Posts with tag: house price growth

Will the Government Boost the Property Market?

Published On: July 13, 2015 at 3:02 pm


Categories: Landlord News

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The general election is firmly behind us, but it is still unknown whether the Conservative Government will boost the property market.

In the past, it has been found that under a Conservative MP, house prices grow at a faster rate than other party constituencies. proved this in 2010, when they conducted research on the matter.

Will the Government Boost the Property Market?

Will the Government Boost the Property Market?

However, it is thought that this is inevitable, as property prices and wealth are connected; wealthier areas are more likely to have a Conservative MP.

Further research by eMoov indicated that house prices increase faster under the Conservatives. Considering this, alongside the fact that the market is recovering from the recession and initiatives are in place to support people buying homes, it is expected that property prices will rise over the next five years.

Although, it is important to remember that since the recession, house prices are changing very differently depending on the property type and the area it is in.

For instance, in the prime market – properties costing millions of pounds – activity dropped before the election due to the threat of a mansion tax. Now that this is no longer lingering, buyers and vendors can relax, fuelling a prosperous market.

However, it is not clear that prices will rise as quickly as they have done in the past in any market, and under any Government.

In the past few years, property prices have been reported as increasing, but have only been rising after large decreases when the recession hit. Areas such as Wimbledon experienced falls of 15% during this period. Northern Ireland saw huge declines of 47%.

Since the crash, areas are fitting into three categories: Places like London have seen prices recovering beyond the highs recorded before the recession; prices have started to recover in some areas, like the East Midlands, but are not back at their peak; or they are not experiencing any increases, such as Liverpool and Bradford.

Additionally, in comparing recovery statistics this time around to data from the last recovery after the 1990s, property price growth has not been as strong as previous years, even in wealthy areas.

The London housing market is still steady, but price rises have slowed, to a current 9% year-on-year. This is due to some areas seeing no growth but others experiencing stable increases.

Furthermore, new measures have been put in place regarding lending and this is impacting demand. Banks are now restricted to lending 4.5 times a borrower’s wage and the Mortgage Market Review (MMR) placed tougher lending criteria on banks. Less people can therefore afford to buy a new house.

As long as the economy continues to recover, property prices will likely grow, if steadily. However, the growth of the past may not be repeated in the future.


UK house price growth at 11 month high

Published On: July 9, 2015 at 3:27 pm


Categories: Finance News

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UK property prices rose again during June and as a result reached an eleven month high, according to latest research from the Royal Institution of Chartered Surveyors (RICS).

However, the survey also suggests that supply continues to fall, with the average stock of houses per surveyor falling to its lowest level since RICS began collating the data in 1978.

Rising demand

As supply drops, the investigation by RICS proves that demand increased in all areas of the UK with the exception of the South East. This increase comes despite a supposed cautious attitude from lenders.

What’s more the data suggests that 41% of surveyors expect house prices to increase within the next three months, the highest proportion since April 2014. 36% said that they expected sales to rise, despite the generally flat trend in new agreements.[1]

‘Although much of the discussion about supply shortages has focused on the owner occupier market, the survey demonstrates in no uncertain terms that the issue, at least at a headline level, is just as visible in the rental sector,’ said Simon Rubinsohn, RICS’s chief economist. ‘This is most clearly reflected in both the house price and rental projections over the medium term which comfortably exceeds the likely growth in wages,’ he continued.[1]

Rubinsohn went on to say, ‘there had been some hope that the removal of political uncertainty following the general election would encourage more properties onto the market but the initial indications are that this is not proving to be the case.’[1]

UK house price growth at 11 month high

UK house price growth at 11 month high

‘Additionally, the recent flat pattern of appraisals by respondents to the survey suggests this is not about to change anytime soon As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable,’ he added.[1]


Head of policy at RICS Jeremy Blackburn said that the Government has a long term plan to drive up owner occupation and property purchasing, but the survey shows that there is more to be done to aid supply.

Just as significant is the pressure that is clearly building across the rental sector, through which a large part of our population is housed. It is particularly important for the younger more mobile workforce that it is central to improving our economic productivity,’ he said.[1]

Mr Blackburn also noted that the housing benefits cuts announced in the budget will lead to many tenants being pushed out of the private rented sector and into social housing.




