Posts with tag: house prices

The latest House Price Index (HPI) by the Office for National Statistics has been released, revealing that the average property price in the UK for May 2019 was £229,431.

Highlights also include:

• House prices for property in the UK grew by 1.2% annually in the year to May 2019, down from 1.5% in the year to April 2019.
• House prices for property in the UK grew by of 0.1% between April 2019 and May 2019, compared with a rise of 0.4% during the same period in 2018.

John Goodall, CEO and Co-founder of buy-to-let mortgage specialist Landbay, commented: “Considering the wave of political and, by extension, economic uncertainty that the UK has been riding since the start of the year – the fact that prices are still growing at all underlines the strength of the housing market. The old cliché rings true; people will always need somewhere to live.

“However, the reality is that affordability remains an almost unshakeable concern for first-time buyers despite the recent uptick in wage growth. Regionally, this is reflected in London by the recent cooling of demand in favour of areas like the East Midlands and East Anglia where prices are rising much faster.

“Prospective buyers should take heart that despite the recent fall in residential transaction volumes, there is significant appetite for mortgage lending from lenders as a collective. The fact that house price growth is slowing means now could well be the time to act.”

Paul Stockwell, Chief Commercial Officer of Gatehouse Bank, has shared his thoughts: “Falling house prices in London have become the norm, but the small annual decline in the North East points to low transaction volumes having an impact on the market across England. 

“It isn’t the first time prices fell in the North East this year, they also took a small dent back in February and March, but declining buyer activity is almost certainly forcing sellers to drop their prices.

“Brexit uncertainty is playing a role, with buyers still in the dark over which way the wind is going to end up blowing, but affordability is almost certainly dampening price growth. 

“If the annual price growth drops any lower, we will see the lowest figures in six years, and with price falls registering outside London and the South East, this is starting to look more likely. Further price falls may be needed to bring buyers back to the table, especially while they wait on Brexit to be decided.”

The next UK HPI will be released 14^thAugust.

The UK House Price Index for April 2019 was released yesterday. The Index shows an update to the latest house price changes for England, Scotland, Wales and Northern Ireland.

The highlights of this report show:

• House prices have risen by 0.7% on average since March 2019
• There has been an annual price increase of 1.4%
• This annual price increase makes the average property in the UK valued at £228,903

More about the report can be read on the Gov.UK website: https://www.gov.uk/government/news/uk-house-price-index-for-april-2019

Lucy Pendleton, founder director of independent estate agents James Pendleton, has commented on the April 2019 Index: “Another drop in property prices in London ensures the capital continues to be a bit of an outlier. Other regions haven’t followed the capital’s trajectory as quickly as has been the case historically. 

“Some comfort can be taken from the fact that, as prices in London fall, buyers are being fairly energetic in stepping up to take the opportunity to get in.  

“This should not be taken as a sign that we will soon see an outright rebound in prices in the capital but it’s extremely unlikely that this kind of behaviour will give way to more dramatic downward revisions in property values.

“What will precipitate a short-term consolidation is an improvement on the number of homes for sale but any fall in values as a result will likely be brief and muted in percentage terms.”

Paul Stockwell, Chief Commercial Officer, of Gatehouse Bank, has said: “House prices have fallen out of inflation’s slipstream in broad UK terms but price growth in Wales is extremely buoyant at nearly 7% year on year.

“In the month after a postponed Brexit, it’s not just there where the property market has staged a sharp recovery. While Wales nearly doubled its annual growth rate, the North East has come hurtling out of the red, posting a 2% rise year on year, compared with the 0.8% annual slump recorded the previous month.

“However, it’s hard to credit March’s political drama for these surprising shifts. It takes time to sell property and these sales reflect buyers’ much longer-term determination to transact.

“Markets in England have bounced back almost across the board, with only one exception. The South East, which is the only region to see an annual fall, while even the worst performing area, London, has bounced back slightly.”

The vast majority of homeowners in Britain are confident in the performance of the property market over the next six months, according to Zoopla’s latest housing market sentiment survey.

Confidence in the market is growing, with 81% of homeowners expecting property values in their areas to increase before the end of the year.

Confidence was particularly high in Yorkshire and the Humber, and the North West, where 91% of respondents said that they expected house prices to rise over the next six months.

At the other end of the spectrum, London is the least confident region, with just 67.2% of homeowners in the capital expecting growth.

