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Housing market ‘set to record its strongest year since 2007’

The housing market is set to record its highest level of sales this year since 2007, according to a property website.

Around 1.5 million sales will have taken place across the UK in 2021, Zoopla predicts.

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It added that housing transactions are expected to decline to 1.2 million in 2022, in line with the long-run average, but still relatively high compared to the past decade.

The impact of the pandemic on the housing market has further to run but at a less frenetic pace

Richard Donnell, Zoopla

Richard Donnell, from Zoopla, said: “2021 is set to be a record year for the housing market with the most moves by homeowners since 2007 and nearly £500 billion of home sales.

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“The impact of the pandemic on the housing market has further to run but at a less frenetic pace.

“We expect the momentum in the market to outweigh some emerging headwinds from higher living costs and the risk of higher mortgage rates.

“The latest data shows a turning point in the rate of house price growth, which we expect to slow quickly with average UK house prices up 3% by the end of 2022.”

Source: Shropshire Star

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Search Acumen: Property market levelling out

The property market has begun to level out compared with the start of the year, but remains incredibly active, according to Andy Sommerville, director at Search Acumen.

He added that demand is still strong, and that Search Acumen expects it to fuel activity in the property market well into Autumn and beyond.

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The latest UK monthly property transactions data showed that the provisional seasonally adjusted estimate of UK residential transactions in September 2021 was 160,950, 68.4% higher than September 2020 and 67.5% higher than August 2021.

Sommerville said: “These latest figures reflect the ambition of homeowners to get property transactions over the line whilst the stamp duty financial incentive still stood.”

He added that first-time buyers, families and those looking for properties outside cities have carried the weight of the market and have taken the most benefit from the stamp duty holiday.

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Somerville said: “Throughout the year, many lawyers have embraced digital ways of working in order to deliver efficiencies to the transaction processes and avoid burnout.

“Given the foreseeable levels of high demand, a long-term and sector-wide shift towards digitisation is needed if we are to accommodate speedier transactions and improve services to buyers in the long run.”

By Jake Carter

Source: Mortgage Introducer

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HMRC: Residential transactions up 68.4%

Residential transactions in September stood at 160,950, 68.4% higher than September 2020 and 67.5% higher than August 2021, according to HM Revenue & Customs (HMRC).

The provisional seasonally adjusted estimate of UK non-residential transactions in September 2021 was 10,420, 20.2% higher than September 2020 and 8.4% higher than August 2021.

The provisional non-seasonally adjusted estimate of UK residential transactions in September 2021 is 165,720, 67.3% higher than September 2020 and 59.7% higher than August 2021.

The provisional non-seasonally adjusted estimate of UK non-residential transactions in September 2021 is 10,630, 17.8% higher than September 2020 and 17.0% higher than August 2021.

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John Phillips said: “As the UK housing market steadily edges closer to normality, property transactions are returning to familiar levels.

“There is no doubt that despite demand still desperately outweighing supply, the desire to move has not wilted for prospective buyers.

“Particularly those looking for larger homes as hybrid working models are adopted widely across the country and people seek office space at home. Buyers who find themselves in frenzied waters right now are – rightly so – making the most of low borrowing rates.

“As we look forward to the rest of 2021, it is safe to say that the number of buyers is not set to drop as people race to buy property before we see possible increases in interest rates.”

Stuart Wilson added: “Today’s findings are no surprise given the considerable activity witnessed in the run up to the conclusion of the stamp duty holiday.

“The holiday itself has been a resounding success, helping not only countless first-time buyers and second-steppers to move up the housing ladder, but also enabling silver spenders and last-time buyers to downsize, find more accessible housing, or move closer to family and friends.

“While the first-time buyer market was arguably the most buoyant, the stamp duty holiday encouraged more older borrowers to consider their options and we saw the tax break driving a 116% year on year increase in the number of people using equity release for property purchase.

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“This increase in borrowers using lifetime mortgages to fund purchase activity has been sustained even after the stamp duty holiday concluded at the end of September, suggesting that it was instrumental in driving awareness around this under-used benefit of lifetime mortgages. This is but one of its many healthy legacies.”

Richard Pike says “We are all on a bit of a roller-coaster ride at the moment.

“One moment we’re up and the next we’re down.

