Posts with tag: house price index

Halifax House Price Index for February 2021 released

Published On: March 10, 2021 at 9:06 am

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Halifax has released its latest House Price Index, which indicates a slight housing market slowdown for February.

The highlights of the report include:

  • House prices in February 2021 were 0.1% lower than in January 2021
  • In the last three months of December to February house prices were 0.5% higher than in the three months previous of September to November
  • Houses prices were 5.2% higher in February 2021 than the same month last year

Russell Galley, Managing Director of Halifax, comments within the report: “Having enjoyed an extremely strong period of activity in the second half of last year, the housing market continued its softer start to 2021, with average prices down very slightly (-0.1%) compared to January. However, with annual house price inflation currently at +5.2%, property values remain comfortably higher than 12 months ago, when February was the last full month before lockdown. 

“The housing market has been at something of a crossroads at the start of this year, with upcoming events key to determining the path of activity and prices over the next few months. The government’s decision to extend the stamp duty holiday – one of the main drivers of demand from homemovers during the pandemic – has removed a great deal of uncertainty for buyers with transactions yet to complete. 

“The new mortgage guarantee scheme is another welcome development from this week’s Budget. Whilst mortgage approvals have reached record highs in recent months, hitting levels not seen since before the financial crisis of 2008, raising a deposit continues to be the single biggest hurdle for first-time buyers to overcome. 

“In the longer-term, the performance of the housing market remains inextricably linked to the health of the wider economy. The pace and extent of recovery are still highly uncertain, and much will depend on the ongoing success of the UK’s vaccination roll out. 

“Though there is the likelihood of an economic ‘bounceback’ from lockdown, with households not unduly impacted by the pandemic deploying the significant reserves of savings that they have built-up, higher unemployment is likely to limit new buyer demand. Therefore, we would not expect the level of growth seen in house prices over the past year to be sustained throughout 2021.” 

Ross Counsell, chartered surveyor and director at GoodMove, has commented on the report: “According to the latest Halifax House Price Index figures, average house prices in the UK are finally beginning to fall, dropping by 0.3% in January compared to December, now standing at £251,968. This marks the biggest monthly decrease since April 2020.

“Although small, the drop in house prices signals that the housing market is finally slowing down after a stellar year in 2020. This is also shown by the annual rate of house price inflation seeing its lowest level since August, as well as the total stock held by estate agents rising to its highest level since before the EU referendum in 2016.

“We are also approaching the end of the Stamp Duty Holiday deadline in March – something that surged the growing demand for properties and consequent high house prices during 2020. On average, it can take between 12-21 weeks in the UK from offer acceptance to property completion, therefore many people looking to buy a home now are likely to understand that they won’t reap the benefits of the Stamp Duty Holiday and are holding off from buying. We foresee house prices to fall even further from April onwards, so waiting until then is a wise move for buyers.

“The future of the property market, and in fact the economy, remains uncertain throughout 2021. Increasing unemployment and a shattered economy should indicate a slow housing market, but if we have learnt anything from 2020 it’s that the housing market remains resilient. Lockdown has shifted the way the nation views property, and we still expect to see ongoing demand for bigger properties in rural locations throughout this year – but at lesser prices than in 2020.”

Halifax House Price Index shows house prices beginning to drop in January

Published On: February 9, 2021 at 9:44 am

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The latest House Price Index from Halifax shows a slight decrease in house prices during January 2021.

The highlights from Halifax’s report include:

  • House prices in January were 0.3% lower than in December
  • House prices were 1.6% higher in the quarter of November to January than in the previous quarter of August to October
  • House prices were 5.4% higher than in January 2020

Russell Galley, Managing Director, Halifax, comments within the report: “The average UK house price slipped by -0.3% in January, the biggest monthly fall since April last year. Whilst this pushed the typical property value down to its lowest level since October, at just under £252,000, prices are around £13,000 higher than a year ago. 

“There are some early signs that the upturn in the housing market could be running out of steam, with the annual rate of house price inflation cooling to its lowest level since August. Industry figures for agreed sales remain well above pre-pandemic levels but new instructions to sell have decreased noticeably, and total stock held by estate agents has risen to its highest level since before the EU referendum in 2016. 

“The Stamp Duty holiday has undoubtedly helped to fuel growing demand amongst households for larger properties. However, given the current time to completion across the market, transactions in the early part of 2021 probably don’t include many borrowers who expect to benefit from the stamp duty reprieve. 

“How far and how deep any slowdown proves to be is a challenge to predict given the prevailing uncertainty created by the pandemic. With swathes of the economy still shuttered, and joblessness continuing to edge higher, on the surface this points to slower market activity and downward price pressures in the near-term. 

“That said, we saw the power of homeowners to drive the market in the second half of last year as many people looked to find new properties with greater space, spurred on by increased time spent at home. Such structural demand changes, coupled with any further policy interventions by government, could yet sustain underlying market activity for some time to come.” 

