement after all.

What a mess. All because guidelines say he must not have more than 10 per cent of his fund counted as listed. The reason this proportion has grown so much is because of the vast redemptions on his equity fund.

What is more, the sentiment seems to be that Mr Woodford is well positioned for Brexit. But with Brexit looking further away every day, the day people think his portfolio will be suddenly transformed gets pushed back. He really cannot catch a break.

Clear advantage

What do plumbers and financial advisers have in common?

One of my favourite businesses is Pimlico Plumbers. Their staff are polite, honest, completely upfront. Their fees are utterly transparent, though not cheap.

Their service is brilliant. Despite the fact the firm’s boss Charlie Mullins is a bit annoying, they are rather wonderful.

There is a lesson here for all businesses. Transparency over charges and brilliant service mean customers feel happy paying higher fees. Sadly all too often in financial services, the transparency and the service are all too lacking, while the high fees remain.

James Coney is money editor of the Sunday Times

Source: FT Adviser

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Average Scottish house prices suffer first annual fall in 3 years

Property prices in Scotland dropped in February for the first time since March 2016, official figures have shown.

Registers of Scotland figures showed the average price of a property in Scotland in February 2019 was £145,762 – a decrease of 0.2 per cent on February in the previous year.

Aberdeen saw the greatest decrease, with prices falling seven per cent to an average of £149,435, while neighbouring Aberdeenshire also suffered a fall in values of 5.8 per cent.

Meanwhile, figures from the Office for National Statistics (ONS) showed that overall UK house prices are continuing to slow to the lowest annual increase in seven years, driven by dramatically falling prices in the previously buoyant market of London, where the value of a typical property slumped by 3.8 per cent.

Overall, prices rose just 1.7 per cent in January down to 0.6 per cent in February according to the latest official ONS figures – the lowest annual increase since September 2012. The average UK house price was £226,000 in February, £1,000 higher than a year ago.

North of the border, official figures showed that the biggest price increases were in Midlothian and Perth and Kinross where average prices increased by 9.9 per cent to £185,753 and 8.8 per cent to £192,631 respectively. Average price increases were recorded in the majority of local authorities – 22 out of 32 council areas – when comparing prices with the previous year.

Janet Egdell, accountable officer at Registers of Scotland, said: “The average price of a property in Scotland in February 2019 signalled the first annual decrease since March 2016, falling by 0.2 per cent in the year to February 2019.

“Prices increased in around two thirds of local authority areas and different property types showed a mixed picture, indicating that the market is highly variable across the country in this time of uncertainty.”

The volume of residential sales in Scotland in December 2018 was 7,392 – a decrease of 8.2 per cent on the original provisional estimate for December 2017. This compares with decreases of two per cent in England and 5.1 per cent in Wales, and an increase of 4.3 per cent in Northern Ireland.

The fall in London prices was the largest drop since mid-2009. However, the UK capital still has the highest average house price at £460,000.

Ben Brettell, senior economist at financial services firm Hargreaves Lansdown, said: “Annual UK house price growth slowed to 0.6 per cent in February, the lowest annual rate in seven years. London prices fell 3.8 per cent, their largest annual fall since August 2009 in the immediate aftermath of the financial crisis.

“This follows efforts by policymakers to cut down on riskier mortgage lending, though clearly uncertainty over Brexit will have played a large part in the capital’s faltering housing market.”

Mike Hardie, head of inflation at the ONS, said: “Annual house price growth has slowed to the lowest rate in close to seven years.”

By JANE BRADLEY

Source: Scotsman

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UK house prices growing at slowest pace in almost seven years

Annual house price growth is at its lowest level in almost seven years, with London house prices suffering most.

UK house prices were up by just 0.6% in the year to February with an average of £226,000, a much more subdued picture than the 1.7% increase seen in the year to January.

It marked the lowest annual increase since September 2012 (0.4%) according to the Office for National Statistics, the Land Registry and other bodies who released the figures jointly.

The national slowdown is largely due to falling prices in London and the South East of England.

Prices in London were down by 3.8% in the year to February, faster than the 2.2% decrease seen in the year to January.

In the South East, prices fell by 1.8% during the year.

Mike Hardie, head of inflation at the ONS, said: “Annual house price growth has slowed to the lowest rate in close to seven years.

“Growth in Wales and the west of England was offset by a sustained fall in London and falling prices in the South East for the first time since 2011.”

Jamie Durham, economist at PwC, said “uncertainty around Brexit” was weighing on the capital’s housing market but prices there are still the highest in the UK at an average of £460,000.

