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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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Housing market experiences busier than usual December

A major estate agency experienced a busy December, despite activity dropping off from November.

NAEA Propertymark found there were eight sales per branch in December, the highest since 2006.

Meanwhile there were an average of 348 prospective buyers per branch, the most since December 2016.

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NAEA PropertyWire attributed the busy December to the stamp duty holiday.

Despite the market being stronger than normal, the number of buyers registered per branch actually fell by 41% from 580 in November.

Meanwhile the number of sales agreed fell from 13 in November.

Mark Hayward, chief policy advisor, Propertymark, said: “The number of potential buyers in the market fell significantly in December after Novembers’ record high.

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

“While we would ordinarily expect to see a lull over the festive period, these numbers show that the tightening of lockdown restrictions, coupled with the reality that many individuals would no longer meet the stamp duty deadline, has exacerbated this.

“As we approach the stamp duty, LTT and LBTT cliff edges on the 31 March, we are increasingly concerned about the pressure this is placing on the property industry with more than two-thirds (69%) of estate agents expecting to see an increase in failed sales due to buyers realising their sales will not complete ahead of the deadline. It’s important that action is taken now to prevent this and support the property sector.”


Source: Property Wire

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First-time buyers losing interest in city living

City living is losing its appeal among first-time buyers, with the vast majority now preferring more subdued locations, Trussle has found.

As it stands just 29% of first-time buyers plan to buy in a city, compared to 53% in a suburb.

Miles Robinson, head of mortgages at online mortgage broker Trussle, said: “The pandemic has increased the financial pressure many first-time buyers were already feeling, as well as creating a seismic shift in what people expect from their home.

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“As a result, financial pressures and rising house prices, alongside a desire for more outdoor space, means demand in more affordable rural locations is currently outpacing that for urban destinations.

“But lenders are starting to return to the market with higher LTV products, which could make more expensive homes in the city more accessible again.

“And, we may see renewed interest in city living once the vaccine has been rolled out and things begin to return to normality.

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

“As such, only time will tell if the current lust for country properties is a long-term trend or more of a spontaneous response.”

Higher house prices in urban locations are likely to play a huge factor in this trend, with 65% saying it’s ‘impossible’ to get on the housing ladder.

The research found that the average budget for a first home was £174,266.


Source: Property Wire

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What will the property sector look like in 2021?

After the property sector was forced to halt everything during the first lockdown, the second half of the year saw demand for online conveyancing services bounce back dramatically.

We expect this surge to continue throughout Q1, due to a number of reasons.

For starters, the huge back up of prospective buyers and sellers after the spring 2020 market cut-off should keep demand going through early 2021.

Buyers have now had months more to save up a viable house deposit, and both sellers and buyers will want to get the ball rolling.

What’s more, low interest rates, resulting in cheaper mortgages for some, are spurring things on.

Couple this with the stamp duty holiday continuing up until 31 March 2021, demand is still soaring.

After these incentives diminish come Q3 and 4, we forecast a plateau later in the year.

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House Prices to Increase

Many believe that the end of the stamp duty holiday, combined with the end of the Furlough Scheme on 31 March 2021, will cause house prices to decrease.

That said, some think the increase in prices will continue into early 2021, and decrease come 2022. They believe that the peak in pricing will coincide with the usual spring boom in house sales, and continued growth will simply be subdued.

We are more inclined to agree with the latter. Low interest rates, as well as cheaper mortgages available for some people, will prop everything up until Q3 and 4.

Then, after this initial demand, and the stabilisation of the market post-COVID, we can see a decrease potentially following suit from 2022 onwards.

Continued Struggles for First-Time Buyers

Statistics show that home movers are set to overtake first-time buyers with home purchases once again. As the year moves to 2021, we can only predict that these struggles will continue for a number of reasons.

Firstly, continually rising house prices, as well as sky rocketing rent, low wages, and unemployment, makes it near impossible for first-time buyers to save a deposit.

What’s more, despite low interest rates, a withdrawal of high loan-to-value mortgage products disproportionately affected first-timers, who typically require bigger mortgages to cover the lack of a hefty deposit.

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

We can expect this struggle to continue if the picture isn’t changed.

What’s more, new equity loan scheme, which is aimed at supporting first-time buyers with new-build purchases, may not have the intended effect.

It certainly seems like a great opportunity, but the country is still lacking affordable housing for many, so we doubt it’ll help.

Then, we have the stamp duty holiday, which has only really benefitted those already on the ladder, further increasing the disparity between first-time buyers and others.

Finally, young people have been affected most dramatically by unemployment this year, further compounding the issue.

What Are Your Predictions for the 2021 Property Market?

Evidently, there’s no clear picture of how the property market will look in 2021. It all depends on how the government deals with the pandemic in the new year, as well as the success of the vaccine.

