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Property industry reacts to UK house price data

Residential property prices increased by 0.4% in February, marking the fourth monthly increase in a row, according to the latest Halifax house price index.

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The data shows that during the month property prices grew 1.7% on an annual basis, against a 2.3% in the prior month.

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The figures showed the average cost of a home in the UK is now £1,000 higher than last month.

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Source: Property Industry Eye

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House prices remain remarkably stable

The UK economy has shown unexpected resilience in the face of rising interest rates and inflation. Agreed, the economy fell into a recession in the second half of last year, but so far, a very mild one.

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The high unemployment, financial stress and big company corporate failures that looked possible a couple of years ago have not materialised.

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The housing market has also held up, confounding expectations of sharply lower house prices.

The last time I wrote about house prices was in November 2022, in the aftermath of Kwasi Kwarteng’s ill-fated mini-budget. At that time I forecast a 15 per cent decline in house prices.

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Source: Reaction

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Housing market shows signs of picking up

Signs of life were seen in the UK housing market in the new year with a rise in the number of mortgages being approved.

Activity remains weak overall, with potential buyers still nervous about high interest rates.

But the latest Bank of England data shows approvals for house purchases rose to 55,200 in January from 51,500 in December.

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This was the highest level since October 2022. Borrowing on credit cards also picked up last month. People took on £1.9bn more in credit on cards, car finance and other loans in January than they repaid.

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Mortgage lenders have been shifting the interest rates charged on home loans at a rapid rate since the start of the year. This started with some significant cuts to the cost of new fixed-rate deals.

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BBC News

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Why the ‘mood music’ surrounding the housing market outside London has changed

An influx of new residents into Manchester, Birmingham, Leeds, Bristol, Edinburgh and Glasgow helped the housing market remain resilient during 2023, according to a new report.

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New research from global property advisor JLL shows there was a surge in demand from renters and buyers for prime residential properties across the UK’s ‘big six’ despite high inflation and interest rates.

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The report, which tracks residential development activity, prices and rents across the six areas, highlighted a desire from city centre residents to live in ‘vibrant, highly-amenitised and well-connected central locations’.

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City A.M.

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House prices fall by -1.4% in December – ONS

Average house price annual inflation was negative 1.4% in the 12 months to December 2023, compared with negative 2.3% (revised estimate) in the 12 months to November 2023, according to the latest data from the Office for National Statistics (ONS).

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The average UK house price was recorded at £285,000, which is £4,000 lower than 12 months ago.

Average house prices in the 12 months to December 2023 decreased in England to £302,000 (negative 2.1%), decreased in Wales to £214,000 (negative 2.5%) and increased in Scotland to £190,000 (3.3%).

The average house price increased in the year to Q4 (October to December) 2023 to £178,000 in Northern Ireland (1.4%).

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On a non-seasonally adjusted basis, average UK house prices increased by 0.1% between November 2023 and December 2023, compared with a decrease of 0.8% during the same period 12 months ago.

Of English regions, annual house price inflation was highest in the North West, where prices increased by 1.2%.

London was the English region with the lowest annual inflation, where prices decreased by 4.8% in the 12 months to December 2023.

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Source: The Intermediary

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UK house prices rise at fastest rate since January 2023

UK house prices rose 2.5% in the year to January, recording the biggest increase since January last year, as lower mortgage rates and fading inflationary pressures led to increased buyer and seller confidence, Halifax has said.

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January marked the fourth consecutive monthly rise, with a 1.3% uplift on December, the UK’s biggest mortgage lender said, with the average home costing £291,000, £3,900 more than in December.

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Kim Kinnaird, the director at Halifax Mortgages, said: “The recent reduction of mortgage rates from lenders as competition picks up, alongside fading inflationary pressures and a still-resilient labour market has contributed to increased confidence among buyers and sellers.

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Source: The Guardian

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UK house market sees ‘respite’ as mortgage rates ease

The UK’s beleaguered housing market enjoyed some “respite” as buyer activity picked up amid easing mortgage rates, according to an influential property professionals survey found.

Housing professionals said there had been a gradual improvement in market sentiment, influenced by the recent easing of mortgage interest rates, according to the December 2023 report from the Royal Institution of Chartered Surveyors (Rics).

