Posts filed under ‘House Prices’
Nine out of 10 home owners expect house prices to rise in the next six months despite almost half saying getting a mortgage is more difficult than three months ago, Zoopla reveals.
As many as 92 per cent of home owners are confident that the value of their property will increase during the rest of this year, according to the latest Zoopla Housing Market Sentiment Survey.
The average prediction is that values will rise 7.6 per cent during this period.
It comes amid growing concern that the introduction of tighter mortgage rules is stalling the housing market, with the survey suggesting four out of every 10 home owners believing getting a mortgage is now harder than three months ago.
However, the new rules are not putting the brakes on Britons carrying out home improvements with 79 per cent of home owners planning to spend at the least the same or more on doing up their properties.
However, one significant shift is in the outlook among London home owners, who are no longer the most confident in the country about house prices in their area.
The proportion of home owners in the capital expecting prices to rise in the next six months has fallen from 98 per cent to 92 per cent in the last three months. It follows a sharp increase in London, where average house prices have climbed £63,069 to £567,392.
The Zoopla survey found that the South East, the South West, the East of England and the West Midlands have all overtaken the capital in terms of homeowner confidence.
Zoopla’s Lawrence Hall said: “After months of consistent growth in the capital’s property market we are now seeing a slight increase in caution among London’s homeowners. More broadly, securing a mortgage appears to be getting harder now that the Mortgage Market Review has caused lenders to be more rigorous with their lending criteria and approval process.”
PROPORTION OF HOMEOWNERS EXPECTING PRICES TO RISE BY DECEMBER
|Region||Rise (%)||Flat (%)||Fall (%)|
|South West England||95%||4%||2%|
|South East England||95%||2%||2%|
|East of England||93%||6%||4%|
|Yorkshire and The Humber||91%||6%||4%|
|North West England||90%||7%||3%|
|North East England||87%||8%||5%|
Source: Zoopla.co.uk (July 2014)
House price growth stalled during June as potential buyers adopted a more cautious approach, figures showed today.
The average cost of a home in England and Wales was unchanged during the month at £172,011, according to the Land Registry.
The annual rate at which house prices are rising also slowed to 6.4 per cent during the month, down from 6.7 per cent in May.
The slowdown in growth comes as separate research showed a steep fall in confidence among potential buyers in the face of high house prices and future interest rate hikes.
A balance of just 5 per cent of people thought it was a good time to buy a home at the end of the second quarter, down from 34 per cent in the previous three months, according to Halifax.
The group said the fall in confidence was the largest recorded since it started collecting the data in 2011.
Around 55 per cent of potential buyers said raising a deposit was the biggest barrier preventing them from getting on to the housing ladder, while 35 per cent sited high house prices and 18 per cent admitted they were worried about future interest rate rises.
But while buyers are now cautious, there was an increase in confidence among potential sellers, with a balance of 25 per cent thinking it was a good time to put a property on the market – the highest level ever recorded by the index.
Both groups also remained optimistic about future property price growth, with a balance of 66 per cent predicting further price rises.
The Land Registry data showed that London continued to enjoy the highest house price growth of 16.4 per cent year-on-year, but this was down from 17.8 per cent in May.
Growth was also strong in the East and South East at 7.8 per cent and 7.9 per cent respectively.
But on a monthly basis, house prices fell in seven regions, with Yorkshire and the Humber seeing the biggest drop of 1.3 per cent, while prices fell by 1 per cent in both the East Midlands and North East.
Even in London, which has been the main driving force for the market, prices edged ahead by just 0.1 per cent during June.
Evidence that the housing market is beginning to slow down naturally will help to further ease concerns that a property price bubble had been building up, particularly in London.
Strong price growth had caught the attention of policymakers and led to the Bank of England introducing measures to help calm the market.
But recent data has suggested some of the heat has started to come out of the market as more people put homes up for sale, helping to ease the supply shortage.
At the same time, potential buyers have become more cautious in the face of high house prices and speculation about when interest rates will start to rise.
Peter Rollings, chief executive of Marsh & Parsons, said:“After a frenetic start to the year, the pace of house price growth has slowed this quarter as the market stabilises and returns to more normal trading conditions.
“With more choice coming onto the market, sellers are able to find their next onward purchase and consider trading up.”
Despite suggestions that the market is slowing, a total of 1,028 homes worth more than £1m changed hands during April, the latest month for which Land Registry transaction data is available, the equivalent of 34 a day.
Recent strong house price growth has left the average UK home costing £260,311, according to Zoopla.
The average cost of a home soared by £90 a day during the first half of 2014, research showed today.
House prices in Britain jumped by 6.5 per cent or £16,265 in the six months to the end of June, to leave the typical property costing £260,488, according to Zoopla.
Home values rose in all regions of Britain during the six months, with London leading the way with an increase of 8.2 per cent or £43,115.
The steep gain pushed the average house price in the capital up to £567,392.
But the East and South East were not far behind posting growth of 7.5 per cent or £19,440, and 7.4 per cent or £23,031 respectively.
The Zoopla research came as data showed the number of homes changing hands reached a six-and-a-half year high during June.
A total of 109,580 properties were sold for more than £40,000 during the month on a non-seasonally adjusted basis, according to HM Revenue & Customs.
The figure was the joint-highest number of homes to change hands since November 2007.
But on a seasonally adjusted basis, the property market showed some signs of moderating, with 102,680 residential properties sold during June, broadly unchanged from the previous two months.
The Zoopla data also provided further evidence that the housing market recovery is beginning to ripple out from London and the South East to other areas of the country.