Read the full Halifax House Price Index report here: https://www.halifax.co.uk/assets/pdf/january-2021-house-price-index.pdf

Halifax House Price Index
Halifax House Price Index shows house prices beginning to drop in January

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “The lockdown is playing its part in keeping prices as high as they are because it has reduced supply, fuelling greater competition among buyers for what is available. 

“The Budget is only around the corner now and, while it remains to be seen whether the Chancellor will extend the stamp duty tax break, he has a big deficit and many other levers to pull that could affect the market in much more significant ways.

“Politicians are used to hearing people cry foul when handouts end. Treasury minister Jesse Norman told a Parliamentary debate earlier this week that the stamp duty holiday has done its job. Therefore the focus could quite quickly shift to other issues, such as capital gains tax. 

“The stamp duty holiday has now faded as a force behind agreed sale prices, though some buyers with smaller chains are still hoping to complete before the deadline.” 

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “This is as muted a response to the faded hopes of a stamp duty tax break that sellers could hope to see. 

“We were being led to believe we’d have to put our heads in our hands in January and brace for impact because of the end of the stamp duty relief but the market’s mechanics pointed to a different result all along. 

“Rents have fallen, putting negative pressure on prices and first-time buyers won’t pay stamp duty on purchases up to £300,000 once the scheme ends anyway, just as they did before. For almost everyone else, apart from those at the top of the chain, the lost relief can be clawed back by renegotiating if necessary. 

“It is sellers, not buyers, who are a little quieter at the moment. A lot of people with children have decided against listing their property for sale while they’re homeschooling and their home looks like a bomb has hit it. There are still plenty of first-time buyers looking and we’re just five weeks away from when people’s gardens start to look better and we always see a rush of activity after spring has sprung, 

“The fact the Chancellor hasn’t ruled an extension to the stamp duty holiday either in or out is helping to create another wait-and-see period for both vendors and buyers. However, properties are still getting a very high level of engagement online. This is always good news and will manifest itself when we have a bit more clarity after the Budget. People are still dreaming of moving to larger properties, and one home we listed recently at nearly £4m received 8,000 views in 14 days. Most of these buyers would not be able to stretch that far but it tells us that the appetite is still there and will be reflected in activity over the summer.

“The bellwether London market has peaked for now and the shift in behaviour of landlords last month is evidence of that. Many landlords decided they would cash in on record prices late last year but were asking too much for homes that weren’t in great condition. Since mid-January, a significant number of them have now given up trying to sell and, having got tenants out, are now trying to let them again. Their gamble hasn’t paid off and this is weighing on supply even further.”

Adnan Shah, founder of ethical real estate investment manager Buraq London, comments: “The modest falls in prices we’re seeing can be blamed on the impending end of the stamp duty holiday, and the chances of an extension are dwindling by the day.

“There have been two significant jumps in residential prices since the general election. First the Boris bounce, and then a post-COVID rally caused by pent-up demand and people rethinking their living situations. 

“This isn’t a market that needs puffing up any more. The threat of valuations becoming detached from reality should concern buyers, landlords and investors alike. 

“However, the vaccine rollout is proceeding better than expected, and if the engines of the economy are firing on all cylinders by the summer, the benefits could keep the housing market purring in the coming months.”

Nationwide’s January House Price Index also reports a slowdown in house price growth.

House price growth slows slightly as end to Stamp Duty holiday approaches

Published On: February 4, 2021 at 9:51 am

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The January 2021 Nationwide House Price Index shows that annual house price growth has slowed for the first time in six months. This slowdown has occurred just as the end of the Stamp Duty holiday approaches.

The highlights of Nationwide’s report include:

  • Annual house price growth has slowed to 6.4% from 7.3% in December
  • Prices are down 0.3% month-on-month, after taking account of seasonal factors
  • Homeownership has increased for the third year running

Within the report, Robert Gardner, Nationwide’s Chief Economist, said: “To a large extent, the slowdown probably reflects a tapering of demand ahead of the end of the Stamp Duty holiday, which prompted many people considering a house move to bring forward their purchase. While the Stamp Duty Holiday is not due to expire until the end of March, activity would be expected to weaken well before that, given that the purchase process typically takes several months (note that our house price index is based on data at the mortgage approval stage).”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, has commented on the index results: “A predicted collapse in house price growth has failed to materialise. This was supposed to be the month that legions of buyers effectively threw in the towel and moderated their offers having been forced to remove the Stamp Duty tax break from the equation.

“Yet, despite everything, this market is still clinging firmly to strong annual price increases and this is further evidence that, while the Stamp Duty tax break was a catalyst for the mini-boom, it’s not the main motivator pouring fuel on this fire. 

