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December 5, 2019

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uk house price growth

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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

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UK house price growth falls to six-year low in weak start to 2019

UK house prices almost stopped growing altogether in January as the annual growth rate fell to almost a six-year low, figures reveal today.

The 0.1 per cent growth rate was just a fifth of December’s own sluggish 0.5 per cent rate of annual growth, Nationwide’s data showed, and its worst since flat growth in February 2013.

However, month on month prices grew 0.3 per cent at the start of 2019 compared to a 0.7 per cent slip between November and December.

That left the average UK house price at £211,966.

Robert Gardner, Nationwide’s chief economist, said: “Annual house price growth almost ground to a complete halt in January.

“In particular, measures of consumer confidence weakened in December and surveyors reported a further fall in new buyer enquiries towards the end of 2018. While the number of properties coming onto the market also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand.”

He blamed the UK’s uncertain economic outlook for the drop, given the backdrop of a record employment rate and strong wage growth.

“Near term prospects will be heavily dependent on how quickly this uncertainty lifts, but ultimately the outlook for the housing market and house prices will be determined by the performance of the wider economy – especially the labour market,” Gardner added.

Andy Soloman, founder of estate agent adviser Yomdel, concurred, saying Brexit continues to weigh on the housing market as people wait to see how the UK’s exit unfolds.

“Unfortunately for the nation’s homeowners, the Brexit inspired ups and downs that have plagued the market over the last year seem to have remained as the UK continues in its struggle to leave,” he said.

“Going forward we should see a fairly muted performance in the short term, but mortgage rates remain low, wages are creeping up and employment growth is strong, and this will bring an air of stability and consistency if nothing else.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, called it a “sentiment-led deterioration” that mirrors a drop in consumer confidence back in November as the Prime Minister’s difficulties with gathering support for her withdrawal agreement became clear.

“Looking ahead, increasing numbers of prospective house-buyers likely will wait a few months for Brexit uncertainty to fade, forcing sellers to lower asking prices to attract braver buyers in the interim,” he added.

“As a result, year-over-year declines in house prices in the near-term should not be ruled out.”

Source: City AM

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House Price Growth Slowed During Summer

Annual UK house price growth slowed during the summer, resulting in a 2% price increase in the year to June, a report from Nationwide has revealed.

The building society said that annual price growth, though continuing to remain positive, has slowed to a five-year low in June.

Nationwide reports that the price of the average UK home is now £214,745.

For the past 12 months annual house price growth has stayed within 2-3% range, suggesting little change in the balance between demand and supply during this period. The report goes on to say that more recently surveyors reported reduced numbers of new buyer enquires while the supply of houses being put on the market remains constant.

On a quarterly basis the only region to show accelerated annual house price growth was Scotland, with price growth there increasing from 0.2% to 3.1% annually in the first quarter, the report said.

Comparatively, London was the only region to show a decline in annual price growth relative to last year, with prices falling -1.9%.  It should be noted that the capital’s house prices are still more than 50% higher than at their previous peak in 2007, while the national average house price is only 15% higher, the report said.

The building society’s chief economist, Robert Gardner, said that the future of the UK house market depends on the evolution of wider economic markets as well as interest rates: “Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.

“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on house price growth and market activity this year, though borrowing costs are likely to remain low.”

“Overall, we continue to expect house prices to rise by around 1% over the course of 2018”.

Managing director of Garrington Property Finders, Jonathan Hopper, said: “British holidaymakers weren’t the only ones taking a break in August. On this evidence much of the property market was out of action too.”

The report questions to what extent Help to Buy (HTB) is affecting the UK housing market. In the 12 months up to March 2018, HTB equity loan completions increased 21% since last year and accounts for ~8% of total house purchase mortgages in England during this period, of which was most popular in North and East Midlands.

“It is unclear how much HTB activity represents additional demand and how much has simply replaced activity that would already have taken place. The scheme has, however, been a key source of demand for newly built homes in recent years. Indeed, HTB has accounted for more than a third (37% in the last 12 months) of new build completions in England. This is even higher in some regions, such as the North West, where HTB accounted for nearly half of new build purchases”, said the report.

The HTB scheme is scheduled to expire in April 2021, however, there is uncertainty around possible extensions or amendments to the scheme and its duration, said the report. Though the report notes that “[given the] long lead time on many housing developments and the political consensus on the need to increase housing supply, it suggests that the scheme will not come to an abrupt end.”

Source: Money Expert

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House prices fall back in February

House price growth fell back in February to 2.2%, down from 3.2% in January, the latest house price index from Nationwide has revealed. 

