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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.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

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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UK house price growth rises to highest rate in five years

UK house price growth jumped to the highest rate in five years this month, as the market continued to experience a post-lockdown bounce.

Annual UK house price growth rose to 5.8 per cent in October, the highest level since January 2015.

Property prices were up 0.8 per cent month-on-month compared to growth of 0.9 per cent in September, according to the latest Nationwide analysis.

Nationwide chief economist Robert Gardner said: “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.

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“Behavioural shifts as a result of Covid-19 may provide support for housing market activity, while the stamp duty holiday will continue to provide a near term boost by bringing purchases forward.

“However, activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”

Garrington Property finders chief executive Jonathan Hopper warned that the “momentum can not last forever”.

“The demand is real but it’s being underpinned by two finite, and probably fleeting, factors,” Hopper said.

“The first is that many buyers want to move for chiefly emotional rather than financial reasons – typically the desire for more space, and a better lifestyle, away from the big cities.

“The second is the Stamp Duty holiday. Like all holidays, it will come to an end. And with the tax break due to close at the end of March, we’re now seeing a stampede of buyers trying to get their purchases in train so they will complete in time.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

London market remains “robust”

“The housing market has ploughed into the usually quieter autumn period and not even touched the brakes,” said Lucy Pendleton, property expert at estate agent James Pendleton.

“Rumoured trouble in the London market has not materialised. All the major indicators that started punching the top of the dial in late summer are still showing very strongly that a post-lockdown feast in demand is continuing.”

Lockdown sparks surge in home hunters

Dan Leather, real estate partner at law firm Gowling WLG, said:”This spike is undoubtedly supplemented by the stamp duty holiday, but is also symbolic of a more enduring lift in the market as the effects of lockdown come to bear on people’s long-term planning and increased demands on their living space.

“We already know that the house builders and developers are working really hard on design and delivery, to identify and serve the adjusted demands of the purchaser.

“This continues to transition and evolve at pace. This sure makes the new build housing product more attractive than ever before, serving as a further incentive to move and generating activities throughout the new and used housing market.”

By Jessica Clark

Source: City AM

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UK house price growth strongest for 16 years

UK house prices recorded the fastest monthly increase for 16 years in August.

House prices rose 2% in August compared to July, according to the Nationwide House Price Index. This was the fastest month-on-month rise since 2004.

And over the year, house prices increased by 3.7% to £224,123 compared to August 2019.

“House prices reversed losses recorded in May and June to reach a new all-time high,” said Robert Gardner, chief economist at Nationwide.

“The bounce back reflects an unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions,” Gardner said.

He said the rebound was driven by factors including pent-up demand and people reassessing their housing needs as a result of life in lockdown.

“Our research indicates that 15% of people were considering moving owing to lockdown,” said Gardner.

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Economic uncertainty

Nationwide expected the trend to continue in the short-term, helped by the stamp duty holiday. But Gardner said: “Most forecasters expect labour market conditions to weaken significantly in the quarters ahead. This would likely dampen housing activity once again.”

Chris Sykes, mortgage consultant at brokers Private Finance, agreed: “Uncertainty over the strength of the UK’s economic recovery is persisting, while concerns about reintroducing a national lockdown are mounting.

“This could cause the market to readjust to a new economic reality.”

Sykes added that lifting the government ban on evictions in September could lead to an upsurge in evictions and negative publicity for landlords, potentially suppressing appetite in the buy-to-let market.

Miles Robinson, head of mortgages at Trussle, added: “There is a chance we’re experiencing a mini-boom ahead of the real after-effects of the pandemic.”

He urged the government and lenders to “think of ways to ensure the market remains accessible to all.”

Written by: Liz Bury

Source: Your Money

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UK house price growth to remain positive over the next quarter – Zoopla

The latest Zoopla House Price Index has been published, with the bulk of new pricing evidence coming from sales agreed before the lockdown.

Data on pricing for new sales agreed in the last four weeks is starting to feed through and points to a resumption in the upward pressure on house prices seen at the start of the year.

As an example, average asking prices for properties marked as sold on Zoopla, which were rising at 7% in the first three months of the year, have returned to registering a similar growth rate over the first two weeks of June.

Near-term outlook for house prices

Most of these new sales agreed are likely to complete between August and October 2020, which Zoopla expects will show sustained UK house price growth of between +2% to +3% over the next quarter, once they feed into the index.

While some have forecast annual house price falls over calendar year 2020, the portal expects any price falls in the house price indices only to crystallise in the final months of the year.

Economic impacts of COVID-19 to hit home in H2 2020

After an initial rebound, demand is expected to weaken over the summer months as the economic impact of COVID starts to materialise, with figures reported last week by the ONS indicating an acceleration in unemployment.