He added: “Elsewhere in the UK, however, house prices continued to rise. The highest price growth was in the North West, with annual house price inflation of 4.0%. The Midlands also maintained strong annual house price growth, particularly in the West Midlands, with annual growth of 2.9%.”

Paul Smith, chief executive of Haart estate agents said: “While clarity over Brexit would be helpful – it is not absolutely vital. Although prolonging the inevitable is certainly frustrating, this level of uncertainty has become the new normal, and since the New Year, we have seen buyers sweep their fears under the rug and return to the market.

“Pent up demand has been building for months and Brits are ready to move. The extended negotiation period is not going to stop them.”

Ray Rafiq Omar, chief executive of Unmortgage, said: “There’s a real need to think outside the box to help those who are stuck renting and badly want to own their own home.

“The government needs to take greater steps in meeting housebuilding targets and creating some much needed movement within the market.”

Source: Yorkshire Coast Radio

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UK house price gauge improves for first time in 8 months – RICS

A measure of British house prices improved for the first time since July but prices are still likely to fall in the coming months as Brexit weighs on the property market, according to a survey published on Thursday.

The Royal Institution for Chartered Surveyors (RICS) said its monthly house price balance edged up to -24 in March from -27 in February, which was the lowest reading since May 2011.

A Reuters poll of economists had pointed to a further fall to -30.

“Brexit remains a major drag on activity in the market with anecdotal evidence pointing to potential buyers being reluctant to commit in the face of the heightened sense of uncertainty,” RICS chief economist Simon Rubinsohn said.

Britain’s housing market has slowed since the June 2016 Brexit referendum although some recent indicators have suggested it might be bottoming out.

RICS said a measure of new buyers improved and surveyors were more positive about the long-term outlook, but the number of homes on the market fell for a fourth month in a row.

Rubinsohn said the trend for new residential starts was flat-lining as developers remained cautious, leaving little prospect of a big increase in home building to ease the shortage of properties on the market.

Writing by William Schomberg, editing by Andy Bruce

Source: UK Reuters

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House prices down 1.6 per cent last month after surprise leap in February

HOUSE prices fell by 1.6 per cent month-on-month in March following a huge 6 per cent jump in February, figures show.

Across the UK, the average house price was £233,181 last month – 2.6 per cent higher than a year earlier – Halifax said.

February’s month-on-month increase had been a record for the index, which started in 1983, taking housing market commentators, who described the jump as “eye-watering”, by surprise.

Russell Galley, Halifax managing director, said the 1.6 per cent month-on-month fall “partly corrects the significant growth seen last month and again demonstrates the risk in focusing too heavily on short-term, volatile measures”.

He continued: “Industry-wide figures show that the number of mortgages being approved remains around 40 per cent below pre-financial crisis levels, and we know that lower levels of activity can lead to bigger price movements.

“The more stable measure of annual house price growth rose slightly to 2.6 per cent and is still within our expectation for the year.”

Mr Galley said the challenges of raising a deposit to buy a home and lower housing market activity generally, combined with ongoing uncertainty around Brexit, have had an impact across the country – “but most notably in London, meaning that we continue to expect subdued price growth for the time being”.

Howard Archer, chief economic adviser at EY ITEM Club, said: “A marked correction in house prices was only to be expected in March following the eye-watering and frankly bizarre record 6 per cent month-on-month jump in prices reported in February.

“The overall impression is that the housing market is currently soft as it is being hampered by challenging conditions with buyer caution currently being reinforced by heightened Brexit and economic uncertainties – although there are significant variations across regions with the overall picture being dragged down by the weakness in London and the south east.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said he does not expect to see a sustained period of falling house prices.

He said: “Low unemployment and stable mortgage rates are sustaining housing demand, despite Brexit uncertainty…

“Accordingly, we still expect year-over-year growth in the official measure of house prices to stabilise at about 1.5 per cent this year.”

Sam Mitchell of online estate agents Housesimple said: “The danger of reading too much into monthly price changes at the moment is perfectly illustrated by what we’ve seen in the first three months of 2019.

“Uncertainty around Brexit and low stock levels are major contributory factors, as is the impact of a market slowdown in London.

“If you take London out of the equation, we are seeing more normal market conditions in other parts of the country, particularly in the north, with healthy levels of transactions during this early spring period, when traditionally there’s more activity in the market.”

Source: Irish News

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Northern Ireland is UK’s strongest performing region for house price growth says index

NORTHERN Ireland remained the strongest performing UK nation for rising property prices in quarter one, according to a new index.

Property values in the north are up 3.3 per cent over the last three months, taking the average house price in the region to £142,484, Nationwide Building Society said.

However, the growth rate has softened from 5.8 per cent in the last quarter.