It’ll also depend on how quickly unemployment rates get back on track.

By Daniel Chard

Source: Mortgage Introducer

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Housing market remains open during new national lockdown

The housing market will remain open during the new lockdown in England.

Boris Johnson has announced a set of new national restrictions for England, similar to the March lockdown.

But unlike the first lockdown, the housing market is to remain open for business.

Government advice on home moving during the coronavirus remains unchanged. Consequently, people in England will be able to move and removal firms, tradespeople, and estate agents can still operate by going inside homes. Adherence to safety and social distancing remains crucial.

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Government advice on moving home: 

You can still move home. People outside your household or support
bubble should not help with moving house unless absolutely necessary.

Estate and letting agents and removals firms can continue to work. If you
are looking to move, you can go to property viewings.

Follow the national guidance on moving home safely, which includes
advice on social distancing, letting fresh air in, and wearing a face

Industry reaction: 

Ben Taylor, CEO of Keller Williams UK, said: “With immense caution I welcome the fact that the property market remains open albeit that viewings and the physical moving process itself must be met with extreme diligence. Why have the government chosen to ‘exempt’ the UK housing market and estate agents?

“Think of it as a string to the broader economy rather than it doing us estate agents a particular favour especially with billions of pounds in accelerated property transactions currently competing to complete by the end of the stamp duty deadline on March 31st.”

The managing director of Enness Global Mortgages, Hugh Wade-Jones, commented: “It remains business as usual for the UK property market and as a result, it’s unlikely we will see any decline in the huge levels of buyer activity seen since last year, nor should we see property prices detract from their current upward trend.

“Billions of pounds in property transactions are also currently waiting to be dragged through the system prior to the stamp duty holiday ending. It would have been a disastrous move for the government to have slammed the door in the face of these aspirational homebuyers so close to the finish line and would have no doubt caused a landslide of property transaction fall throughs and a drop in values.

“Of course, the industry must continue to operate with immense caution and all physical aspects of the home buying journey itself must be treated with kid-gloves. Literally.”

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

Mark Hayward, chief policy adviser, Propertymark, said: “We welcome the news that the housing market is to remain open throughout this new lockdown period, but it is essential that all agents continue to play their part in reducing the spread of the virus through following all relevant guidance on how to safely conduct viewings.

“It is vital that agents operate in accordance with government and Propertymark guidelines to help prevent the spread of Covid-19, keep movers and buyers safe and keep the housing market moving through these uncertain times.”

Director of Behnham and Reeves, Marc von Grundherr, commented: “The latest news of another national lockdown should do little to slow the momentum of the UK property market, given that official government advice still deems it ok to transact and move home.

“As a result, the industry will continue to service the vast number of homebuyers who have entered the market since last spring and this will ensure that many more will benefit from the current stamp duty holiday.

“With no speed bumps in sight for the time being, the market is now clear to accelerate through the gears throughout the coming year and we should see a healthy increase in transactions and price growth over the coming months, if not, across the remainder of the year.”

You can view the full government guidance for the lockdown in England by clicking here.


Source: Property Industry Eye

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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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Housing market stabilising during second lockdown

The housing market in England and Wales is displaying signs of stabilising, according to analysis of web traffic from property advice website Property Price Advice.

Valuation requests on the website have broadly returned to their four-year average, representing a significant fall from the immediate post-lockdown spike.

Requests in June were almost 70% above the four-year average, the highest ever recorded on the website.

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Peter Sherrard, founder of Property Price Advice, said: “Activity from our web users (via natural searches) in October was closer to what we’ve been seeing over the last few years, and shows that the buzz of the post-lockdown summer market is certainly cooling off.

“We will be monitoring activity with a close eye and it will be interesting to see if the second lockdown will see a repeat of house-hunter activity from the first.

“Clearly the dynamics of unemployment, mortgage lending criteria, general housing supply for sale, all coupled with a potential covid vaccine, will have a profound effect on transaction levels and potentially price.”

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

Property Price Advice also has a computer model designed by economic consultants Pragmatix Advisory, which translates this web activity into housing price and transaction forecasts for the next eight weeks.

Given the level of activity, average house prices for November and December are expected to be 3.3% ahead of the same months in 2019.


Source: Property Wire

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Demand for homes in rural areas rises due to the pandemic

London firm Urbanist Architecture has seen a 65% increase in enquiries for homes in the countryside since Q4 2019, research from architecture and planning firm Urbanist Architecture has found.

With the UK population confined to their homes for the majority of 2020, lockdown has caused an increasing number of city dwellers to rethink their current surroundings and yearn for greener pastures and open spaces.

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Ufuk Bahar, managing director at Urbanist Architecture, said: “Prior to COVID-19, around two-thirds of our projects were focused in highly desirable London boroughs such as Westminster, Islington, Camden and Greenwich, with work ranging from extensions to new build homes and flat conversions.

