uk property market

The UK housing market is “back to business as usual”, after a welcome level of stability returned to the market following a period of unprecedented uncertainty created by September’s mini-Budget, which sent the price of fixed-rate mortgages soaring.

The property portal reports that a level of stability has returned to the market after a period of unprecedented uncertainty created by September’s mini-Budget, which sent the price of fixed-rate mortgages soaring.

Inflation seems to be on the way down, albeit more slowly than hoped, and while another interest rate rise cannot be ruled out, market forecasts suggest that we are nearing the end of these increases.

All in all, the fundamentals are encouraging for the property market, according to the latest housing market update from OnTheMarket (OTM).

The latest data provided by the property portals shows that 70% of UK buyers are confident that they would buy a property within the next three months, compared to 71% in March.

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As well as continuing confidence among buyers, OTM’s figures also reveals that seller sentiment remains stable, with 64% of vendors confident they would sell their property within the next three months in April, compared with 63% in March.

“There are usually regional variations as there’s no such thing as a uniform property market but even so, this time around there was little fluctuation across the country in April,” said OTM CEO, Jason Tebb.

Meanwhile, almost half – 43% – of all properties were SSTC within 30 days of first being advertised for sale in April. While this is less than last April’s 63%, Tebb points out that market conditions were very different then with double-digit price growth and the ‘race for space’ in full swing.

He continued: “Now, a welcome element of stability has returned, with the numbers perhaps impacted by the Easter holidays and the traditional seasonal dip in the market when families are away and house hunting isn’t a priority.

“While Nationwide building society reports that house prices rose by 0.5% in April after seven consecutive months of falls, of more interest to agents are transaction numbers, as these are a much better indicator of the overall health of the market.

“Encouragingly, transaction numbers are also on the rise after months of declines, according to HM Revenue & Customs. Meanwhile, the Bank of England’s mortgage approvals for house purchases, an indicator of future borrowing, are also rising, although they remain below the monthly average for last year.”

Some volatility is still evident when it comes to mortgages. Mortgage rates, which soared in the autumn before falling back in the early part of this year, have recently edged upwards again as Swap rates, which underpin the pricing of fixed rates, have risen once more.

“There’s good news for first-time buyers however,” said Tebb. “Lenders have been cutting rates on higher loan-to-value(LTV) mortgages, suggesting they’re confident about the prospects for the market.”

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

He added: “A period of relative normality and stability will be extremely welcome after all the ups and downs of the past few months. People move for different reasons and are steadily getting on with the business of moving.

“Despite the recent upheaval, soaring inflation, the rising cost of living and higher mortgage rates, things are settling down and instead of peaks and troughs, the market has transformed into something more consistent. It would be fair to say that the market has rebalanced and looks as though it’s set for ‘business as usual’ going forwards.

By Marc Da Silva

Source: Property Industry Eye

The economic turbulence of the past few years has proved to be a challenging time for many investors. Yet while traditional asset classes such as precious metals or stocks have failed to weather the storm, property has gone from strength to strength.

Research by peer-to-peer real estate investment platform, easyMoney, reveals that during a period of uncertainty or a global crisis, property is among the most reliable investment assets as it continues to deliver good returns even when the wider economic situation is going through a difficult time.

And while looking forward, the outlook isn’t dire, things haven’t really started picking up in 2023. As such, easyMoney has looked at which investment classes performed best during these recent tricky years to understand the options available when navigating the potentially uncertain times ahead.

The research reveals that one of the best investment classes for amateur investors during times of crisis is property.

In 2021, the UK was still in the midst of the pandemic, while in 2022, things got even more complicated with the Russian invasion of Ukraine and Liz Truss’s disastrous mini-budget.

Despite this, the value of property increased significantly, with the average house price rising by 10.1% from £258,430 in 2021 to £284,407. Even in London, where the market failed to match the nation’s wider success during the pandemic, prices increased by 5.9% to hit a high of £530,807.

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The only other asset class to surpass the strength of property during this period was dividend payouts. Dividend aristocrats such as Coca-Cola and RELX increased by 15.2% and 13.3% respectively. However, such investments are often more difficult to access for the amateur investor, reserved mainly for professionals with massive amounts of money to play with.

For the amateur investor, therefore, property remains the best bet. Certainly when compared to other classes that such investors have relatively easy access to.