Caution amongst lenders and more limited availability of 90% loan to value (LTV) mortgages will reduce demand, particularly amongst first-time buyers who, over recent years, have been the engine of the housing market.

In 2019, a fifth of all homebuyers purchased a home with a deposit of 10% or less, so a decrease in the availability of 90%+ LTV mortgages could preclude this cohort of would-be buyers from entering the market, effectively reducing demand.

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Government and central bank support will continue to play an important role in how the economy fares with a knock-on impact for the strength of consumer sentiment.

Retail sales, for example, rebounded more than many expected in May.

While almost a fifth of mortgage holders have taken payment holidays, borrowers are able to take these up until the end of October 2020, meaning support is extended for the rest of the mortgaged sector up until April 2021.

Further support and innovation to support the economy and the housing market cannot be ruled out in these unprecedented times, which will limit the downside, albeit not completely.

Strongest sales rebound in northern cities

New sales agreed, subject to contract, have grown the most in England where the market is open for business.

The rebound in sales has been strongest in northern England, led by Leeds, Sheffield and Manchester where sales are up to 20% higher than in February 2020.

In cities where sales are not keeping pace with pre-COVID levels, including Glasgow, Newcastle and Cambridge, this is down to a lower supply of homes for sale.

Level of homes for sale (inventory) in these cities is significantly lower than last year.

While the new flow of homes for sale is back to pre-COVID levels, the number of homes for sale per estate agency branch is 15% lower than a year ago.

This is a result of the market closure at what is a busy time of year.

Stock levels in Cambridge, for example, are up to 40% lower year-on-year.

Zoopla says that the lack of supply supports their view of house price growth holding steady in the short term.

House price growth

UK house price growth is up 2.4% on the year, and has increased from 1.6% at the start of 2020.

The 20 city index registered slower growth over May, slowing to +2.1% from 2.4% in April as less pricing evidence dragged the growth rate lower.

The city with the highest rate of house price growth over the past 12 months is Nottingham (4.3%), followed by Manchester (3.9%).

Meanwhile, Oxford (-0.6%) and Aberdeen (-2%) have recorded modest price falls.

Regional momentum

Activity levels are expected to rebound in Scotland, Wales and Northern Ireland as these markets reopen and pent up demand is released.

These countries account for less than a fifth of UK housing sales but more activity will support headline measures of demand and market activity in the immediate term.

The Welsh market opened on Monday but demand for homes has been building since the English market reopened, gaining momentum over the last two weeks.

Demand for housing in Wales has now rebounded close to what has been recorded in England.

Sales agreed, however, remain 65% lower than pre-COVID levels in Wales as the physical viewing of property has not been permitted.

Zoopla expects sales volumes to increase over the rest of June and into July, mirroring the rebound in England.

Scotland’s market, which reopens later in June, has seen a similar trend with demand recently returning to pre-COVID levels, but with sales volumes lagging well behind.

Commenting on the findings Richard Donnell, Director of Research & Insight, said:

“The rebound in housing market activity has taken many in the industry by surprise.

“It is welcome news given the projections for falling economic growth and rising unemployment.

“Estate agents and developers are responding and using the upsurge in demand to rebuild their sales pipelines and open up their developments.

“We see returning pent up demand and new buyers entering the market creating upward pressure on prices in the face of a lower supply of homes for sale which has been exacerbated by the lockdown.

“House price growth is set to hold up in the near term and we expect the downward pressure on prices to come in the final months of the year as demand weakens.

“While the average asking price for homes marked as sold on Zoopla are 7% higher than a year ago this is down to an increase in sales in higher value markets where activity has remained subdued in recent years.

“We do not expect the rate of growth in the Zoopla House Price Index to reach this level, rather it is expected to hold steady at 2%.

“The Welsh housing market opened this week and levels of demand have already returned close to the levels seen in England in anticipation of the market reopening. Scotland, where the market reopens on 29 June has also seen demand rise back to pre-COVID levels but sales remain more than two thirds lower and are expected to rebound in the coming weeks.”

Source: Property Industry Eye

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UK house price growth hits a six-year low in September

House prices grew at their slowest pace since April 2013 last month, in keeping with the predominantly flat trend seen over recent months.

On a monthly basis, house prices were actually down by 0.4% in September, while prices were up 0.4% quarter-on-quarter, according to the results of the most recent house price survey from Halifax.

Versus a year ago, the mortgage lender’s House Price Index was ahead by just 1.1% to reach £232,574.

The report also included some revisions to previous months’ figures following an update to the index’s methodology, with Halifax revising August’s monthly rise down to 0.2% from 0.3%.

Halifax’s managing director Russell Galley said: “Underlying market indicators, including completed sales and mortgages approvals, continue to be broadly stable.

“Meanwhile for buyers, important affordability measures – such as wage growth and interest rates – still look favourable.”

