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House prices increased 7.5% in the year to January 2021

Average UK house prices increased by 7.5% in the year to January 2021, according to the latest House Price Index by the Office for National Statistics (ONS).

Prices rose by the greatest margin in Wales, increasing by 9.6% to £179,000, this was followed by England, where prices rose by 7.5% to £267,000.

Prices in Scotland increased by 6.9% to £164,000, and in Northern Ireland to £148,000, up 5.3%.

The North West was the English region, which saw the highest annual growth in average house prices up 12.0%.

In contrast, the West Midlands noted the lowest at 4.7%.

Tahir Farooqui, chief executive of Canopy, said: “With a further increase to house prices comes an even bigger gap between hopeful first-time buyers and their new home.

“While the government is promoting a range of incentives such as 95% mortgages and a tapered end to the stamp duty holiday, it’s not addressing the true problem.

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“House prices are too high and securing an affordable mortgage is a pipe-dream for many.

“One way to put to good use the £64,000 of rental payments that the average tenant spends before buying their first home, is rent tracking.

“This means each monthly payment builds up their credit score, ensuring they have better access to financial products when the time comes to secure a mortgage. A strong credit score is a foundation for financial freedom.”

Rich Horner, head of individual protection at MetLife, added: “The market is finally breathing a sigh of relief with today’s data showing strong house price growth, that will only continue to be fuelled by the Chancellor’s move to extend the stamp duty holiday.

“For the next few months, at least, buyers will be encouraged to continue their property search and make moves before June.

“There still remains an element of worry around what the second half of the year looks like as the property market, and society more broadly, returns to a level of normality after more than a year of lockdown.

“But pent up demand and a supply shortfall will work in the favour of sellers to buoy property prices.

“However, at the lower end of the market a level of reservation could move in. For a significant number the events of the past 12 months have left them in an ambiguous financial position.”

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Miles Robinson, head of mortgages at Trussle, said: “Despite a slight fall in house prices month-on-month from December 2020 to January 2021, it’s important to note that house prices are still significantly higher than the same period last year.

“Traditionally, the property market is quieter at the beginning of the year and it’s Spring that tends to spark a change in buyer momentum.

“However, buyer demand has remained strong throughout 2021.

“At Trussle we saw a 15% increase in mortgage applications in January and a 17% increase in February, when comparing the same periods year-on year.

“The recent Budget announcement confirming an extension to the stamp duty holiday, as well as a 95% mortgage guarantee scheme is likely to continue to boost buyer demand.

“This in turn could elevate house prices even further.”

By Jake Carter

Source: Mortgage Introducer

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The Budget stimulated an 80% rise in buyer demand

The recent Budget stimulated an 80% rise in buyer demand for property compared to the four-year average, according to Zoopla’s monthly House Price Index.

Despite this, the supply of new homes is down 13%, compared to the 2020 average.

Zoopla outlined that the volume of homes for sale is expected to recover as the COVID-19 vaccination programme continues to gather pace and the Prime Minister’s roadmap out of lockdown comes into effect.

From a national perspective, average home values are up 4.1% since the start of the first lockdown, amounting to £8,907 on the year or £750 per month.

While annual house price growth is down slightly from 4.4% last month, this marks the fourth consecutive month of house price growth over 4%.

Regionally house price growth in the Midlands, North of England, Wales and Scotland are at an almost 10-year high, fuelled by the relative affordability in these markets.

At a city level, Liverpool and Manchester continue to show the strongest levels of annual house price growth, up 6.6% and 6.4% respectively.

Sales agreed are up 5.3% compared to the same period in 2020, and the average time to sell a property in the UK has fallen by nearly a week across the UK excluding London, down from 50 days in 2020 to 44 days.

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In contrast, London is the only region in the UK where properties are taking longer to sell.

The North East and the North West have recorded the highest reduction in time to sell on a regional level, falling by 17 days and 12 days, respectively.

At the same time, the North West and Yorkshire and the Humber are the fastest moving markets in the UK, with sales agreed on properties in an average of just 38 days from the point of listing.

The index also revealed that houses are selling three weeks faster than flats.

The lockdown-led ‘search for space’ means houses are taking an average of 42 days to go from the point of listing to sale agreed, this compares to 62 days for a flat.

