House prices rose at their fastest rate for nearly seven years during June, figures showed today.
The average cost of a home was 8.8 per cent higher during the three months to the end of June than it had been a year earlier, according to mortgage lender Halifax.
The rise, which was the biggest annual gain seen since October 2007, left the typical UK property costing £183,462.
But house prices slipped by 0.6 per cent during June itself, the fourth monthly fall recorded by the Halifax index since December.
The group stressed that monthly house price changes could be volatile, with June’s fall coming after values surged by 4 per cent in May.
It added that the three-month-on-three-month change, which is considered to be a more reliable indicator of underlying market trends, showed prices rising by 2.3 per cent.
House price changes according to this measure have now remained in a narrow range of 2 per cent to 2.3 per cent since June last year.
Stephen Noakes, mortgages director at Halifax, said: “Housing demand continues to be supported by an economic recovery that is gathering pace, with employment levels growing and rising consumer confidence, although real earnings growth remains sluggish.”
Today’s figures are in line with data reported by Nationwide, which also showed strong annual gains in June, with house prices rising by 11.8 per cent.
The jump left the average property costing £188,903, the first time they have surpassed the 2007 peak reached before the housing market correction.
the heat has come out of the housing market
The strong house price growth seen in recent months has led to speculation that a bubble may be building up in the property market.
In June, the Bank of England’s Financial Policy Committee announced measures aimed at ensuring a house price boom does not threaten the economic recovery.
The steps to cool the market included a cap under that lenders must ensure no more than 15 per cent of new mortgages went to people borrowing more than 4.5 times their income.
It also introduced a new stress test, under which banks must check whether borrowers could continue to afford their mortgages if interest rates rose by 3 per cent.
But the measures were less draconian than had been predicted and came amid signs that the housing market was already beginning to moderate.
New buyer enquiries fell for the sixth consecutive month during May, according to the Royal Institution of Chartered Surveyors.
HM Revenue & Customs also reported that property sales fell by 3 per cent during the month, to stand below 100,000 for the first time in six months.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “With estate agents reporting that applicant levels are falling, fewer sealed bids and packed open houses, some moderation is returning to the market.
“As more property comes up for sale, with vendors worrying that they may have missed the boat, the heat has come out of the housing market.”
Meanwhile, speculation that the Bank of England’s Monetary Policy Committee could start raising interest rates by the end of this year, has left potential buyers cautious about taking on high levels of debt.
The typical property in the UK currently costs £260,311, according to Zoopla.
Raising interest rates too soon could damage the UK’s economic recovery, a business group warned today.
The influential British Chambers of Commerce (BCC) warned the Bank of England that a premature hike to the official cost of borrowing could hurt business confidence, amid signs of weakness in its second quarter survey.
John Longworth, director general of the BCC, warned that higher borrowing costs could “limit the growth ambitions among the very firms we are counting on to drive the recovery.”
The warning comes amid ongoing speculation over when the Bank’s Monetary Policy Committee will begin to increase interest rates.
Bank Governor Mark Carney has previously warned that interest rates are likely to start rising from their record low of 0.5 per cent sooner than markets expect.
His comments led to speculation that the first increase could come before the end of this year, although he later downplayed the chances of a rate rise in the near future.
Despite this, his earlier comments were enough to cause a spike in swap rates, upon which fixed rate mortgages are based, leading to some of the most competitive deals being withdrawn from the market.
risks to the recovery from raising rates prematurely are much greater than the risks of waiting a little longer.
The leading two-year fixed rate loan for someone with a 25 per cent deposit recently jumped from 1.89 per cent to 1.98 per cent, according to financial information groupMoneyfacts.co.uk.
Increases in the cost of fixed rate deals were seen across the board, regardless of the size of the deposit borrowers had.
The BCC’s survey, which is closely watched by both the Bank of England and the Treasury, was positive overall and pointed to continued economic growth.
But most key balances in the survey fell compared with the first quarter of the year, particularly for services, export and investment, indicating a dip in businesses performance.
Concerns about future interest rates were also higher among the 7,000 firms questioned than they had been in the previous quarter.
The BCC said the falls in its balances – which represent the difference between firms reporting an improvement against those reporting a deterioration – were unsurprising after the economy “jolted forward” during the first quarter.
It also stressed that despite the drop, all of the balances for both manufacturing and services were above their long-term averages.
But Longworth added: “These results reinforce the case against the Bank of England making any hasty decisions on raising interest rates in the very short-term.
“We must nurture the business confidence we are seeing at present by giving firms the security of working in a low interest rate environment for the foreseeable future – with eventual rises both moderate and predictable.”
David Kern, chief economist at the BCC, also called on the MPC to restore clarity to its future earnings guidance, and reassure businesses that from next year they would face only gradual increases in interest rates.
He said: “With inflation well below target and earnings still rising by less than 1 per cent per year, the risks to the recovery from raising rates prematurely are much greater than the risks of waiting a little longer.”
The MPC is widely expected to leave interest rates unchanged when it announces the results of its monthly meeting this week.
When it does start to increase the cost of borrowing, a 0.25 per cent change to the Bank Rate will add around £22 a month to a £150,000 mortgage on a variable rate.
Former child star Charlotte Church claims her millions have dried up and that she’ll have to work for the rest of the life, it was reported today.
The Voice of an Angel singer Charlotte – now 28 – was said to be worth £25m when she was only 17 years old.
