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House Price Growth at Lowest Level since 2013, Reports ONS

Published On: August 16, 2018 at 8:03 am

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Average annual house price growth was at the lowest level since 2013 in June, according to the latest official House Price Index from the Office for National Statistics (ONS).

The average house price in the UK rose by 3% in the year to June 2018, which is down from 3.5% in May 2018. This is the lowest annual rate of growth since August 2013, when it was also 3%. Annual house price growth has slowed since mid-2016 and has remained under 5% – with the exception of October 2017 – throughout 2017 and into 2018.

This slowdown in UK house price growth over the past two years has been driven mainly by a slowdown in the south and east of England. The lowest annual rate of growth was seen in London in June, where prices dropped by an average of 0.7% over the year, down from -0.2%.

In June, the average UK house price was £228,000. This is £6,000 higher than in June last year and £1,000 higher than May 2018. On a seasonally adjusted basis, the average house price in the UK was unchanged between May and June this year, compared with an increase of 0.5% during the same period of 2017.

By property type

Across the UK, all houses showed a rise in average price in June when compared to the same month last year. Semi-detached houses recorded the greatest increase, at an average of 4.4% in the 12 months to June, to £216,000.

The average price of a flat or maisonette grew by 0.5% in the year to June, to £204,000 – the lowest annual growth of all property types. Weaker growth in UK flats and maisonettes was driven by decreases in the value of this type of property in London. The capital accounts for around 25% of all UK flat and maisonette transactions.

By country 

The main contributor to the increase in UK house prices during June came from England, where the average property value rose by 2.7%, to £245,000. Wales saw house prices increase by an average of 4.3% in the 12 months to June, to stand at £157,000.

In Scotland, the average property value grew by 4.8% over the same period, to £150,000. And the average price in Northern Ireland currently stands at £133,000, following a 4.4% increase

House Price Growth at Lowest Level since 2013, Reports ONS

House Price Growth at Lowest Level since 2013, Reports ONS

over the year to the second quarter (Q2).

By region

On a regional basis, London continued to be the region with the highest average house price in June, at £477,000, followed by the South East and East of England, which stood at £325,000 and £293,000 respectively.

The lowest average price continued to be found in the North East, at £127,000.

The West Midlands recorded the highest annual growth in June, at an average of 5.8%. This was followed by the East Midlands (4.1%).

The lowest annual growth was seen in London, where the average price dropped by 0.7% over the year. This is the lowest annual growth rate for the capital since September 2009, when it was –3.2%. London has shown a general slowdown in its annual growth rate since mid-2016. The second lowest annual growth was in the North West, where prices fell by 0.6% in the 12 months to June.

A recent report from home.co.uk claims that a slowdown in certain UK regions is now spreading to other parts of the country.

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Lee James Pendleton, the Founder Director of independent estate agent James Pendleton, responds to the ONS data: “This is the fifth consecutive month that London house prices have fallen over the year. The capital has dropped from its knees onto its back, but, with every stumble, new blood is coming into the market.

“After a rate rise, however, all eyes are on anything that hints at excessive borrowing and a country addicted to easy money.”

The Executive Director of the Intermediary Mortgage Lenders Association (IMLA), Kate Davies, also comments: “Government policy aimed at recalibrating the balance between the buy-to-let sector and the ability of first time buyers to access the property market has – as intended – put pressure on the buy-to-let sector. This has, in turn, led to a falling off of investment in the sector, which directly correlates with private rental prices in the UK.

“This is confirmed by reports last week by the Royal Institution of Chartered Surveyors (RICS) of a drop in landlords advertising rental properties to let. This is unsurprising, given landlords are weighing up their options in light of their loss of tax relief, which has put pressure on their finances.

“The true impact of these policy changes is still rippling through the system. However, the end result seems clear: decreased investment into the buy-to-let sector by landlords reduces supply, which, in turn, will increase the upwards pressure on rental prices. Unfortunately, it will be those who are currently renting, or seeking suitable properties to rent, who will bear the brunt of the increases.

“More needs to be done to protect and foster the rental sector, especially as homeownership has become unattainable for many. The Green Paper published on Tuesday by the MHCLG [Ministry for Housing, Communities and Local Government] underlines the urgent need for more properties to be made available in the public rented sector: we welcome this – any increase in the number of properties available for sale or rent will help ease the pressure on the private rented sector and the stock or properties available for purchase.  The Government made clear its intentions in last year’s White Paper (Fixing our Broken Housing Market): it is vital that the momentum is maintained so that real results can be delivered.

