Posts with tag: house price growth

Nationwide Reports Further Slowdown in House Prices in November

Published On: December 1, 2016 at 10:22 am

Tags: average house price,house price growth,house prices,mortgages

House prices have slowed yet again, according to the November House Price Index from Nationwide.

Although house prices rose by 0.1% on a monthly basis in November, the annual rate of growth has decreased from 4.6% in October to 4.4%. The average house price in the UK now stands at £204,947, down from £205,904 in the previous month.

House price growth in line with 2015

The Chief Economist at Nationwide, Robert Gardner, explains the figures: “UK house prices increased by 0.1% in November, after taking account of seasonal factors. As a result, the annual rate of house price growth slowed slightly to 4.4%, from 4.6% in October, though this is in line with the growth rates prevailing since early 2015.

Nationwide Reports Further Slowdown in House Prices in November

“There are some signs that, despite the uncertain economic outlook, demand conditions have strengthened a little in recent months, reflecting the impact of solid labour market conditions and historically low borrowing costs. Mortgage approvals increased in October, and surveyors report that new buyer enquiries have increased modestly.

“The relatively low number of homes on the market and modest rates of housing construction are likely to keep the demand/supply balance fairly tight in the quarters ahead, even if economic conditions weaken, as most forecasters expect.”

Fixed rate mortgages most popular

Gardner looks at the mortgage market: “Fixed rate mortgages have remained the most popular product type by a considerable margin in recent years. Data from the Council of Mortgage Lenders suggests that over 90% of new mortgages were contracted on fixed rates over the past 12 months. This may be driven by a desire to lock in record low interest rates.

“The proportion of new mortgage lending contracted on fixed rates has increased considerably since the low point in 2010, when less than half of lending was on fixed rates. In recent years, the proportion of lending accounted for by fixed rate deals has persisted at levels well above those prevailing before the financial crisis.”

He continues: “Fixed rate deals are most popular amongst first time buyers, for whom certainty over monthly payments is likely to be particularly important. Indeed, over the past 12 months, 95% of new mortgage lending to first time buyers was on fixed rates.

“Borrowers taking out fixed rate mortgages have benefitted from historically low interest rates. For example, in October, the average two-year fixed rate (for those with a 25% deposit) was 1.51% – over two percentage points below the level prevailing in 2012. Moreover, for borrowers with a 10% deposit, two-year fixed rates are currently the lowest on record, at 2.42%.”

The Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, responds to the latest house prices report: “It would seem that UK buyers are setting a tentative first foot out of their post-Brexit foxholes with a modest increase in new buyer enquiries, just as home sellers, who have remained prominent in the market all year, decide to avoid this seasonal property cold snap and go into hibernation until 2017.

“The UK property market has really taken a battering from a multitude of influences this year, causing uncertainty in the sector, and it has weathered the storm, with prices still maintaining their upward trend this late in the year, albeit slowing the pace.”

He adds: “However, just like the current temperatures, the market will now see stock levels plummet as many choose to put their sale on hold over the festive season and resume their marketing in the New Year. We expect this might see a drop in prices at the last hurdle for 2016 in the December index, although this will be far from unusual and nothing to panic over.”

The Night Tube Launches on the Northern Line

Published On: November 18, 2016 at 12:19 pm

Author: Em Morley

Categories: Property News

Tags: house price growth,house prices,London,night tube,Northern Line

Today’s the day that the Night Tube launches on the Northern Line on Fridays and Saturdays. The service will join the Central, Victoria and Jubilee lines, which rolled out their overnight routes over the past few months.

Ahead of the all-night extension, online estate agent eMoov.co.uk has analysed house prices from north to south on one of the capital’s oldest Tube lines. The research looks at the current property demand by each station, the average house price in each area and the growth in values across the Northern Line in the last year.

Property south of the river dominates demand on the Northern Line – six of the ten most in-demand areas are below the Thames, making southwest London a hotspot for Night Tube homebuyers. Being so well connected makes it a particularly great location for commuters.

Morden, the southernmost stop on the line, is the most in-demand area, at 44%. Zone 3’s Colliers Wood, 43%, and Balham, 41% are close behind.

