Posts filed under ‘House Prices’

Living by a station costs ‘an extra £42,000′

Homebuyers wanting to live close to a popular station can expect to pay an extra £42,000, research claims.

29.08.14 Railway

Adding £42,000 to their budget means buyers can afford to include properties that are just 500 metres from a London station in their search, compared to an otherwise identical property 1,500 metres away.

The findings by Nationwide Building Society were based on a typical London home.

It also suggested the premium on a typical property in Manchester that is 500 metres from a station is £12,000, while in Glasgow it is £9,400.

Robert Gardner Chief EconomistRobert Gardner, Nationwide’s chief economist, said: “London homebuyers’ willingness to pay a greater premium for being close to a station compared with those in Greater Manchester and Glasgow probably reflects the greater reliance on public transport in the capital, with residents less likely to drive.”

The research found London has the densest network of stations and services, with 94 per cent of properties within 1.5 kilometres of a station, compared with 72 per cent in greater Glasgow and 69 per cent in greater Manchester.


Homebuyers can find properties that are within commutable distance of their work with the help of Zoopla’s travel time search tool.

You can discover which locations are within your preferred commute time from work. For example, if you work near Waterloo Station, you can search for properties for sale or to rent that are within a certain travel time from there.


The research comes as the building society also unveiled an increase in house price growth in August, with property prices rising by 0.8 per cent.

The annual rate of house price inflation also increased during the month, rising to 11 per cent, up from 10.6 per cent in the 12 months to the end of July.

The latest monthly gain, which followed a change of just 0.2 per cent in July, left the typical home costing £189,306.

The acceleration in price growth is at odds with recent reports that the property market was beginning to slow down as more homes were put up for sale and buyers stayed away from the market.

Gardner said: “The outlook for the housing market remains highly uncertain.

“The number of mortgage approvals fell by almost 20 per cent between January and May, suggesting that activity was cooling.

“However, there was a modest rebound in June and it is unclear how much of the slowdown was due to the introduction of the Mortgage Market Review rather than an underlying loss of momentum.”

He said surveyors had reported that inquiries from new buyers had moderated in recent months.

But he added that the brightening economic outlook was likely to provide ongoing support for housing demand, while supply remained constrained, despite more homes being put up for sale.

Meanwhile, the first increase to the Bank Rate is not expected until early 2015, despite the fact that two members of the Bank of England’s Monetary Policy Committee voted for a hike at the most recent meeting.

The Nationwide figures come just days after the National Association of Estate Agents reported a steep drop in the number of people submitting above asking price offers in a bid to secure a home.

The group said only 4 per cent of homes sold for more than the asking price in July, down from 19 per cent in May, while 66 per cent of sales were agreed for offers below the asking price last month.

It added that the number of homes being put up for sale had increased during July at its fastest rate for nearly three years.

Gardner said house price inflation was continuing to outpace earnings growth by a significant margin, with average wage increases running at less than 1 per cent in recent months.

But despite this situation, he said affordability at a national level did not appear stretched by historic standards, partly due to low mortgage rates, which have left the cost of servicing a home loan close to the long-run average of around 30 per cent of take home pay.

Mark HarrisMark Harris, chief executive of mortgage broker SPF Private Clients, said: “August proved to be a decent month for the housing market, even though it is traditionally a quiet time of year when not much gets done.

“Prices continued to edge up slightly, while we had one of our best months for new business – emphasising the continued strength of the London property market in particular.

“While borrowers may be worried about an interest rate rise, there are plenty of excellent rates still available which will continue to support activity in the market to an extent.”

August 29, 2014 at 11:26 AM Leave a comment

Boost for househunters as supply of property increases

The number of homes for sale rose at its fastest rate for nearly three years in July as market conditions swung in favour of buyers, research showed today.

House prices 2

Sellers are increasingly having to accept less than their asking price as some of the heat comes out of the booming property market, according to the National Association of Estate Agents.

The average number of properties estate agents had on their books increased by 11 per cent during the month to stand at 51.

Competition among potential buyers also eased in July, as the number of house hunters registered with estate agents fell for the fourth consecutive month.

Overall, around 368 people were registered as buyers per estate agent branch, down from 371 in June.

But despite the fall, the number of potential buyers was still significantly higher than it had been in July 2013, when estate agents had an average of just 250 house hunters on their books.

The combination of more homes being on the market and fewer buyers chasing them has helped to ease the previous mismatch between supply and demand, which had been forcing prices higher.

