Posts tagged ‘House Prices’
The average property price paid by first time buyers hit a two-year high in September, as starter homes outperformed the rest of the market, research showed today.
The typical cost of a first home soared by 4.1 per cent during the month to stand at £160,218, according to estate agent haart.
But house prices eased across the wider property market as the supply of homes for sale increased, but demand fell.
There were 2.8 per cent more homes put on the market during September than in the same month of 2013, the fourth consecutive month during which supply has increased on an annual basis.
At the same time, the number of new buyers registering with estate agents fell by 6.6 per cent, also the fourth month in a row in which demand has eased year-on-year.
The change in market dynamics led to the average cost of a British home dipping by 1.1 per cent to £203,135, while in London prices dropped by 3.3 per cent to stand at £507,967.
But house price gains remained robust on an annual basis, with prices 6.9 per cent higher than they were a year ago across Britain as a whole, while in London they were a massive 19.8 per cent up.
Despite the easing in the mismatch between supply and demand, competition for homes remained intense, with an average of 10 buyers chasing every home for sale, rising to 16 potential buyers per property in London.
Paul Smith, chief executive of haart, said: “Although our data shows a small slowdown in house price growth on a monthly basis, this must be taken in the wider market context.
“Good mortgage deals are still very much on the table and interest rates aren’t going up for the foreseeable future.
“We have 10 buyers chasing every new property instruction UK-wide, so sellers shouldn’t start sneezing yet. The run up to Christmas has already begun and the market remains strong.”
Property sales increased by 1.8 per cent during the month, to stand 7.2 per cent higher than in September 2013.
But the number of first time buyers registering with estate agents fell by 6.4 per cent compared with a year ago.
People taking their first step on the property ladder put down average deposits of £34,550 during the month, while they borrowed an average of £125,668.
On a brighter note, this group accounted for 44.7 per cent of all mortgages advanced in September, slightly up on 41.1 per cent 12 months earlier.
Today’s figures add to growing evidence that the booming property market is beginning to cool.
Nationwide Building Society said house prices dipped by 0.2 per cent in September, while Halifax said annual house price inflation may have peaked at 10 per cent.
House prices hit a new record high in August but the booming London market showed signs of slowing down, figures revealed today.
The average cost of a home in Britain rose by 0.6 per cent during the month to stand at £274,000, according to the Office for National Statistics.
The annual rate of growth was unchanged from the previous month at 11.7 per cent, as the housing market recovery continued to ripple out across the country.
London remained the key driver of growth, with prices in the capital soaring by 19.6 per cent year-on-year.
But property values in London dipped by 0.1 per cent during the month to stand at £514,000 or 39.5 per cent above their pre-crisis peak.
In the South East and the East annual house price growth picked up slightly to 12.3 per cent and 11.6 per cent respectively, while it was 9.6 per cent in Northern Ireland and 9.3 per cent in the South West.
But growth was more subdued in other regions, with prices edging ahead by just 3.8 per cent year-on-year in the North East, while they were 4.7 per cent higher in Wales and 5.6 per cent up in the North West.
Property values are now above their pre-crisis peaks in London, the South East, East, South West, East Midlands and West Midlands.
“For six regions of the UK, average property prices achieved on completion are yet to match their pre-crisis score.”
Meanwhile, estate agent Knight Frank forecast that the cost of a home would rise by only 3.5 per cent in 2015, as the market pauses for breath.
In regional terms, the group expects house price gains in all areas of the country to be in the 3 per cent to 5 per cent range.
The South East is expected to see the strongest gains at 5 per cent, while growth will be slowest in the North East, North West, Yorkshire & the Humber and Wales at 3 per cent.
Despite the predicted slowdown in growth next year, the group still expects house prices to rise by a cumulative 18.2 per cent in the five years to the end of 2019, which would represent a 12 per cent gain in real terms.
The prediction comes amid growing evidence that the property market is beginning to cool as more homes come on to the market.
At the same time, survey evidence suggests demand is reducing as potential buyers are put off by the high house prices currently being demanded by sellers and the prospect of interest rate rises next year.
Mortgage lender Halifax last week said annual house price inflation may have peaked at 10 per cent, although it still reported a 0.6 per cent price gain for September.
Nationwide reported a 0.2 per cent fall in property values for the same month, with annual growth also slowing.
A flat in London has gone on the market for less than £100,000, it has been revealed.
The property in south London has recently seen its asking price reduced, making it significantly under the amount buyers can expect to pay in the capital.
But the Streatham property is currently listed at £99,950, having been reduced from an initial asking price two months ago of £129,950.
Jacksons, the estate agent handling the sale, described the property as “a bijou flat” as it is a studio with an open plan kitchen and separate bathroom.
It is on the first floor and covers a total area of 194 sq ft.
The studio is on the corner of Babington Road and Ambleside Avenue, providing good access to many of Streatham’s facilities.
The typical price of a flat in the area is £323,000, while a detached property goes for almost £1m.
The steam evaporated out of Britain’s housing market during September as demand fell for the third consecutive month, research showed today.