Newly agreed sales figures also suggest a less negative market and short-term sales expectations have also risen with the year ahead and expectations are the most positive they have been since January 2022. The average time to complete a sale is also decreasing, now averaging 18 weeks, down from 20 weeks in September.

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Prices have continued to fall but the rate of decline slowed, Rics said. It forecast prices will continue to creep downwards, before stabilising by the end of the year. Professionals predicted a solid recovery in home sales volumes emerging in 2024.

New data from the Office for National Statistics published this week showed prices were down by 2.1 per cent on the year, which is the biggest drop since June 2011.

The latest feedback on house price expectations remains varied across the UK. House prices in Scotland are expected to rise in first three months of this year – the first-time that Scottish respondents’ three-month expectations for prices have moved into positive since May 2022.

This coincides with an overall improvement in sentiment within the Scottish residential market, according to respondents, which appears to be linked to the trend towards lowered mortgage rates.

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Together with Northern Ireland and north-west England, Scotland is one of the only areas of the UK where respondents expect prices to move higher over the course of 2024.

Tenants are likely to face rises of over 4 per cent over the next year as supply of rented accomodation continues to be constricted. The Rics professionals believe rental growth will average 5 per cent a year over the next five years.

Tarrant Parsons, Rics senior economist, said: “With 2023 proving to be a particularly challenging year for the UK housing market, it appears recent weeks have seen a little bit of respite emerge.

“Supported by an easing in mortgage interest rates of late, buyer demand has now stabilised, and this is expected to translate into a slight recovery in residential sales volumes over the coming months.

By David Connett

Source: i News

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UK house prices to rise by 3% in 2024

Knight Frank has revised its UK house price forecasts as inflation is falling faster than expected, with the company now suggesting that house prices will rise by 3% in 2024.

This compares to a decline of 4% which was predicted in October.

Knight Frank also expects cumulative growth of 20.5% in the five years to 2028.

This is partially a result of stronger demand, as the number of mortgage approvals was 10% higher in November than the previous year and the firms expects a double-digit percentage increase in sales volumes this year compared to 2023.

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The report forecasts slightly lower growth for the mainstream London market (+2%) this year as continued affordability constraints in the capital mean lower-value areas of the country are likely to outperform.

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In the prime country house market, Knight Frank expects a narrower decline this year (-2%) as the market comes down from the highs of the pandemic in recent years.

By Jodie Bradley

Source: Bridging & Commercial

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Have House Prices Fallen Or Risen In 2023?

9 2023 was a tough year for the property market. With an unstable mortgage market, where rates went on a rollercoaster ride, demand was subdued. Many commentators were predicting property prices to decline as a result. But have house prices fallen or have they risen in 2023?
House prices are often seen as a reliable indicator of the health of the property market. And while not infallible, they can offer an insight into how confident sellers and buyers are in the market.

The last year was not the best in terms of confidence in the market. Rising mortgage rates and high inflation has forced many people to put their plans to buy a new home on hold.

There was much speculation how the year will end regarding prices, with many predicting that they will fall. Now that we have data from several industry insiders, can we determine whether house prices have fallen or risen in 2023?

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Halifax Announces Slight Rise In House Prices in 2023
After Nationwide and Rightmove, Halifax has released its latest House Price Index for December 2023. The data shows that house prices have risen by 1.1% compared to November last year.

According to the lender’s figures, this is the third monthly price rise in a row, pushing up the average UK house price to £287,105.

Year-on-year, Halifax’s House Price Index suggests that house prices have risen by 1.7% in 2023, compared to 2022. This means house prices were £4,800 higher in December than in December the previous year.

However positive these figures appear, they contradict data from Nationwide and Rightmove.

Nationwide’s House Price Index for December 2023 showed that house prices have stagnated on a monthly basis in the final month of the year. Compared to December 2022, house prices have fallen by 1.8%.

Rightmoves’ final House Price Index of 2023 also says the year has ended with a decline in house prices by 1.1% compared to the year before. Their data put the monthly house price decline in December at 1.9%, compared to November.

So what’s going on? Have house prices fallen or risen? The difference is down to the use of different datasets.