Nationwide had reported strong results for the UK housing Market in January – against market expectation and at odds with some other indices.

Overall there was a 0.3% month-on-month fall took the average UK house price to £210,402 – the first time since August 2017 that house prices have fallen month-on-month.

Robert Gardner, Nationwide’s chief economist, said: “After picking up unexpectedly in January, UK house price growth fell back in February, to 2.2% from 3.2% the previous month.

“House prices fell by 0.3% over the month, after taking account of seasonal factors.

“Month-to-month changes can be volatile, but the slowdown is consistent with signs of softening in the household sector in recent months.

“Retail sales were relatively soft over the Christmas period and at the start of the new year, as were key measures of consumer confidence, as the squeeze on household incomes continued to take its toll.”

Meanwhile Jeff Knight, director of marketing at Foundation Home Loans, said the costs of buying a property are still plaguing the sector.

He said: “Despite housing prices dropping slightly, affordability remains a challenge. Many face the likelihood of having to relocate outside the capital for a realistic offer – and given sluggish wage growth and lack of available properties as sellers hold their breath, even that is a challenge.

“Purchasing a property in today’s market can leave many feeling exhausted and disheartened by the process, particularly if they have previous blips on their credit record.

“Providing flexible financial options and a sufficient supply of properties to all those wanting to make the ownership goal a reality is crucial, a top-of-the-list priority across the industry.”

Lucy Pendleton, founder director of independent estate agents James Pendleton, said the results were more in line with what was expected for 2018.

She added: “Cancel that street party, it was just a blip after all. Last month’s optimism has evaporated faster than a snowman on the Equator.

“The January surge looked just as out of place too but Nationwide had already issued its own spoiler alert for this one.

“The firm warned the housing market was slowing earlier this month based on a huge 43% drop in lending at the end of last year.

“If they are right, expect a slow rise, slight fizzle, a gentle landing and no major pop as we move into the second half of the year. House price growth will have to tend to zero at some point if the market is to remain as flat as broadly expected in 2018.”

Source: Mortgage Introducer

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UK house price growth falls to 5.1%

Average house prices in the UK rose by 5.1% in the year to November 2017, down from 5.4% in the year to October 2017, the November ONS House Price Index showed.

In England house prices increased by 5.3% over the year to November 2017 and Wales saw house prices rise by 4.5% over the last 12 months.

In Scotland, the average price rose by 3.6% and in Northern Ireland it increased by 6.0%.

Jeremy Duncombe, director, Legal & General Housing Partnerships said: “The first interest rate rise in a decade has evidently had only a limited impact on annual price growth, with prices continuing to rise in November.

“Though some potential buyers might have been deterred by the base rate rise, for most borrowers the Bank of England’s decision meant only a modest increase of £25 a month for the average borrower.

“However, there remains the potential for another base rate rise in the future. Hopeful buyers and existing homeowners coming to end their mortgage deals would be prudent to begin searching for a new deal now, well before a potential rise is factored in by the market.”

In Great Britain, the average price in November for first-time buyers was £191,376, up 0.6% from the month before and 5.5% year-on-year.

Craig McKinlay, sales and marketing director at Kensington Mortgages, said: “House prices are now rising at more sustainable levels across the UK than in recent years, with some areas such as London even seeing a price correction.

“However many first-time buyers continue to face the affordability challenge of getting onto the housing ladder.

“Rapid increases in the price of property over the past few years mean many hopeful buyers must still play catch-up, while an ongoing lack of housing supply continues to impact the market.

McKinlay added: “The good news is that there is help on hand for those worried about this affordability challenge.

“Not only does the government’s recent announcement of a stamp duty exemption on properties for the first £300,000 make positive reading for first-time buyers, but increased lender support for government schemes like Help to Buy also increases the options for younger buyers with their eye on the ladder.”

The UK Property Transaction Statistics for November 2017 showed that the number of seasonally adjusted transactions on residential properties has increased by 7.1% in the year to November 2017.

Between October 2017 and November 2017, transactions increased by 0.6%.

Ishaan Malhi, chief executive and founder of online mortgage broker Trussle, said: “Those looking to get onto the property ladder should see the current slowdown in price growth as an opportunity to buy. With interest rates still extremely low and the recent changes to stamp duty, first-time buyers are arguably facing better conditions than they have for some time.

“However, affordability is going to be an issue for many. Wage growth has failed to keep pace with inflation, so saving for a deposit is going to be that bit harder.

“Nevertheless, with many parts of the UK now seeing house price growth begin to level off, what was once an almost impossible task is getting a little easier, and this trend should continue over the coming months.”

Source: Mortgage Introducer

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