Posts with tag: house prices

Second Steppers Relying on Bank of Mum and Dad

Published On: July 3, 2018 at 8:57 am

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Second time lucky? Apparently not.

 

It isn’t just first-time buyers who are faced with the struggle of moving up the property ladder. Second steppers are beginning to turn to the Bank of Mum and Dad for financial support, currently requiring on average, £25,000 to assist their second property investment.

According to Lloyds Bank, the number of second steppers who have to borrow from family and friends in order to progress in the property market has increased. This figure has risen from 27% in 2017 to 33% in the 2018 poll.

58% of second steppers expressed that making their next steps on the property ladder wouldn’t be plausibly without additional financial support.

Moreover, results from analysis revealed that 62% of second steppers would resort to remortgaging their property as a method of accumulating the extra cash, whilst 39% would use money from their savings accounts.

However, 22% would definitely require assistance from their parents and 13% would seek financial support from their grandparents. Alternatively, 6% would turn to friends for this support.

This is also adding an enormous amount of pressure on parents themselves, as they are forced to either raid their own savings or even downsize to a smaller property to release funds.

The sacrifices don’t stop there.

Second steppers are also making sacrifices. Almost three in ten agreed that they will have fewer children than originally planned due to the challenges they have experienced whilst attempting to climb the property ladder. More second steppers are delaying having children as a result of these circumstances.

Mortgage Products Director at Lloyds Bank claims: “Support from generous family and friends remains vital in helping second steppers in taking the next step on the property ladder, despite more second steppers now feeling optimistic about the housing market.

“We continue to see parents make big sacrifices as their children return for help with housing for a second time. However, to ease the burden on parents, we are seeing more second steppers plan ahead for their next big move by saving and paying more to their mortgage.”

Manchester and Edinburgh House Prices Rise, shows Hometrack’s May UK Cities Index

Published On: July 2, 2018 at 9:36 am

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Hometrack’s May UK Cities House Price Index shows Edinburgh to have had a positive month, as it is leading the table with a growth of 7.1% to an average of £225,300. Manchester has followed very close behind, with a rise by 7% to £163,300.

Meanwhile, the index also shows annual growth in London to be at its lowest level in nine years. The annual growth of the capital is recorded to be at 0.4%, and, looking at other areas around the country, there are four other major cities that are also seeing prices fall in real terms. The data shows that Belfast, Oxford, Cambridge and Aberdeen have all seen returns below the 2.4% rate of inflation.

Hometrack insight director Richard Donnell has commented: “We expect house prices to keep rising across regional cities such as Birmingham, Manchester and Edinburgh over the next two to three years. During this time house price growth in London will remain flat with annual price rises of approximately 0-2 per cent.

“As a result, the gap between house prices in cities outside of the South East and house prices in London will continue to contract.

“Naturally, the relative price gap between cities fluctuates over the course of the housing cycle as supply and demand is affected by factors such as economic growth, job creation, wage increases and the flow of new investment.

“Hometrack expects that Manchester and Birmingham will close the gap to London fastest in the coming years as these cities are likely to see the strongest jobs growth.

“The level of house price inflation seen in large regional cities during the last peak, between 2000 and 2003, gives a good indication of how much prices may rise this time around. If history is to repeat itself and these cities are to get back to where they were, then prices could increase by as much as 20-25%.”

Land Registry Registrations Comeback as Property Market Recovers

Published On: July 2, 2018 at 8:56 am

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Land Registry data suggests a recovery for the property market as last month’s transactions witnessed an increase.

The most recent Land Registry’s Price Paid Data report, recording the number of sales lodged for registration, reveals that there were 77,166 residential transactions during May.

This figure increased to 6.7% in April but decreased to 4.2% annually.

Of all registrations that were received, in May, the Land Registry claimed that 21,349 occurred during the month.

375 of these were for residential properties in England and Wales for £1m.

London had most million-pound sales in the month at 215, while Birmingham and Manchester had one each.

The most expensive residential sale during the month was of a detached property in the Royal Borough of Kensington & Chelsea for £15.7m. The cheapest was for two properties in Rushden, east Northamptonshire, for £9,500.

The time lag at the Land Registry means it can take months for property transactions to appear, but the latest data reflects what many agents are describing as a topsy-turvy and unpredictable market.

Transactions filed to the Land Registry had dropped 27% between January and February, before increasing 5.3% in March and then falling 13.4% in April.

Five-Year Low for Annual House Price Growth, Nationwide Reveals

Published On: June 29, 2018 at 8:55 am

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According to the latest Nationwide’s House Price Index, there has been a decline in the development of house price growth. It has been the slowest growth for five years in June. With reference to the statistical data provided, the south seems to be performing far poorer than other areas, with prices down 1.9% year-on-year.

However, despite this recent drop, house prices in the capital remain more than 50% above their 2007 peak, whereas overall prices in the UK are just 15% higher, with the East Midlands exhibiting the strongest performance as a region in England, at 15%.

Scotland was exceptional as a region, witnessing a pickup in annual price growth to 3.1% this quarter. Wales witnessed a softening in price growth to 4%, despite it being the best performing home nation.

Nationwide’s Chief Economist, Robert Gardner commented: “Annual house price growth fell to its slowest pace for five years in June. However, at 2% this was only modestly below the 2.4% recorded the previous month.

“Indeed, annual house price growth has been confined to a fairly narrow range of c2-3% over the past 12 months, suggesting little change in the balance between demand and supply in the market over that period.