Galley added that looking forward, Halifax expects activity levels and price growth to remain subdued while the current period of economic uncertainty persists.

However, the monthly Halifax house price index was just one of many that track the UK market and has periodically been higher than others.

Nationwide building society said annual house price inflation slowed to 0.2% last month, while the Office for National Statistics, which uses data from the Land Registry, estimated it at 0.7% in July.

London estate agency Benham & Reeves’ director Marc von Grundherr said: “These most recent of statistics from one of the country’s volume mortgage lenders are the latest in a very mixed picture and one that adds to confusion as to what on earth the property market is really doing.

“The various indexes of late have not only contradicted each other but often contradict themselves month-on-month – in fact, the numbers have bounced around like a beach-ball on a bungee rope since the beginning of the year.”

Von Grundherr also said the fact that the year-on-year numbers were still positive “defies the gravity” of the current political situation.

Shares in housebuilders like Persimmon and Taylor Wimpey were down in early trade.

By Iain Gilbert

Source: Sharecast News

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UK house price growth ground to a halt in August

House price growth ground to a halt in August across the UK amid signs of a “slowdown” in activity in the property market, according to the latest figures from Nationwide.

Average prices were unchanged between July and August when analysts factored out seasonal variation in the latest house price index from the building society.

The average home in Britain sold for just over £216,000 ($263,000) in August, no higher than a month earlier but up 0.6% on a year earlier.

It marks the ninth month in a row of muted price growth below 1% or even declines on an annual basis.

Marc von Grundherr, director of London estate agent Benham & Reeves, said prices were “climbing at a snail’s pace.”

“While the UK property market may have ground to a halt on a month on month basis, it is an admirable show of defiance to at least register some annual growth, given the seasonalities at play and the addition of political turbulence that continues to plague home seller sentiment,” said von Grundherr.

He said price growth could continue to stall over the next few months as prime minister Boris Johnson takes Britain closer to a no-deal Brexit, but predicted a “consistent and strong uplift” later this year or next.

Robert Gardner, Nationwide’s chief economist, said: “Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued.

“Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable.

“Housing market trends will remain heavily dependent on developments in the broader economy. In the near term, healthy labour market conditions and low borrowing costs will provide underlying support, though uncertainty is likely to continue to exert a drag on sentiment and activity.”

By Tom Belger

Source: Yahoo Finance UK

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UK house price growth slows in May amid Brexit uncertainty

Annual growth of UK house prices remained below one per cent for the sixth consecutive month in May, as political uncertainty continued to weigh on the property market.

Prices fell 0.2 per cent month-on month, while annual house price growth slowed to 0.6 per cent, falling from 0.9 per cent in April and below the consensus of 1.2 per cent, according to Nationwide.

That left the average UK house price in May at £214,946.

Brexit caution weighs on UK housing market

“Nationwide’s data confirm that house prices remain on an essentially flat trend, primarily because Brexit uncertainty has instilled some caution among buyers,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

He added: “The trend likely won’t improve in the next couple of months, given the political deadlock in Westminster.”

The data underlines fears of a persistent slowdown in activity in parts of the UK’s residential market amid uncertainty over Brexit, with industry experts noting in recent months that many buyers and sellers have adopted a “wait and see” approach until the political deadlock comes to an end.

However, following the avoidance of a no-deal Brexit on 29 March, a number of studies have signalled a recent uptick in consumer confidence, with UK Finance finding mortgage approvals at a 26-month high last month.

But Howard Archer, chief economic adviser to the EY Item Club, warned any boost from avoiding Brexit would be “limited”.”With Brexit being delayed until 31 October – and it currently very unclear what will happen then – and the domestic UK political situation volatile, prolonged uncertainty will weigh down on the economy and hamper the housing market,” he said.

And he predicted UK house prices will only rise one per cent over 2019.

First-time buyer numbers start to recover

Nationwide also said today that first-time buyer numbers have continued a steady recovery in recent quarters, apart from in London, where “a period of rapid house price growth…means that monthly mortgage payments would also be unaffordable for a large proportion of the local population”.

The research found that the process of saving up for a deposit was one of the key barriers for many potential buyers.According to today’s study, it takes roughly 15 years for someone earning the typical wage in London to save for a 20 per cent deposit on their first home. Robert Gardner, Nationwide’s chief economist, said: “Survey data suggests that new buyer enquiries and consumer confidence have remained subdued in recent months.

“Nevertheless, indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable.”

He added that those buyers will continue to be put off by the current economic uncertainty, despite high employment and wage growth.

“While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months,” he said.

Volatile UK housing market reflects Brexit divisions

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Once again, we see no real pattern for the housing market emerging – one month prices, transactions or mortgage approvals are up, then down or very little movement, the next.