“Those working in London wanted to build a life in the city and its sought-after Zone 2/3 suburbs, and a fast commute into Zone 1 was, more often than not, a deciding factor when our clients were deciding where to live.

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“Although our team has strong experience in delivering countryside and green belt projects, we could have never predicted the demand we’re seeing now.

“More and more clients are coming to us looking for large plots of land in truly rural locations, with many deciding to ditch city life and the daily commute for good in the wake of the pandemic.”


Source: Property Wire

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Housing market to remain open despite national lockdown

Housing Secretary Robert Jenrick has confirmed that the housing market will remain open despite the looming national lockdown.

On Saturday Prime Minister Boris Johnson confirmed a new month-long lockdown for England beginning on November 5 and ending on December 2.

Information regarding the fate of the housing market during the lockdown was initially scarce between, however Housing Secretary Robert Jenrick has taken to Twitter over the weekend to confirm that the market will remain open.

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On Sunday evening Jenrick confirmed that property moves would still be allowed and that tradespeople would still be able to enter properties.

The residential property surveying industry has also received confirmation from the Ministry of Housing, Communities & Local Government that physical property inspections can continue to be provided.

Additionally the Prime Minister confirmed that mortgage repayment holidays will no longer be ending with further information published set to be published today.

Kate Davies, executive director of IMLA, praised the government for keeping the market open in challenging times.

She said: “While the country faces a second national lockdown, the government has rightly decided to keep Britain’s housing market open.

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

“Lenders, advisers, surveyors, and conveyancers are already experiencing unprecedented levels of demand from consumers eager to take advantage of the government’s Stamp Duty holiday, which is due to end on 31 March 2021, and also the Help to Buy scheme, which will be available only to first-time buyers from 1 April 2021.

“They now face the task of helping thousands more consumers potentially requesting payment deferrals as borrowers struggle to meet their mortgage repayments during the lockdown.

“Closing the housing market at this time would have only added to this pressure on the sector by creating yet another backlog of demand once lockdown ends.”

By Ryan Fowler

Source: Mortgage Introducer

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Residential Mortgage Market Current Climate 2020

2020 has been a very strange one for many different reasons, not just the COVID-19 pandemic but all of the many ways it has impacted businesses and lives. UK Industries that were thriving, suddenly ground to a halt due to lockdown restrictions. The UK property market has experienced a very unusual journey since the Government first announced the lockdown which started in March 2020.

How Lockdown affected Residential Mortgages

The restrictions effectively meant that houses could not be bought or sold, no viewings could take place and estate agents’ offices were not open to the public. The property market came to a complete standstill, awaiting news of when lockdown restrictions would be lifted. It was estimated that 450,000 buyers’ and renters’ plans were put on hold during this period.

The construction of new builds was also put on hold for a while, where social distancing was not possible, so this put a big delay on the exchange of contracts for new build properties. So, while nobody could buy homes, the residential mortgage market naturally had little demand until lockdown restrictions were lifted again.

However, even in the early days of lockdown, a search trend appeared; there was a big increase in people searching for properties outside of city centres and busy towns, looking for homes with more space and gardens. The impact of being confined to their home for such long periods had clearly given a lot of people some thinking time and a need to have more space. Cities and towns had also emerged as the main hotspots for Covid-19 cases, so this could also be a factor in the increased house hunting outside of these areas.

Post-Lockdown in the Property Market

Once the restrictions lifted in May 2020 and viewings could take place and properties could be sold again, the market started moving forward with deals. What really helped get the property market back on track though, was the Government’s announcement to introduce a stamp duty holiday.

From 8 July a temporary reduced rate of stamp duty land tax was brought into effect, with first time property purchases of up to £500,000 having no stamp duty to pay at all. This gave a lot of people the opportunity to make a house purchase that they would not have been able to afford without saving up to factor in the stamp duty rate.

While this was a great catalyst for house purchases, the fact that the UK was about to go into recession and many people were facing reduced furlough wages, and the possibility of future redundancies, many lenders had to adjust their lending criteria, in some cases requiring bigger deposits due to the increased risk they faced.

Mortgage lenders quickly had to react to the unprecedented situation they found themselves in, with mortgage holidays also being introduced, which left many lenders receiving considerably less in mortgage payments in 2020.

After having a lull in application numbers during lockdown to process, there were suddenly lots of applications coming through but some lenders did not the same staff levels to deliver the work, which slowed that aspect of the market down slightly. But the biggest problem post-lockdown for lenders was to re-work their lending criteria to try and curb the expected risks that lay ahead with the UK economy crash.

COVID-19’s Impact on UK House Prices

After the mini boom of house sales when lockdown restrictions lifted, there has been a lot of buoyancy in the property prices. In October, it was announced that the average asking price for properties hit a record high and record numbers of mortgage applications have also been recorded. This was due to the combination of the stamp duty holiday and the catch up after lockdown, added to with more people looking to move out of cities and towns.

