Posts filed under ‘House Prices’
House prices dipped by 0.2 per cent in September as the booming property market continued to show signs of cooling, figures revealed today.
The slide, which followed 16 consecutive months of price rises, left the average British home costing £188,374, 2 per cent higher than the pre-correction peak.
The annual pace of house price growth also moderated, easing to 9.4 per cent, down from 11 per cent in August, according to Nationwide Building Society.
The figures are in line with other data which suggests the property market is beginning to slow as buyers become more cautious in the face of future interest rate rises and the high prices being demanded by sellers.
The Bank of England yesterday said the number of mortgages approved for house purchase fell for the second month in a row during August.
Robert Gardner, Nationwide’s chief economist, said: “Price growth may soften further in the final quarter of the year, given the high base for comparison from Q4 2013.
“However, the outlook remains uncertain. There have been tentative signs from surveyors and estate agents that buyer demand may be starting to moderate, but the low level of interest rates and strong labour market suggest that underlying demand is likely to remain robust.”
House prices rose in all 13 regions of Britain during the year to the end of September.
London continued to see the strongest annual growth, with property prices in the capital soaring by 21 per cent to stand at an average of £401,072, 31 per cent higher than their 2007 peak.
Annual gains were also strong in the Outer Metropolitan at 14.4 per cent, and the Outer South East and East Anglia at 13.2 per cent and 11 per cent respectively.
But there continues to be a considerable north/south divide, with prices in the North rising by just 4.3 per cent during the past year, while in Wales they edged up by 5 per cent and in Scotland they were 5.2 per cent higher.
Average house prices in the south of England, which encompasses London, the South East, South West and East Anglia, were up 15.3 per cent year-on-year.
But in northern regions of England, property values rose by an average of just 6.7 per cent.
Nationwide said house price growth in the south has exceeded gains in the north for the past 22 quarters.
However, there was a significant slowdown in the pace of gains in London during the three months to the end of September, with prices rising by just 0.9 per cent during the period.
East Anglia led the way in the third quarter with a gain of 3 per cent, followed by Northern Ireland at 2.9 per cent and the West Midlands at 2 per cent.
At the other end of the scale, prices fell by 2.1 per cent in the North in the three months to the end of September, while they dipped by 0.8 per cent in Wales.
Matthew Pointon , property economist at Capital Economics, said despite the recent fall in demand from potential buyers, he still expected housing market activity to pick up in the next few months.
He said: “More homes should come onto the market as potential sellers’ expectations about future increases in the value of their current property moderate and, alongside the return of real earnings growth, that should tempt buyers back.
“We therefore expect the number of buyers and sellers to be more-or-less matched, which implies house prices are set for a prolonged period of much more moderate growth than that seen over the past 18 months.”
House prices jumped by 1 per cent in August defying signs that the property market was beginning to slow down, figures showed today.
Strong gains in London continued to drive the rest of the property market, with house prices in the capital soaring by 2.7 per cent to stand at £467,070, 21.6 per cent higher than a year ago, according to the Land Registry.
The housing boom is rippling out from London to other parts of the country, with the South East posting growth of 1.7 per cent, while prices were 1.6 per cent higher in Yorkshire and Humberside and 1.5 per cent up in the East.
But growth remained subdued in other regions, with property values creeping ahead by just 0.1 per cent in both the South West and North West, and by 0.2 per cent in the West Midlands.
Meanwhile, more than 37 properties a day changed hands for more than £1m in June, the latest month for which data is available.
A total of 1,135 homes were sold for at least seven figures during the month.
The Land Registry data comes as Governor of the Bank of England Mark Carney warned that the point at which interest rates would start to rise from their current record low of 0.5 per cent was “getting closer”.
Speaking at a conference, Carney said leaving interest rates low for too long could lead to other risks building up in the economy, with the housing market currently posing the biggest threat.
He said: “Relative to the recent past, the economic outlook is much improved.
“While there is always uncertainty about the future, you can expect interest rates to begin to increase.”
But he added that when rates did start to increase it would gradual, and the Bank Rate was likely to peak at below pre-crisis levels.
Economists expect the first increase in interest rates to be made in early 2015, although two members of the Bank’s Monetary Policy Committee have already voted for an increase.
For homeowners who are keen to lock into low interest rates, there are a number of competitive mortgage deals on the market.
Norwich and Peterborough Building Society has a two-year fixed rate deal at 1.89 per cent for people with a 35 per cent deposit who pay a £195 fee.
Those who want the security of a longer deal can get a five-year fixed rate loan at 2.89 per cent from Yorkshire Building Society, which comes with a £975 fee.
Today’s Land Registry figures contradict growing evidence that the housing market is beginning to slow down, although the Land Registry data, which is based on completed sales, tends to lag other indexes.
Mortgage lender Halifax said property values crept ahead by just 0.1 per cent in August, while the annual rate of growth also slowed.
Data from the British Bankers’ Association also showed a 3 per cent fall in the number of mortgages approved for house purchase in the month, compared with July.
Strong house price gains have left the average British home cost £265,022, according to Zoopla.
