Posts filed under ‘House Prices’
Property values hit a new record high during February as house price growth continued to accelerate, Government figures showed today.
The average cost of a home increased by 9.1 per cent during the year to the end of February, up from an annual rate of 6.8 per cent in January, and the highest level of year-on-year growth since June 2010.
There was also a strong jump in February itself, with property prices rising by 1.9 per cent during the month.
The gain pushed average house prices in the UK up to £253,000 – a £20,000 increase compared with the same month of 2013, and the highest level ever recorded by the Office for National Statistics.
London continued to drive the rest of the property market, with average prices 17.7 per cent higher in the capital than they had been a year earlier to stand at £458,000.
The South East and the East saw the next strongest gains at 8 per cent and 7.7 per cent respectively, although this was less than half the level of growth seen in London.
Once London and the South East were stripped out, house prices across the rest of the UK edged ahead by 5.8 per cent during the 12 months.
But despite the slower rate of growth outside of the south, all regions of the UK posted positive house price inflation during the 12 months to the end of February.
In England, growth outside of the south was fastest in the East Midlands at 7.6 per cent, while it was slowest in the North East with prices 2.9 per cent higher than they had been a year earlier.
The average cost of a home rose by 5.3 per cent year-on-year in Wales, while property values were 2.8 per cent higher in Northern Ireland and 2.4 per cent up in Scotland.
But despite the increases, the average cost of a home in Northern Ireland is still 50.2 per cent below the pre-crisis peak reached in August 2007.
Typical prices in Scotland and Wales are also lower at 6.8 per cent and 2.4 per cent below the peaks reached in 2008 respectively.
But while the recent strong gains are good news for existing homeowners, they are bad news for first-time buyers.
This group paid an average of 10.5 per cent more for their first home than people getting on to the property ladder had a year earlier, at an average of £192,000.
Today’s data is the latest in a raft of strong figures on the property market.
Nationwide said house prices rose for the fifthteenth consecutive month in March, while Halifax said annual house price inflation was rising at its fastest rate for nearly six-and-a-half years.
“Confidence among aspiring buyers has seen an uplift from a more prosperous economy, a more accessible mortgage market and rejuvenated jobs environment.”
But fears that a bubble may be building up in the market were eased by Bank of England figures showing that the number of mortgages approved for house purchase actually dipped slightly during February.
Property sales jumped to a six-year high during the first quarter of the year as buyers continued to return to the market, figures showed today.
The average chartered surveyor estate agent sold 22.7 homes in the three months to the end of March, the highest level since February 2008, according to the Royal Institution of Chartered Surveyors.
The group said the pick up in activity occurred across Britain, with all regions seeing an increase in inquiries from potential buyers, apart from Wales, where interest was static following strong growth in the previous months.
At the same time, there was a big increase in newly agreed sales outside of London and the South East for the second consecutive month.
But the group said that while activity was now encouraging in areas of the country where it had previously been stagnant, the market continued to be hampered by a shortage of homes being put up for sale.
It added that the predicted ‘spring bounce’ had failed to materialise, with new instructions falling for the third month in a row.
The imbalance between supply and demand continued to push prices higher during the month, with 57 per cent more surveyors reporting price rises than those who recorded falls.
Outside of London and the South East, price gains were strongest in the South West and East Midlands.
It was the eleventh consecutive month in which house price rises had been recorded by the survey across Britain as a whole, the longest period of consistent growth since the onset of the financial crisis.
With no sign that the current shortage of homes on the market will ease any time soon, surveyors expect property prices to continue rising into the summer.
Overall, 48 per cent more surveyors expect the value of property to increase during the coming three months, while 77 per cent more expect gains over the coming 12 months.
Looking further ahead, surveyors now expect annual house price inflation to average 6 per cent per annum during the next five years.
Simon Rubinsohn, RICS chief economist, said: “Now that the housing market recovery is well and truly underway and mortgage finance is more readily available, buyers seem to be looking to test the market right across the country, not just in the usual hot spots of the South East.”
But he said it was a “major concern” that enough houses to meet this demand were not coming on to the market.
He said: “For the market to operate effectively, we desperately need more homes in areas where people want to buy and want to live.
“Until this happens we’re likely to see prices continue to increase and it is going to be ever harder for many first-time buyers to conceive of ever owning their own home.”
Today’s figures come after Nationwide said house prices rose for the fifthteenth consecutive month in March, while Halifax said annual house price inflation was rising at its fastest rate for nearly six-and-a-half years, although it reported a price fall on a monthly basis.
But other data suggests there is not a bubble building up in the market, with mortgage approvals for house purchase actually falling slightly during February, according to the Bank of England.
House prices rose at their fastest rate for nearly six-and-a-half years during the first quarter as demand from potential buyers remained strong, figures showed today.
The average cost of a home was 8.7 per cent higher in the three months to the end of March than it had been in the same period of 2013, the highest rate of annual growth since October 2007, according to Halifax.
Stephen Noakes, mortgages director at Halifax, said: “Housing demand continues to be supported by an improving economic outlook, growth in employment, rising consumer confidence and low interest rates.”
But on a monthly basis prices dipped slightly, falling by 1.1 per cent during March to leave the average property costing £178,249.
The fall followed particularly strong growth seen during February, when prices jumped by 2.5 per cent.
Halifax also stressed that monthly changes could be volatile.
It added that March’s blip was only the third monthly decline recorded during the past 15 months.
