Marketing No Comments

House price inflation reaches strongest point in seven years

Annual house price inflation is now at its strongest level in nearly seven years, according to the Halifax House Price Index.

The average UK property price has reached £261,743, a new record high.

On an annual basis, house prices have risen by 9.5%, on a quarterly basis they are up 2.4%, and month-on-month, prices have increased by 1.3%.

All UK regions, bar the North East, saw an acceleration in year-on-year house price inflation last month.

The strongest growth was once again recorded in Wales, up 11.9% annually, closely followed by the North West and Yorkshire & Humber, both of which posted double-digit annual growth.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

For Wales and the North West, these are the biggest percentage gains since April 2005, and for Yorkshire & Humber since June 2006.

The South of England, however, traditionally the driving force of national house price performance, is lagging behind the rest of the country; this is especially the case in Greater London, where average prices are still 3.1% higher than a year ago but growing more slowly than the rest of the country.

Russell Galley, managing director of Halifax, said: “House prices reached another record high in May, with the average property adding more than £3,000 (1.3%) to its value in the last month alone.

“A year on from the first easing of national lockdown restrictions, and the gradual reopening of the housing market, annual growth surged to 9.5%, meaning the average UK home has increased in value by more than £22,000 over the past 12 months.

“Heading into the traditionally busy summer period, market activity continues to be boosted by the government’s stamp duty holiday, with prospective buyers racing to complete purchases in time to benefit from the maximum tax break ahead of June’s deadline, after which there will be a phased return to full rates.

“For some homebuyers, lockdown restrictions have also resulted in an unexpected build-up of savings, which can now be deployed to fund bigger deposits for bigger properties, potentially pushing property prices even higher.

“Whilst these effects will be temporary, the current strength in house prices also points to a deeper and long-lasting change as buyer preferences shift in anticipation of new, post-pandemic lifestyles – as greater demand for larger properties with more space might warrant an increased willingness to spend a higher proportion of income on housing.

“These trends, coupled with growing confidence in a more rapid recovery in economic activity if restrictions continue to be eased, are likely to support house prices for some time to come, particularly given the continued shortage of properties for sale.”

Discover our Residential Mortgage Broker services.

Mark Harris, chief executive of SPF Private Clients, added: “House price growth in the south of England may be lagging behind the rest of the country but property prices are still more expensive there than elsewhere.
“While buyers are prepared to go further in the search for more space and less need to be in the office every day, pushing up demand for property away from the capital, it remains to be seen whether this is a long-term trend or whether the attraction of city centres will return at some point.
“Cheap borrowing and affordability is giving buyers more purchase power, which is pushing up prices.
“Lenders remain keen to lend and have plenty of cash to do so, resulting in ever-lower mortgage rates from sub-1%.
“However, lenders aren’t only targeting those with big deposits or similar levels of equity in their homes, with options also increasing for first-time buyers at 95% loan-to-value and the first properties being sold under the government’s First Homes initiative.
“This is just as well given that rising property prices are not good news for first-time buyers, and will make getting on the housing ladder even more of a struggle.”
Sundeep Patel, director of sales at Together, said: “The surge in demand for property we’re continuing to see showed no indication of slowing last month.

“House prices reached another record high in May, up by 1.3% (more than £3,000) in value than in April. Annual growth also surged by 9.5%, with the average house price in the UK now at £261,743.

“However, with the stamp duty tax break starting to taper off from the end of this month, we’re likely to see this unprecedented rush for new homes ease off by the time we hit the end of summer.

“The recently released travel traffic light list for UK holidaymakers may also dampen activity as people prepare to make a break for guaranteed sun and so stick a pin in their property plans back home.

“How the property market will shape up by the end of this year is no way near certain.

“However, whether house prices have been artificially inflated or not, it is possible the backlog in demand from keen buyers will markedly increase opportunities for specialist lenders, as increased volumes of borrowers turn to finance such as bridging loans to quickly purchase their ideal homes.”