The Night Tube Launches on the Northern Line

In contrast, the least in-demand areas on the Northern Line are north of the river. Both Charing Cross and Embankment top the list, at just 3%. As prime central London has taken a hit over the last few months, it’s unsurprising that the capital’s most expensive spots have seen demand drop. Hampstead, between Zones 2 and 3 in north London, also ranks as one of the least in-demand areas on the Northern Line, at 8%. Although this isn’t quite on par with prime central London, this affluent residential area has suffered a drop in demand as a result of high prices, at an average of £1,466,516.

As it crosses two lines through the centre of the city, the Northern Line extends into some of London’s most expensive areas.

Tottenham Court Road boasts the highest average house price, at £2,083,431, followed by Hampstead. The third spot goes to Charing Cross, at £1,416,625.

Yet again, the southernmost tip of the Northern Line tops the list for the most affordable property. Morden’s average price is just £398,422. Colindale has the second most affordable house prices, at £405,576, while Zone 5’s Edgware enjoys an average value of £434,211.

The Night Tube will be particularly beneficial to these three areas, as late night crowds will be more inclined to live further out of the centre, knowing that they can still get home cheaply and easily.

The most impressive growth rates on the Northern Line are scattered across all zones. Burnt Oak has recorded the greatest increase in house prices on the line, at 12%, and was trailed by a three-way tie between Edgware, Kennington and Waterloo, at 10%. Morden again shows impressive growth, at 9%.

But despite strong growth around the capital’s outer zones, it was the prime central London stops that recorded the greatest declines. Goodge Street, Warren Street and Tottenham Court Road all saw prices fall by 1%. This is no doubt a result of these areas being home to some of the highest property values.

Clearly, the Night Tube service on the Northern Line will have the most positive effect on homeowners living in the furthest reaches of north and south London, making property on the outskirts of the capital more appealing, particularly to younger would-be homebuyers.

The Piccadilly Line will launch its Night Tube service on Friday 16^th December, and other lines are expected to expand their routes in the New Year.

The Founder and CEO of eMoov, Russell Quirk, comments: “The launch of the Northern Line Night Tube service is no doubt one of the most anticipated, as the line connects both the very north and south peripherals of the city, with the Jubilee and Victoria line services merely brushing the boundary south of the river.

“With the price of property in central London forcing many, especially younger, homeowners and renters out into these peripherals, property close to a 24-hour link that reaches right across the city will be a sought after commodity indeed.”

He continues: “Property demand across the Northern Line reflects this, with the most sought after stations for buyer demand all located in Zone 3 and further afield, with the exception of Clapham North. Although demand should increase the entirety of the Night Tube service, homeowners at each end of the Northern Line should be particularly well placed to see the value of their property increase, in line with this heightened buyer demand.”

Landlords, now might be a great time to buy on the Northern Line…

House Price Growth Slows Again to 5.2%

Published On: November 7, 2016 at 9:36 am

Author: Em Morley

Categories: Property News

Tags: average house price,house price growth,house prices

House price growth has slowed yet again, to 5.2% on an annual basis, according to the latest House Price Index from Halifax.

Quarter-on-quarter, prices rose by just 0.1%. However, this is a slight improvement on last month’s decrease of 0.1%. The quarterly rate of growth has dropped from a peak of 3% in February.

Average house price

Following a monthly change of 1.4% between September and October, the average house price now stands at £217,411.

House Price Growth Slows Again to 5.2%

October’s 5.2% rate of growth is the lowest annual increase recorded since July 2013 (4.6%), reports Halifax.

However, the monthly rise seen in October marks the second consecutive month of growth.

Property market activity

Home sales have broadly stabilised over the past few months. Despite monthly fluctuations, sales have largely plateaued in recent months following the distortions seen earlier in the year, caused by the rush to complete on purchases ahead of the introduction of higher Stamp Duty for additional properties.

Nevertheless, home sales in the third quarter (Q3) were 8% lower than the same period last year, indicating an overall softening in activity.

Mortgage approvals have also steadied, reports Halifax. The volume of mortgage approvals for house purchases – a leading indicator of completed sales – rose in September; the first monthly increase for four months.

Overall, the amount of approvals seems to have broadly stabilised over the last three months, albeit at a lower level than a year ago. Approvals in Q3 2016 were 12% lower than in Q3 2015.