Salford in Greater Manchester was the best performing town during the first half of 2014, with the average house price soaring by 12 per cent or £14,874 to stand at £138,619.
It was followed by Brough in Yorkshire, where prices jumped by 11.9 per cent or £25,184, to leave the average property costing £211,156.
Lawrence Hall, of Zoopla, said:“Homeowners up and down the country are starting to see the benefits of the recovery as home values make further headway in 2014.
“Property price growth has largely been a London and South East story until recently, so it is very encouraging to see the house price recovery broadening and the ripple effect starting to take hold further north.
“Over the past few years Salford especially has prospered from job creation in the area, which has helped boost the local property market.”
Overall, house prices rose by just over 6 per cent in the South West, North West and Yorkshire and the Humber during the first six months of the year, while they rose by more than 5 per cent in the East Midlands, North East and West Midlands.
Gains were lowest in Wales and Scotland at 3.5 per cent and 1.1 per cent respectively.
Recent strong house price growth has led to concerns that a bubble could be building up in the property market, particularly in London where values have soared by 20.1 per cent during the past year.
First-time buyers are being squeezed out of the property market by soaring house prices, with numbers dropping by 20 per cent during June, research showed today.
People buying their first home accounted for just one in five sales during the month, down from one in four in May, and the lowest proportion since May last year.
The National Association of Estate Agents said buyers aged between 18 and 30 accounted for only 3 per cent of all purchasers during the month, the lowest level it has ever recorded.
The group warned that the plight of first-time buyers is expected to get worse going forward.
Nearly 80 per cent of estate agents expect the Bank of England’s recent call for lenders to limit mortgage advances to people borrowing more than 4.5 times their income to hit those buying their first home.
The figures came as haart warned the typical homebuyer would face a stamp duty bill of at least £7,500 by the end of 2016 if house prices continued to rise at their current rate.
The independent estate agent said if property values continued to increase at an annual rate of 10 per cent, the average property would cost more than £250,000 in two-and-a-half years’ time.
This rise would push people buying an averaged priced home into the 3 per cent stamp duty band, up from the 1 per cent band for properties costing up to £250,000.
Mark Hayward, managing director of the National Association of Estate Agents, said: “Things are getting even tougher for first-time buyers.
“Not only do you now need to stump up ridiculously large sums of money in terms of deposits and stamp duty to be able to get on the ladder, but new rules mean buyers will also have to prove they can easily afford repayments now and in the future.
“Alongside this, a scaling back of the Government’s Help to Buy scheme and the implementation of the Mortgage Market Review in April will also have a significantly negative impact on the first-time buyer market.”
But there was some good news for potential buyers during the month, with the average number of properties estate agents had on their books increasing to 46, up from 44 in May.
While the figure still remains low compared with historical standards, it was accompanied by a fall in the average number of buyers registered with estate agents, with these dropping to 371, down from 374, helping to ease the mis-match between supply and demand.
In a further sign that the property market is beginning to slow down, there was also a fall in sales agreed during the month.
The typical estate agent branch sold nine properties in June, down from an average of 10 homes in May.
The drop is likely to help further ease concerns that a bubble was building up in the property market.
But there is growing evidence that the market is beginning to cool as more homes come on to the market, and buyers become more cautious in anticipation of future interest rate hikes.
Booming property prices could trigger a fresh recession as households become increasingly indebted, the Governor of the Bank of England has warned.
Mark Carney said a property price bubble remained the biggest risk to the UK’s economy in the medium term.
Appearing before the Treasury Select Committee, he warned that as property prices rose, households could become overstretched financially as they struggled to buy a home.
He added that if households took on high levels of mortgage debt, they would have less money to spend on other things, hitting consumption and posing a danger to the economy.
He said: “What happens if households are borrowing at high multiples is they have to economise on everything else in order to pay their mortgages.
“And if enough people are highly indebted, that has a big macroeconomic impact. It can tilt the economy back into recession, and we start from a position of vulnerability.
“There is the possibility that currently responsible lending standards become irresponsible to reckless.”
Carney defended the Financial Policy Committee’s recent decision to limit the volume of mortgages lenders could advance to people borrowing more than 4.5 times their income to 15 per cent as an “insurance policy” against a rise in high loan-to-income mortgages.
But he added that it had stopped short from banning these loans, as they did have a role to play, particularly for first-time buyers whose incomes were likely to rise in the future.
Carney added that the Bank would continue to take steps to ensure mortgage lending did not become “reckless” if necessary.
His comments came hours after Government figures revealed that house prices rose at their fastest rate for four years during May at 10.5 per cent, with annual price growth reaching a record 20.1 per cent in London.
They also showed that the average cost of a property bought by a first-time buyer had crossed the £200,000 threshold.
The important Treasury Select Committee hearing came on the day of a major cabinet reshuffle, deflecting some media coverage over Carney’s warning.
There have been growing concerns that a bubble could be building up in the property market, particularly in the capital.
But recent data has suggested that the market may be beginning to slow naturally in London, as would-be buyers bulk at the current high prices being demanded by sellers, with prices falling in some boroughs.
Potential buyers are also reported to have become more cautious following warnings from the Bank of England that interest rates could start rising sooner than previously expected.
The Royal Institution of Chartered Surveyors also recently reported that more homes had begun to come on to the market, as sellers were keen to cash in on recent strong price gains.
At the same, the rate at which new buyers were registering with estate agents is falling, helping to ease the mismatch between supply and demand.
Data released by the Office for National Statistics yesterday also showed that house prices still remain below their pre-correction peak in all areas of the country apart from London, the South East and the East.