“Mortgage lenders will continue to underpin the private rented sector by supporting buy-to-let borrowers as best they can, but we need the Government to recognise that putting further financial pressures on landlords will inevitably impact those who are renting.”

Shaun Church, the Director of mortgage broker Private Finance, adds: “A slight correction in house prices is no bad thing for the UK property market. Years of steady house price hikes have created huge affordability issues for first time buyers, so the fact that annual house price growth has fallen to its lowest point in five years will be a welcome change for many. The trend has been reversed completely in the capital and, with negative price growth also seen in the North East, it could be that other regions will see a more relaxed pace of house price rises in the coming months.

“House prices are still rising faster than wages and, until the two are more evenly matched, affordability issues will continue to impact homeownership levels. The good news for buyers is that mortgage rates continue to be very affordable – though with interest rates on the up, it may be wise to lock into low rates sooner rather than later.”

House Price Declines Spread Across More UK Regions

Published On: August 15, 2018 at 9:53 am

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House price declines have spread across more UK regions, in the face of rising supply and falling demand, according to the August Asking Price Index from home.co.uk.

On average, house prices in England and Wales fell by 0.3% in the month. The largest monthly declines were recorded in London and the South East (both 0.6%).

The North West, West Midlands and Scotland were the only regions to record positive house price growth.

Rising supply has led to market saturation in the East of England, and this region looks set to join London and the South East in negative annual growth before the end of the year, home.co.uk reports. The same pattern of a supply-induced slowdown, combined with a pullback in demand, is now affecting the East Midlands and the South West, which is exerting downward pressure on prices.

The West Midlands and North West look like the next regions to be similarly affected, as the negative sentiment that originally emanated from London and, later, the South East, spreads north and west. Consequently, overall annual house price growth is trending to zero and stock levels are trending up.

home.co.uk believes that London and the South East’s woes are far from over, as the two regions suffered the largest price declines over the past month. Asking prices in the capital have been slowly falling for 26 months and, thus far, the only solace is that the latest figures suggest that, perhaps, supply has stopped rising.

Meanwhile, northern property markets continue to perform strongly, as does Wales, which is leading price growth ahead of the West Midlands. These regions – several years later in the cycle than London – are still showing significant market activity, and low or falling time-on-market figures. Although, as mentioned earlier, slowdowns appear imminent in the West Midlands and North West.

The typical time-on-market continues to rise annually in London (10%), the South East (9%) and East of England (14%). Overall, the average time-on-market for England and Wales has increased to 84 days – the same as in August 2017.

Overall supply of properties for sale in the UK has risen by 4%, while the total stock for sale has increased by 10.3% year-on-year.

In August 2017, the annual rate of house price growth stood at an average of 3.3%; today, it is just 1.1%.

Pervert Landlord Installed Secret Cameras in Tenants’ Rooms

Published On: August 15, 2018 at 9:26 am

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Categories: Landlord News

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Pervert landlord films tenants secretly and is spared jail

A landlord has been fined £5,000, plus £500 in legal costs, 100 hours of unpaid work, and given 20 rehabilitation days.

He’s been spared jail, even after he was found to have made 183 videos of naked women, planting cameras in his tenants’ rooms so he could watch them showering and having sex.

Paul Dunster, 59, made the videos over a ten year period to ‘satisfy his sexual needs’.

He initially denied two charges of voyeurism, but later admitted making the secret videos after setting up cameras in the bedroom and bathroom of one of the properties he rented out.

In the Sexual Offences Act 2003, voyeurism is a relatively new offence. These cases often involve an individual filming someone without their consent. They contain a maximum sentence of two years.

Police raided the former security worker’s home in Portsmouth, Hampshire, and found two memory cards containing the voyeuristic videos.

The court heard that Dunster was landlord of seven flats, and had total outstanding mortgages of £870,000.

Prosecutor David Reid told Portsmouth Crown Court: “The first memory card had 18 videos which showed sexual encounters between men and women in the bedroom.

“Those videos lasted a total of 20 minutes but none of the tenants were aware of the camera.

“The second memory card was taken from the bathroom and showed women having baths and showers – women who were also totally unaware they were filmed.

“There was significant planning to this and it was an abuse of trust as the women were tenants.”