Demand for three-bed homes rose by 30% in the week after the Budget, in relation, the average value of a house has risen by 4.9%.

Meanwhile, the average price of a flat has increased by 1.9% over the same timeframe.

An estimated 130,000 properties for sale in England will be stamp duty free for another six months following the Budget which will amount to £123m saved in tax.

Overall, Zoopla anticipates that more than half a million buyers this year will benefit from some level of stamp duty relief.

David Ross, managing director of Hometrack, said: “The 95% LTV mortgage guarantee scheme and the stamp duty extension outlined in the Budget have led to a spike in buyer demand, which was up 24% in the days following the announcement.

“The stimulus provided by the mortgage guarantee scheme will likely promote a similar increase of uptake of higher equity loans from the knock-on in demand up the property chain.

“With time to complete standing at around four months, buyers in the North of England look set to benefit the most – with two-third of local stock under £250,000 in value, and therefore always exempt from stamp duty.

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“While prospects for the wider housing market have improved on the back of the Budget, the post-lockdown path to the full reopening of the economy and unwinding of support measures will still have a big impact.

“Therefore, we still expect house price growth to moderate later in the year, but overall transactions look set to get an additional boost from the stamp duty measures.”

Nigel Purves, chief executive of Wayhome, added: “With a full year of lockdown behind us, there has been increased momentum in the housing market ahead of the busy Spring period.

“Indeed, house prices were up by 4.9% year on year and flats were also up by 1.9% over the same period.

“Over the coming months with offices, shops and restaurants set to reopen, we may witness some individuals turning back to connectivity and convenience, while others continue their ‘search for space.

“While the introduction of 95% loan-to-value mortgages may bring hope to those wanting to step foot on the ladder, affordability remains a serious problem.

“There are many households whose incomes still won’t meet the criteria for mortgage approval, despite their ability to consistently pay rent on the kind of homes they would like to buy.

“Going forward, the government needs to work with the property industry to better support alternative routes to help ‘reluctant renters’ achieve homeownership.”

By Jake Carter

Source: Mortgage Introducer

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Average house prices up 8.7% in England and Wales

Average house prices increased by 8.7% across England and Wales in the year to January 2021, according to e.surv Chartered Surveyors’ House Price Index.

On a monthly basis, average house prices rose by 1.2% between between December 2020 and January 2021.

Overall, the average price of a house in England and Wales was £330,958 at the end of January.

Richard Sexton, director at e.surv, said: “2020 proved an exceptional year in almost every way and many of the changes it ushered in won’t be easily swept aside.

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“Indeed, our data shows that the remarkable growth in property prices we saw in the second half of last year has continued into 2021.

“Rapid growth in the South West, East Midlands and the North West means that average property prices have started the year up close to 9% on January 2020.

“There are, as always, a number of factors at play, but we may well have moved beyond the release of the demand that was pent-up at the start of 2020 and into a new phase for the market.

“For many, the pandemic has proved very financially trying, but this hasn’t been universal. For some households, where people have kept their jobs and transitioned totally to home-working, the pandemic has provided an opportunity to cut spending and build their savings.

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“For these consumers in a more fortunate financial position, the combination of low mortgage rates and the stamp duty holiday have made entering (or often re-entering) the property market an attractive prospect.

“Many buyers have made the decision to make a move in the last year and the popularity of larger properties with more outdoor space has increased greatly, as buyers have reevaluated their current living situation.

“That activity in the property market has been able to continue at all over the last year, is due in a large part to the industry’s willingness to embrace technology and work innovatively.

“From remote valuations to virtual house viewings, the industry has shown that it is able to adapt and change to meet extraordinary circumstances – a positive sign for the future.”

By Jake Carter

Source: Mortgage Introducer

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Landlords optimistic about 2021 house price growth

The majority (66%) of landlords expect house prices to rise in 2021 as the world starts to return to a new normal, research from Accommodation.co.uk has found.

Three quarters (76%) are still keen to seek urban opportunities over rural ones, despite reports of people leaving cities due to the pandemic.