But despite selling more than 10 million records, she confesses to not being as rich as some people think.
Speaking to BBC One Wales, she said: “I will have to work for the rest of my life. Not because I want to but because I have to.
“I always understood that all that stuff isn’t important and my career was not the be and end all.”
The mother of two previously lived in a luxury home in Cardiff with her ex-husband rugby star Gavin Henson.
She now lives in a 1930s villa in the Vale of Glamorgan where she lives with her children and partner Jonathan Powell.
Properties for sale in the Vale of Glamorgan:
1. Four bedroom detached house for offers over £400,000.
2. Three bedroom detached house for £159,000.
3. Seven bedroom detached house for £895,000.
Less than one in 10 people who work in London can afford to buy a typical property within an hour’s commute of the capital, exclusive research from Zoopla can reveal.
The figures are the latest evidence of the struggle ordinary workers, on an average wage, have when it comes to buying a home.
With property prices in London rising more than £60,000 in the past year alone, many potential buyers will be widening their search – particularly if they have families and are looking for more space.
But the Zoopla figures show they will be forced to look further afield than even they anticipated.
Just nine per cent of properties for sale within an hour’s commute of the capital are within a buyer’s budget if they earn an average London salary of £33,965.
Jonathan Harris, of mortgage brokers Anderson Harris, said: “It is not just London which has enjoyed significant house price growth, but the surrounding areas have also seen prices rise over the past few months. This has meant that those spreading their net and looking to buy cheaper property outside of the capital are finding it is not that easy with family homes in particular at a premium.
“Commuters are having to look further afield beyond the magic ‘one hour maximum’ commute for an affordable home, which is do-able if you don’t have to be in London every day of the week. Otherwise, it can put a strain on family life, with fathers in particular having to leave the house before the children are awake and returning after they’ve gone to bed.”
The calculation is based on a buyer with a 25 per cent deposit and borrowing a maximum of 4.5 times their annual salary.
It means someone earning around £33,000 would be able to afford to buy a property valued at £200,000.
Zoopla can reveal a worker needs to earn more than £90,000 a year to buy an average London property valued at £567,392 – restricting them to less than 70 per cent of homes for sale that are within an hour’s commute of London.
The figures are based on a maximum income multiple of 4.5 times income. Borrowers have previously been able to secure higher income multiples, but fears about the property market overheating in London have led to the Bank of England introducing new measures.
It is restricting the number of homeowners able to borrow more than this amount.
By October, banks will only be able to lend 15 per cent of their total residential mortgages at or above this level.
The Zoopla figures also reveal that despite a £282,500 income, workers would still not be able to afford 5 per cent of homes within an hour’s commute of the capital.
The first thing that almost all buyers look at while browsing properties online are the photographs. If they don’t like the look of the house from the photos, they probably won’t bother looking at the rest of the listing – and you can make a huge difference to the appeal of your photographs by styling specifically for the camera.
Anna’s top five tips for getting great photos
Look for the best angles. Ask the photographer which angle they intend to take for each room. Stand behind the camera and assess what you see – could there be a better angle? The best property photographers don’t shoot from eye level either – they use a tripod at around hip-height, which brings the viewer further into the room.
- Move anything that gets in the way of – or creates a lack of – balance in the shot. In particular, get rid of anything that encroaches on the shot in the foreground, for example plants or chairs close to the camera. Check that the shot has a good focal point, and make sure the furniture and accessories appear balanced. Move items to fill up any dead space and to hide or distract from unattractive features such as cables, heaters, vents, sockets or pipework. Remove all items hanging on the back of doors and be ready to shift things to suit the camera angle rather than the way you had things arranged for viewing from the entrance door.
- Be aware of the light. Know which direction the front of your house faces (or whichever part you intend to use for your main shot) and aim to have your photos taken at a time when the sun will be shining on that part. Turn on lights (especially table lamps) to create contrast and highlight certain areas.
- Check what you can see through or reflected in doors, windows and mirrors. Move your cars if they can be seen through windows, and be aware of what is visible in the next room through a doorway.
- Whole room shots are the priority, but try to get some lifestyle shots too. Lifestyle images are a great way of making your brochure stand out, so ask the photographer to take closer shots of attractive fireplaces, window seats, period features or garden seating areas. Consider setting up a couple of lifestyle vignettes, such as a baking set-up in the kitchen or a reading scene in the living room. If you’re not confident, do this after the main room shots have been taken and don’t let them take over.
The left hand photo is a photograph of a master bedroom that makes it look dark, small, and completely uninspiring. On the right is a shot of the same room after I had rearranged and styled it for the photograph, with the bed on the other side of the room to allow a shot to be taken from the window that shows the en-suite bathroom. The bed moved back to the window wall for viewings, but this layout works better for the photograph.
The listing below of a three bedroom terrace house in Cheltenham has some great shots, and some that could be improved. The front shot is definitely not the best angle of this house, and I would suggest that second (photo 12) is miles better. It’s a lovely shot of the deck with a table and chairs to suggest a lifestyle and the back of the house is far more attractive.
Anna Hart is an expert in staging homes for sale, working with house sellers to maximise their chances of selling as quickly and as profitably as possible. Anna’s ebook ‘How To Sell Your House For Top Price, Fast‘ brings her practical and proven house sale preparation strategy to sellers across Britain, and there’s a special offer on her books for Zoopla blog readers here.