Judge David Melville QC said: “The residents would have been disgusted to know you had a camera set up in the bedroom to film people having sex.

“I’m sure people would also have been disgusted to know you set up a camera in the bathroom to satisfy your sexual needs. It is sad story and one which is disgusting.”

Intermediaries Expect Landlord Business to Stabilise in next 12 Months

Published On: August 15, 2018 at 9:02 am

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The majority (65%) of mortgage intermediaries expect the level of landlord business to stabilise over the next 12 months, according to the latest Financial Adviser Confidence Tracking (FACT) Index from Paragon, which is based on interviews with 200 mortgage intermediaries.

This report, covering the second quarter (Q2) of the year, marks the first time that intermediaries have forecast a stable outlook for landlord business since the 2015 Summer Budget, when then Chancellor George Osborne announced plans to phase out tax relief on landlords’ finance costs.

The first round of the tax changes, which are being gradually introduced between 2017-21, was implemented in the 2017-18 tax year and will affect tax payments due by midnight on 31st January 2019.

Alongside the 3% Stamp Duty surcharge on additional properties, and new Prudential Regulation Authority (PRA) rules on buy-to-let affordability and underwriting, the tax changes have had a significant effect on property transactions.

The latest figures from UK Finance show that buy-to-let mortgages for property purchases have dropped by around 40%, from 8,900 in May 2015 to 5,400 in June this year. Landlord remortgaging, however, has risen sharply over the same period, from 8,900 to 12,600.

Intermediaries say that almost half (49%) of landlord business is for a straightforward remortgage, with six out of ten landlords who are remortgaging looking to lock in a better interest rate.

Encouragingly, Q2’s FACT results also include the first increase in the proportion of landlords raising finance for portfolio expansion since 2015 – which is up marginally from 22% in Q2 to 23% – and a small rise in applications from first time landlords, edging up to 14% of the total.

John Heron, the Managing Director of Mortgages at Paragon, comments on the report: “It’s encouraging to see intermediaries forecast a more stable outlook for buy-to-let business after such a long period of negative sentiment. Purchase activity continues at much lower levels, but it is interesting to see the step-up in remortgage business, as landlords look to maximise certainty and minimise costs as the interest rate changes start to take effect.”

Remortgaging Bolstered by Interest Rate Rise, UK Finance Reports

Published On: August 15, 2018 at 8:05 am

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A surge in remortgaging during June was bolstered by this month’s interest rate rise, according to analysis of the latest UK Finance figures.

The report indicates that 37,400 new homeowner remortgages were completed in June, which is up by 8.4% on an annual basis. This £6.8 billion of remortgaging was 13.3% higher than in June 2017.

Meanwhile, 33,700 new home mover mortgages were completed in the month, some 7.9% fewer than in the same month last year. The £7.3 billion of new lending was 6.4% down year-on-year. The average home mover is 39-years-old and has a gross household income of £56,000, UK Finance found.

For first time buyers, there were 34,900 new mortgages in June, down by 3.6% annually. By value, this £5.8 billion of new lending was 1.7% lower. The average first time buyer is 30-years-old, with a gross household income of £42,000.

The report also shows that 5,400 new buy-to-let home purchase mortgages were completed in the month, some 19.4% fewer than in the same month of 2017. This £0.8 billion of lending was down by 11.1%.

Remortgaging Bolstered by Interest Rate Rise, UK Finance Reports

Remortgaging Bolstered by Interest Rate Rise, UK Finance Reports

There were 12,600 new buy-to-let remortgages in June, which is the same as in June last year. By value, this equated to £2 billion – also the same as 2017.

Comments

The Director of Mortgages at UK Finance, Jackie Bennett, explains the data: “Remortgaging continued to dominate in June, with figures up 13% on the same period last year, as existing two and three-year products came to an end and borrowers opted for new deals.

“Despite a boost in recent months, speculation of a base rate rise saw the market remain relatively subdued, with year-on-year declines in activity among both first time buyers and homemovers, as customers adopted a wait-and-see approach.

“House price inflation has moderated in recent months, yet it still remains above earnings growth, and so affordability is still a challenge for would-be borrowers.

“And, although the full impact has yet to be felt, tax and regulatory changes continue to bear down on borrowing activity in the buy-to-let purchase market.”

Shaun Church, the Director at mortgage broker Private Finance, also comments: “Despite numerous pledges and incentives from Government to get more people onto the housing ladder, June showed a disappointing performance in the first time buyer market. Mortgage eligibility remains the key stumbling block for many prospective buyers, so the recent relaxation of lending criteria from major lenders could help boost activity among first time buyers in the future.