“There are few signs of an imminent change. Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.

“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.

“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low. “Overall, we continue to expect house prices to rise by around 1% over the course of 2018.”

Focusing on the development of house prices over time, the north-south divide very much remains, as evidenced in Nationwide’s Quarterly Regional House Price Statistics report. Particularly in the southern regions of England, house prices are now above the 2007 levels. Particularly London, where, despite recent price falls, prices are now over 50% above their previous peak. Meanwhile, in the north, prices are similar to or below 2007 levels.

 

House Prices Recover From April Slump but Annual Growth Slows

Published On: June 11, 2018 at 9:01 am

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Recently, the rate of annual house price growth has slowed for not only one month, but two. According to Halifax, the property market is described as being “subdued.”

Halifax’s May House Price Index has revealed that average house prices were up by 1.9% annually, slower than the 2.2% yearly growth recorded in April, to £224,439.

House prices are resuming to climb on a monthly basis, up 1.5% during May after a 3.1% decline in April.

It is possible that house prices are largely being sustained by a strong labour market, according to Russell Galley, Managing Director of Halifax who commented: “These latest price changes reflect a relatively subdued UK housing market.

“After a sharp rise in January, mortgage approvals have softened in the past three months. Both newly agreed sales and new buyer enquiries are showing signs of stabilisation having fallen in recent months.

“The continuing strength of the labour market is supporting house prices. In the three months to March the number of full-time employees increased by 202,000, the biggest rise in three years.

“We are also seeing pay growth edging up and consumer price inflation falling, and as a result, the squeeze on real earnings has started to ease.

“With interest rates still very low we see mortgage affordability at very manageable levels providing a further underpinning to prices.”

Remarking on the figures, Jeremy Leaf, north London Estate Agent and a former RICS Residential Chairman, said: “At first glance, these figures look disappointing with Halifax reporting annual house price growth softening in May.

“Once again, we are seeing the rather topsy turvy pattern to the housing market – up one month, down the next. It is the same on the ground – no real pattern, with buyers and sellers negotiating hard but not always successfully.

“Looking forward, we expect more of the same and possibly slightly better as we await figures reflecting the crucial spring market period.”

UK House Price Growth Continues to Falter

Published On: May 24, 2018 at 9:15 am

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The Office for National Statistics (ONS) and Land Registry has released its UK House Price Index (HPI).

The UK’s HPI is a quarterly publication, introduced in 2016, and includes data from all residential properties purchased for market value.

Source: HM Land Registry, Registers of Scotland, Land and Property Services Northern Ireland and Office for National Statistics

Source: HM Land Registry, Registers of Scotland, Land and Property Services Northern Ireland and Office for National Statistics

Some comments on the report are as follows:

John Eastgate, Sales and Marketing Director at OneSavings Bank says: “House prices are a reflection of general levels of consumer confidence and these numbers show that whilst we’re not as confident as we were a couple of years ago, equally no one is forecasting anything disastrous for the UK economy. HPI levels in excess of 5% are arguably not sustainable, so we should welcome this more moderate figure, noting that even at this level, HPI is still comfortably in excess of wage inflation.

Set against the backdrop of insufficient levels of new housebuilding, we still therefore face a housing market characterised by increasing affordability challenges and scarcity of supply.  Last week’s research from The National Housing Federation shows the scale of the problem – the country needs 340,000 new homes each year, a figure significantly above the government target, reinforcing the crucial need for a co-ordinated housing strategy.”

Doug Crawford, CEO of My Home Move, comments; “despite the recent downbeat mood and a monthly dip in the average UK house price, today’s data paints a picture of relative strength and stability underpinning the housing market. House prices have maintained a steady growth trajectory, not just through 2018 but also over the whole of the last year. In fact, annual growth has only dipped below 4% or above 5% in two of the last fifteen months. It’s encouraging that in a time of speculation about the wider economy, house prices have continued to plot a steady course.

“What we’re left with is a growth trend in UK house prices that is somewhere below the boom years of 2014 to 2016 – which is welcome news for first-time buyers – but noticeably stronger than the 2011-2013 period, which will reassure homeowners. The general appetite for homeownership is undiminished, and we are entering the time of year ahead of the summer holiday season where good weather can help prompt aspiring buyers to put moving plans into action.

“Clearly, it will take more than rising temperatures to fix the ongoing gap between housing supply and demand. In the meantime, there is no shortage of appealing mortgage deals to help consumers, who will also be helped by recent wage growth and the Bank of England’s continuation of the 0.5% interest rate.”

Thomas Fisher, economist at PwC, said: “Today’s release from the ONS and Land Registry shows that UK house price growth continued to falter in March, while London house price inflation remained negative with the weakest growth rate since 2009.

“While house price inflation of 4.2% in the year to March 2018 is the same as the growth in house prices in the year to February, the shorter-term month-on-month price changes point towards weakness in the market. Across England, house prices in all but one region, the East of England, fell between February and March. For the UK as a whole, average house prices fell 0.2% from the month before.

“For London, annual house price inflation turned negative at -0.7%, the weakest growth rate since September 2009 in the aftermath of the financial crisis. The London housing market has been weakening ever since the Brexit vote in mid-2016 and this shows no signs of letting up yet.

“The growing consistency of house price weakening across regions means that risks are weighted to the downside for the remainder of 2018. We anticipate that UK average annual house price growth in 2018 is likely to slow to less than 4%.”