Posts with tag: Fine & Country

Latest Government UK House Price Index reveals jump in annual price change

Published On: November 19, 2020 at 10:55 am

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Categories: Property News

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The commuter belt rental markets where tenants can reduce their rent by as much as half

The latest Government UK House Price Index has been published, showing that house prices have seen an annual increase of 4.7%.

The UK House Price Index summary for September 2020 states that the monthly price increase for a property within the UK was 1.7%. The average house price was recorded as £244,513.

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “No part of the UK economy has flown over the COVID storm like the property market and the picture in September strengthened across the board.

“This is the first time the index will have included the first sales that didn’t only benefit from the Stamp Duty tax break but were prompted by it too, and it shows.

“However, the race for space is still the market’s main driver. Price growth for flats and maisonettes is muted compared to larger properties, which have been flourishing amid high demand. 

“The heavy lurch in favour of more inside and outside space is behind the 21.3% surge in residential property transactions in September, a trend already identified for us by HMRC. 

“With growth nationwide fairly evenly spread, this mini-housing boom is really taking the whole country with it. The North East and Scotland had been lagging behind but growth jumped impressively in these areas, while the South West put in a blistering performance with annual growth of 6.4%.

“Much is being made of the Stamp Duty boost at the moment but the Help To Buy scheme also becomes less generous at the end of March. This will continue to be a contributing factor as we head into next year but it’s the Stamp Duty holiday that is stealing the show at the moment. In fact, the price of new builds had been growing twice as fast as existing properties over the summer but this trend was turned on its head in September.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, says: “This was the moment the market really entered fifth gear this year, leaping from the doldrums into the jet stream with the full weight of lockdown and the Stamp Duty holiday behind it. 

“After weighing on the market nationally in recent years, London is once again helping to lead the way. Buyers in the capital celebrated the Stamp Duty changes by delivering record prices that are now only a whisker away from the half a million-pound mark. 

“Expect this rate of growth to cool though. Fast forward to the autumn and renters have reverted to type and have begun putting off moves until the New Year. However, buyers are still treating vendors to a feast of offers. The bids coming in are quite business-like. There are no longer any silly offers being thrown in speculatively by those misreading the level of fear in the market. 

“Stock is still selling, as long as it’s of good quality and this is where there has been the odd wrinkle. Many landlords, spying an opportunity to get a good price for their rental, have been selling up in an attempt to ride the wave of high demand and offload their buy to let. However, there’s a lot of this stock on the market sitting around because too many landlords haven’t brought their properties up to scratch before listing them.

“We’re seeing some price reductions among those who were a bit late to the party and thought prices would continue to climb rapidly, but these homes are still attracting very healthy valuations compared with a year ago. Poor weather has had the most marked impact recently. Buyers are not as quick to make a commitment when the rain is coming down, even though they know time is against them if they are to capitalise on the Stamp Duty holiday ending in March.” 

Marc von Grundherr, Director of Benham and Reeves, says: “The property market continues to fire on all cylinders with positive movement across the board in all but one region on a monthly basis and a clean sweep where annual price appreciation is concerned. While the current Stamp Duty holiday has caused huge backlogs of sales waiting to complete, there’s no doubt that it has contributed a considerable level of fuel to the furnace. 

“Despite these backlogs, the fires of market activity should continue to burn bright and this will help carry the market through the traditionally quieter winter period.

“London, in particular, seems to have turned a corner, fuelled by international demand ahead of April’s Stamp Duty surcharge for foreign buyers. This confidence in the capital’s market makes for positive reading and a weaker pound has seen a huge influx of activity which is starting to translate to positive top-line price growth.”

James Forrester, Managing Director of Barrows and Forrester, comments: “High levels of homebuyer demand continue to grease the cogs of the UK housing market and this continued price growth is being primarily driven by second and third rung buyers looking for larger homes in the wake of lockdown restrictions. 

“A second national lockdown will only intensify this trend and as a result price growth should remain stable in the mid-term at the very least. Hopes of a vaccine will also breathe new life into the market with any chance of a downturn looking slim at present. However, the end of the Stamp Duty holiday and the furlough scheme could still pose a danger with many predicting the market could fall off a cliff as demand dries up.  