“The remortgage rally has continued into summer, no doubt bolstered by the speculation of August’s rate rise. Borrowers may be thinking they have missed the boat to lock into rock bottom rates following the base rate rise, however, rates remain very affordable. Those lingering on a standard variable rate are urged to consider swapping to a fixed rate now, as they could potentially save thousands in the long-run.”

The Group Operations Director at Just Mortgages and Spicerhaart, John Phillips, offers his thoughts: “These latest figures show that the housing market is struggling, especially amongst home movers, where activity is down 7.9%. I think the main reason for this is not that people don’t want to move, but they are reluctant to because Stamp Duty is so high that they are not prepared to shell out thousands of pounds just to move. So, they are staying put.

“The trouble is, while remortgaging is up, which is good – but is more to do with rate rises than anything else – the UK economy needs people to move house, because it has a positive knock-on effect on so many other sectors. So, if the Government wants to fix this, it needs to make a bold statement.

“The Stamp Duty cut has worked for first time buyers, but we need similar incentives for the rest of the market. I would like to see an 18-month suspension of Stamp Duty across the board. This gives the market seven months or so before the Brexit deadline in March, and a year afterwards, to let things settle.”

Boris Johnson makes the Headlines with Criticism of Housing Market

Published On: August 14, 2018 at 9:54 am

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Boris Johnson has made it into the headlines yet again, this time for criticising the housing market in the UK.

The ex-foreign secretary’s latest outburst came on the same day that Theresa May’s Government announced plans to tackle homelessness.

Johnson is still attempting to weather the political storm over comments he made last week about Muslin women wearing face-coverings.

However, his latest column for The Telegraph insisted that “absurdly high” Stamp Duty should be cut and warned of an “oligopoly” of construction companies reducing the supply of new homes by “land-banking”.

Boris Johnson makes the Headlines with Criticism of Housing Market

Boris Johnson makes the Headlines with Criticism of Housing Market

Accusing housing developers of showing “disdain” for young people, he said: “This is meant to be Britain, the great homeowning democracy, but we now have lower rates of owner-occupation for the under-40s than France and Germany.

“That is a disgrace. And you cannot expect young people to be automatically sympathetic to capitalism when they find it so tough to acquire capital.”

The article does not mention the ongoing controversy over his previous week’s column relating to the issue of Muslim head-coverings.

The latest piece came on the same day that the Prime Minister’s Housing Secretary, James Brokenshire, announced the Government’s plans to tackle rising levels of homelessness in the UK.

Responding to the headlines, Alexandra Morris, the Managing Director of online letting agent MakeUrMove, says: “Boris Johnson is right to say that the housing market is in crisis. His announcement appears timed to coincide with the Housing Minister, James Brokenshire, announcing a plan to reduce homelessness, which he disappointingly suggests is in part due to “instability in the private rental market”. The truth is that we’re facing a huge problem of lack of supply, and the dire homelessness situation we find ourselves in now is also symptomatic of the lack of a joined-up housing policy from successive governments. The Government’s current housing policies are just tinkering around the edges of the issue. We need to deal with the cause of the problem, not the symptoms.

“The lack of supply is driving up the percentage of income required for a deposit. This is only one impact. The lack of supply is also creating problems in the private rental sector, with rental prices being pushed up.

She continues: “The danger of just tinkering with the symptoms of the housing crisis are also evident in the private rental sector, where successive governments have introduced a wide range of measures, including the phasing out of mortgage interest tax relief, the impending introduction of the tenant fees ban, as well as proposals to ban no fault evictions and introduce three-year tenancies.

“Whilst we welcome regulation which further professionalises the private rental sector – and we would welcome initiatives such as increasing empty property taxes and incentives to encourage landlords to offer longer tenancies or maintain rent levels for longer – by implementing piecemeal changes with little regard for the ultimate impact, the Government is simply compounding the problem.”

She insists: “What is needed here is a comprehensive strategy to increase supply across the housing market, from properties for those looking to buy, to a greater availability of properties in the rental market. If the Government could get to grips with this fundamental issue, then the problems of lack of security for tenants and an inability to save for a deposit would all be dealt with as a consequence. It’s time the Government stopped implementing sticking plasters and pursued a wholesale transformation of the housing market.”