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UK House Price Growth Goes to 13.4% – Nationwide House Price Index

Average house price growth in the UK has risen to 13.4 per cent, according to the latest Nationwide House Price Index, released yesterday.

The figures, released yesterday, show that prices grew 0.7 per cent month on month, after the taking into account of seasonal factors.

Commenting, Robert Gardner, chief economist for Nationwide, said: “Annual house price growth accelerated to 13.4 per cent in June, the highest outturn since November 2004. While the strength is partly due to base effects, with June last year unusually weak due to the first lockdown, the market continues to show significant momentum. Indeed, June saw the third consecutive month-on-month rise (0.7 per cent), after taking account of seasonal effects. Prices in June were almost 5 per cent higher than in March.”

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There was much comment on the increase from within the industry. Sundeep Patel, director of sales at Together, said: “Another month of strong growth for house prices goes to show just how competitive the race for space has become, with buyers still eager to snap up properties at pandemic prices, ahead of the first taper for the Stamp Duty holiday extension ending this week. Today’s figures show house prices were up by 0.7 per cent month-on-month and annual house prices rose by a staggering 13.4 per cent – the highest level recorded since November 2004.”

He added: “That said, from the second half of the year onwards, we are expecting to see things start to slow down as potential buyers adapt to this next phase of the pandemic, without Government support and tax breaks. Whatever property financing is needed in the future, lenders who can offer a degree of flexibility are going to be highly sought after, as people look to pursue property plans against their changing needs in the market.”

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

Others were far more critical.

Guy Harrington: “This is only going to end one way. Given the economic backdrop and with government support schemes ending in a few months, this insane level of growth is long overdue a correction. In some rural hotspots houses are selling for 40 per cent over the asking price. The UK housing market has a rocket attached that is burning low on fuel and once this perfect storm passes, we are headed for a serious shock to the system.”

BY PETE CARVILL

Source: Property Wire

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Manchester and Leeds see strongest UK house price growth

Throughout the past year, Manchester and Leeds has led UK house price growth. The north of England is expected to continue performing the strongest during 2021 as well.

The north of England is dominating UK house price growth. The latest house price index from Zoopla revealed Manchester saw the largest increase in average house prices during the past year, rising by 5.7%. Leeds followed closely behind with 5.6% growth. Then, Nottingham and Liverpool had a rise of 5.4% and 5.3%, respectively.

The index also revealed the north-west of England led the way regionally in UK house price growth with a 5% increase year-on-year. Yorkshire and the Humber and Wales followed jointly with 4.9%. As a whole, UK house price growth was 3.9%. This is the strongest growth seen since August 2017 and is up from 1.3% last year.

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The north continues to be in high demand

There has been strong demand across the UK as the property market has defied the traditional seasonal slowdown. According to Zoopla, buyer demand soared by 40% across the whole of 2020. And the north of England has seen a particularly strong level of demand.

Even though property prices are on the rise in the north, prices are still much more affordable, especially when compared to much of the south. Because of the savings buyers can achieve there, demand is expected to continue even after the stamp duty holiday comes to an end.

Many people have reprioritised their housing needs due to the COVID-19 pandemic and successive lockdowns. This is expected to continue impacting demand. People are in search for larger properties and locations closer to public parks.

Because of this, more buyers, tenants and investors will likely look to the north to be able to get more space for their money. Demand and property prices in the north, especially the north-west, will likely continue to increase in 2021 and the coming years as well.

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

House price predictions moving forward

While property price growth across the UK is expected to be more subdued in 2021, many experts feel property prices will still rise next year. Zoopla is forecasting a particularly strong start to 2021. This is due to buyers and investors rushing to beat the stamp duty holiday deadline in the spring. Additionally, buyers who have reassessed their home priorities are still itching to move.

In the house price index, Zoopla states: “Stamp duty is a factor supporting demand, but we have questioned the scale of the importance. A recent consumer survey by Zoopla found that 44% of movers’ plans were not influenced by the stamp duty holiday – they remain focused on the need to relocate and find more space and a better location.”

Despite the uncertainty surrounding COVID-19 and Brexit, the UK property market is expected to remain resilient throughout 2021. Savills recently revised its future property price predictions. The north-west is expected to see the strongest growth in 2021 with home values forecast to increase by 8.5%. Additionally, across five years, prices are predicted to rise by 24.1% in the north-west. This is the largest increase predicted out of any UK region.