“That said, the current hopper of property transactions is overflowing with deals waiting to be done and this momentum should carry the market through any wider economic potholes that may arise over the next year. We expect the more affordable regional frontrunners to continue to lead the way both where transaction levels and house price growth are concerned.” 

Property industry responds to August 2020 Government UK House Price Index news

Published On: October 22, 2020 at 8:15 am

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Rising rental yields signal a period of opportunity for property investors

The latest UK House Price Index from the Government has been published, revealing an increase in the price properties are being sold for.

The average UK house price is at £239,196, which is up 2.5% in the year to August 2020.

Director of Benham and Reeves, Marc von Grundherr, commented: “Explosive levels of buyer activity at the front of the sales process is continuing to yield a consistent increase where sold prices are concerned, albeit at a less headline-worthy rate of growth.

“Never the less, the UK property market is continuing to defy wider economic turmoil and build on the momentum seen since the market reopened.  

“London certainly seems to be picking up the pace despite a reduction in demand due to orders to work from home where possible. However, as the months have gone on, we’ve seen the green shoots of international demand start to return and it seems as though this is now aiding a house price revival in the capital.” 

Managing Director of Barrows and Forrester, James Forrester, commented: “More positive signs where house price growth is concerned but we’re also seeing the market start to buckle under the weight of stamp duty fuelled activity and this could have repercussions over the next few months. 

“If you’re not yet in the midst of your property purchase, the chances are you won’t complete in time to secure a stamp duty discount. As more homebuyers realise this is now the case, we should see the mad scramble of recent months start to reduce and market activity at the front end of the transaction process start to return to some level of normality. 

“Of course, with so many purchases already stuck in the hopper, the UK property market has plenty of fuel to see it through the quieter winter months and so while activity might start to fall, it’s likely the rate of house price growth will remain strong over the remainder of the year.” 

Matthew Cooper, Founder & Managing Director of Yes Homebuyers, commented: “While the market remains buoyant at present, we’re starting to see the repercussions of another ill-thought-out attempt by the Government to stoke the fires of house price growth.  The current stamp duty holiday has led to a huge uplift in demand which has helped boost market sentiment, there’s no doubt about that.  

“However, we’re now seeing huge delays at the legal stage of the selling process as those operating within this segment of the market have become overwhelmed and are ill-equipped to service such demand levels. 

“As a result, thousands of homebuyers who thought they were due to save thousands in stamp duty, will now be left wondering if this will be the case. For many of them, it won’t and we could see a sharp decline in market health as many pull out of a sale, while others refrain altogether.”

Government UK House Price Index
Property industry responds to August 2020 Government UK House Price Index news

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “Here is official confirmation that the market did indeed get up to a canter over the summer months. The annual rate of growth soared as buyers frustrated by lockdown and lack of space crammed into the market in search of larger properties. That alone explains this year’s sudden rally, as the stamp duty holiday was only introduced in July. A lag will mean any extra demand it created will not be seen in the Land Registry figures before the end of the year. 

“The question is how long this surge can last, with speculation already swirling that the market is set for a fall. Such predictions are probably premature. 

“Though strong growth like this will be temporary and we will soon be entering the traditionally quieter winter period, there are reasons to suspect that this is no ordinary autumn. 

“Consumer confidence among large swathes of the population is still very high. We already know that during lockdown a record 29% of disposable income was tucked away and saved as people were unable to get out and enjoy themselves. Rightmove also reported a 70% annual jump in the number of sales agreed during September and it says that, for the first time on record, agents have more properties marked as sold than available for sale. 

“This is incredible. These aren’t metrics usually associated with a stalling market, though the rate of growth will inevitably slow before picking up again in the New Year.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, says: “This was the moment the market began to catch fire over the summer having emerged from the pandemic in better shape than many predicted. Now, as we enter autumn, the heat still isn’t coming out of this market.