The NAEA said 66 per cent of sales agreed during July were for less than the asking price, a sharp turnaround from May when just 46 per cent of below asking price offers were accepted.

Even more significantly, only 4 per cent of homes sold for more than the asking price in July, down from 19 per cent in May when buyers were outbidding each other in a bid to secure a home.

Despite the fall in buyers, sales levels remained static during July at an average of nine per branch.

There was also no change in the number of people getting on to the property ladder, with first time buyers accounting for 20 per cent of sales, the same proportion as in June.

Mark HaywardMark Hayward, managing director of the NAEA, said: “The lack of housing supply has been a significant issue over the last few months, so the sign of increasing stock is positive for the market and house buyers in search of their ideal home.

“Another positive for house hunters are the recent reports suggesting house prices are on the decline; our NAEA report has found similar, with a significant amount of homes being sold at less than the asking price.”

The group warned that the fall in potential buyers may in part have been driven by the high Stamp Duty bills many people now faced.

It said 90 per cent of its members said Stamp Duty either frequently or occasionally deterred buyers from moving, while 92 per cent thought the Government should reform the tax.

Meanwhile, research by Knight Frank found that northern cities offer young professionals the best chance of getting on to the property ladder, despite the fact that people working in them generally had lower salaries.

The group, which looked at affordability by comparing regional house prices to local average earnings for 22 to 39 year olds, found that Durham was the most affordable city in which to buy a home.

Property values in the city average just £81,774, while pay for young people was around £24,484, giving a house price to earnings ratio of 3.3.

It was followed by Nottingham at 3.4, Liverpool at 3.6 and Manchester at 3.7, with Bradford completing the top five most affordable cities.

Hastings and Canterbury were the most affordable cities in the South for young professionals to buy a home in, both with house price to earnings ratios of 6.8.

Unsurprisingly, London was the least affordable place for young people to buy a home, despite having the highest salaries of £40,279.

But with property values in the capital averaging £437,608, people faced a house price to earnings ratio of 10.9.

August 27, 2014 at 10:38 AM Leave a comment

Banks approve an average mortgage amount of £167,000

The number of mortgages approved for house purchase eased back in July as the market continued to settle following the introduction of tough new rules. And the average size of a mortgage approved increased, figures showed today.

Mortgage 6

A total of 42,792 loans for people buying a new home were in the pipeline during the month, according to the British Bankers’ Association.

The figure was slightly below the previous month’s total, while it was also down on the recent six month average of 44,536.

But despite the dip, approvals for house purchase were still 12 per cent higher than they had been in July 2013, and above the 41,800 level seen in April and May, around the time that the Mortgage Market Review was introduced.

The new rules, which included tougher affordability criteria, are thought to have slowed down the mortgage application process as lenders got used to new systems.

A BBA spokesman said: “Mortgage approval processes have now settled after the introduction of the Mortgage Market Review, to a typical level of around 40,000 mortgages approved a month for house purchase.”

Matthew Pointon, property economist at Capital Economics, added: “We doubt this slight dip in mortgage approvals is the start of another downward trend in lending.

“As the MMR disruption dissipates, the recovery in mortgage lending should start to gain traction.”

The average size of a mortgage approved for house purchase increased to £167,600 during the month, up from £161,000 a year earlier.

The number of loans approved for people remortgaging increased to 19,784 in July, following two consecutive monthly falls, although they were still 8 per cent below the level seen during the same month of 2013.

There was also a fall in net lending, which strips out redemptions and repayments, with this measure totalling £821m, down from £1.1bn in both the previous month and July last year.

The lower level of mortgages approved for house purchase contributes to growing evidence that the housing market is beginning to slow down.

Estate agents have reported a fall off in enquiries from new buyers, partly in response to recent house price growth.

Strong house price gains have left the typical British property costing £263,705, according to Zoopla.

Meanwhile, more homes have been coming on to the market, easing the previous mismatch between supply and demand.

Ray Boulger 2But Ray Boulger, senior technical manager at John Charcol, was surprised by the drop in mortgage approvals for house purchase.

He pointed out that the BBA uses seasonally adjusted figures, which try to smooth out seasonal variations in the market.

On a non-seasonally adjusted basis, a total of 48,621 mortgages were approved for house purchase during the month, the highest level since October 2013.

Boulger said: “Our experience at John Charcol is that we have not seen a fall off in enquiries.

“August is usually a bit quiet, but this year has not been quieter than normal, and if anything it has been less quiet.”