“This isn’t really that surprising. By the end of last year, the market’s gains had already eroded the tax benefit of the Chancellor’s scheme, which already suggested there was more going on. Those who benefit least are also those more likely to be older, with families and most in need of more space. These households are also more likely to have the money to make that move happen. They are responsible for the narrative that has characterised the past nine months. 

“Continued talk of negative interest rates isn’t doing anything to cool demand for mortgages either and the housing market could still have a few more surprises up its sleeve this year.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “Forget the mild monthly price decline, this is hardly the performance of a market in peril. The fact that most buyers agreeing purchases now will almost certainly miss out on Stamp Duty relief has barely moved the needle so there are wider factors at work here and chances are they’ve been cooking up a storm all along.

“Just look at what this market has weathered. After a year in which it has faced a stubborn pandemic, associated economic chaos and tightening borrowing criteria for first-time buyers, it has still surged beyond anyone’s expectations. Even in London, which can swing earlier and further than other regions, the pendulum is showing a reluctance to swing to the other extreme. Achieved sales prices have softened but it hasn’t been enough to send badly squeezed first-time buyers stampeding back to estate agents’ windows. 

“Expect low-interest rates and vaccine optimism to continue to play a commanding role in what happens over the next few months, as all eyes turn to unemployment and the end of the furlough scheme. Those buyers who are confident in their income, however, will continue to make that felt and there are still plenty of them around.”

Adnan Shah, founder of ethical real estate investment manager Buraq London, comments: “A slight nudge southwards is a positive start to a year that had a lacklustre future written for it. January was arguably the sternest test of the residential market since the pandemic began. 

“The initial shutdown last year stemmed a lot of panic, whereas last month’s statistics demonstrate that the residential market is actually much more willing to shrug off the sort of temporary economics that reach our ears daily than people give it credit for.”

End of 2020 saw house prices at record high, Halifax House Price Index shows

Published On: January 12, 2021 at 9:34 am

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The latest Halifax House Price Index has been released, showing data from December. The key findings of the report highlight:

  • On a monthly basis, house prices in December were 0.2% higher than in November
  • In the latest quarter (October to December) house prices were 2.6% higher than in the preceding three months (July to September)
  • House prices in December were 6.0% higher than in the same month a year earlier

Read the full report here: www.halifax.co.uk/assets/pdf/december-2020-house-price-index.pdf.

Lucy Pendleton, property expert at independent estate agent James Pendleton, comments: “This market seems to be able to hurdle anything and, though the annual growth rate has cooled slightly, it still continues to plough a low-Earth orbit.

“It must be beginning to dawn on the Chancellor that the stamp duty tax break was completely unnecessary. Any sensible estate agent is hoping the market puts on the brakes before we end up in bubble territory. A housing market has to take the economy with it ultimately, and the threat to the labour market in the second quarter of this year is a major concern.

“The simple truth is that extra space has become non-negotiable for legions of homeowners with families, and the usual winter slowdown has met the immovable force that is hundreds of thousands of people all trying to jump to larger properties at the same time.

“It’s right about now that vendors begin to think of their homes as piggy banks once again, even if agents on the ground are seeing more homes fall short of asking prices. This only leads to tears later on when the chasing pack forces valuations back to a more sensible level, and there are indications in London that this is already beginning to happen.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “Buyers forced to re-evaluate their living arrangements have delivered a market with endless momentum that now threatens to course right through to the spring. It’s very unusual to reach a record high in December, when buyers usually use the winter to pause their house hunting.

“This time around, buyers have remained steadfast and this underlines the fact that the race for more space is no passing fashion. It looks set to be a seismic shift in priorities that could last a generation and a third national lockdown is only going to solidify that trend.

“People have long memories when it comes to the traumas inflicted in situations like this. Room to spread out is now putting other so-called essentials in the shade and forcing compromises over things that would once have been deemed priorities like en-suites and out-buildings.

“This is forcing buyers to focus on a much longer time horizon that allows them to mentally set aside headaches like Brexit, the pandemic, and the end of government support measures.

“The more time passes, the more apparent it becomes that the desire for a larger home is trumping the stamp duty tax break in buyers’ eyes, as it becomes increasingly unlikely that transactions will complete in time to benefit.”

House prices continue to rise, latest ONS UK House Price Index shows

Published On: December 17, 2020 at 9:10 am

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The October Office for National Statistics (ONS) UK House Price Index has been released, showing that house prices still continue to rise.

The main highlights of the report include:

  • The average UK house price has increased by 5.4% over the year to October 2020, reaching a record high of £245,000
  • Average house prices in England have increased over the year by 5.4% (£262,000)
  • Average house prices in Wales have increased over the year by 5.8% (£176,000)
  • Average house prices in Scotland have increased over the year by 6.0% (£163,000)
  • Average house prices in Northern Ireland have increased over the year by 2.4% (£143,000)
  • The highest regional annual growth in average house prices occurred in the East Midlands, North West, and Yorkshire and The Humber, each seeing an increase of 6.6%

You can read the full report here.