The bank also reports that supply remains historically low. Housing stock was largely flat over the three months from July to September, but remains around the lowest levels ever recorded.

The Housing Economist at Halifax, Martin Ellis, comments: “House prices in the three months to October were largely unchanged compared with the previous quarter. The annual rate of growth continued on its recent downward trend, easing to 5.2%.

“Activity levels, like house price growth, have softened compared with a year ago. Home sales, however, appear to have stabilised in recent months, following the distortions earlier in the year due to the changes to Stamp Duty in April.”

He continues: “Annual house price growth has nearly halved from a peak of 10% in March this year, but remains robust at 5.2%. This expected slowdown appears to have been largely due to mounting affordability pressures, which have increasingly constrained housing demand. Whilst house price growth may ease further in the coming months, very low mortgage rates and a shortage of properties available for sale should help support price levels.”

The Co-Founder and Director of online mortgage lender LendInvest, Ian Thomas, also responds to the index: “October has seen a flattening out of house price growth, with a real effect of the Stamp Duty changes feeding through to reduced market demand. This is something that we are seeing the industry call on the Government to address in the upcoming Autumn Statement and housing white paper publication.

“Many are forecasting that the property market may see a slowdown, as the uncertainty around Britain’s withdrawal from the European Union impacts on customer confidence.”

House Price Growth Fuels Tenant Evictions, According to Generation Rent

Published On: November 1, 2016 at 10:27 am

Author: Em Morley

Categories: Property News

Tags: evictions,house price growth,house prices,rent arrears,Section 21

Recent house price growth of 10% has caused a 60% rise in private tenant evictions, according to lobby group Generation Rent.

The organisation is calling on the Government for greater protection for renters from no-fault evictions.

Private tenants in England are now 2.5 times more likely to be evicted without their landlord giving a reason than they were during the 2009 recession.

Link between house prices and evictions

The analysis found that when house prices started falling, the number of no-fault tenant evictions also dropped shortly afterwards, followed by rent prices. When house prices started rising again, the amount of no-fault evictions followed suit nine months later, having fallen by 44%, with rents picking up after that, having dropped by 1.3%.

Since 2010, evictions have tripled, according to the data. And tenants are not to blame, insists Generation Rent, as rent arrears have dropped over the same period.

David Adler, the Oxford University academic that conducted the study, attributes the findings to investor confidence. He explains that if house prices start rising, then landlords are more likely to decide to sell and evict their tenants. When prices are coming down, landlords are less likely to try and sell and more likely to retain their rent-paying tenants. As a consequence, rent levels experience downward pressure.

Tenant evictions

Private landlords can evict their tenants without needing to give a reason under section 21 of the Housing Act 1988. Tenants served with a valid section 21 notice have no defence, and often move out of their home within the two-month notice period, without the landlord taking further action.

House Price Growth Fuels Tenant Evictions, According to Generation Rent

The study compared data for accelerated evictions – the closest measure to the number of section 21 evictions that the Government publishes – with the Office for National Statistics’ house price index and index of private rental prices.

It found that both house prices and evictions began to drop in the first quarter (Q1) of 2008.

The rental index lagged behind, falling only in Q2 2009 – more than a year later. House prices then began their ascent first, in Q2 2009. Evictions then followed, picking up again in Q4 2009. Again, the rental index lagged behind, only bouncing back in Q3 2010.

Adler compared evictions and house prices at a local authority level over a ten-year period, uncovering a highly significant relationship between house price growth and tenant evictions. He concluded that a 10% increase in house prices fuels a 60% rise in tenant evictions on average.

The total number of accelerated evictions in 2015, 16,441, means that around 39 tenants in every 10,000 were evicted using the no-fault process, with all cases going through the courts. This compares to 4,963 cases in 2009 – around 15 tenants in every 10,000.

However, Generation Rent believes that many more tenants have moved out of their homes without going through the courts, knowing that they have no defence, but the Government does not record these figures. According to the group’s polling, one in four private tenants have experienced an unwanted move.

Are rent arrears the reason?

The organisation reports that landlords often claim to need section 21 powers in order to repossess properties when tenants are in rent arrears, as the official eviction process for these cases (section 8) is too slow.