Of those expecting house price growth across the UK, the average level of growth anticipated is 4.8% over the next six months.

However, it was those in Scotland that were the most confident in the property market, as homeowners north of the border believe that house prices will increase by 5.5% before the end of the year.

The North East was next, followed by the West Midlands, with homeowners in these two regions expecting growth of 5.4% and 5.1% respectively.

The lowest level of house price growth expected was in the North West, at 4.45%.

Laura Howard, the Spokesperson for Zoopla, says: “Despite evidence of a slowing housing market and ongoing political uncertainty, homeowners remain optimistic about the future of property prices.

“Zoopla’s latest UK Cities House Price Index showed that house price growth slowed to 1.7% across the country’s 20 major cities in the 12 months to April, and to 2.2% across the UK as a whole. Yet, 81% of homeowning Brits expect property values to increase in their area over the next six months, at the higher rate of 4.8%.”

She continues: “A staggering 91% of homeowners in Yorkshire and the Humber expect prices to rise in their region by the end of the year, at an average rate of 4.5%. This mirrors the pace of the markets in native Sheffield and Leeds, which registered rises of 4.4% and 3.5% respectively, according to Zoopla’s Cities Index.

“Conversely, it’s no surprise that London homeowners are the least confident, with prices in the capital falling by an average 0.5% compared to 12 months ago – the largest fall across all 20 cities. However, still, more than two-thirds (67%) of London homeowners expect to see rises in the next six months – and of a considerable 4.5%.”

Howard believes: “Whether or not these forecasts prevail, consumer sentiment plays a crucial role in the health of the housing market. A feeling of stability means buyers are more likely to start actively looking for their next home, confident that now is the right time to make a purchase. And, in turn, an active pool of buyers will encourage sellers to list their homes for sale.

“This not only brings buoyancy to the housing market, but also offers an opportunity for agents. Vendors fuelled with optimism for house price growth will need to listen carefully to the advice of their estate agents when looking to sell their homes, relying on agents’ local market expertise and experience to accurately price their properties. Consumer positivity must be channelled, to ensure that pricing is correct from the outset – this is vital for a swift sale at a price that’s as near to asking as possible.”

The average house price in the UK dropped by 0.2% between April and May this year, according to the latest House Price Index from Nationwide.

On an annual basis, house price growth dropped from an average of 0.9% in April, to just 0.6% in May. This slight decrease took the average house price to £214,946 last month.

Robert Gardner, the Chief Economist at Nationwide, explains the figures: “Annual house price growth remained below 1% for the sixth month in a row in May, at 0.6%.

“Survey data suggests that new buyer enquiries and consumer confidence have remained subdued in recent months. Nevertheless, indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable.

“Housing market trends are likely to continue to mirror developments in the broader economy. While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months.”

He looks into conditions for prospective first time buyers: “First time buyer numbers have continued their steady recovery in recent quarters, reaching 359,000 in the 12 months to March, just 10% below 2006 peaks. The trend is partly due to robust labour market conditions, with employment rising at a healthy rate and earnings growth slowly gathering momentum.

“Low borrowing costs have also provided important ongoing support. Even though house prices remain high relative to average incomes, the cost of servicing the typical mortgage as a share of take-home pay has remained close to or below long-run averages in most parts of the country.

“The main exception is in London, where a period of rapid house price growth in the three years to 2015 means that monthly mortgage payments would also be unaffordable for a large proportion of the local population.

“Outside of London and the South East, raising a deposit appears to be the main challenge for most prospective first time buyers.

“Even in Scotland and the north, where property appears most affordable, it would still take someone earning the average wage and saving 15% of their take-home pay each month more than five years to save a 20% deposit. In Wales and Northern Ireland, it would take prospective buyers nearly seven years, and almost eight for people living in the Midlands.

“Reflecting the trend in overall house prices, the deposit challenge is most daunting in the south of England, where it would take an average earner a decade or more to amass a 20% deposit.

“Again, the pressures are most acute in the capital, where someone earning an average income would take more than 15 years to save a 20% deposit on the typical London property (even longer than was the case before the financial crisis, when it would have taken over ten years).”

But Government schemes and family support are helping to ease deposit constraints. Gardner says: “In recent years, a growing proportion of first time buyers have been drawing on help from friends and family, or an inheritance to help raise a deposit.