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Aaron Short, founder and chief executive at Accommodation.co.uk, said: “We are always listening to our landlords and tenants to ensure our proposition remains current and reflects the needs of the market and this is why the National Landlord Index remains so important.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“Understanding how landlords perceive the market and what impact COVID and Brexit are having will determine the shape of the future lettings market.

“It is great to see landlords positive about the market this year and this certainly mirrors the growth we have seen.”

BY RYAN BEMBRIDGE

Source: Property Wire

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London’s Islington leads the way on house price growth

Prices in London’s Islington surged by 13.4% to £727,922 in 2020, making it fastest growing area in the UK, Thirlmere Deacon analysis of Halifax data has found.

A number of other areas in Greater London also recorded strong rises, like Croydon (10.9% to £397,538), Hounslow (9.1% to £523,659) and Romford (7.6% to £391,000).

Outside London the biggest mover was Leeds, which had the country’s second-fastest rise, a whopping 11.3% to an average price of £247,116.

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Stuart Williams, founder and chief executive of Thirlmere Deacon, said: “Over the past 24 months, the UK property market has endured changing economic and political climates and remains to be incredibly resilient.

2019 brought political uncertainty and Brexit lingered over the UK, after the decisive election result in December 2019 the property market began 2020, with relative optimism and the ‘Boris Bounce’ triggered activity.

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“As the pandemic took hold and the UK entered lockdown, the property market was effectively put on pause though a limited number of transactions completed and off plan purchases were agreed during this time.

“Upon reopening in mid-May the UK property market saw pent up demand unleashed which has driven price growth upwards – every region in the country recorded an increase in house prices in 2020.”

BY RYAN BEMBRIDGE

Source: Property Wire

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House prices have doubled over the past decade

Average house prices have increased by 51% over the past 10 years, according to e.surv’s Chartered Surveyors House Price Index.

On a monthly basis, house prices across England and Wales increased by 1.4% between November and December 2020.

Throughout 2020, house prices rose by 7.8% despite the added complications of COVID-19.

This is the highest annual increase since 2016, however the majority of growth took place in the last six months of the year as pent-up demand was released by more relaxed coronavirus restrictions.

As a result, the average house price in England and Wales was £326,762 at the end of December.

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Richard Sexton, director at e.surv, said: “During 2020, large numbers of people across the UK were confined to their houses for long periods of time, as we battled the pandemic.

“Over the year many people were forced to adapt their homes to function as offices, schools and nurseries.

“This increased emphasis on where we live and where we spend so much of our lives undoubtedly helped focus many people’s minds on the property market.

“This increased focus was reflected in the types of property that were most sought after in 2020.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“Larger, typically more expensive, properties with more outdoor space became even more highly prized, which in turn increased the price of the average transaction.

“It’s important to remember that the pandemic which produced such an unusual year is very much still with us.

“Everyone involved in the property market must continue to operate in a responsible manner, making use of technology where possible to support the industry while putting safety first.”

By Jake Carter

Source: Mortgage Introducer

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UK house prices up 7.3 per cent – strongest annual growth in six years

UK house prices enjoyed their strongest annual growth for six years in 2020 as the market was spurred on by tax breaks and changing demand amid the pandemic, according to latest figures from Nationwide Building Society.

The average UK house price jumped 7.3 per cent this year to £230,920 after rising 0.8 per cent in December alone.

Broken down by region, England saw prices rising 6.9 per cent year-on-year in the fourth quarter.

Wales was the next best price performer, with a 6.6 per cent rise, followed by Northern Ireland (up 5.9 per cent) and Scotland (up 3.2 per cent).

The report revealed that prices have jumped 5.3 per cent since March, when the pandemic struck, after demand was sent surging by a stamp duty holiday and the shift to homeworking.

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Nationwide said the stamp duty boost had brought forward people’s home-moving plans, while changing working patterns had increased demand for larger homes in less densely populated locations.

Robert Gardner, Nationwide’s chief economist, said: “The resilience seen in recent quarters seemed unlikely at the start of the pandemic.

“Indeed, housing market activity almost ground to a complete halt during the first lockdown as the wider economy shrank by an unprecedented 26 per cent.

“But, since then, housing demand has been buoyed by a raft of policy measures and changing preferences in the wake of the pandemic.”

