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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.

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“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.

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“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

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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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Rightmove puts house price index on hold

Rightmove has temporarily halted its monthly house price index following the coronavirus (COVID-19) lockdown.

Its final set of data (for now) found that the total available number of homes for sale has fallen by just 2.6% since lockdown.

There were some 65,531 new listings on the site between 8 March and 11 April – compared to 112,570 between 10 March and 6 April 2019.

But the property portal said this marked an “abrupt turnaround from the best start to a year since 2016”, adding that before lockdown sales had been up 11% year-on-year.

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Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: ‘The latest Rightmove survey confirms what we have been seeing on the ground – our offices may be closed but the market is anything but quiet.

“Buyers and sellers are pausing, not cancelling sales, or listings, while continuing to access websites readying themselves for when lockdown restrictions are eased.

“But the market cannot re-start in isolation. We need surveyors to work with lenders, agents, and solicitors to ensure successful transitions as well as continuation of social distancing and safe visiting.”

Despite listings continuing Rightmove has said it will park its index for now.

Miles Shipside, Rightmove director and housing market analyst, said: “Given the lockdown and pausing of key activities in the housing market, statistics on the number of properties coming to market, new seller asking prices, and new sales agreed are not meaningful.

“You do not have a functioning market when buyers can’t buy and sellers can’t sell.”

By Ryan Fowler

Source: Mortgage Introducer

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Will the coronavirus epidemic harm UK property prices?

With current turbulence in equity markets, some investors who sold out of stocks and currencies last week are looking around for alternatives. UK property, which has been severely depressed due to the uncertainties around Brexit last year, looks like it could be one of them. UK house price growth continued its upward trend in the months immediately succeeding the election – in January UK house prices were up 1.9% year on year.

This was the largest increase in 14 months and beat December’s number of 1.4%.

At London estate agent Benham & Reeves, there is notable new interest in the market. It reports a higher total number of transactions so far in Q1 than in the past 112 months, which represents a dramatic upswing in interest. It is a trend being seen elsewhere in the housing market.

“Investors should be looking at fixed-return and less risky alternative investment options,” says Yann Murciano, CEO at BLEND Network. “We have already seen investors liquidating their equity positions and looking for alternatives that provide steady yield.”

BLEND Network is a peer-to-peer property lending marketplace that connects lenders directly with borrowers and focuses on lending to established property developers. Lenders can lend from GBP 1000 to property-secured loans and earn up to 15% p.a.

Murciano thinks that the coronavirus will undoubtedly affect the London property sector, but says the worst of the impact will be restricted to the international buyer and luxury property market focused on Prime Central London real estate. Outside the capital, property prices are less volatile and he sees a growing pool of local, specialised developers who can deliver projects with strong investment potential.

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There is still a shortage of housing supply in the UK

The UK continues to suffer from an under-supply of low cost housing and there are now a number of funds and platforms that are addressing the appetite from investors for strategic allocations into that sector.

But what sort of impact can we expect from coronavirus on the UK property sector?

The Royal Institute of Chartered Surveyors (RICS) has polled surveyors in the UK, asking them about what they expect to see in terms of the effects of the virus. Activity in the housing

market was up in February, but much of the economic effects of the coronavirus have really only been felt since the beginning of March. It may be we see a delay of sellers putting houses onto the market at the same time as buyers and investors are looking for new opportunities.

The recent decision by the Bank of England to cut rates should not be discounted either. This will make mortgages cheaper and with the additional and very dramatic stimulus measures announced, will have a positive effect on the UK economy in the medium term. This could create a situation where we have more buyers than sellers in this market, with knock on consequences for house prices.

Another factor has been the introduction of stamp duty at 2% for overseas buyers of UK property, announced in the UK budget last week, which will apply from April 2021. This will apply in England and Northern Ireland and is intended to take some of heat out of UK property from foreign investment. That said, it means there is now a closing window of opportunity for foreign investors in UK property. This could create demand at a time when the property market would otherwise be running out of steam.

Source: The Armchair Trader