This includes precious metals. From 2021 to 2022, the value of silver fell by -13.3%; the value of platinum fell by -12.1%; and palladium declined by -11.8%. Only gold enjoyed a boost in value, albeit a modest one of 0.3%.

The stock markets are another reasonable option for amateur investors, but they too could not match the power of property. America’s S&P 500 declined in value by an average of -4.7% while London’s FTSE100 fared better with an increase of 5.9%.

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

Jason Ferrando, CEO of easyMoney, says:

“Property is a reliable investment class and resilient in the face of wider economic struggles, as has been proven since the start of the pandemic and throughout the current financial situation we find ourselves in. People expected house prices to plummet in early 2023 and that simply hasn’t happened.

“But, for amateur investors, it’s not just a question of great returns, it’s also about accessibility. For someone who doesn’t have in-depth knowledge of the stock market and its internal workings, for example, taking advantage of stocks and shares can be daunting and unnecessarily risky.

“Meanwhile, accessibility to the property market once required investors to have enough money to afford at least a mortgage but now, thanks to peer-to-peer investment platforms, this barrier has been removed.

“Peer-to-peer property investment platforms enable investors to get involved with property investment for much smaller amounts of starting capital by contributing their investment towards a larger pot which is then used to develop property.

“At a time when traditional financial institutes are struggling to provide reliable investments for everyday people, peer-to-peer platforms are offering a genuine way for people to make their money work for them.”

Source: Property Reporter

Online estate agent says higher than expected sales levels despite weakest quarterly house price performance since 2011.

The UK housing market is ‘defying expectations’ with stronger than expected sales, despite weakening house prices, according to Zoopla.

The online property portal said the market had seen a boost in the number of homes put up for sale, and that 500,000 homes sales are now expected in the first half of this year, well above the levels seen in the aftermath of the global financial crisis.

However, the figure, if achieved, would still be the lowest half year transaction numbers seen in the UK since 2013, aside from the pandemic affected 2020 figures.

Annual house price growth has slowed to 4.1% year-on-year from 9% a year ago, with prices 1% lower than Ocotber 2022.

The firm said the quarterly growth rate had been negative for the last three months, which it said was the “weakest rate of quarterly growth since 2011” amid “swift repricing nationally”. It added that 65% more homes were available this March compared to the same month last year.

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Richard Donnell, executive director at Zoopla, said: “The housing market is arguably more balanced than it has been for more than three years.

“Levels of supply have recovered and buyers and sellers are not miles apart on where they see pricing and this means deals are being agreed at an increasing rate.”

The property market took a hit after the disastrous mini-budget in September last year and mortgages reached 14-year highs. Sales agreed in March were 16% lower than the same time last year but 11% higher than 2019, Zoopla said, while buyer demand is 43% lower than a year ago. Demand is, however, still 16% higher now than this time in 2019, Zoopla said.

Donnell continued: “Prices are drifting lower compared to a year ago but fears of a major downturn in prices are overdone.

“Falling mortgage rates and a strong labour market are supporting activity levels from committed movers who need to be realistic on price if they are serious about moving home in 2023.”

He predicted: “We expect to see levels of activity continue to steadily improve over Easter and into the summer and H2.”

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

This is more optimistic than the gloomy outlook given by figures from the Nationwide figures last month. House prices fell by 0.8% in March, it said, dropping the largest amount year-on-year for more than a decade, the building society said.

Robert Gardner, Nationwide’s chief economist, said: “It will be hard for the market to regain much momentum in the near term since consumer confidence remains weak and household budgets remain under pressure from high inflation.”

Although, housebuilder Crest Nicholson last month indicated the housing market was slowly recovering and Rightmove said prices rose slightly between February and March.

Zoopla said sellers are having to reduce the prices of homes to shift them, by an average of 4% (£14,000), and homes are taking longer to reach the stage of being sold ‘subject to contract’ – by 71% (15 days) compared to 12 months ago.

Kevin Shaw, national sales managing director at estate agents Leaders Romans Group, said he was “confident” about the coming months. “As spring has sprung, the daffodils are out and we’re entering the traditional season of house moves. Added to that, an increase of ‘sold’ signs is providing some encouragement, as is the fact that house price correction has now taken place, interest rates and mortgage rates are unlikely to go much higher and lenders are competing for borrowing rates.”