August 26, 2014 at 11:52 AM Leave a comment

House prices: how much will your child pay for their first property?

A baby born today faces the prospect of paying £3.4m for their first property, new research has suggested.

20.08.14 Baby

The alarming statistic comes on the back of recent double digit house price rises that have forced first time buyers to turn to the Bank of Mum and Dad to help with a deposit.

The calculation is based on the average house rising in value by 8.6 per cent during the past 60 years.

If this pattern continues, a typical house worth just over £200,000 today is expected to reach £3,391,474 in the year 2048, the year when a child born today reaches a typical first time buyer age of 35.

The research by online estate agents eMoov also suggested that even a child who is 10 years old today faces paying more than £1.6m for a property, requiring a deposit of more than £320,000.

And if you have a child who is currently 4 years old, they will most likely need £2.4m.

By 2032, the average deposit of 20 per cent will be the equivalent of the price of the average price of a property today.

Russell Quirk, eMoov’s chief executive, said: “Our research shows the staggering truth about the rise of property prices within Britain in recent times. Property prices are always on the move, but viewed over decades our research shows an annual rise of 8.6 per cent since 1954.

“If the trend continues then the bank of Mum and Dad will become even more important for the next generation of home owners”

Mortgage experts agree that parents will play a more pivotal role in helping their children onto the property ladder.

Mark HarrisMark Harris, of mortgage brokers SPF Private Clients, said: “Already the Bank of Mum and Dad has become essential in helping first-time buyers onto the housing ladder and this research suggests that their role will become even more crucial.

“With wages failing to keep pace with property prices, home ownership is only going to become more unaffordable unless Mum and Dad come to the rescue with a hefty deposit.”

August 20, 2014 at 1:54 PM Leave a comment

UPDATED: Average house price rises £100 a day

Property values hit a new record high in June as prices jumped by £100 a day during the month, Government figures showed today.

house prices 9

The typical cost of a British home rose to £265,000 during the month to stand 10.2 per cent higher than a year earlier, according to the Office for National Statistics.

People getting on to the property ladder faced the steepest house price inflation, with the cost of a typical first time buyer home rising by 12 per cent during the year to £204,000.

The increase, which was the biggest since April 2010, means someone taking out a 75 per cent loan-to-value mortgage would need to put down a £51,000 deposit and have household earnings of around £50,000.

But despite the strong year-on-year rise in house prices, there were further signs that the market is beginning to slow.

The average cost of a home rose by only 0.5 per cent during June itself, down from a jump of 0.8 per cent in May and a 2 per cent gain in April.

The annual rate of growth also slowed slightly to 10.2 per cent, down from 10.4 per cent in May.

London continued to drive the rest of the market, with the typical cost of a home in the capital soaring by 19.3 per cent in the 12 months to the end of June to stand at £499,000.

But no other region in Britain recorded double-digit growth, with the South East posting the next strongest gain at 9.7 per cent, followed by the East at 7.9 per cent.

Once London and the South East were stripped out, property values across Britain rose by only 6.3 per cent during the year.

London, the South East and the East remained the only regions in which house prices have passed their pre-correction peaks, with the typical home in the capital now 35.6 per cent above the previous high.

In Scotland prices are only 1.6 per cent below their 2008 peak, while in Wales they are 3.2 per cent lower.

But in Northern Ireland the average home still costs 47.4 per cent less than it did in August 2007.

Ray Boulger 2Ray Boulger, senior technical manager at mortgage broker John Charcol, said: “The rate at which property prices are increasing has stabilised.

“One thing that surprised me was that the annual figure for London increased slightly after dropping in the previous month.

“But the ONS figures are based on completions, so they reflect transactions agreed in March or April and lag other indexes such as Nationwide.”

There is growing evidence that the housing market is beginning to slow down following a period of strong price growth.

The Royal Institution of Chartered Surveyors said demand from potential buyers fell for the first time since mid-2013 during July, while the number of homes being put up for sale rose for the second consecutive month, easing the mismatch between supply and demand.

Meanwhile, Nationwide Building Society said property values inched ahead by just 0.1 per cent in July.

There is also anecdotal evidence from estate agents that house prices are falling in some of the prime areas of central London, while surveyors questioned by RICS predicted prices in the capital would rise by just 1.9 per cent during the coming 12 months.

But while the headline figure for house price inflation is easing, growth is starting to accelerate outside of London and the South East as the recovery ripples out across the country.

August 19, 2014 at 10:03 AM Leave a comment

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