“There’s been some talk lately of what effect the removal of many high LTV mortgages is having on the first-time buyer market which is as much a leading indicator as the all important London market. In the capital, where these two worlds collide, it’s having very little effect. Demand for cheaper properties hasn’t weakened and that’s because the bank of mum and dad is still widely open for business, interest rates remain low and high rents mean it’s still well worth getting on the property ladder. 

“As long as mortgage repayments remain cheaper than the cost of rent, demand to buy a first home will continue to show strength, and first-time buyers everywhere are still able to turn to the Help to Buy scheme if they need to. 

“We are about to hit a period when the market traditionally slows down. When the clocks change, people switch into hibernation mode and new enquiries begin to soften until the New Year. How much the stamp duty holiday will affect that this year remains to be seen, but this incentive plays a relatively muted role in the capital where prices are highest.”

Craig McKinlay, New Business Director at Kensington Mortgages, commented: “Compared to house prices crashing by over 15% in early 2009, it is still pretty remarkable how well the market is faring thanks to pent up demand and a stamp duty break. The market is more robust now than what can be said for the wider economy, and this is only likely to continue for the rest of the year for those who can make their next move on the property ladder.

“However, although home movers are doing well, the same may not be said for first-time buyers. Due to service demand, lenders keep dipping in and out of the high LTV market – making it difficult for this group of borrowers to find a mortgage tailored to their needs. The government’s Generation Buy scheme should reassure some lenders to enter more permanently again, but we need a set date of when this will be introduced sooner rather than later.

“For those that are struggling to secure a mortgage with a high street lender, it may be worthwhile getting in contact with a mortgage broker.”

Despite house price growth, mortgage approvals continue to rise

Published On: October 8, 2020 at 8:24 am

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Categories: Finance News

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Halifax House Price Index

Halifax has released its latest House Price Index, revealing that house prices continue to rise. Mortgage approvals have also increased, reaching the highest levels since October 2007.

Russell Galley, Managing Director of Halifax, comments within the report: “The average UK house price is now approaching £250,000 after September saw a third consecutive month of substantial gains. 

“The annual rate of change will naturally draw attention, with the increase of 7.3% the strongest since mid-2016. Context is important with the annual comparison, however, as September 2019 saw political uncertainty weigh on the market. 

“Few would dispute that the performance of the housing market has been extremely strong since lockdown restrictions began to ease in May. Across the last three months, we have received more mortgage applications from both first-time buyers and homemovers than any time since 2008. 

“There has been a fundamental shift in demand from buyers brought about by the structural effects of increased home working and a desire for more space, while the stamp duty holiday is incentivising vendors and buyers to close deals at pace before the break ends next March. 

“It is highly unlikely that the housing market will continue to remain immune to the economic impact of the pandemic. The release of pent up demand and indeed the stamp duty holiday can only be temporary fillips and their impact will inevitably start to wane. And as employment support measures are gradually scaled back beyond the end of October, the spectre of increased unemployment over the winter will come into sharper relief. 

“Therefore, while it may come later than initially anticipated, we continue to believe that significant downward pressure on house prices should be expected at some point in the months ahead as the realities of an economic recession are felt ever more keenly.”

Read Halifax’s full House Price Index report here.

Property industry reactions

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, has commented: “The property market has been basking in its own economic microclimate lately, characterised by a relative feeding frenzy for larger, more expensive homes. 

“That’s unusual. Historically, the market has traditionally looked to first-time buyers for an indication of direction. However, it is existing homeowners with the buying power to spend more who have been driving house price growth over the past couple of months, fuelled by a desire for more space.

“The share of transactions being taken up by more expensive properties has grown and this role reversal has been responsible for the steep upward lurch in valuations. Increases in prices at this end of the property food chain have a disproportionate effect on house price statistics.    

“There will be a flip side though. When this extra demand for larger homes starts to return to normal, the annual rate of growth overall could sit down as quickly as it stood up. That said, demand is likely to continue to outweigh supply and significant outright falls in prices for any property category remain unlikely nationwide.

“The only caveat to that is the end of the furlough scheme. The Chancellor has been choosing his words carefully and seems deeply opposed to pulling the rug out from under the jobs market. That would be the biggest near-term source of weakness and it remains a larger threat than Brexit.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, has said: “The often-frothy Halifax index has lived up to its reputation and is pushing the bounds of credibility here. 