Elsewhere, average house prices in England recorded their first annual fall since 2012, as property values in London tumbled at their fastest year-on-year rate in a decade.

House price growth across the UK remained subdued overall in March, with prices just 0.7 per cent higher annually.

Property values edged up by 0.2 per cent month on month across the UK, taking the average house price to £213,102.

Across England, house prices fell by 0.7 per cent annually in the first quarter of 2019, reaching £255,683 on average.

The fall in the average house price in England was driven by declines in London and the South East – with prices still climbing in many other parts of the country.

Nationwide said it was the first annual price fall in England since the fourth quarter of 2012.

In London, house prices fell by 3.8 per cent annually in the first quarter of 2019.

Nationwide chief economist Robert Gardner said: “London was the weakest-performing region in quarter one, with prices 3.8 per cent lower than the same period of 2018 – the fastest pace of decline since 2009 and the seventh consecutive quarter in which prices have declined in the capital.

“This trend is not entirely unexpected, however, as it follows several years of sustained out-performance which left affordability more stretched.

“Policy changes that have impacted the buy-to-let market in recent years are also likely to have exerted more of a drag in London, given that the private rental sector accounts for a larger proportion of the housing stock in the capital than elsewhere in the country.”

Nationwide said that across the UK, Northern Ireland saw the biggest annual increase in house prices in the first quarter of 2019 with a 3.3 per cent uplift – although house prices in the region are still well below their 2007 peak.

Mr Gardner continued: “Northern Ireland remained the strongest performing home nation in quarter one, although annual price growth softened to 3.3 per cent, from 5.8 per cent last quarter.

“Scotland saw a slight pick-up in annual price growth to 2.4 per cent, while Wales saw a marked slowing in growth to 0.9 per cent (from 4.0 per cent last quarter).”

Mr Gardner said house prices across the South of England, and to a lesser extent in the Midlands, are well above pre-financial crisis peaks, while those in Northern England, Wales and Scotland are still close to 2007 levels.

“However, prices in Northern Ireland are still more than 35 per cent below the all-time highs recorded in 2007,” he said.

Howard Archer, chief economic adviser at EY Item Club, said: “March’s soft house prices reported by the Nationwide maintain the view that the housing market is currently being hampered by challenging conditions, with buyer caution currently being reinforced by heightened Brexit and economic uncertainties.”

Sam Mitchell, chief executive of online estate agent Housesimple, said: “Monthly figures are starting to show a common theme, with positive growth in the Midlands and North of England and negative growth in and around London.

“This is likely to be the pattern for the foreseeable future, until the EU situation is resolved at least, as the impact of protracted Brexit negotiations drags more heavily on the London market.

“The market would have preferred a decision one way or the other. Instead, we are now in this state of short-term limbo, leaving many buyers and sellers unsure what to do.

“Normally, we would expect to see a spike in transaction levels around this time as we enter the traditional spring bounce period, but with the extension to the EU leaving date, the bounce is likely to be a little subdued this year.”

Source: Irish News

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London house prices start to stabilise after three-year dip

Signs that London’s house prices could be starting to stabilise emerged this morning, with a new study showing that values picked up slightly in February.

According to Zoopla, househunters that have previously held off on deals are seeking out buying opportunities in the capital following weaker house price growth amid the Brexit uncertainty.

The property portal said that “while market conditions remain weak, there are signs of a pick-up in demand following a 3-year house price re-correction of London homes”.

The rate of London’s annual house price growth picked up modestly in February, climbing 0.4 per cent when compared with the same month in the previous year.

The number of London postcodes registering a fall in house prices also dipped from 69 per cent in October to 55 per cent in February.

Every city in the UK registered a rise in house prices in February for the first time since 2015.

The city which saw the sharpest year-on-year rise in house prices was Leicester, which registered a 6.8 per cent bump in values over the 12 months.

Richard Donnell, research and insight director at Zoopla, said that there was a “greater realism on pricing by sellers”.

Donnell added: “With unemployment at a record low and mortgage rates still averaging two per cent, buyers appear to be largely shrugging off Brexit uncertainty until there is a material change in the overall outlook.”

Yet today’s figures come despite a swathe of recent data showing that activity in the capital’s housing market has largely continued its downward trajectory in recent months.

House price rises in January fell to 1.7 per cent across the UK, according to recent Office for National Statistics (ONS) data, with London recording the lowest annual growth out of any region.

The Royal Institution of Chartered Surveyors (Rics) also warned recently that uncertainty over Britain’s imminent departure of the EU is likely to damage the UK housing market over the coming months.

By Sebastian McCarthy

Source: City AM