Halifax and Nationwide are likely to base their figures on data from properties bought with their mortgages, Rightmove uses property prices from all properties listed on their portal.

As such, Rightmove’s data seems to be the most complete. However, not all properties are listed on the portal. This means that all these figures have to be taken with a pinch of salt.

The most complete data to establish if prices have risen or fallen comes from land registry data. So we will have to wait for the Office forNational Statistics’ House Price Index to know for sure, which will be released mid to end of January.

But the likelihood is that house prices will have fallen by around 1% at the end of December 2023 compared to the previous year.

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Predictions For Next Year
While the currently available data doesn’t help to definitively answer the question of have house prices fallen or risen, there is more consensus about what direction prices will go this year.

Most commentators, including Rightmove and Nationwide, agree that house prices are likely to decline in 2024. Even Halifax believes that house prices will drop by between 2% and 4%.

Despite mortgage rates having come down recently as lenders compete for borrowers, mortgage rates are still at an elevated level. Inflation is also slowing, but prices for many everyday items are still high, putting pressure on many household budgets.

The current economic uncertainty will likely continue into 2024, keeping many buyers and sellers cautious.

Source: Property Road

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The Future of the UK Property Market: Analysing Interest Rates in 2024 

Introduction 

The UK property market has always been a significant focus for investors, homeowners, and renters alike. As we look ahead to the year 2024, one crucial factor that will shape the market is interest rates. In this blog post, we will delve into the potential impact of interest rates on the UK property market, exploring the key factors driving their movement and what this might mean for buyers, sellers, and investors. 

Understanding Interest Rates 

Before we discuss the future of interest rates, it’s important to grasp their significance in the property market. Interest rates are set by the Bank of England to control inflation and influence economic growth. When interest rates are low, borrowing becomes cheaper, leading to increased demand in the property market. Conversely, high interest rates can deter potential buyers due to increased mortgage costs. Therefore, fluctuations in interest rates can significantly impact the property market’s dynamics. 

Factors Influencing Interest Rates 

Several factors influence interest rates, and understanding these can help predict their movement in 2024. The Bank of England’s Monetary Policy Committee (MPC) considers various economic indicators, such as inflation, GDP growth, and employment rates. Additionally, external factors like global economic conditions and political events can also affect interest rates. As we approach 2024, the Committee will closely monitor these indicators and adjust rates accordingly. 

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The Impact of Interest Rates on Buyers 

Interest rates play a crucial role in determining affordability for potential buyers. In a low-interest-rate environment, mortgage repayments are more manageable, allowing buyers to enter the market and potentially drive up property prices. However, if interest rates rise significantly in 2024, mortgage repayments may become less affordable, leading to reduced demand and potentially stabilizing or lowering property prices. 

The Impact of Interest Rates on Sellers 

Higher interest rates can also affect sellers in the property market. If mortgage costs increase, potential buyers may be deterred, leading to a decrease in demand for properties. This could result in longer selling times and potentially lower sale prices. On the other hand, if interest rates remain low or decrease, sellers may benefit from increased demand and potentially higher sale prices. 

The Impact of Interest Rates on Investors 

Interest rates can significantly impact property investors. Low interest rates make borrowing cheaper, allowing investors to finance their purchases more affordably. This can lead to increased investment activity in the property market. However, if interest rates rise, investors may face higher financing costs, potentially reducing their purchasing power and limiting investment opportunities. 

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Predictions for 2024 

While it is challenging to predict future interest rates with certainty, experts suggest that interest rates in 2024 will largely depend on economic conditions. If the UK economy experiences strong growth, it is likely that interest rates will gradually rise. Conversely, if economic recovery is slower, interest rates are likely to remain low or even decrease further. The Bank of England will continue to monitor economic indicators and adjust rates accordingly to maintain stability. 

Conclusion 

The future of the UK property market in 2024 will be heavily influenced by interest rates. As buyers, sellers, and investors navigate these market dynamics, it is crucial to stay informed about the factors driving interest rate movements. By understanding the impact of interest rates on affordability, demand, and investment opportunities, individuals can make informed decisions in the dynamic landscape of the UK property market in 2024.