“However, it underlines just how much the housing market has become the economy’s iron lung of late, while its other vital signs flash amber at best. 

“The market’s rate of climb has been as steep as it has been artificial so don’t expect this to last. The three main drivers remain in play for now — homeowners moving to larger properties, stamp duty relief and pent-up demand, which is still being felt because of delays to the conveyancing and mortgage approvals process. 

“Buyers at the upper end of the market are confident but not careless, and owners of poor-quality stock are having to increasingly watch from the sidelines as their properties sit on the market for extended periods. This is a house price boom fuelled by aspiration, not loose money.”

mortgage approvals
Despite house price growth, mortgage approvals continue to rise

Marc von Grundherr, Director of Benham and Reeves, commented: “It’s now abundantly clear that the market has not only shrugged off any pandemic induced symptoms but has also well and truly waved goodbye to the prolonged uncertainty caused by Brexit. 

“Of course, any knee-jerk restrictions imposed by the Government in the coming months could result in a case of one step forward, two steps back where price growth is concerned. 

“It’s therefore imperative that we allow the industry to remain operational to service the overwhelming levels of buyer demand seen in recent months. Failing to do so could leave many buyers in lockdown limbo and cause house prices to plateau.”

James Forrester, Managing Director of Barrows and Forester, commented: “Yet further signs of a monumental market revival and one that continues to be fuelled by heightened levels of buyer demand. The questions is how much fuel is left in the tank? 

“It’s very likely that we will see this strong level of growth sustained as we see out the remainder of the year. However, with the furloughs scheme coming to an end, this could be the final swan song before a period of muted market activity. 

“The Government has played its hand in anticipation of this with the promise of 95% mortgages for those struggling to get on the ladder. However, even a 5% deposit may prove financially unviable for those struggling to find work. 

“So, while the outlook is certainly a bright one at present, there may well be dark clouds on the horizon. There’s no doubt the market can weather this storm, but its the duration and initial damage of that storm that remains to be seen.”  

Hugh Wade-Jones, Managing Director of Enness Global Mortgages, commented: “Homebuyers continue to take advantage of great mortgage rates where they can and this is allowing them to buy bigger and better with more space both indoors and out. Naturally, these homes command a higher price tag and this is helping to contribute to a much more buoyant rate of house price growth. 

“This is certainly a trend that’s being led by the top end of the market and by those with the financial stability to transact on these larger homes at the drop of a hat. 

“As this demand is met and starts to subside we will see these huge levels of top-line house price growth follow suit and a more ‘normal’ market landscape return.”

Colby Short, Founder and CEO of GetAgent.co.uk, commented: “Home sellers continue to benefit from the uplift in buyer demand spurred by the current stamp duty holiday, with sold prices up across the board on a monthly basis with the exception of Scotland.

“This is being driven by the more affordable regions of the UK where the price threshold of £500,000 and the resulting stamp duty saving is more abundant and this is a trend that should remain consistent right through until next April.”

Matthew Cooper, Founder & Managing Director of Yes Homebuyers, commented: “It’s quite easy to get carried away with the huge house price growth being shown at the front end of the transaction process via mortgage approvals and asking prices. However, the reality is that the market is moving at a far slower rate where actual sold prices are concerned. 

“Although prices have still gained positive ground, this likely to be a temporary hoorah and there is a very strong chance that this growth will recede rapidly come April once the sun has set on the stamp duty holiday.”

Adam Pigott, CEO of OpenBrix, commented: “We’ve seen a huge boost to market sentiment as a result of the current stamp duty holiday and it seems as though a second adrenaline shot may be administered in the form of a potential 95% mortgage for struggling homebuyers.

“Should this be the case, house price growth should remain consistently strong although it’s yet to be seen to what extent the end of the furloughs scheme may dampen this appetite.  

“Until this impact is felt, the market continues to fire on all cylinders and we are a world away from the catastrophic declines that many predicted at the start of the year.”