House price momentum slowed to its lowest level since June 2013 as buyers became more cautious, the Royal Institution of Chartered Surveyors said.
The number of people looking to buy a new property slipped for the third month in a row, in the face of tougher lending criteria and the prospect of higher interest rates.
London was particularly hard hit, with the capital recorded a slump in new inquires for the fifth consecutive month, a trend not seen since April 2012.
At the same time, the number of new homes coming on to the market remained virtually unchanged.
The lack of fresh properties being put up for sale, combined with falling buyer numbers, helped to further ease the mismatch between supply and demand.
Meanwhile, a number of surveyors reported a return to more sensible prices, with people making offers below the asking price on homes that had not shifted.
But despite the slower market conditions, surveyors continue to expect house prices to rise in the coming three months, with only those in London predicting falls.
Overall, surveyors predict house prices across the UK will rise by 2.1 per cent during the next year.
Simon Rubinsohn, RICS chief economist, said: “Demand and supply are looking a little more balanced, which is removing some of the upward pressure in prices, particularly in London.
“This is a healthy development. Part of this is down to the Bank of England becoming more vocal about the risks, part of this is down to affordability, part of this is down to the new mortgage rules and part of this is down to expectations of higher interest rates.
“However ideally, more supply should be coming onto the market, but with interest rates still at historically low levels and long term house price expectations positive, households are not under any real economic pressure to sell.”
He added that the group expected the outlook for house prices next year to be far more subdued.
Meanwhile, politics had a negative impact on the property market in some areas.
In Scotland, a balance of 6 per cent of surveyors reported a drop in interest from potential buyers, down from a balance of 49 per cent reporting a rise in August, which the group attributed to the impact of the referendum on independence.
Meanwhile, there was a fall in 12 month price expectations for larger properties, which RICS said was likely to be in response to political rhetoric around a Mansion Tax.
In contrast to the slowdown in buyer activity in the housing market, demand continued to grow solidly in the rental one.
But the number of new homes being made available to let failed to keep pace with demand from potential tenants.
The RICS survey is the latest in a run of data to suggest the booming housing market is beginning to cool.
The number of mortgages approved for house purchase fell for two consecutive months in August, while both Nationwide and Halifax have reported an easing in the annual rate of house price growth.
Recent house price gains, combined with low wage growth, have led to affordability becoming increasingly stretched at a time when banks and building societies are applying tougher lending criteria.
House price growth slowed to 0.6 per cent in September as affordability became increasingly stretched, figures showed today.
The rise, which followed no change in August, added more than £1,000 to property prices, leaving the average value of a UK home at £187,188, the highest level since April 2008, according to mortgage lending Halifax.
Recent strong house price gains, combined with slow wage growth, have pushed the typical cost of a home up to 5.04 times average earnings.
The price to earnings ratio is now at its highest level since June 2008, and close to the 5.83 peak reached in July 2007 when house prices stood at £199,084.
The increase leaves consumers on average earnings needing increasingly big deposits or equity stakes in order to comply with Bank of England guidance under which lenders should not advance more than 4.5 times a borrower’s income.
Unsurprisingly, the deterioration in affordability is beginning to act as a brake on the property market.
Halifax reported that the annual rate of growth eased for the second consecutive month in September to stand at 9.6 per cent, down from a recent peak of 10.2 per cent in July.
The figure is in line with data reported by Nationwide Building Society, which showed a slowdown in annual house price inflation slowdown to 9.4 per cent in September, with prices dipping by 0.2 per cent during the month itself.
Meanwhile, property sales fell below 100,000 in August for the first time since November 2013, according to HM Revenue & Customs.
The number of mortgages approved for house purchase, a leading indicator of market activity, also dropped for the second month running in August.
Martin Ellis, Halifax housing economist, said: “The recent rapid rise in house prices in some parts of the UK, earnings growth that remains below consumer price inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand.
“This weakening in demand has led to a modest easing in both house price growth and sales.”
He added that annual house price inflation may have peaked at around 10 per cent.
“A moderation in growth looks likely during the remainder of 2014 and into next year as supply and demand becoming increasingly better balanced,” he said.
Matthew Pointon, property economist at Capital Economics, said: “The cooling in house price inflation is being driven by a sharp drop in housing demand.”
He said demand should recover as mortgage lenders got used to the new regulations, more homes came on to the market and there was a return of real earnings growth.”
But he added: “It is unlikely buyers will be willing or able to accommodate yet another burst of house price inflation, which suggests we are set for a prolonged period of far more subdued house price gains.”
Meanwhile, consumer confidence about house price growth has fallen to a 15-month low, according to Zoopla.
Around 88 per cent of homeowners think property prices will rise in their area in the coming six months, down from 92 per cent six months ago and the lowest level since July 2013.
The survey of 6,746 homeowners also found that 39 per cent of people thought it was now more difficult to get a mortgage than it had been three months ago.
Zoopla’s Lawrence Hall said: “With the lengthier funding approval process following the Mortgage Market Review and fewer homeowners predicting that house prices will continue to rise in the short term, the coming months will be crucial to determine if the housing market recovery has stalled or simply paused for breath.”