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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.

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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.

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“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

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June house prices rose 3.4% as ‘flood of buyers’ returned

UK house prices increased by 3.4% in the 12 months to June, compared to an annual rise of 1.1% in May, the UK House Price Index revealed.

Month on month, house prices rose on average 2.7% between May and June.

Regionally, the East Midlands saw the greatest annual price rise of 4.5% while the North East saw the lowest annual price growth with a rise of 1.7%.

Shaun Church, director of Private Finance, said: “These latest figures reveal the scale of the impact that the sudden burst in pent-up demand had on house prices following the reopening of the property market.

“Price rises were driven by a flood of buyers resuming purchases put on hold during lockdown immediately after restrictions were eased. Initial strong demand has been boosted by the higher stamp duty threshold coming into effect in July.”

Around 150,000 housing transactions were put on hold in March and restarted again in June, according to the Centre for Economics and Business Research (CEBR).

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However, Church expects the strong market activity to be short lived.

“An uptick in infections and mounting concern over the reintroduction of national and local lockdowns is weighing on consumer confidence,” he said. “This could cause buyer activity to dip, resulting in the market readjusting to a new economic environment.

“Lenders are taking a risk-averse position in response to high uncertainty levels in the UK economy. Mortgage providers are increasing rates on higher loan-to-value products to reduce exposure to riskier borrowing propositions. Unfortunately, this will create barriers to entry for first-time buyers, the group of people that have been hardest hit financially by the pandemic.”

It is widely expected that the property market will experience a downturn next year.

CEBR forecast a 14% drop in house prices in 2021. In its latest report, the Intermediary Mortgage Lenders Association said the policy decisions lenders made now about loan-to-value restrictions would affect the severity of a downturn next year.

However, estate agents said they are no signs yet of the market slowing down.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Although a little historic, these figures highlight the resilience of the property market and the strength of pent-up demand even as we were recovering from lockdown and before the announcement of the stamp duty holiday.

“This comprehensive survey reflects prices paid for property and so is an indicator of some optimism. We are being told repeatedly that this mini-boom will not continue as the job retention scheme unwinds and unemployment rises but we not seeing many signs of that on the ground. If anything, the market is being more restrained by lender caution and lack of capacity to deal with the number of enquiries rather than demand fizzling out.”

Written by: Samantha Partington

Source: Your Money

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House price growth rose by 3.7% in April

Annual house price growth rose to 3.7% in April 2020, up from 3% in March, Nationwide’s House Price Index has found.

Monthly prices rose by 0.7% to £222,915, as Nationwide said the impact of the pandemic is not fully captured by the data.

Robert Gardner, Nationwide’s chief economist, said: “In the opening months of 2020, before the pandemic struck the UK, the housing market had been steadily gathering momentum. Activity levels and price growth were edging up thanks to continued robust labour market conditions, low borrowing costs and a more stable political backdrop following the general election.

“But housing market activity is now grinding to a halt as a result of the measures implemented to control the spread of the virus, and where the government has recommended not entering into housing transactions during this period.”

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He added: “The medium-term outlook for the housing market is also highly uncertain, where much will depend on the performance of the wider economy.

“Economic activity is set to contract significantly in the near term as a direct result of the necessary measures adopted to suppress the spread of the virus.

“But the raft of policies adopted to support the economy, including to protect businesses and jobs, to support peoples’ incomes and keep borrowing costs down, should set the stage for a rebound once the shock passes, and help limit long-term damage to the economy.

“These same measures should also help ensure the impact on the housing market will ultimately be much less than would normally be associated with an economic shock of this magnitude.”

Tomer Aboody, director of property lender MT Finance, said: “Nationwide portrays a confident housing market with the fastest rate of growth in prices since February 2017. Of course, lockdown will affect sales and prices, but that is the reason – people are locked down, surveyors cannot value properties and would-be buyers can’t view them.

“There is still huge demand for property and buyers are confident about the market, which wasn’t the case in 2008. Then, the financial system was devastated; this time, lending isn’t an issue and banks remain keen to lend.

“There will be the inevitable slowdown of transactions but once lockdown has been lifted, huge pent-up demand which should take the marker back up.”

Miles Robinson, Head of Mortgages at online mortgage broker Trussle, said: “The Land Registry data released this week shows that property sales collapsed by 40% during March, which is perhaps a more representative picture of how the Coronavirus is beginning to affect the housing market.

“However, we have seen lenders that had previously hiked LTV thresholds at the beginning of lockdown begin to loosen restrictions and, with the COVID-19 exit plan due to be published next week, we could see the market start to shift back into action.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Harlow in Essex leads the way on 10-year house price growth

In the past decade Harlow in Essex has recorded the highest house price growth, CashLady analysis of Land Registry data has found.

Over the period prices have risen by 74.92% in Harlow, followed by Southend-on-Sea (74.85%), Watford (74.75%), Thurrock (73.20%) and Cambridge (73.03%).

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In December 2019 prices in Harlow averaged at £290,068, up from £165,829 a decade before.

If prices continued to rise at the same rate they would reach £507,387 by 2030.

At the other end of the spectrum Aards and North Down in Northern Ireland saw prices fall by 7.73% in 10 years, followed by Aberdeen (-7.47%), Inverclyde (-5.81%) Mid and East Antrim (-5.32%) and County Durham (-5.18%).

BY RYAN BEMBRIDGE

Source: Property Wire

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Halifax: House prices up 2.8% annually

House prices increased by 2.8% in the year to February, according to Halifax’s house price index.

On a monthly basis, house prices increased by 0.3%.

Looking at the data on a quarterly basis, house prices rose by 2.9%.

Russell Galley, managing director, Halifax, said: “The UK housing market has remained steady heading into early spring.

“Much like we saw in January, the increases seen in February reflect the continued improvement of key market indicators.

“The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.

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“Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy, and we wait to see how these will affect housing market sentiment later in the year.”

Ben Johnston, director of off-market property app Houso, added: “House prices are on a continued upwards trajectory, but it remains to be seen how much of an impact the unexpected hurdle of Coronavirus is going to have on the market.

“The Bank of England could feasibly follow the Federal Reserve with a rate cut to help markets and shore up the stagnating economy in an effort to prevent other businesses going the way of FlyBe.

“Next week’s Budget gives the government the chance to stimulate growth further by reducing stamp duty although this might not be enough until the Coronavirus has stabilised and the threat has diminished.

“That all-too-precious confidence, which is so important for the market, is hanging in the balance.”

Lucy Pendleton, founder director, James Pendleton, said: “It’s no surprise to see continued healthy price growth like this. Demand and supply have both been rebounding recently but, so far, the number of new buyers is definitely outpacing the return of sellers.

“Coronavirus impacted our business for the first time on Wednesday, stealing away a sale that was just days from exchanging.

“The buyer worked in the events industry which is being rocked by large numbers of cancellations. He was unfortunately one of the employees told his job was at risk, forcing him to pull out of the purchase completely. The hope is this will remain an isolated case, but the impact of the virus will become clearer in March.

“For now, with valuations still rising and competition for certain properties still fierce, buyers have begun to put in offers on multiple properties in a bid to secure an option before stalling over exchange of contracts in case something better comes along. This could create an unappealing log jam and put more completions at risk if Covid-19 starts to become a major factor.

“Despite the newspaper and TV screens being peppered with images of people wearing face masks and plastic bottles on their heads, there’s still a huge appetite to move, and buyers and vendors have so far refused to put their searches on hold.”

By Jake Carter

Source: Mortgage Introducer