“The housing market climbed quickly to the top during the stamp duty holiday, then it dipped as expected, and now we’re heading up again.

“In reality, we’re still riding pretty high and house prices, as reported by the ONS, continue to climb as demand for properties with more space and away from city centres remains.

“Inflation may yet play its part and the Monetary Policy Committee will have a lot to think about in its next meeting.

“However, the economy is still fragile and, although raising interest rates may be the conventional way to put a lid on rising inflation, the question is, can we afford to hamper growth after such a long period of stagnation.

“We may well see interest rates rise in the coming months, but it is by no means a certainty.

“Coming out of the pandemic was always going to be a tricky time, but for now our market is weathering the storm while many other industries are taking the brunt.”

By Jake Carter

Source: Mortgage Introducer

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House price forecast: UK prices to stabilise in run up to Christmas

After a record breaking year, the housing market appears to have peaked and is set to cool, new research shows.

The latest Reallymoving House Price Forecast shows residential property prices will rise by just 0.1% over the final quarter of 2021 as the post-pandemic property market settles into a period of slower growth.

Prices will rise 1.3% in October, but decline by 0.1% in November and 1.1% in December. Conveyancing quote volumes are also on a downward trend, indicating a drop in buyer demand.

Conveyancing quote volumes continue to decline steadily, falling 4% between August and September, further indicating that buyer demand is settling back down to more normal levels.

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Reallymoving captures the purchase price buyers have agreed to pay when they search for conveyancing quotes through the comparison site, typically 12 weeks before they complete. This enables reallymoving to provide a three-month house price forecast that historically has closely tracked the Land Registry’s Price Paid data, published retrospectively.

It is estimated that house prices will rise by 1.3% in October as a result of deals agreed between buyers and sellers in July due to continued strong demand post stamp duty holiday and the limited supply of new properties coming on the market, creating greater competition for homes. This will be followed by a marginal fall of 0.1% in November and a larger drop of 1.1% in December, reflecting a drop in demand from buyers in the late summer as the post-pandemic property boom began to subside.

Following months of strong growth, house prices will rise by just 0.1% in the final quarter of 2021, bringing the average house price to £335,924 at the end of the year.

The shortage of stock as reported by agents is supporting property prices as the market adjusts to the end of all stamp duty incentives and the end of the furlough scheme, with the prospect of an imminent base rate rise an added incentive for buyers to get deals done as quickly as possible and secure a fixed rate mortgage deal while low-cost deals remain.

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Rob Houghton, CEO of reallymoving, commented: “A return to slower growth and a steadier housing market is welcome, but there are a number of factors converging which could knock consumer confidence over the coming months such as the supply chain crisis, rising inflation and living costs, plus the prospect of increasing interest rates – though it’s too early to see their impact in the data yet. While the reduced supply of new homes for sale is making things difficult, buyers who are ready to move now are keen to press ahead and lock in a fixed-rate mortgage deal, helping keep their borrowing costs low.

“First-time buyers who have found themselves increasingly priced out of the market will be encouraged by evidence that the post-pandemic property boom is running out of steam, with prices falling over the final quarter in five UK regions and less competition for starter homes now that stamp duty incentives are over.

“For those who have held off making their move due to the frenzied market conditions over the last few months, now is a good time to buy and lock in a five-year fixed rate deal that will insulate them from any imminent rate rises and make it easier to ride out any short-term inflationary pressures.”


Source: Property Industry Eye

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Energy efficiency requirements may slow housing market

The housing market may be stalled by government plans to require buyers to improve their new homes’ energy efficiency under their mortgage terms.

Property Mark, the trade body that represents letting agents, said the requirements – which have yet to be set out in detail – could initially deter people from moving homes.

Mortgage lenders will need to disclose the energy efficiency of homes they lend money for, plans published on Tuesday outlined.

Lenders will also have to set themselves goals to improve the insulation of homes on their books.

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Plans were included in the government’s roadmap to slash CO2 emissions by up to 70 per cent by 2030.

The plans could initially make older properties harder to sell, Property Mark’s policy and campaigns manager, Timothy Douglas, told CityA.M.

Home buyers may have to invest thousands of pounds in making improvements to their homes, something that could create “significant barriers,” Douglas said.

Mark Harris said there was “increasing impetus” behind the green revolution.