House Prices Showing Steady Growth

Published On: July 9, 2015 at 9:54 am


Categories: Finance News

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House prices in the UK rose by 3.3% in the second quarter (Q2) of 2015 compared to Q1, making the average price now £200,280, according to the latest property price index.

This indicates that the quarterly rate of change has picked up after two consecutive drops and prices in Q2 were 9.6% higher than the same quarter last year, revealed the Halifax data.

This was greater than May’s 8.6% growth and the highest quarterly increase since September 2014 when it was also 9.6%. On a monthly basis, prices rose by 1.7% between May and June, the fourth continuously monthly increase.

The steady growth in prices arrives as home sales remain stable. Data from HM Revenue & Customs (HMRC) shows that UK home sales rose by 1% between April and May and sales in the period from March to May were 0.5% higher than in the three months before, but were 4.2% lower than in the same period in 2014.

House Prices Showing Steady Growth

House Prices Showing Steady Growth

Halifax Housing Economist, Martin Ellis, says that supply remains very short, with the stock of homes for sale currently at record low levels: “This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015.

“Economic growth, higher employment, increasing real earnings growth and very low mortgage rates are all supporting housing demand with signs of a recent modest pick-up in demand.”1

CEO of Dragonfly Property Finance, Jonathan Samuels, adds that there are mixed signals in the property market as the latest index from Nationwide indicates that prices have dropped slightly.

He also reveals that although prices in London have slowed, house prices per square metre have increased by 45% since 2010, emphasising demand in the capital.

He says: “With economic growth stronger than expected during the first quarter, a buoyant jobs market and people generally better off, you would expect the market to continue to improve throughout the rest of 2015, if at a more moderate rate compared to recent years.”

He also says that the current Euro crisis in Greece could affect the UK property market: “We could see a flight away from equities into bricks and mortar, but at the same time if Europe as a whole is adversely affected, then the UK economy will almost certainly suffer too.”1 

London prime property agency, VanHan’s Thomas van Straubenzee is predicting an influx of enquiries from wealthy Europeans hoping to move their assets from the continent into London, as they seek to avoid the Euro crisis.

He states: “We have seen interest from the Middle East and India pick up again, which is not surprising as we had noticed that these buyers were particularly affronted by the idea of a mansion tax.

“We do not see London house prices slowing down anytime soon, as demand continues to outstrip supply, particularly at the top end of the market.”1

Jonathan Hopper, Managing Director of Garrington Property Finders, claims that vendor expectations have been surpassing what buyers are willing to pay in several parts of the UK, but this over-optimism is being put in check.

“Despite mortgages being at their cheapest level for years and the supply of homes for sale being tight in many price brackets, buyers are still intensely value sensitive,” he says. “Buyer demand is strong but sensible and buyers are being much more sober in their offering behaviour than in the last boom.”

Hopper continues: “Though confidence among both buyers and sellers remains high, as the summer slowdown begins, sellers must be wary of letting their pricing ambitions run away from what the market will tolerate.”1


House Price Growth in South Surpassing UK Average

Published On: July 7, 2015 at 11:07 am


Categories: Property News

Tags: ,,,

Residential analyst, Hometrack, has revealed findings from its latest UK Cities House Price Index.

UK house prices have risen by an average of £11,500 in the 12 months to May 2015. Seven cities in the South of England have significantly surpassed this growth.

The average price of a UK home is now £189,400, with London’s typical price more than double this, at £425,700.

House Price Growth in South Surpassing UK Average

House Price Growth in South Surpassing UK Average

Oxford has experienced the highest monetary growth in the year to May, of £41,700. This is almost quadruple the UK average. London follows at £38,900, Cambridge at £23,900, Bristol at £22,400, Southampton at £15,300, Bournemouth at £15,300 and Portsmouth at £15,000. These gains are due to robust demand, reinforced by strong local economies.

All 20 cities reported gains in the past year, however, three northern cities added less than half the UK average to property prices. Liverpool with £4,200, Newcastle with £4,700 and Sheffield with £5,300 are still 14%, 8.5% and 3.8% below their 2007 peak, respectively. These cities form part of nine cities in the North of England, Scotland and Northern Ireland, which are recovering at a much slower rate than other areas, due to weaker demand from buyers.