“In 2017/18, almost half of first time buyers had some help raising a deposit, either in the form of a gift or loan from family or a friend, or through inheritance, up from around a quarter in the mid-1990s and 35% of buyers in 2015/16.

“The Government’s Help to Buy equity loan scheme has also been an important source of support for first time buyers, by easing deposit constraints.

“Those buying with Help to Buy accounted for 14% of first time buyer transactions in England in 2018, and almost 40% of private new build homes were bought under the scheme last year, although the proportion varies across the country.

“Help to Buy Wales accounted for over 40% of private new build completions in the principality in 2018. Meanwhile, Scotland saw c.2,300 sales in 2017/18 through the Affordable New Build Scheme, approximately 17% of private new build completions, where the lower proportion largely reflects the narrower scope of the scheme.”

Market trends are also providing a tailwind, he explains: “The interest rates charged on mortgages where the borrower puts down a smaller deposit have also declined relative to those with larger deposits in recent quarters.

“This trend is also likely to be allowing some borrowers to enter the market sooner, as there is less of a cost advantage to waiting to accrue a larger deposit.”

Guy Harrington, the CEO of residential and commercial lender Glenhawk, gives his thoughts on the index: “Slowing growth is a trend we will likely see for some considerable time. There are a number of factors dragging on the housing market; not only do we now have a leadership battle in Government, but also the potential of a general election, compounded by Brexit. Despite this unsettling backdrop, a combination of the low interest environment, ongoing Government support, sluggish house price performance and willing lenders presents a great opportunity for buyers.”

Annual house price growth across the UK picked up to an average of 1.4% in March, which is up from 1.0% in the previous month, according to the latest House Price Index from the Office for National Statistics (ONS).

However, over the last three years, there has been a general slowdown in house price growth, driven mainly by declines in the south and east of England.

The lowest annual house price growth in March was recorded in London, where the average property value dropped by 1.9% over the year, which is up from -2.7% in February.

Across the UK, the average house price was £227,000 in March. This was £3,000 higher than in the same month of last year.

In England, the typical property value stood at £243,000 in March, following a 1.1% rise in the year to March, which was up slightly from 1.0% in February. House prices in Scotland increased by an average of 3.3% over the same period – up from just 0.5% in February – to reach £149,000. House price growth in Wales averaged 3.0% in the year to March, which is down from 3.6% in February, taking the typical property value to £159,000.

House prices in Northern Ireland rose by an average of 3.5% in the year to the first quarter (Q1) of 2019. It remains the cheapest UK country to purchase a property, at £135,000.

Across the English regions, Yorkshire and the Humber recorded the highest annual house price growth in March, at an average of 3.6%. The West Midlands followed, at 3.4%.

The lowest annual growth was seen in London, where prices fell by an average of 1.9% in the 12 months to March. The North East followed, with a decline of 0.8% over the same period.

While house prices in the capital fell over the year, the region remains the most expensive area to purchase a property in England, at £463,000, followed by the South East and East of England, at £318,000 and £287,000 respectively. 

The North East continued to record the lowest average house price, at £123,000, and is the only English region yet to surpass its pre-economic downturn peak.

Comments

John Goodall, the CEO and Co-Founder of buy-to-let specialist Landbay, says: “Despite this month’s slight uptick, we’ve not seen the spring bounce we had hoped to see – UK house price growth has remained subdued so far this year. For potential buyers, this, combined with sustained wage growth and record low unemployment, means affordability is starting to improve. 

“However, transaction volumes remain stagnant in the face of Brexit uncertainty, and so the role of the private rental sector remains as important as ever. Until we have some clarity, the market is unlikely to pick up, so all eyes are on October to provide some certainty to buyers and sellers alike.”

Lucy Pendleton, the Founder Director of independent estate agent James Pendleton, also comments: “Continued price declines in the capital are helping to paint England as the sick man of the UK, with house prices in Scotland and Wales still accelerating way ahead of inflation. 

“The silver lining is that this could be a real boost for transactions, as buyers step back into the fray, though it will take a bit more persistent declines for us to see anything resembling a whirlwind of activity. Even though it’s a zero-sum game for most, buyers are still hesitant and have a tendency to wait for markets to level off before pressing on with a move. 

“London is also not the blueprint for the whole country, as a very different story is being told everywhere else.

“A hot property market in the Midlands and North West is propping up the UK’s overall picture, and this, together with declines that have so far not been dramatic in London, show property is still the relatively safe long-term investment it has always proved to be.”