He also predicted a boost for the second hand market with the end of Help to Buy, which he explained “will mean many first-time buyers opting for used properties in place of brand new homes”.

By Emily Twinch

Source: Housing Today

For some, 2023’s housing market has had a rosier start than 2022. For others, it has been more hesitant. However you view it, 2023 is still, to a large extent, having to wait for the dust to fully settle following the chaos of Q4 2022.

Nicky Stevenson, MD of Fine & Country, shares her thoughts on what has been happening: “The Bank of England indicates that December mortgage approvals, at 35,600, were at their lowest level since the Global Financial Crisis, down by nearly a third quarter on quarter. However, Rightmove report the number of prospective buyers contacting agents at the start of the year was up 4% compared to the last ‘normal’ market in 2019. The start of January was also the third busiest day on record for property valuations, considered a sign of future demand.”

She adds that by the end of January, the swap rate had pared back to 3.8%, its level of early September. Although the base rate of interest has just risen to 4%, it looks likely to stay below 4.5%.

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Stevenson says: “These factors, together with the latest forecasts for the UK economy, mean that mortgage approvals are likely to settle somewhere above December’s level. There are signs too that inflation has peaked, and the latest independent forecasts for the UK economy released by HM Treasury paint a tentatively more optimistic picture, with the economy now expected to contract in 2023 by less than 1%.”

The rate of house price growth continues to moderate. Nationwide reported annual price growth in January fell to 1.1%, down from 2.8% in December, and all major indices indicate month-on-month marginal falls in prices.

Stevenson comments: “This contrasts with new seller asking prices which rose by 0.9% in January, the equivalent of £3,301, however, they are over £8,000 lower than their peak in October. With the market of 2023 set to be dominated, at least in the short term, by needs-based buyers as opposed to discretionary buyers, price sensitivity will be key to securing interest and offers, with the supply/demand pendulum likely to swing back in the favour of buyers.

“As many have commented, gains achieved in the market in recent times mean that for the majority of sellers a reduction in asking price is unlikely to translate into a financial loss when compared to the purchase price, rather sellers need to ensure their aspirations align to current market conditions.”

Focusing specifically on the prime sector, Stevenson says that year-on-year price growth in the premium markets is currently outpacing the wider market.

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

She notes: “The 10.8% annual price growth continues to be fuelled by high-value activity in London and across the South. At £851,000 the prime market price threshold has risen by over £125,000 compared to January 2021.”

According to Stevenson, the recently released data from the 2021 Census indicates that there are close to 25 million households in England and Wales, of which 62% are in home ownership. This is down from 63% in 2011.

Stevenson concludes: “Such properties are either owned outright or owned with a mortgage or a loan. Mortgage status that has been recorded by the census since 1991 and Census 2021 marks the first time the data has shown that a greater proportion of homeowners are now mortgage free, at 53%, up from 47% in 2011.

“Wales and the South West boast the highest proportion of mortgage-free homeowners of all regions of England and Wales, while only in London is the proportion lower than 50%.”

Source: Property Reporter

The darkest hour is just before dawn, as the saying goes. That could apply to the mortgage market. Much of the recent commentary on the UK housing sector has been relentlessly negative – but much of it is wrong. In fact, there are real reasons for optimism.

While the market has suffered from recent political turbulence and the rising cost of living, there are already signs that the worst is past, and we could soon see the market pick up again.

In fact, agents in the first half of this year may find they’re busier than usual, as buyers and sellers who delayed their plans in the aftermath of the ill-fated mini Budget return.

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A new era

Of course, no one is pretending that nothing has changed. Many buyers did hit the pause button in October when the new government’s financial plans saw swap rates shoot up. Mortgage rates followed, and there were predictions that the base rate could reach record levels. That was bound to knock confidence.

But, since then, policies have changed and swap rates have already come down by more than one per cent. The expectation now is for the base rate to peak at between four per cent and 4.5 per cent, and possibly fall from there. Mortgage rates, likewise, are already under five per cent, and we could see rates back below four per cent early this year.

It’s a similar story with prices. Again, it was obvious we’d see a correction following the turbulence and uncertainty late last year. But much of this has already happened, and it followed a sustained period of increases.

