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UK house prices surge 5.7 per cent in June

UK house prices shrank by 0.3 per cent in June compared to the previous month, according to data released today.

But the growth rate rocketed 5.7 per cent on an annual basis last month, according to Halifax’s latest house price index, to take the average UK house price to £237,110.

That compares to May’s £237,837, when Halifax recorded an annual growth rate of 5.2 per cent – the best in two years until today’s figures.

Russell Galley, managing director of Halifax, said: “This extends the largely flat trend we’ve seen over recent months.

“More generally the housing market is displaying a reasonable degree of resilience in the face of political and economic uncertainty.

“Recent industry figures show demand looking slightly more stable, with mortgage approvals ticking along just above the long-term average.”

However, he warned that a “major restraining factor” for the UK housing market was the lack of houses up for sale.

“With the ongoing lack of clarity around Brexit, people will be looking for more certainty in the coming months, both to encourage them to list their property and to create the confidence needed to encourage buyers,” Galley added.

“Of course, the likelihood of continued historically low mortgage rates will underpin prices in the near term.”

Halifax figures are a ‘complete outlier’
Howard Archer, chief economic adviser to the EY Item Club, dismissed Halifax’s data as a “complete outlier in annual terms”.

It compares to Nationwide’s annual growth rate of just 0.5 per cent in June and Office for National Statistics (ONS) data of 1.4 per cent growth for April.

“There are signs that housing market activity may have got a little help from the avoidance of a disruptive Brexit at the end of March, but the overall benefit looks to have been limited,” Archer said.

“Improved consumer purchasing power and robust employment growth has also recently been helpful for the housing market but this has recently shown some signs of levelling off.”

Meanwhile, former Royal Institution of Chartered Surveyors (Rics) chairman, north London estate agent Jeremy Leaf, also questioned the figures.

“It paints a confusing picture with the annual house price increase actually greater than it was last month while comparative figures from 12 months ago are also unreliable,” Leaf said.

Buyers ‘looking beyond Brexit’
Leaf added that Brexit uncertainty has softened UK house prices, with today’s figures likely to dampen buyers’ appetites as prices continue to fall.

However, he said that many buyers have stopped delaying purchases and are pushing ahead with house hunts even amid the political uncertainty hitting the market.

“We are finding that some buyers, including some investors, are looking beyond Brexit and political uncertainty and are prepared to go ahead if they can perceive value,” he said.

Brian Murphy, head of lending for Mortgage Advice Bureau, said: “The market trend continues to follow a similar direction of travel to the one that we’ve observed since the beginning of this year; those who need to move are doing so, regardless of politically-driven news headlines, and are far more likely to make the decision to purchase based on their own circumstances should the need dictate.

“The availability of competitive mortgage products is also providing many with support, as lenders remain very much ‘open for business’ with some repricing downwards of late in order to gain more traction in the market.”

What will UK house prices do after Brexit?
EY’s Archer predicted that even in the event of a Brexit deal, the UK’s prolonged departure from the bloc will hamper growth of UK house prices over 2019.

The accounting giant predicts prices to rise only around 1.5 per cent this year.

“Prolonged uncertainty will weigh down on the economy and hamper the housing market,” Archer said.

“Consumers may well be particularly cautious about committing to buying a house, especially as house prices are relatively expensive relative to incomes.”

While a lack of homes on the market and very low interest rates should prop up the market in the meantime, Archer warned the nature of Brexit will dramatically impact UK house prices.

With a deal, house prices could grow by around two per cent over 2020.

But in a no-deal Brexit, Archer warned house prices could “quickly drop” by as much as five per cent.

By Joe Curtis

Source: City AM

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House prices rise monthly but fall yearly

House prices across England and Wales rose by 0.6% on the month but fell by 2.7% on the year, with the average house price now sitting at £219,060, estate agent haart has found.

New buyer registrations have risen by 2.5% on the month and by 3.8% annually. The number of properties coming onto the market this month fell by 1.1% and by 5.9% on the year.