The good news for us at the sharp end is that there is no major correction being seen or expected for the time being at least, despite some predictions to the contrary.”However, the recent EU parliamentary elections demonstrate the country is still massively divided about Brexit just as the property market is split about how to remove the uncertainty it has created.”

By Sebastian McCarthy

Source: City AM

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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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UK house price growth hits six-year low as experts warn of ‘Brexit downward spiral’

London house prices fell 1.6 per cent in the year to January, official data revealed today, as experts warned a mix of Brexit uncertainty and the death of buy to let are hurting the value of homes.

The sharp price drop in the capital’s housing market meant overall UK house prices rose just 1.7 per cent on an annual basis, the Office for National Statistics (ONS) said today, the lowest rate since June 2013.

London’s decline deepened after a 0.7 per cent drop in December 2018, while homes in the east of England lost 0.2 per cent of their value in January, compared to the same month the year before. This contrasted with growth of 4.2 per cent in the Midlands and 2.8 per cent in northern England.

Although London house prices have fallen, it remains by far the most expensive place to purchase a property in the UK, at an average of £472,000. It is followed by the south east and the east of England, at £321,000 and £288,000 respectively.

Real estate partner at Pinsent Masons, Kevin Boa, said: “It’s no wonder that there is little buyer appetite whilst Brexit uncertainty persists, alongside the death of buy to let, increased stamp duty and the prospect of interest rate rises.”

“Yet regardless of what happens with Brexit, there remains a massive gulf between asking prices and buyers’ ability to afford mortgages, especially in the south east”, he added.

“The bottom line is we are still not building enough homes to meet population forecasts, even if Brexit leads to a decline in net migration. Whatever happens with prices over the coming months and years, this chronic lack of housing is the biggest issue for the UK’s property market.”

John Goodall, chief executive of buy-to-let specialist Landbay, said: “At a regional level, price rises in London continue to lag behind the likes of the east midlands and east Anglia, a sign that demand in the capital is cooling as many buyers migrate away in search of something more affordable.”

Kevin Roberts, director of the Legal & General Mortgage Club, said the figures provide more evidence of a “subdued” market.

“As far as the mortgage market is concerned, however, it’s not doom and gloom at all. The current low-interest climate coupled with increased lender innovation means we’re seeing more and more buyers take their first steps, with the number of first-time buyers hitting a 12-year high last year,” he added.

The ONS also revealed today that growth in London private rental prices remains sluggish, rising by 0.2 per cent in the 12 months to February 2019, up from 0.1 per cent in January 2019.

London’s private rental growth was the lowest in the country, followed by the north east at 0.3 per cent. It weighed on the UK’s overall figure, which was 1.1 per cent in the 12 months to February 2019.

Co-founder of London rental agency Ideal Flatmate, Tom Gatzen, said: “Broadly speaking, the annual rate of rental growth across the UK remains at its most palatable for the last three years.”

He added: “However, these consistent uplifts, regardless of how marginal, continue to put pressure on the already strained cost of living for tenants across the nation.”

By Joe Curtis

Source: City AM

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UK house price growth slows to lowest level since 2013 as uncertainty rattles market

House price growth fell to its slowest pace in almost six years in December as uncertainty continues to weigh on the housing market.

UK house prices rose just 2.5 per cent year-on-year, marking the slowest annual growth since July 2013, according to new figures from the Office for National Statistics (ONS) and the Land Registry.

Growth was dragged down by a 1.1 per cent drop in prices in the east of England, while prices in the south also remained sluggish. Prices in London rose just 0.1 per cent.

The latest figures take the average property value in the UK to £230,776, while London retains the top spot for house prices, with an average value of £473,822. Across the UK, prices ticked up just 0.2 per cent month-on-month.

Mike Hardie, head of inflation at the ONS, said: “House prices continued to grow, albeit at the lowest UK annual rate since July 2013, with growth in the north east and London lagging behind Northern Ireland, Wales and the West Midlands.”

The figures are the latest reminder of the challenges facing the housing market, as both buyers and sellers have been impacted by economic and political uncertainty.

Data published yesterday by Lon Res showed prime property prices in the capital fell 5.7 per cent year-on-year in the fourth quarter.

More than 50 per cent of prime properties had their asking price slashed before being sold, the research stated.

Marc von Grundherr, director of estate agent Benham and Reeves, said the slowing market has been largely impacted by the decline in the value of flats.

“Whilst Brexit remains farcical, we should expect some volatility of course,” he said. “But our view is that given the relatively robust London market, there is cause for significant optimism in both values and transactions from the second quarter onwards.”

But Howard Archer, chief economic adviser to the EY Item Club, warned of continued difficulties as Brexit draws nearer.

“If the UK leaves the EU at the end of March without an approved Brexit deal, house prices could well fall by up to five per cent in 2019 amid heightened uncertainty and weakened economic activity,” he said.

Source: City AM