Chris Sykes, mortgage broker at Private Finance: “These latest figures from the ONS show that UK average house prices increased by 5.4% over the year to October 2020, up from 4.3% in September, reaching a record high of £245,000 – the highest annual growth rate the UK has seen since October 2016. This highlights the extent to which the housing market has dramatically contradicted and outperformed expectations in 2020. 

“These figures come after other recent statistics, also from the ONS (14th Dec 2020), highlight that redundancies have reached record highs of 370,000 in the third quarter of the year and the unemployment rate sits at 4.9% – more evidence that the unique circumstances of the year have led to the housing market being detached from the economic reality. 

“Moreover, it remains important to remember that as with any economic shock, existing inequalities are amplified, and the housing and mortgage market is indicative of this amplification, with borrowers with large amounts of cash for a deposit or large amounts of equity benefitting from historically low interest rates as well as saving money through the SDLT holiday – to those who have, more shall be given…

“This growth in house prices has led to renewed confidence in the housing market and lenders are now returning to offering riskier propositions, including lending at higher LTVs, a section of the market that was effectively extinct until quite recently. 

“These figures clearly indicate a period of unprecedented levels of demand and sales, however, the question remains as to for how long the market can keep flying in the face of the economic facts and will it be able to continue this period of growth or at least stabilise, or will we now see decline in prices in the coming months?

“With Brexit, further lockdowns, and the complexity of the vaccine rollout it would appear that there are still some turbulent times for the market to navigate…”

Increasing house prices trend of 2020 continues in the UK

Published On: November 10, 2020 at 9:20 am

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The November Halifax House Price Index report has now been released, showing the 2020 trend for increasing house prices continues.

The report highlights:

  • House prices in October were 0.3% than in September on a monthly basis
  • House prices were 4.0% higher in the months August to October than in the preceding three months of May to July
  • House prices were 7.5% higher in October 2020 than in the same month the previous year – the strongest growth since June 2016

Russell Galley, Managing Director of Halifax, said: “The average UK house price now tops a quarter of a million pounds (£250,457) for the first time in history, as annual house price inflation rose to 7.5% in October, its highest rate since mid-2016. Underlying the pace of recent price growth in the market is the 5.3% gain over the past four months, the strongest since 2006. However, month-on-month price growth slowed considerably, down to just 0.3% compared to 1.5% in September. 

“Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses. Since March flat prices are up by 2.0% compared to a 6.0% increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses. 

“This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the Chancellor’s waiver on stamp duty for properties up to £500,000. 

“While Government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain. Though the renewed lockdown is set to be less restrictive than earlier this year, it bears out that the country’s struggle with COVID-19 is far from over. With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “Average house prices may have crashed through a quarter of a million pounds for the first time but the growth rate that got them there is frankly ridiculous. 

“There seems little prospect that house prices are really rising this fast nationally, and it’s a dangerous thing to be saying, unless true, because it can scare off first-time buyers, who are the lifeblood of the market. 

“The huge demand that has driven the market higher has been fuelled by armies of buyers pumped up by impatience, adrenalin, frustration and relatively cheap borrowing. 

“That’s what will take the credit for this continuing surge in prices but we won’t see figures like this for long if we’re lucky. Growth like this is only ever in the interests of a tiny proportion of the population — it’s not good for agents in the long run or consumers. A boom followed by a bust in the spring should be avoided at all costs but the higher prices travel, the more likely that is. However, a slowdown in monthly price growth indicates that the market has already started to level off.”

Marc von Grundherr, Director of Benham and Reeves, comments: “We find ourselves in a dramatically different place to this time last year and while shorter term growth rates are starting to show signs of a seasonal slowdown, house prices continue to hit record highs. 

“A second national lockdown is unlikely to have any impact on current house price trends with the market remaining open for business and buyer demand remaining strong. 

“While the hopper continues to overflow with a huge number of pending transactions waiting to complete, there should remain a consistent level of house price growth to carry the market through Christmas and well into 2021.”

James Forrester, Managing Director of Barrows and Forrester, comments: “While the nation continues to wobble over the economic turmoil posed by the current pandemic and a second lockdown, the UK housing market is using these headwinds of uncertainty to fill her sails as house prices continue to climb ever higher.

“Homebuyers continue to overrun the market and for many, the task of buying or selling may well have provided a welcome distraction to the daily doom and gloom of COVID and so we haven’t seen the decline that many market naysayers so keenly awaited. 

“With the Bank of England announcing further economic support, we should see a degree of smooth sailing as the year ends.”

Read the full Halifax House Price Index report here.