Paul Smith, chief executive of estate agent haart, said: “Brits’ appetite to move home remained very health in May, as buyer registrations continued to creep up by 4% across England and Wales, and by a very significant 9% in London.

“At the same time, housing stock continues to diminish, and as a result, there are now 28 buyers chasing every instruction across London, and 12 across England and Wales.

“While we normally see the market cool down after a spring bounce, vast pent up demand will ensure momentum continues into June and July.

“In particular, families looking to be in their new home for the new school year are having to scramble to find a suitable property in time. A lack of larger homes on the market means that families paid £9,085 more for detached homes last month, than they did the year before.

“A lack of new homes to move into is also forcing large numbers into rental accommodation. In fact, we have seen a 30% increase in tenant demand on the year in London. Landlords who are considering selling up should bear this in mind.

“The reality is that tenant demand will always outstrip rental supply, and the yields to be gained are still far more favourable and a safer bet than the majority of other investment opportunities available.”

Haart said that hopefully, the result of the Conservative Party leadership contest will provide the country with the reassurance to move forward.

Smuth added: “Despite political uncertainty, the need to move home will always be there. But the reality is that the UK housing market thrives under positivity.

“If the new Prime Minister can provide a strong vision of the UK’s post-Brexit future, greater stability and confidence will follow, which should lead to an uptick in transactions.”

In May, there were 12 buyers chasing every property across England and Wales. The market has become less efficient this month, as the number of transactions fell by 4.5% on the month, while the number of viewings has increased by 1.9%.

The average purchase price for first-time buyers has risen by 1.4% on the month and by 4.4% on the year. This comes as the number of first-time buyers registering onto the market has risen by 5.2% on the month but fallen by 18.1% on the year.

The average amount first-time buyers are paying for a deposit has fallen by 1%, while also falling by 3.7% on the year.

The average property price in London has risen by 2.2% on the month but has fallen by 1.1% year-on-year. Meanwhile the number of new buyers entering the market has risen by 3.5% from the previous month and by 8.7% from the same time last year.

The number of tenants entering the market across England and Wales has risen by 6.7% on the month and by 5.5% on the year.

The average rent is down 1.5% month-on-month and 3.8% year-on-year and now sits at £1,261 pcm across England and Wales.

Tenant demand in London has increased by 8.8% on the month, and has risen by 30.6% on the year. London rents are down 0.3% month-on-month but have risen by 7.1% year-on-year.

By Michael Lloyd

Source: Mortgage Introducer

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UK house prices near record high for new homes on market

UK house prices for newly-marketed properties neared a record high this month, spurred on by a cluster of UK regions shrugging off recent political uncertainty.

Four northern regions witnessed their highest ever asking prices in June, pushing property prices nationally up 0.3 per cent to just £91 below June 2018’s record figure of £309,439.

According to Rightmove, the regions of East Midlands, the North West, Wales and Yorkshire & the Humber all enjoyed record asking prices.

That is despite newly-marketed houses in the capital falling in price by an average of 0.4 per cent this month.

“More buoyant markets in the north and midlands are helping to nudge up prices due to the seemingly relentless strength of buyer demand,” said Miles Shipside, Rightmove director and housing market analyst.

“Buyers in four regions are seeing higher new seller asking prices on average than ever before.”

In London, Shipside blamed a combination of stretched affordability, moving costs including stamp duty and Brexit uncertainty for the 0.4 per cent drop in the capital, where prices in June have fallen for the last three years.

Brian Murphy, head of lending at the Mortgage Advice Bureau, said: “The complex current market dynamic is driven by varying levels of consumer sentiment.

“One might suggest that those areas which are seeing more ambitious asking prices are somewhat insulated from the ongoing turbulence at Westminster – that or buyers and sellers in those areas are opting to ignore the headlines and carry on regardless, according to their personal circumstances.”