The Bank of England base rate reduced to 0.10% in March and this impacted the interest rates of loans including mortgage loans. The market has seen mortgage rates hit as low as around 1.28% for the applicants who are moving home and that meet the lending criteria. First Time Buyers are also seeing better interest rates. Average rates for 2-year fixed mortgages sat below 1.5% throughout the first half of the year but there has been an upturn since.

So, for First Time Buyers, with the stamp duty holiday and very low interest rates, it has been a very opportune time to get onto the property ladder, at least for those who have not been negatively financially impacted by Covid-19. However, they may have found it harder to get a mortgage now though, with the stricter lending criteria that has been introduced.

It has also been a good time for people looking to sell their property and downsize, as they are generally getting a value for their property that is much higher than it would have been 12 months ago. So, where people are selling a more expensive property to buy a lower value home, this has been a good time to do so with the house prices being high but the opposite applies for people buying a considerably more expensive property than their existing one.

100% Mortgages Re-introduced

For the first time in a long time, mainstream mortgage lenders have started to re-introduce 100% mortgages to help those looking to buy a property but who don’t have a deposit. However, the first types of these mortgage that are available do require a temporary deposit to be put down by parents or another person for three years, to protect against the risk associated with a fall in house prices.

House Price Crash Predictions

The current high property values that are being achieved will not last and property experts are expecting a crash in house prices at a point in the near future, as these are exceptionally high values we are seeing right now as well as high numbers of sales. In September, sales agreed was up 70% compared to 12 months previous, while October’s figures are looking closer to a 58% increase on last year.

The market is also running at a very fast pace right now with sales going through really quickly and this doesn’t look like it is going to slow down just yet. Recently, estate agents have also noticed that many sellers are becoming overly optimistic about the asking price, as they have heard about record high sales.

With unemployment at 4.5% for June to August 2020 and more redundancies expected from businesses that are not recovering as quickly as they need to in order to keep their workforce on, this will soon have an impact on property sales because less people will be able to get mortgages.

As well as unemployed people not being able to buy a property, many people will be worried about potentially losing their job in the future and therefore will not take on the risk of getting a mortgage, choosing to rent instead.

Many property experts are looking at the 2008 property crash to try and predict when this one will happen, however the circumstances are clearly very different. Brexit would have triggered changes to the residential mortgage market but the Covid-19 pandemic shook the market up before that came into the picture.

The timeframe that many experts are suggesting the crash will happen is around the 12-18 months mark, so towards the end of 2021 or going half-way into 2022. The stamp duty holiday is due to end in March 2021 and this should see a big slowdown in property purchases.

Another factor that could come into play is whether the UK will go into lockdown restrictions again that put house sales on hold. Wales announced their 2-week lockdown starting on 23 October 2020, which includes estate agents closures. England has not yet announced a similar approach, choosing local lockdown restrictions without impact to house sales at this point.

Is Now a Good Time to Apply for a Residential Mortgage?

For many people, the stamp duty holiday and low interest rates make this a really good time to buy a house. However, house prices are very high but have been falling since July. First Time Buyers looking for properties at the lower end of the house price range should be able to buy a property without the value being too inflated. They should calculate the amount they can save through the stamp duty holiday and the lower monthly mortgage payments that they can now apply for, to see whether it is worth waiting for house prices to drop again.

Working with a leading whole-of-market Residential Mortgage Broker such as UK Mortgage Broker, we are able to cut through the minefield of lender offers, limitations, max LTV’s and special requirements to find the best residential mortgage offers for not only First Time Buyers, but also experienced Residential Mortgage owners

Another consideration is the extension to the Help to Buy Scheme which gives home buyers the opportunity to benefit from financial support for buying new build properties.

How to get the Best Residential Mortgage Deals

If you are looking to take advantage of the current stamp duty holiday and buy a property, you may find that the high street lenders have much stricter lending criteria right now and you might benefit from using a Residential Mortgage Broker instead who can provide you with truly independent and impartial Residential Mortgage Advice.

A mortgage broker can help you to find the best deal to suit your specific circumstances, such as your income, any outstanding debt, adverse credit history or any other detail that can make it harder to get a mortgage such as being self-employed.

A whole-of-market Residential Mortgage Advisor has access to mortgage deals that you would not be able to find directly, often with exclusive rates to save you money over the term of the mortgage. They also take the hassle out of searching through tons of different mortgage deals and can help you to prepare your documents and other requirements to make sure the mortgage goes through without unnecessary delay. With the stamp duty holiday ending on 31 March 2021, it is important to get the process going as quickly as possible, so Contact Us today to speak with one of our Specialist Residential Mortgage Advisors and get started on finding your perfect mortgage deal.