The north will likely continue leading the way in house price growth. It’s an attractive area to buy property for both homebuyers and buy-to-let landlords. And 2021 could prove to be a good time to lock in lower mortgage rates.

Source: Buy Association

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UK house price growth rises to highest rate in five years

UK house price growth jumped to the highest rate in five years this month, as the market continued to experience a post-lockdown bounce.

Annual UK house price growth rose to 5.8 per cent in October, the highest level since January 2015.

Property prices were up 0.8 per cent month-on-month compared to growth of 0.9 per cent in September, according to the latest Nationwide analysis.

Nationwide chief economist Robert Gardner 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.

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“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, 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.”

Garrington Property finders chief executive Jonathan Hopper warned that the “momentum can not last forever”.

“The demand is real but it’s being underpinned by two finite, and probably fleeting, factors,” Hopper said.

“The first is that many buyers want to move for chiefly emotional rather than financial reasons – typically the desire for more space, and a better lifestyle, away from the big cities.

“The second is the Stamp Duty holiday. Like all holidays, it will come to an end. And with the tax break due to close at the end of March, we’re now seeing a stampede of buyers trying to get their purchases in train so they will complete in time.

London market remains “robust”

“The housing market has ploughed into the usually quieter autumn period and not even touched the brakes,” said Lucy Pendleton, property expert at estate agent James Pendleton.

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

“Rumoured trouble in the London market has not materialised. All the major indicators that started punching the top of the dial in late summer are still showing very strongly that a post-lockdown feast in demand is continuing.”

Lockdown sparks surge in home hunters

Dan Leather, real estate partner at law firm Gowling WLG, said:”This spike is undoubtedly supplemented by the stamp duty holiday, but is also symbolic of a more enduring lift in the market as the effects of lockdown come to bear on people’s long-term planning and increased demands on their living space.

“We already know that the house builders and developers are working really hard on design and delivery, to identify and serve the adjusted demands of the purchaser.

“This continues to transition and evolve at pace. This sure makes the new build housing product more attractive than ever before, serving as a further incentive to move and generating activities throughout the new and used housing market.”

By Jessica Clark

Source: City AM

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UK house price growth strongest for 16 years

UK house prices recorded the fastest monthly increase for 16 years in August.

House prices rose 2% in August compared to July, according to the Nationwide House Price Index. This was the fastest month-on-month rise since 2004.

And over the year, house prices increased by 3.7% to £224,123 compared to August 2019.

“House prices reversed losses recorded in May and June to reach a new all-time high,” said Robert Gardner, chief economist at Nationwide.

“The bounce back reflects an unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions,” Gardner said.

He said the rebound was driven by factors including pent-up demand and people reassessing their housing needs as a result of life in lockdown.

“Our research indicates that 15% of people were considering moving owing to lockdown,” said Gardner.

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Economic uncertainty

Nationwide expected the trend to continue in the short-term, helped by the stamp duty holiday. But Gardner said: “Most forecasters expect labour market conditions to weaken significantly in the quarters ahead. This would likely dampen housing activity once again.”

Chris Sykes, mortgage consultant at brokers Private Finance, agreed: “Uncertainty over the strength of the UK’s economic recovery is persisting, while concerns about reintroducing a national lockdown are mounting.

“This could cause the market to readjust to a new economic reality.”

Sykes added that lifting the government ban on evictions in September could lead to an upsurge in evictions and negative publicity for landlords, potentially suppressing appetite in the buy-to-let market.

Miles Robinson, head of mortgages at Trussle, added: “There is a chance we’re experiencing a mini-boom ahead of the real after-effects of the pandemic.”

He urged the government and lenders to “think of ways to ensure the market remains accessible to all.”

Written by: Liz Bury

Source: Your Money

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UK house price growth to remain positive over the next quarter – Zoopla

The latest Zoopla House Price Index has been published, with the bulk of new pricing evidence coming from sales agreed before the lockdown.

Data on pricing for new sales agreed in the last four weeks is starting to feed through and points to a resumption in the upward pressure on house prices seen at the start of the year.

As an example, average asking prices for properties marked as sold on Zoopla, which were rising at 7% in the first three months of the year, have returned to registering a similar growth rate over the first two weeks of June.

Near-term outlook for house prices

Most of these new sales agreed are likely to complete between August and October 2020, which Zoopla expects will show sustained UK house price growth of between +2% to +3% over the next quarter, once they feed into the index.