Anna Clare Harper, chief executive of SPI Capital, added: “Investors and homeowners alike are wondering whether the housing market boom is about to bust?
“With 9.5% house price growth in the year to May, despite the huge economic problems caused by the pandemic, it’s a sensible question.
“The truth is, what tends to happen in the housing market is different from what happens with other purchases and investments.
“In other sectors, when consumers get nervous, they stop spending so much. When investors get nervous, they are scared into selling.
“Things are different in the housing market because homes are ‘essential’. We all need a place to call home.
“So, unlike crypto ‘investments’ or shares, people tend not to sell unless they really need to. And, with interest rates low and forecast to remain so, it can be cheaper to pay a mortgage on an equivalent property than to pay rent.
“So a mass sell-off from property owners who have already managed to put down a deposit seems unlikely unless interest rates rise significantly.
“According to Halifax, average annual house prices are at an historic high, at £261,743, which will seem unaffordable to many – in particular younger people.
“A big cause of growth over the past year has been the desire for more space – and for those not moving, home renovations are increasingly popular.
“This is symbolic of our rising living standards which is, on the whole, a good thing. As a result, house prices and construction costs rising.
“This means, in turn, that the cost of renting, buying and improving homes are likely to continue to rise.”

By Jake Carter

Source: Mortgage Introducer

Discover our Mortgage Broker services.

Marketing No Comments

Welsh house prices exceed £200,000

The average house price in Wales has topped £200,000 for the first time – now standing at £209,723, Principality Building Society’s Wales House Price Index for Q4 2020 has found.

Last year showed the strongest annual house price inflation in 15 years (8.2%).

Detached home prices were 11% higher than a year ago, as people search for space prompted by the pandemic.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

This is compared with 5-6% growth for most other property types.

Tom Denman, chief financial officer at Principality Building Society, said: “The strength of the housing recovery in the second half of 2020 is striking, and this reflects both the stimulus provided by the Welsh government in terms of the time-limited Land Transaction Tax holiday, the pent-up demand which built up during the first lockdown, and the race for space to buy bigger properties with larger gardens.

“In Q4, all local authority areas were reporting house prices higher than a year earlier. This increased demand has been driven by increased savings in many households during the lockdowns coupled with continued historic low mortgage rates. There has probably been some additional demand from buyers across the border with England, with house prices more affordable in Wales in relative terms.

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

“The recent UK HM Treasury review of independent forecasts for 2021 showed wide divergences in house price expectations for the year. With so many unknowns it is impossible to offer a forecast with any reasonable accuracy. However, once there is more clarity on the containment of the virus and on the full re-opening of the economy, it will become easier.”

Merthyr Tydfil recorded the strongest rise on a quarterly basis of 18.2%, taking its average house price to £147,687, though this may have been exaggerated due to a modest amount of sales data.

In north Wales, Anglesey house prices rose by 16% annually to £237,782, while Conwy (£224,068) and Flintshire (£216,224) rose by 13.7% and 13.3% respectively.

In south Wales, Monmouthshire (£332,558) and Newport (£222,107) also achieved strong annual double-digit increases, rising 14.2% and 12.1% respectively.

BY RYAN BEMBRIDGE

Source: Property Wire

Discover our Mortgage Broker services.

Marketing No Comments

House price inflation surges to 7.5% in October

House prices rose by 7.5% year-on-year in October due to strong demand for higher value homes, Halifax’s House Price Index has found.

Quarterly prices increased by a substantial 4.0%, bringing the average price to £250,457 across the UK.

However, month-on-month price growth slowed considerably, down to 0.3% compared to 1.5% in September.

Russell Galley, managing director, Halifax, said: “Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

“Since March flat prices are up by 2.0% compared to a 6.0% increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses.

“This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the Chancellor’s waiver on stamp duty for properties up to £500,000.

“While government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain.

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

“Though the renewed lockdown is set to be less restrictive than earlier this year, it bears out that the country’s struggle with COVID-19 is far from over.

“With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”

Jamie Johnson, chief executive of FJP Investment, said: “The property market is moving from strength to strength. Amidst the uncertainty, buyer demand for bricks and mortar is pushing prices to record highs.

“Yet with the country now in a second lockdown, is this momentum about to suddenly run out? I don’t believe so. After all, the stamp duty holiday is still in play and the government has confirmed buyers and renters can still move houses throughout November. Clearly, it understands the importance of the property market in supporting the economy.

“I anticipate the rate of house price growth to slow down in November, however it will no doubt continue to remain in positive territory. People are clearly looking to invest in safe and secure assets during in this uncertain climate, and real estate has a proven track record of being resilient and quickly recovering from period of market volatility.”

BY RYAN BEMBRIDGE

Source: Property Wire

Discover our Mortgage Broker services.