When price changes are looked at on the more reliable quarterly basis, values rose by 2.3 per cent during the three month to the end of March, compared with the previous three months, the biggest quarterly jump since January 2010.
Halifax said prices were being driven up by a combination of strong demand from potential buyers and a lack of supply.
But the group said the imbalance was showing some signs of easing, with the number of new homes that developers started to build in England rising by 24 per cent during 2013 compared with a year earlier.
Mr Noakes added: “The recent strengthening in house prices is increasing the amount of equity that many homeowners have in their home.
“This will potentially encourage and enable more owners to put their property on the market for sale over the coming year, therefore boosting supply and easing pressure on prices.”
Today’s figures come after Nationwide said prices rose for the fifthteenth consecutive month during March, rising by 9.5 per cent on an annual basis.
The recent run of positive data on the housing market has caused fears in some quarters that a bubble could be developing in the market.
But figures from the Bank of England showed that mortgage approvals for house purchase actually fell by 8 per cent during February.
A further short-term dip in mortgage lending is anticipated as lenders get to grips with the new rules under the Mortgage Market Review, which comes into force later this month.
The monthly fall reported by Halifax for March should act to further ease concerns that a runaway market is developing.
Matthew Pointon, property economist at Capital Economics, said: “The stable growth in house prices is consistent with other indicators suggesting that while the housing market is continuing to recover it is not, at least at the national level, accelerating out of control.
“The most likely scenario is for house prices to make further steady gains over the coming year.
“But, at least outside central London, the conditions are not in place for prices to accelerate towards boom-like conditions.”
Is London experiencing a property bubble? Buyers make £100,000 in three months with off-plan properties
Buyers are making £100,000 in three months on new build London flats that have not even been completed, it has been revealed.
In the latest evidence of a property bubble in the capital, buyers are making six figure sums on homes that do not even exist.
One buyer bought a two bedroom new build flat in Carlton Vale in north west London just before Christmas for £400,000. She moves into the flat next week once the building has been finished. She explained it has now been valued at £500,000.
But she was not the first ‘owner’ of the property. It was a resale flat, meaning it had a previous owner – one who had already made £60,000 since building first began more than a year ago.
Buying off-plan can be seen as high risk as prices may go down as well as up. It means buyers could potential face negative equity – where the price of their home is less than their mortgage – by the time they first step foot into the property.
Carlton Vale is one of a growing number of ‘property pockets’ in London that have seen values rise sharply.
It is nestled between Queen’s Park and Kilburn Park, and near the prestigious Maida Vale. Average prices have risen more than 12 per cent in the past year to £417,760.
Jonathan Harris, of mortgage brokers Anderson Harris, said: “Off-plan purchases nearly always carry the risk that the value will drop after purchase as the initial gloss fades away.
“This aspect is heightened by the ‘bubble’ as the danger is that market values will drop, potentially leaving a purchaser with a property that is worth significantly less than they paid for it.
“There is also the risk that your mortgage is no longer sufficient to complete a purchase that you are committed to, leaving you to make up the shortfall yourself or worse still losing your initial deposit.”
House prices rose for the fifteenth month in a row during March as demand from buyers remained strong, figures showed today.
The average cost of home increased by 0.4 per cent during the month to stand at £180,264, just 3 per cent below the peak reached in 2007, according to Nationwide.
Prices were 9.5 per cent higher than in March 2013, the strongest rate of annual house price inflation recorded since May 2010.
Robert Gardner, Nationwide’s chief economist, said: “There is little doubt that the recovery in the housing market is now firmly established, with activity levels picking up and house prices recording their fifthteenth successive monthly increase in March.
“Record low mortgage rates, improved availability of credit and the brighter economic outlook are all leading to increased demand for housing.”
Recent strong gains in house prices have led to concerns in some quarters that a bubble could be building up in the property market.
But Mr Gardner pointed out that while annual house price inflation was continuing to grow at a robust rate, the market was showing some tentative signs of moderation, with the monthly rate of growth slowing for the third consecutive month.
However, he warned that the supply of properties was continuing to lag far behind demand, with the number of new homes in being built in England still around 40 per cent below the pre-crisis level, which was already insufficient to keep up with the rate at which new households were being formed.
On a regional basis, all 13 areas of the UK reported annual house price growth for the third consecutive quarter.
But Nationwide cautioned that a north-south divided was emerging in the property market, as prices in London and the south raced ahead.
The average cost of a house in the capital was 18 per cent higher during the first quarter of 2014 than it had been a year earlier at £362,699 – more than double the typical price of a home in the rest of the UK excluding London.
Mr Gardner said: “The gap between house prices in London and the rest of the UK is the widest it has ever been, both in cash and percentage terms.”
He added that house prices in London, the Outer Metropolitan and Outer South East had now surpassed their pre-crisis peaks, while property values in East Anglia and the South West were now less than 5 per cent below their 2007 highs.
But at the other end of the scale, the average cost of a home in Northern Ireland is still 49 per cent below its pre-credit crisis level, while in the North West prices are still 10.6 per cent down on their previous high and in the North they are 10 per cent lower.
Today’s figures are the latest in a run of positive data on the housing market, with the Bank of England reporting earlier this week that mortgage lending soared to a five-and-a-half year high during February, boosted by strong demand from people buying a home.
Recent gains have left the average home in England costing £259,745, according to Zoopla.