Average UK house prices rose 10 per cent in 2021 and another 12.6 per cent in 2022 to October – up more than a fifth in under two years. Given that 2020 was also strong, despite the onset of the pandemic, what we’ve seen is less of a correction and more the froth coming off at the top of a bull market.

Most importantly though, the indications are that demand remains strong. Activity on property search engines remains high, and recent reductions in mortgage rates should attract more buyers off the sidelines. Add that to better-than-expected GDP growth in the latest figures, and things are looking up.

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

Foundations for growth

Several other factors are also supporting the market. Among these is overseas demand, which has played a central role in key locations such as London. With the pound remaining relatively weak, the UK is once again an attractive market. Along with the return of commuters, that’s helped push demand in the capital back up to 2019 levels, according to one major London agent.

Domestic demand and the crucial first-time buyer market will also continue to see support.

On the one hand, the government announced in December that it would extend the Mortgage Guarantee Scheme by a further year, helping those with five per cent deposits onto the property ladder. Launched in April 2021, it’s already provided help to 24,000 households, with 85 per cent of transactions being first-time buyers. As chief secretary to the Treasury John Glen said: “Extending this scheme means thousands more have the chance to benefit, and supports the market as we navigate through these difficult times.”

On the other hand, the private sector is also innovating to help buyers with private help-to-buy initiatives. Challenges remain around such schemes, including the cost of funding, overall affordability models and total capacity. Nevertheless, we’re likely to see this market continue developing in both depth and range in 2023.

Technology driving innovation in the market

Crucially, technology helping spur innovation is also being more generally adopted by lenders, brokers, agents and others in the mortgage market. By the end of last year, Smartr365’s end-to-end mortgage and protection platform covered more than half of the UK mortgage market by volume. That’s expected to continue to grow through 2023.

Mortgage technology is now in the “late majority” phase of the technology adoption life cycle. That’s to say, it’s finally mature – and becoming ubiquitous.

That will help the mortgage industry become more efficient, better serve existing demand, tap into new buyers, and provide better solutions for customers. It should mean that we can help more people, more quickly to get the support they need to buy and sell.

And it means that brokers and others in the market are better placed than ever to look forward with optimism – whatever 2023 may bring.

By Conor Murphy

Source: Mortgage Solutions

According to new data, a January spike in AML activity across the property sector suggests that those predicting the catastrophic decline of the market in 2023 have done so both prematurely and incorrectly.

The analysis of unique AML data has enabled a comprehensive look at buyer and seller activity within the property sector.

In doing so, this data allows early insight into the health of the market before it is reported by any house price report or mortgage data release.

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Their historic data has already mapped a number of previous market trends.

It shows a -30.6% month to month reduction in AML market activity in December 2021 following the first Bank of England base rate increase.

But while many were quick to call the impending collapse of the market, Credas Technologies, the company responsible for compiling the data, predicted the opposite.

AML market activity climbed 52.4% between December 2021 and January 2022, peaking in June of last year as the market continued to perform strongly.

Following last September’s disastrous mini-budget and the resulting turbulence seen across the mortgage sector, the data also shows AML activity drop at an average rate of -8.1% per month between October and December 2022.

However, 2023 has seen a degree of stability return to the market and the latest figures suggest that the market has bounced back at a considerable rate.

They estimate that by the end of January, AML market activity will have increased by 45.3% versus December of last year, up 21.6% when compared to January 2022, returning to the same levels seen during much of last summer.

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

“We saw a heightened level of market turbulence following last September’s mini-budget which caused an immediate decline in property market activity.

At which point, the property sector naysayers re-emerged to once again make predictions of doom and gloom, having been previously proved wrong when doing so at the start of 2022.

However, our ahead-of-the-curve insight suggests that the property sector has bounced back at an impressive rate when compared to the decline seen during the final quarter of 2022.

At the same time, the current level of market activity has also exceeded that of January 2022 by quite some margin, suggesting that any momentary market wobble could well be in the rear view mirror.

Whilst nobody has a crystal ball, what our data does indicate is that those who have made the most dire of predictions for the housing market in Q1 may well prove, for the second time in a year, to be wildly pessimistic.

Early indications are that the outlook is much healthier than many have so confidently predicted.”

Source: Property Notify