Landlords will also be required to ensure properties for new tenancies must have an EPC rating A-C.

“Without the correct incentives, these costs are likely to be passed on in the form of higher rents. Lenders such as Leeds and Landbay already offer green buy-to-let mortgages, with others expected to follow suit,” Harris added.

“Without changes or improvements, lenders may restrict lending to lower loan-to-values, higher pricing, or not lend at all. This could penalise those who are unable to adapt to or adopt new efficient technologies economically and potentially create the next round of mortgage prisoners.”

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Simon Gammon, Knight Frank Finance’s managing partner, said the current discounts in green mortgage products at the moment were “quite tiny,” with savings of hundreds not thousands to be made.

“Increasingly, what we are going to see is a differential in price between an efficient home and a non efficient home being remortgaged.”

It will be an incentive for home owners to improve their properties every time they remortgage, Gammon added.

Homeowners will also be able to apply for a £5,000 grant to install a heat pump from next year, in a ‘boiler upgrade scheme’, to slash emissions.

The National Residential Landlords Association (NRLA) has called on the government to confirm whether landlords will be able to apply for these grants from next year too.

“Eighty per cent of private rented households have gas central heating and replacing such systems will be both costly and vital to achieving net zero,” NRLA boss Ben Beadle said.

“Once again private landlords have been left waiting for the Government to publish details of the standards they will be required to comply with, the deadlines they must meet, and how such work should be funded.”

By Emily Hawkins

Source: City AM

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ONS: House prices up 10.6% annually in August

UK average house prices increased by 10.6% over the year to August 2021, up from 8.5% in July, according to the latest Office for National Statistics (ONS) UK House Price Index.

The average UK house price was £264,000 in August 2021, £25,000 higher than the same time last year.

Average house prices increased over the year in England to £281,000 (9.8%), in Wales to £195,000 (12.5%), in Scotland to £181,000 (16.9%) and in Northern Ireland to £153,000 (9.0%).

London continued to be the region with the lowest annual growth (7.5%) for the ninth consecutive month.

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Rob Barnard, director of intermediaries at Masthaven Bank, said: “The continued ‘race for space’ created by the pandemic has continued to drive up house prices, with the tapering of stamp duty relief over the past year hardly slowing momentum down.

“While booming levels of buyer activity are certainly encouraging, it is difficult to know if they will last.

“The end of the government support schemes, as well as expected tax hikes in the new year, could serve to weaken demand going forward.

“Indeed, the country’s economic outlook over the coming winter looks uncertain, from rising inflation to extensive supply chain issues.

“Amid this backdrop, borrowers will require the guidance of specialist lenders now more than ever to ensure they can get on the housing ladder.

“Prospective buyers struggling to buy a home, or those who have seen their financial circumstances take a knock over the past 18 months, will need the advice and personalised products which specialist lenders can provide.

“It will be vital that specialist lenders continue to innovate and develop tailored products and collaborate with brokers to understand the unique and shifting needs of customers.”

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Kevin Roberts added: “Structural factors have continued to drive unprecedented levels of buyer activity, from the enduring ‘race for space’ amid remote working, to the very affordable mortgage rates that are available to borrowers today.

“However, it is also possible that this uptick stems from the return of international buyers.

“In fact, our SmartrCriteria tool revealed that searches made on behalf of international buyers grew by 160% in August.

“Naturally, this coincided with the easing of international travel restrictions and the slowing of domestic purchase activity as the Stamp Duty holiday drew to a close.

“Whether such levels of demand will persist through Q4, however, is uncertain and seeking the guidance of an experienced adviser will be key as we face into the next few months.

“Independent mortgage advisers are well-placed to offer bespoke recommendations and inform borrowers of the best deals to help turn this corner.”

Anna Clare Harper said: “The temporary stamp duty reduction, alongside billions of pounds worth of loans and grants, was designed to protect consumer and investor confidence through the pandemic.

“Combined with lockdown-led upsizing, low interest rates making finance cheap, and competition amongst lenders, this has added to housing demand and a price boom, whilst supply is restricted.

“The trouble is, rising house prices are in direct conflict with other government objectives.

“More expensive housing makes homeowners feel confident, which is great for the economy, but also makes housing less affordable and less accessible.

“This is a recipe for social disaster, since it comes at a time when many landlords are giving up due to the burden of laws and regulations affecting properties and their management.