It insists that this claim might be credible if accelerated evictions rose and fell in line with rent arrears rates. In fact, data from LSL Property Services dating back to 2009 shows that arrears were at the highest level during the recession, at 11% of all rent due, and dropped to less than 7% in 2015 – the reverse of accelerated evictions rates. Generation Rent therefore states that there is very little correlation between no-fault evictions and rent arrears.

It warns that the increase in no-fault evictions comes at a time when increasing numbers of families have no option but to rent in the private sector. According to the English Housing Survey, 1.5m private rental properties are home to children, or 36% of the sector.

Changes to the law

Generation Rent is calling on the Government to reform the private rental sector in order to give tenants better protection from evictions and greater stability in their homes, and encourage landlords who are committed to providing long-term homes.

By abolishing the section 21 eviction process, the group claims that the Government would encourage landlords who wished to sell to do so with their tenants in situ. It believes that should landlords have a genuine reason to repossess their property from a tenant, they must have appropriate grounds to do so and compensate the tenant.

The organisation estimates that three months’ rent would cover the cost of an unwanted move for a tenant. As a result of this proposed change to the law, tenants would enjoy indefinite tenancies and would still be able to move if their circumstances changed.

Adler comments on the study: “These findings demonstrate that house price inflation not only makes homeownership harder to access, but undermines tenants’ security in their current home. When house prices are low and the economy is performing poorly, landlords may not be able to find another tenant or a buyer, so they are forced to negotiate with existing tenants, and rents fall. When house prices are rising, evictions allow landlords to free up their property for sale or raise their rents to a new tenant, and rents then rise.”

The Director of Generation Rent, Betsy Dillner, adds: “A tenant can pay the rent on time every month and otherwise behave impeccably, and yet still be asked to leave with two months’ notice, with no appeal and no help. The influence that house prices have on the level of evictions utterly refutes any claim that tenants are adequately protected.

“If we gave landlords a limited number of grounds for eviction and required them to provide compensation, then many would be deterred from evicting their tenants, while unwanted moves that did happen would be less stressful for the tenant.”

She continues: “Private renting is the only option for growing numbers of families and people on ordinary incomes. By making it as easy as possible for a landlord to cash in their property, our outdated law is inviting hobbyists to house them, instead of professionals.

“As long as the Government prioritises the interests of amateur landlords, renters cannot expect a stable home.”

Landlords, does house price growth have an effect on how likely you are to evict a tenant? And what do you think of Generation Rent’s calls for section 21 to be abolished?

London House Price Growth Drops to 20-Month Low

Published On: October 21, 2016 at 10:55 am

Author: Em Morley

Categories: Property News

Tags: average house price,house price growth,house prices,London,property market

London house price growth has dropped to a 20-month low, according to the latest UK Cities House Price Index from Hometrack.

City level house price growth is currently running at 8.5%, but growth in London has slowed rapidly over the last quarter to the lowest level of growth for 20 months. 11 cities are registering higher growth than at the start of 2016, while nine are slowing.

City house price growth outstrips UK

House price inflation recorded across UK cities by Hometrack is holding steady, at 8.5% per year – higher than the 5.7% growth recorded 12 months ago. House prices in the UK’s major cities are experiencing a higher rate of growth than the overall UK market, where property value growth stands at 7.2% per year.

House price growth continues to run more than three times faster than growth in earnings, as household confidence improves, earnings rise ahead of inflation and low mortgage rates make housing affordable for those with equity.

London House Price Growth Drops to 20-Month Low

Growth rates increasing in 11 cities

11 cities in the UK are recording higher rates of capital growth than in January 2016. The majority of these are large, regional cities outside of the South East, including Liverpool, Manchester, Cardiff and Birmingham. These cities have attractive affordability in terms of house prices to earnings ratio. Annual house price growth currently ranges from 6.6% in Liverpool to 8.0% in Birmingham.

Growth slower across nine cities

Nine cities have seen lower house price growth than at the start of the year, with the greatest slowdown led by Cambridge, Oxford, London and Aberdeen. Hometrack puts slower growth down to affordability, economic and market confidence factors.

London house price growth slowest for 20 months

In the last quarter, London house price growth has dropped to the lowest rate since January 2015. Fears of a potential housing bubble, tightening credit terms and concerns over a mansion tax have impacted demand for housing in London over recent months.