However, he added that the outlook for the housing market remains “highly uncertain” as restrictions to control the virus tighten across the UK and with government support measures and the stamp duty holiday set to end in the spring.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

He said: “Housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”

Howard Archer, chief economist at the EY Item Club, also warned that the property market will see a reversal of fortunes in 2021 and could fall by around 5 per cent by the end of next year.

He said: “We believe that the housing market is likely to come under mounting near-term pressure as the economy is hampered by pandemic-related restrictions, while there may well still be a significant rise in unemployment despite the furlough scheme being extended until April.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors, said: “We are in a very different place now as optimism following the initial rollout of a vaccine and the possibility of a Brexit deal has been replaced by realisation that the effects of the virus will get worse before they improve, as well as recognition of the negative impact on confidence and values.

“However, the determination of the overwhelming majority of buyers and sellers to conclude sales agreed prior to Christmas, relatively few price renegotiations and approval of the Oxford/AstraZeneca vaccine bodes well, provided present constraints prove relatively short term.”

Source: The Irish News

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House prices rose at twice the rate of flats in 2020

The rate at which the price of houses is rising is more than double that for flats as lockdown-weary Britons look for more space.

Annual property price growth for houses in the UK is currently running at 4.3%, while price growth for flats is just 1.8%, according to our latest House Price Index.

The trend is being seen across the country, with all regions reporting significantly stronger increases in the value of houses than those of flats.

Richard Donnell, our director of research and insight, said: “The search for space has been a key feature of the rebound in market activity as households re-evaluate their housing requirements.

“Demand for family homes with gardens, parking and extra space to work from home has continued to rise.”

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Why is this happening?

The coronavirus pandemic triggered a ‘once-in-a-lifetime reassessment of housing’ in 2019, as lockdowns and social distancing created a greater appetite for home offices and outdoor space.

Analysis of our advanced search property tool over the past 12 months found that ‘garden’ was the top feature buyers looked for, while ‘detached’, ‘rural’ and ‘secluded’ all also made it into the top 10.

The high level of demand for houses is putting upward pressure on prices, as demand outstrips supply.

By contrast, flats are suddenly in less demand than they were before the pandemic, leading to slower price growth.

Who does it affect?

The rise in the value of houses was strongest in Wales, followed by the North West and Yorkshire and the Humber, all regions in which affordability is less of a barrier to price growth.

By contrast, the price of flats was broadly unchanged year-on-year in the East, while they edged ahead by less than 1% in the West Midlands and the South West.

The current trend could make it harder for sellers trying to trade up the property ladder from a flat to a house. This is because they are not only likely to find their current property takes longer to sell, but they will also face increased competition for their next home and an enlarged gap between the price of the two properties, if they are staying in the same region.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

What’s the background?

The quest for more space has contributed to a shift in the demographic profile of home movers, and there has been a notable increase in sales in more affluent demographics, where house prices are typically higher.

This shift, along with a high level of transactions, has contributed to a 26% rise in the value of property that changed hands in 2020, with sales rising by £62 billion to £300 billion.

Moving into 2021, older, equity rich, long-time homeowners are expected to continue to take a growing share of sales.

Top three takeaways

  • The rate at which the price of houses is rising is more than double that for flats as lockdown-weary Britons look for more space
  • Annual property price growth for houses in the UK is currently running at 4.3%, while price growth for flats is just 1.8
  • The trend is being see across the country, with all regions reporting significantly stronger increases in the value of houses than those of flats.

By Nicky Burridge

Source: Zoopla

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UK house prices grew at fastest rate since 2015 in November

UK house prices grew at an annual rate of 6.5 per cent in November, the fastest rate since January 2015, as the sector batted off the second national lockdown.

According to Nationwide’s house price index, prices also increased on a month-on-month basis to be up 0.9 per cent compared to last November.

As a result, the average house price in the UK now stands at £229,721, up from £227,826 last month.

Nationwide said that despite the second lockdown, which has seen economic activity shrink in other sectors, the housing market has remained “robust” through November.

Property transactions hit 105,600 in the period, the highest since 2016, while mortgage approvals reached their highest levels since 2007.

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Robert Gardner, Nationwide’s chief economist, said: “The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy.