“The housing market has the potential to solve many social, economic, and indeed political problems.

“However, it also has the potential to increase divides in society.

“Perhaps the most obvious are geographical and age divisions. Firstly, there’s the ‘North-South’ divide, to be tackled by ‘levelling up’.

“Secondly, there’s the widening gap between older and younger generations, which is most likely to be tackled through tax.

“In terms of what next, the housing market will continue to be vital to our economy, and also vital to the achievement of wider government policy.

“It’s hard to see a future without tax reform of some kind to level the playing fields between the older ‘haves’ and younger ‘have-nots’.”

By Jake Carter

Source: Mortgage Introducer

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Scottish house prices continue to climb

Average Scottish house prices continued to rise in August, reaching £211,029, according to Walker Fraser Steele.

This followed a 1.8% month-on-month rise and a 12.1% increase in the year to August 2021.

All 32 local authority areas saw prices rise over the year, and transaction levels in August were at a seven-year high.

On a regional basis, Na h-Eileanan Siar saw the only yearly decline, falling by 8.1%, while Shetland Islands saw greatest monthly decline, also down by 6.7%.

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Meanwhile, Scottish Borders saw the largest annual rise, up by 28.4% and Stirling noted the greatest month-on-month increase, up by 5.9%.

Alan Penman, business development manager at Walker Fraser Steele, said: “At the end of July, the average Scottish house price stood at £207,344 but by the end of August this figure was £211,029 – reaching a new record high, with a rise of £3,685, or just under 2% in the month.

“The race for space continues to support the prices of larger properties.

“The scarcity of this type of stock coupled with the continued high demand means prices remain strong.

“Property at the top-end has performed well throughout 2021 and there is no sign of any imminent let-up.

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

“We noted last month that the exceptional performance of larger properties was likely to continue and this month we have more evidence to support that view.

“People’s preference for more space and working from home has meant buyers have often sought properties that can accommodate new lifestyles.

“But we should remember that borrowers’ ability to afford these properties has in no small way been a result of the Land and Buildings Transaction Tax holiday earlier in the year, and the continued record low interest rates.

“In terms of the geographical performance of the Scottish regions, the area with the highest annual increase in average house prices in August was the Scottish Borders, where average prices have risen by 28.4%, which again reflects the fact that the mix of homes that have been sold in this area has trended towards the more expensive end of the market.”

By Jake Carter

Source: Mortgage Introducer

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Mortgage Affordability hits 2021 high in September

The average maximum loan size available is up by nearly 10% compared to the start of the year in September – representing a 2021 high, according to the latest analysis from Mortgage Broker Tools (MBT).

Analysis of real cases processed through the MBT research platform found that the maximum loan size available to an average customer was £254,821 in September, compared to £234,224 in January.

This increase was primarily driven by improved options for first-time buyers with the maximum loan size available such a buyer standing at £276,060 in September, up from £230,555 in January.

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Tanya Toumadj (pictured), CEO at Mortgage Broker Tools, said: “It’s a very competitive lender landscape at the moment and that means more options for borrowers. Cutting rates is one way for lenders to get an edge, but it’s not the only way and we’ve seen improved choice at higher LTVs and lenders making changes to their affordability calculators to become more competitive.

“At Mortgage Broker Tools, we’ve also seen the introduction of new ways for first-time buyers to enhance their affordability options, with results that show the benefits of combining an equity loan with a first charge mortgage, and this has certainly helped to boost the average loan size available to this group of customers.

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“The latest MBT Affordability Index shows that even though the maximum loan size available is at its highest point this year, a quarter of cases are still deemed to be unaffordable by lenders, so it’s really important that brokers carry out thorough research amongst as many providers as possible.

“Our residential panel, for example, features 44 lenders, which is nearly a third more than its nearest competitor. This difference in panel size makes a tangible difference to how much a client is able to borrow – in fact, we have calculated that by researching the additional lenders we offer, an average client would be able to borrow an extra £38,000. And this could be the difference in helping a client to achieve their objectives or letting them down.”

Source: Mortgage Introducer

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Housing market is strong ‘but there is an underlying weakness that needs to be resolved’

UK property price growth slowed marginally last month as the stamp duty holiday came to a near end, but a drop in the number of homes being put up for sale looks set to keep driving up prices, according to the latest Royal Institution of Chartered Surveyors (RICS) survey.