On a quarterly basis, house prices in London have risen by 0.9%, compared to an average of 3.0% over the last three years. This recent slowdown is yet to impact the annual rate of growth, which currently stands at 10%, but is expected to drop towards 5% by the end of the year.

Supply/demand balance across cities

Hometrack’s study of supply and demand relative to house price growth is re-enforced by an analysis of property listings and sales data over the past three years. Sales rates are close to matching the number of new properties onto the market, which creates scarcity and supports house price growth.

In contrast, London has the weakest market conditions, with the supply of new homes on the market growing faster than sales, which have dropped back in recent months due to weaker demand. The ratio of sales to new supply is at its highest level for three years, further emphasising the outlook for a continued slowdown in the rate of London house price growth over the coming months.

The Founder and CEO of eMoov.co.uk, Russell Quirk, comments on the figures: “Whether you believe that Brexit has had an impact on the property market or not, this latest data by Hometrack shows that, in the last quarter, price growth has slowed to a 20-month low in the capital. It’s clear that the European limbo that the country as a whole is currently stuck in, until Article 50 is triggered, has led to an air of panic, with the ratio of sales hitting a three-year high.

“This imbalance of supply outstripping demand is somewhat of an anomaly for those selling in London, and so the resulting fall in prices has probably come as more of a shock than it actually is.

“This supply-demand seesaw is the basic premise on which the UK market and the value of property is decided on. It just so happens that London is currently sitting at the bottom end of this seesaw, along with eight other major UK cities.”

However, he adds: “This said, it’s still home to the highest average house price in the country and, year-on-year, is just one of two cities to have enjoyed double-digit price growth.

“It is important to note that more than half of the cities monitored in the Hometrack index are recording higher annual growth rates than they were in January, so whilst London is cooling, the UK market as a whole doesn’t seem to be feeling the chill.”

House Price Growth Continues to Slow, According to Halifax

Published On: October 7, 2016 at 9:33 am

Author: Em Morley

Categories: Property News

Tags: average house price,Brexit,house price growth,house prices

House price growth has slowed to just 0.1% on a monthly basis, according to the latest House Price Index from Halifax.

House Price Growth Continues to Slow, According to Halifax

Although annual house price growth still stands at 5.8%, prices have only risen by 0.1% over the past month. Additionally, on a quarterly basis, house prices have dropped by an average of 0.1%.

At present, the average house price in the UK is £214,024.

The Founder and CEO of eMoov.co.uk, Russell Quirk, comments on the data: “Halifax’s figures show the market has continued to slow, with growth almost stalling month-on-month, and down marginally over the last quarter.

“Although there may be a small few still walking on EU eggshells when it comes to the sale or purchase of a property, the leave decision continues to have a very minute influence on the UK market at present, as, at this point, we are a member of the EU. This slowdown is undoubtedly seasonal, and looking at this time last year, prices were on a much steeper month-on-month downturn.

“Those small few should remain reassured that until Article 50 is triggered, the UK market will remain in good health when compared to previous years, albeit cooling slightly, and endure no sudden or lasting impact as a direct result of the referendum vote. When Article 50 is implemented, we could see a market wobble, however, the extent of this is likely to be minor.”

He looks ahead: “We are heading into what is seasonally a very busy time in the UK property market in the lead up to Christmas, with many looking to get their sale or purchase over the line before the festive season starts. I’m confident that over the coming three months, we will witness the usual winter flu shot to the market, with the scramble to complete helping to push prices up again.

“Our advice for those on the Brexit fence would be to keep faith in what remains to be a strong UK market, as indecision at this point is based on nothing but empty rhetoric from both sides of the Brexit camps.”

Ian Thomas, the Co-Founder and Director of online mortgage lender LendInvest, also responds to the figures: “Recent months have seen a number of external factors chipping away at demand, such as Brexit, the additional Stamp Duty charge on second homes and the traditionally slow summer.

“The confirmation that the Help to Buy scheme will end later this year is another one. The initiative has been extremely popular, so it will be interesting to see if its conclusion will drive down demand, and therefore sales, of new build properties.

“It is good that the Government has made housebuilding such a significant part of their party conference over the last week, with new measures designed to improve the rate at which we build new homes. The time for talking about the housing shortage must end – we need action, not words.”