All cities, except Aberdeen, which saw a decrease of 0.4%, reported monthly gains in May, potentially a post-general election bounce. Bristol had the highest increase, of 1.3%, followed closely by Cambridge, Leicester, Liverpool and Belfast at 1.2%.

Other key findings include:

  • UK property prices rose by 0.8% in May to £189,400 – 3.8% above the 2007 peak.
  • 11 out of the 20 cities in the Index have outperformed their 2007 peak. London at 36.5% above, Cambridge at 34.7% and Oxford at 31.1% are at the top.
  • The cities furthest from their peak were Belfast at -47.7%, Liverpool at -14% and Glasgow at -12.8%.
  • Significant monetary gains were made by all cities, ranging from £4,200 in Liverpool to £41,700 in Oxford.
  • Bristol is still reporting the fastest monthly price growth, with a 1.3% increase in May.

Director of Research at Hometrack, Richard Donnell, comments: “House prices have picked up momentum post-election. An increasing proportion of households are feeling the benefits of the improving economy, which means that house price growth is set to continue in the coming months. The greatest risk is an earlier than expected increase in interest rates, which would knock market sentiment.

“The strong demand-side recovery seen in southern England has yet to spread to other cities, revealing the diverse nature of the housing market. All cities are making gains at different rates of growth, but the cities with the biggest increases all have something in common – strong local economies.

“Affordability pressures will bite at some point in the high value, high growth markets. The double-digit price growth registered in cities such as London, Oxford and Cambridge is being sustained by a lack of supply and below average transaction volumes with a third of sales funded by cash or buy-to-let mortgages.

“London has the highest price to earnings ratio, but it covers a wide range of sub-markets. Over the last three years, the impetus for house price growth has shifted from prime markets to the more affordable markets in Outer London and the commuter belt.”1

Hometrack’s price change analysis


Current average price Multiple of UK average Price gain in last 12 months Price change since 2007

Prices compared to 2007 peak

Oxford £380,100 2.01 £41,700 £90,300 31.1%
London £425,700 2.25 £38,900 £113,900 36.5%
Cambridge £359,200 1.9 £23,900 £92,600 34.7%
Bristol £227,600 1.2 £22,400 £28,700 14.4%
Bournemouth £246,300 1.3 £15,300 £13,700 5.9%
Southampton £198,500 1.05 £15,300 £15,000 8.1%
Portsmouth £198,00 1.05 £15,000 £15,500 8.4%
Leicester £146,700 0.77 £9,500 £2,300 1.5%
Belfast £118,900 0.62 £9,300 -£96,845 -47.7%
Aberdeen £193,600 1.02 £9,300 £24,400 14.4%
Cardiff £178,900 0.94 £8,800 £2,400 1.3%
Leeds £146,400 0.77 £7,800 -£10,100 -6.4%
Manchester £139,200 0.73 £7,800 -£7,600 -5.1%
Nottingham £129,500 0.68 £7,300 -£100 0%
Birmingham £136,300 0.72 £6,500 -£5,600 -3.9%
Glasgow £112,200 0.59 £6,200 -£16,500 -12.8%
Edinburgh £198,600 1.05 £6,100 -£12,200 -5.8%
Sheffield £126,700 0.67 £5,300 -£5,000 -3.8%
Newcastle £122,100 0.64 £4,700 -£11,400 -8.5%
Liverpool £111,700 0.59 £4,200 -£18,200 -14%
UK average £189,400 1 £11,500 £6,900 3.8%

Hometrack’s UK city index snapshot May 2015


%yoy May 2015 Average growth per month last quarter

House price to earning ratio

Glasgow 5.8% 1.4% 3.7
Liverpool 3.9% 1.1% 4.3
Newcastle 4% 0.8% 4.7
Nottingham 6% 1.3% 4.8
Sheffield 4.4% 0.9% 5
Birmingham 5% 0.9% 5.3
Manchester 5.9% 0.8% 5.3
Leeds 5.6% 1.1% 5.4
Belfast 8.5% 1.4% 5.5
Leicester 6.9% 1.1% 5.8
Aberdeen 5.1% 0.5% 6.2
Edinburgh 3.2% 1.4% 6.5
Cardiff 5.1% 0.5% 6.8
Southampton 8.3% 1.2% 7
Portsmouth 8.2% 1% 7.2
Bristol 10.9% 1.5% 7.9
Bournemouth 6.6% 1.2% 8.7
Cambridge 7.1% 0.8% 11.5
Oxford 12.3% 1.1% 12.4
London 10.1% 1.3% 12.5
20 City Composite 8.7% 1.4% 6.8
UK average 6.5% 1% 6.3


Annual Property Price Growth at Two-Year Low

Published On: July 3, 2015 at 5:06 pm


Categories: Finance News

Tags: ,,,

The annual rate of property price growth dropped to a two-year low in June, revealed Nationwide.