The industry survey shows that the residential property price balance fell to +68 in September from a downwardly revised +72 in August.

Simon Rubinsohn, chief economist at RICS, said: “Both price and rent expectations [are] close to series highs pointing to greater pressure on affordability at a time when money markets are sensing interest rate increases coming sooner rather than later.”

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The UK property market appears to be strong on the surface but Tom Bill, head of UK residential research at Knight Frank believes that “there is an underlying weakness that needs to be resolved”.

He continued: “The imbalance between supply and demand is unsustainable and in many cases arises because prospective sellers are unable to find anywhere to buy themselves, creating a vicious circle of low supply. In some cases, they cannot even find properties to rent as a short-term option.

“There were 13 new buyers for every property listed in the UK in September. Over the last five years, the only time demand has exceeded supply to a greater extent was in January 2020, the first month of the short-lived Boris bounce.

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“The imbalance is keeping upwards pressure on prices but, like many other parts of the economy, needs to resolve itself over the next six months to ensure greater stability in the UK housing market in 2022.”

Fears that the end of stamp duty holiday would mean a tapering off in demand have evidently been disproved with demand for properties high, despite rising prices, according to Peter Beaumont.

He said: “While the ratio of average house price to average salary has never been higher, potential buyers are seizing a window of opportunity while borrowing rates remain low- before the chancellor announces measures to balance the books and the Bank of England steps in with measures to counter rising inflation.”


Source: Property Industry Eye

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Property industry reaction to Rightmove House Price Index

The average asking price of property coming to market increased by 1.8% in October, the biggest rise at this time of year since October 2015, according to Rightmove.

The data reveals that the number of property sales being agreed was up 15.2% in September, versus 2019’s ‘normal market’ comparison.

Property industry reaction:

Director of Benham and Reeves, Marc von Grundherr, commented: “We’ve seen a second wave of activity hit the market in the wake of the stamp duty holiday as those who refrained from the chaotic market conditions seen over the last year now decide to take the plunge.

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“With the market remaining particularly buoyant, those entering with a property to sell are pricing high and this has caused yet further growth where asking prices are concerned. While initial asking price expectations are perhaps a little over-optimistic, to say the least, a lack of stock to satisfy demand means that homes are selling fast and for a very good price.

“We’re certainly starting to see stronger signs of a London market revival. House price growth across the capital has remained fairly muted in contrast to the rest of the nation but a return to the workplace and the return of foreign interest is starting to drive the market forward.

“Don’t be surprised to see London regain the property price growth top spot before the year is out.”

The managing director of Barrows and Forrester, James Forrester, said: “Instead of stumbling over the hurdle of a final stamp duty holiday deadline as many predicted, the market has posted an incredibly strong performance with asking prices climbing across every region.

“We’re now seeing definitive proof that while the stamp duty holiday may have acted as a starting pistol where the property market revival was concerned, the race certainly hasn’t been run and this strong upward growth is unlikely to dissipate anytime soon.

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“While it seems too soon to talk about Christmas, it won’t be long before it arrives and while many will be eying the New Year with regard to selling their home, now is the time to get your house in order so that come the 1st January you’re on the market and attracting interest.”

The founder and CEO of, Colby Short, commented: “This latest market performance may come as a surprise to some but we are heading into what is traditionally a very busy period for the housing market and we can expect to see more of the same as the end of the year approaches.

“Of course, the question is how long it will last and the answers to that question lie with the Bank of England’s Monetary Policy Committee. Should the decision be made to threaten our economic recovery with an increase in interest rates, we could the housing market slow considerably.”

Mark Ross, managing director of Redbrik, remarked: “Stock shortages continue to drive prices upwards, though accurate pricing rather than over-pricing is very important to get prospective buyers through the door.

“We expect prices to continue to rise, albeit at a steadier pace. This should give buyers and sellers more confidence to come to the market as they better understand the less frantic conditions.

“Extrapolating the market fluctuations, we’ve seen property firmly re-establish itself as a reliable long-term investment for owner-occupiers and investors alike. While we expect a 0.5% increase in the mortgage rate over the next six months, we predict rates will remain comparatively low as banks, and building societies compete for business.”


Source: Property Wire

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