Posts tagged ‘House Prices’

Mortgage approvals jump to four-month high despite tough new lending rules

Mortgage approvals for people buying a home jumped to a four-month high in June as the market recovered from the introduction of new lending rules that saw an increase in the time it takes to secure a mortgage offer.

Mortgage 6

A total of 67,196 loans were agreed for people buying a property during the month, the highest level since February, according to figures published by the Bank of England.

Pipeline loans for people remortgaging to a new deal also increased, rising to 31,682, the highest number since March.

The jump in mortgage activity during June suggests the lending market has recovered from the blip it experienced in April and May due to the introduction of the Mortgage Market Review (MMR).

The rules, which included tough new affordability criteria, led to an increase in the time it takes to secure a mortgage offer.

Mortgage brokers and commentators warned at the time of the rules’ introduction in late April that they were likely to lead to a temporary fall in mortgage approvals while lenders got to grips with new systems and processes.

Net lending, which strips out repayments and people remortgaging to a new deal, fell slightly in June, according to the Bank.

Mortgage advances on this measure totalled £2.08bn during the month, down from a spike of £2.29bn in May, but still above the recent six-month average of £1.9bn.

Samuel TombsSamuel Tombs, senior UK economist at Capital Economics, said: “The rise in the number of mortgages approved for new house purchase to a four-month high suggests that the disruption caused by the introduction of the Mortgage Market Review regulations in April has faded quickly.

“Looking ahead, further rapid rises in employment and still low mortgage interest rates should stimulate further demand for mortgage lending.

“However, with lenders set to face tough stress tests later this year and action from the Financial Policy Committee in June perhaps dampening expectations of future house price growth, the recovery in mortgage lending still looks likely to be a gradual affair.”

The figures come the day after data from the Land Registry showed house price growth in England and Wales stalled during June.

Property values 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.

But across England and Wales as a whole, house prices were still 6.4 per cent higher than they had been a year earlier at an average of £172,011.

The figures add to growing evidence that some of the heat is coming out of the property market, as more homes are put up for sale, easing the mismatch between supply and demand.

Surveys from estate agents also suggest that potential buyers are becoming more cautious in the face of high house prices and concerns about future increases in interest rates.

Recent strong price growth has left the average UK home costing £260,311, according to Zoopla.

July 29, 2014 at 10:47 AM Leave a comment

Home owner confidence high despite it being ‘more difficult’ to get a mortgage

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.

29.07.14 House prices

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%
West Midlands 93% 5% 3%
Wales 92% 5% 4%
London 92% 3% 5%
Yorkshire and The Humber 91% 6% 4%
North West England 90% 7% 3%
East Midlands 90% 6% 4%
Scotland 90% 6% 4%
North East England 87% 8% 5%

Source: Zoopla.co.uk (July 2014)

 

July 29, 2014 at 10:27 AM Leave a comment

UPDATED: Growth in house prices slows as buyers adopt ‘cautious’ approach

House price growth stalled during June as potential buyers adopted a more cautious approach, figures showed today.

28.07.14 home

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.

 

July 28, 2014 at 10:19 AM Leave a comment

End of the longest depression is signalled this Friday

This Friday marks the end of the longest depression in British economic history, it has been revealed.

financial crisis

Official figures will confirm that the total amount produced by Britain – or Growth Domestic Product – exceeds the level last seen before the recession hit.

Government figures show GDP fell by 7.2 per cent between its height during the first three months of 2008 and its low in the second quarter of 2009.

Technically, a depression – defined as a long or deep recession – does not end until GDP exceeds this pre-recession peak.

Britain’s economic recovery has been slow. National output during the first quarter of this year was still 0.6 per cent below that peak, according to the Office for National Statistics.

But momentum has picked up significantly during the past year and Britain now has one of the fastest growing economies among wealthy countries in the world.

This confidence is already being felt in the property market. Latest research by Zoopla shows the average value of a home soared by £90 a day during the first half of this year, leaving the typical property costing £260,488.

But experts warn that while the economy is improving, there are other issues – such as the forthcoming General Election – that are influencing the performance of the house market.

Mark HarrisMark Harris, of mortgage brokers SPF Private Clients, said: “The official numbers are demonstrating what the housing market has known for some time – the worst is over for the economy. Confidence is returning, with many of the buyers who may have been worried about job security and delayed making a purchase, finally ready to take the plunge.

“However, while the recovery is welcome it is also tentative. There are signs that the housing market is now starting to cool a little with buyers better able to negotiate over prices than before. With the threat of an interest rate rise on the horizon and the uncertainty surrounding the General Election, along with the possibility of a mansion tax, there are plenty of hurdles for the housing market to overcome.”

 

July 22, 2014 at 3:02 PM Leave a comment

Average house prices rise by £90 a day

The average cost of a home soared by £90 a day during the first half of 2014, research showed today.

house prices 8

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.

July 22, 2014 at 11:39 AM Leave a comment

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