“Behavioural shifts as a result of Covid-19 may provide support for housing market activity, while the stamp duty holiday will continue to provide a near term boost by bringing purchases forward.

“However, housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: ‘These figures feel like the storm before the calm as buyers and sellers rushed to take advantage of the stamp duty holiday before the March deadline, despite continuing Covid restrictions in October, the possibility of a no-deal Brexit and economic growth stalling.

‘That frenzy has been since replaced by a quieter, but just as determined mood to complete sales previously agreed. We don’t see any signs either of significant price adjustments, irrespective of whether there is an extension to the stamp duty holiday, with activity continuing to be supported by a shortage of listings and longer-term low interest rates.’

Housing market set to come under pressure

EY Item Club’s chief economist Howard Archer warned that the elevated levels of activity in the market were unlikely to last.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“The EY Item Club suspects that house prices could be around 5 per cent lower than now by mid-2021″, he said.

“The housing market is likely to come under mounting near-term pressure amid rising COVID-19 cases and lockdown restrictions, while there is likely to be a significant rise in unemployment even though the furlough scheme has been extended until March. Meanwhile, earnings have been limited and are likely to remain so.

“There is also likely to be a fading of the pent-up demand effect on housing market activity, while pandemic-related restrictions may also have some dampening impact on the housing market and consumer confidence.

“Indeed, consumer confidence declined further in November to be at a six-month low, which may increase the caution of many people in making major spending decisions.

Nationwide’s figures came after banker Halifax revaled that consumer confidence in the housing market had shrunk last month.

Just 14 per cent of people surveyed by Halifax said that they believed their home had become more valuable this month, compared with 17 per cent in September and October.

Despite the slip, the figure remains high above the four per cent recorded during the first national lockdown in May.

By Edward Thicknesse

Source: City AM

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House prices climb 5% as movers maintain momentum

House prices grew by 5% in the year to September, the highest annual growth rate for four years, according to the latest Nationwide House Price index.

Month-on-month, house prices rose by 0.9% after a 2% rise in August that pushed up the average UK house price to £226,129.

Most UK regions saw a small rise in annual price growth in quarter three compared to the previous quarter.

The South West was the strongest performing region, with annual price growth rising from 2.3% to 5.5% and for the first time since 2017, house price growth in southern England exceeded that in northern England.

Annual house price growth in London was up 4.4% in Q3 driving the cost of the average property in the capital to a record high of £480,857. Homes are now selling for 57% more than their 2007 price tags.

In the UK, prices are 21% higher than their 2007 peak.

Scotland was one of the few areas to see a slowing in the annual rate of price growth to 2% in Q3, compared to 4% in Q2. Meanwhile, Wales saw annual growth accelerate to 3.8% from 1% in the previous quarter.

Pent up demand is one of the drivers behind price rises. Almost 20% of households surveyed by Nationwide in September, who were considering moving before the pandemic, had put their plans on hold.

Nationwide chief economist Robert Gardner said: “Housing market activity has recovered strongly in recent months. Mortgage approvals for house purchase rose from around 66,000 in July to almost 85,000 in August – the highest since 2007, well above the monthly average of 66,000 prevailing in 2019.

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“The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing.

“The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.”

Weaker economy effects

Economic forecasters expect labour market conditions to get significantly weaker as tighter restrictions on movement supress economic activity and the furlough scheme is replaced with a less comprehensive jobs support package.

Despite this, some households who were not planning on a move, have changed their minds because of the crisis.

Around 10% of those surveyed in September said they were in the process of moving as a result of the pandemic, with a further 18% considering a move for the same reason.

This sentiment was highest in London where 25% of households said there were now considering moving and close to 20% said they were actually moving.

Jeremy Leaf, former Royal Institution of Chartered Surveyors residential chairman, said: “There is little sign on the ground yet that this report and others which have emerged recently reflect the calm before the storm and a fizzling out of the mini-boom.

“Certainly increased restrictions and the unwinding of the furlough scheme will have some impact on confidence but not much at the moment.

“Of just as much concern to our buyers, and particularly those vital first-time buyers, is mortgage accessibility with lenders running the risk of reducing activity in the market at a time when it is so vital to the economy generally.”

Written by: Samantha Partington

Source: Your Money