Annual Property Price Growth at Two-Year Low

Annual Property Price Growth at Two-Year Low

The building society found that annual house price inflation fell to 3.3% last month from 4.6% in May. A year ago, prices were increasing by 11.8%.

Property prices in Wales and Scotland have even fallen in the past year, according to Nationwide.

Between May and June, prices around the UK decreased by 0.2%, making the average UK house price now £195,055.

Nationwide’s Chief Economist, Robert Gardner, says: “House price growth continues to outpace earnings, but the gap is closing, helped by a pick-up in annual wage growth, which moved up to 2.7% in the three months to April from 1.9% at the start of the year.

“The slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London.”1

Last month, a study by LSL Property Services revealed that prices in parts of central London have declined by up to 22% since last autumn.

Some economists did not expect house price inflation to drop so continuously.

Chief UK and European Economist at IHS Global Insight, Howard Archer, comments: “While we are slightly surprised by June’s dip in house prices, it does not fundamentally change our view that house prices are likely to be firmer over the second half of the year.”1 

Archer still predicts price rises of 6% this year and 5% next year.

Capital Economics’ Matthew Pointon says the monthly price drop does not mean the market is cooling: “On an underlying basis, prices are still rising, and with active housing demand finally recovering, annual house price gains have bottomed out.”1 

Regionally, the area with the fastest price growth is now Northern Ireland, with increases of 8% over the year between the second quarter (Q2) of 2014 and Q2 2015, found Nationwide.

In London, prices rose by 7.3%.

In Scotland, prices dropped by 1% in 12 months and Wales experienced price decreases of 0.8%.

Regional house price changes between Q2 2014-Q2 2015

Region Annual change Average price
Northern Ireland 8% £126,525
London 7.3% £429,711
Outer London 6.8% £315, 620
South East 6% £244,119
East Anglia 5.2% £198,826
East Midlands 4.1% £160,482
South West 3.8% £215,363
West Midlands 3.4% £165,873
Yorkshire and the Humber 3.3% £147,387
North West 1.4% £146,908
North 0.1% £125,189
Wales -0.8% £144,701
Scotland -1% £140,512

However, within these regions, there were large variations between prices in individual cities.

In property hotspots, Reading saw prices rise 13%, Oxford experienced price growth of 12% and in Edinburgh, prices increased by 11%.

Prices fell in areas including Sunderland, at 4% and Nottingham, the Highlands and Islands, and West Yorkshire at 2%.


Property Market Optimism Steadies

Published On: July 3, 2015 at 2:02 pm


Categories: Landlord News

Tags: ,,,

Property Market Optimism Steadies

Property Market Optimism Steadies

Fewer homeowners are expecting a rise in the value of their property in the next 12 months, revealed research from Clydesdale and Yorkshire Banks.

Under half (49%) of survey respondents believe the value of their home will grow over the next year, compared to 54% in January and 55% a year ago. A further 49% predict that the price of their property will stay the same and 2% think it will decrease.

The study also found that homeowners in London are the most optimistic, with 73% forecasting an increase in the value of their home. This is followed by those in the South East at 62% and 56% in the East of England.

Contrastingly, 11% of respondents in the North East expect the value to drop and 6% of homeowners in the North West and Scotland are not positive.

For those predicting value rises, growing house prices is the key factor, alongside the economic recovery.

67% of homeowners in the South East and 64% in London name this as the main reason for expecting an increase in the value of their property. Just 37% of those in the North West said the same.

Director of Retail Banking, Steve Fletcher, says: “It has been a positive to see confidence returning to the property market, however, our latest research has shown that this is levelling out with a drop in the number of people who believe their home will increase in value over the next year.

“There are still a number of property hotspots, such as London and the South East, where property prices are rising and we anticipate that this will continue. However, this is not mirrored across the UK as a whole.”1