The scale of the UK’s housing problems were underlined this morning, with new research showing that less than one in 10 towns offer affordable property for nurses, teachers, paramedics, police and firefighters.

Some eight per cent of towns offer affordable housing for key public sector roles, tumbling from 24 per cent five years ago.

Central London remained the least affordable area, while the top three most affordable towns in Britain for key workers are all in the north west.

Halifax, which produced the results, said the gap is due to UK house prices outpacing earnings growth for public sector workers.

Average house prices have risen by 32 per cent compared to key worker average annual earnings growth of seven per cent.

By Sebastian McCarthy

Source: City AM

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Average Property Values Continue To Rise In May

Average property values rose by 5.2 per cent over the past year, according to the latest May Halifax Property Price Index – a dramatic jump in property values by recent standards.

The increase represents the biggest annual rise since the start of 2017, and brings average property values to £237,837

However, the lender stated that the overall message was one of ‘stability’ and that May’s sharp rise in prices was against a backdrop of ‘particularly low’ growth in the same period last year.

On a monthly basis, property values rose by 0.5 per cent, down from a 1.2 per cent rise the previous month, while in the quarter to the end of May prices were 2.5 per cent higher, compared to 4.2 per cent growth in the previous quarter.

Britain’s housing market has slowed since 2016’s Brexit referendum, driven by price falls in London and neighbouring areas, exacerbated by higher purchase taxes on homes costing over 1 million pounds and on second homes and small landlords.

The figures stated by Halifax are in contrast to the latest data released by Nationwide, which reported a much lower annual growth rate in property values of just 0.9 per cent, and a monthly growth rate of 0.6 per cent.

Managing director at Halifax, Russell Galley, said: ‘We saw a slight increase in house prices between April and May, but the overall message is one of stability.

‘Despite the ongoing political and economic uncertainty, underlying conditions in the broader economy continue to underpin the housing market, particularly the twin factors of high employment and low interest rates.’

Mr Galley said that this was supported by industry-wide figures, which suggest ‘no real change’ in the number of homes sold each month, while Bank of England data show the number of mortgages being approved rose by almost 6 per cent in April, reversing the softness seen in the previous month.

He concluded: ‘We expect the current trend of stability to persist over the coming months, though clearly any downturn in the wider economy would be keenly felt in the housing market.’

Source: Residential Landlord

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UK house prices show biggest annual rise since Jan 2017 – Halifax

UK house prices rose at the fastest annual rate since the start of 2017 during the three months to the end of May, mortgage lender Halifax said on Friday, though it added the figure was flattered by weak growth a year ago.

Halifax said house prices in the three months to May were 5.2% higher than in 2018, up from 5.0% annual growth in the three months to April, their highest since January 2017 and beating a forecast in a Reuters poll of economists.

Britain’s housing market has slowed since 2016’s Brexit referendum, driven by price falls in London and neighbouring areas, exacerbated by higher purchase taxes on homes costing over 1 million pounds ($1.27 million) and on second homes and small landlords.

Halifax said prices rose 0.5% on the month in May, in contrast to predictions of a fall, and April’s monthly house price growth was revised up to 1.2% from 1.1%.

“The overall message is one of stability,” Halifax managing director Russell Galley said.

“Despite the ongoing political and economic uncertainty, underlying conditions in the broader economy continue to underpin the housing market, particularly the twin factors of high employment and low interest rates,” he added.

Since the start of this year, Halifax house price data have been consistently stronger than figures from rival mortgage lender Nationwide, which reported annual price growth of just 0.6% in April.

The most recent official data showed house price inflation of 1.4% in the year to March, and Pantheon Macroeconomics economist Samuel Tombs said he expected price growth to remain around this level for the rest of this year..

“Households’ real incomes still are rising at a solid rate, while the recent decline in interest rate expectations should reduce mortgage rates soon,” he said.

Reporting by David Milliken; Editing by Alistair Smout

Source: UK Reuters

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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