A bed ‘hanging’ above the front door, a staircase above a kitchen worktop and a living room floor defined by built in storage are just some of the creative ideas found in a one bedroom London property covering less than 200 sq ft.
It is currently the most viewed property on Zoopla, having received more than 150,000 hits in the last 30 days.
It covers a total area of 188 square foot, managing to include kitchen and living areas, as well as a shower room and mezzanine sleeping level.
Winkworth, the agents handling the sale, described the terrace property as a ‘unique one bed house presented in great condition throughout’.
It suggests the property would make an ideal buy to let or pied-a-terre.
The property is situated in Richmond Avenue, which is a highly sought after residential road in Barnsbury. The bars, boutique shops and restaurants on Upper Street are just a short distance away.
The area has good transport links, with the closest tube being the Northern line’s Angel. Kings Cross is also nearby and provides an array of tube links across London.
The average price of a home in Richmond Avenue has risen more than £220,000 in the past year to £1,736,942.
The amount of equity people unlocked from their property has jumped by 10 per cent in the past year on the back of strong house price gains, research showed today.
The average person who remortgaged during August released £20,219 from their home, 10 per cent more than they had in the same month of 2013, according to property services group LMS.
The group estimates a total of more than £500m of equity was released during the month, a 9 per cent rise on August last year.
It said recent house price increases had increased the amount of equity people had in their properties, putting them in a better position to remortgage.
But despite the increase in the amount of money people unlocked, total remortgage lending fell to £3.87bn in August, 1 per cent lower than in July, as the impact of tighter lending criteria continued to be felt.
The group, which processes more than 28 per cent of all remortgage transactions in Britain, also estimated that the number of loans for people switching to a new deal was 8 per cent lower than in August last year.
Overall, people remortgaging accounted for 21 per cent of new home loans during the month.
Andy Knee, chief executive of LMS said: “The hangover from MMR accounts for lower remortgage volumes, as those who could remortgage for a better rate or to reduce monthly payments are put off by the time-consuming and intrusive checking process.
“However, as the process is fine-tuned, affordability will come down, lender appetite will return and the arrival of highly competitive rates towards the end of the year will encourage more remortgage activity, to offer excellent long-term fix opportunities.”
Average incomes increased for the second consecutive month during August, which combined with more competitive mortgage rates, led to annual repayments as a proportion of income for people remortgaging dropping to their lowest level since the start of the year.
The typical person remortgaging took out their previous mortgage four years and nine months ago, a longer period than the average remortgage time of three years and one month in August 2008, before the credit crisis struck.
The average loan-to-value ratio for people remortgaging fell to 57 per cent.
The figure was down from 70 per cent when they last took out a home loan, reflecting recent strong house price gains.
People in London had the lowest loan-to-values, borrowing an average of just 50 per cent of their property’s value, while those in the North West had the highest at 65 per cent, followed by homeowners in Wales at 64 per cent.
The typical cost of a flat has soared at double the rate of other types of property during the past 10 years, spelling bad news for first time buyers, research showed today.
The average price of a flat has increased by nearly £51,000 – the equivalent of £425 a month – since 2004, to stand at £208,169, according to mortgage lender Halifax.
Flat values have soared by 32 per cent during the period, more than double the 15 per cent rise recorded for all residential properties.
The price of flats has risen at nearly three-times the rate of prices for detached homes, which have increased by just 12 per cent since 2004.
The performance of flats has been particularly strong since 2009, with values soaring by 43 per cent in the five years to 2014, compared with a 15 per cent price gain for bungalows.
But Halifax said some of the steep price rises for flats were due to the booming London property market, with flats account for a relatively high proportion of the housing stock in the capital.
It added that in five regions of Britain, terraced houses had actually been the best performing property type since 2004.
All types of home suffered substantial price falls during the housing market downturn in 2007 to 2009, with terraced houses and flats the worst affected, recording price drops of 33 per cent and 32 per cent respectively.
The group said the steep drops for these property types, which are popular with first time buyers, was likely to be the result of the tighter lending criteria employed by lenders during the period, which made it harder for people to buy their first home.
Martin Ellis, housing economist at Halifax, said: “There has been a significant increase in the number of first-time buyers since 2010 compared with a modest decline in the number of those moving home.
“This difference is reflected in a bigger rise in prices over the past five years for those property types that are most popular with first-time buyers: flats and terraces.
“Since 2009, larger property types – such as detached homes, semis and bungalows – have underperformed flats and terraces.”
Despite the steep price rises seen for flats, semi-detached homes and terraced houses have actually remained the most popular types of property purchased during the past 10 years, with these property types collectively accounting for 60 per cent of all sales so far in 2014.
For first-time buyers, semi-detached homes have increased in popularity, accounting for 29 per cent of purchases this year, up from 25 per cent in 2004.
But while 21 per cent of homes sold in 2004 were detached, these properties accounted for just 16 per cent of transactions this year.
Flats are cheapest to buy in the East Midland, where they cost an average of £94,518, followed by the North at £101,883.
Unsurprisingly, flats are most expensive in Greater London, where they sell for an average of £328,771.
It is cheaper to buy a terraced house than a flat in Scotland, Wales and the North West.