While some have forecast annual house price falls over calendar year 2020, the portal expects any price falls in the house price indices only to crystallise in the final months of the year.

Economic impacts of COVID-19 to hit home in H2 2020

After an initial rebound, demand is expected to weaken over the summer months as the economic impact of COVID starts to materialise, with figures reported last week by the ONS indicating an acceleration in unemployment.

Caution amongst lenders and more limited availability of 90% loan to value (LTV) mortgages will reduce demand, particularly amongst first-time buyers who, over recent years, have been the engine of the housing market.

In 2019, a fifth of all homebuyers purchased a home with a deposit of 10% or less, so a decrease in the availability of 90%+ LTV mortgages could preclude this cohort of would-be buyers from entering the market, effectively reducing demand.

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Government and central bank support will continue to play an important role in how the economy fares with a knock-on impact for the strength of consumer sentiment.

Retail sales, for example, rebounded more than many expected in May.

While almost a fifth of mortgage holders have taken payment holidays, borrowers are able to take these up until the end of October 2020, meaning support is extended for the rest of the mortgaged sector up until April 2021.

Further support and innovation to support the economy and the housing market cannot be ruled out in these unprecedented times, which will limit the downside, albeit not completely.

Strongest sales rebound in northern cities

New sales agreed, subject to contract, have grown the most in England where the market is open for business.

The rebound in sales has been strongest in northern England, led by Leeds, Sheffield and Manchester where sales are up to 20% higher than in February 2020.

In cities where sales are not keeping pace with pre-COVID levels, including Glasgow, Newcastle and Cambridge, this is down to a lower supply of homes for sale.

Level of homes for sale (inventory) in these cities is significantly lower than last year.

While the new flow of homes for sale is back to pre-COVID levels, the number of homes for sale per estate agency branch is 15% lower than a year ago.

This is a result of the market closure at what is a busy time of year.

Stock levels in Cambridge, for example, are up to 40% lower year-on-year.

Zoopla says that the lack of supply supports their view of house price growth holding steady in the short term.

House price growth

UK house price growth is up 2.4% on the year, and has increased from 1.6% at the start of 2020.

The 20 city index registered slower growth over May, slowing to +2.1% from 2.4% in April as less pricing evidence dragged the growth rate lower.

The city with the highest rate of house price growth over the past 12 months is Nottingham (4.3%), followed by Manchester (3.9%).

Meanwhile, Oxford (-0.6%) and Aberdeen (-2%) have recorded modest price falls.

Regional momentum

Activity levels are expected to rebound in Scotland, Wales and Northern Ireland as these markets reopen and pent up demand is released.

These countries account for less than a fifth of UK housing sales but more activity will support headline measures of demand and market activity in the immediate term.

The Welsh market opened on Monday but demand for homes has been building since the English market reopened, gaining momentum over the last two weeks.

Demand for housing in Wales has now rebounded close to what has been recorded in England.

Sales agreed, however, remain 65% lower than pre-COVID levels in Wales as the physical viewing of property has not been permitted.

Zoopla expects sales volumes to increase over the rest of June and into July, mirroring the rebound in England.

Scotland’s market, which reopens later in June, has seen a similar trend with demand recently returning to pre-COVID levels, but with sales volumes lagging well behind.

Commenting on the findings Richard Donnell, Director of Research & Insight, said:

“The rebound in housing market activity has taken many in the industry by surprise.

“It is welcome news given the projections for falling economic growth and rising unemployment.

“Estate agents and developers are responding and using the upsurge in demand to rebuild their sales pipelines and open up their developments.

“We see returning pent up demand and new buyers entering the market creating upward pressure on prices in the face of a lower supply of homes for sale which has been exacerbated by the lockdown.

“House price growth is set to hold up in the near term and we expect the downward pressure on prices to come in the final months of the year as demand weakens.

“While the average asking price for homes marked as sold on Zoopla are 7% higher than a year ago this is down to an increase in sales in higher value markets where activity has remained subdued in recent years.

“We do not expect the rate of growth in the Zoopla House Price Index to reach this level, rather it is expected to hold steady at 2%.

“The Welsh housing market opened this week and levels of demand have already returned close to the levels seen in England in anticipation of the market reopening. Scotland, where the market reopens on 29 June has also seen demand rise back to pre-COVID levels but sales remain more than two thirds lower and are expected to rebound in the coming weeks.”

Source: Property Industry Eye