Posts with tag: house price inflation

House Price Inflation Continues Strong Growth Seen Since 2013

Published On: January 17, 2017 at 10:02 am


Categories: Property News

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House price inflation across the UK continued the strong growth seen since 2013 at the end of last year, according to the most recent index from the Office for National Statistics (ONS)/Land Registry.

Average house price inflation stood at 6.7% in the year to November 2016, up from 6.4% in the previous month.

House Price Inflation Continues Strong Growth Seen Since 2013

House Price Inflation Continues Strong Growth Seen Since 2013

This takes the average property value across the UK to £218,000, up by £14,000 on the previous year and £2,000 higher than October.

The main contribution to November’s house price inflation was England, where values rose by an average of 7.2% over the year, to reach £234,000. Wales saw house prices increase by 4.1%, to stand at £147,000, while the average value in Scotland was up by 3.3% to £143,000. In Northern Ireland, the average price was £124,000 in November.

Regional house price inflation

London continued to boast the highest average house price of any region across the UK, at £482,000, followed by the South East and East of England, at £313,000 and £278,000 respectively. The lowest average price continued to be found in the North East, at £127,000.

The East of England showed the highest annual house price inflation, with values up by 10.5% in the year to November. Growth in the South East was second highest, at 8.6%, followed by London, at 8.1%. The lowest annual increase was recorded in the North East, at just 3.2%.

Local authority house price growth

The largest annual growth in property values in the 12 months to November was in Rutland, where prices rose by a whopping 20.7% to reach an average of £307,000. The lowest annual increase was seen in the City of Aberdeen, where prices dropped by 7.8% to an average of £172,000.

In November, the most expensive borough to buy a property was Kensington and Chelsea, where the average home cost a huge £1.3m. In contrast, the cheapest place to buy was Burnley, at just £75,000.

The CIO and co-founder of LendInvest, Ian Thomas, comments on the latest figures: “Despite some knocks, the property market will remain fundamentally strong throughout 2017, with a sustained drive by Government to increase the supply of new homes.

“The Housing White Paper, expected later this month, will add detail to the commitments already made by the Housing Minister to tackle the housing crisis. Industry will be watching with hopes that these announcements will reinvigorate the market.”

The ONS/Land Registry index follows reports from both Your Move and Rightmove yesterday, which claim that house prices ended 2016 almost at the peak recorded back in March last year.

So will values start to come down as they reach a potential affordability ceiling?

House Price Growth Slow, But Demand is Still Surging

Published On: October 7, 2015 at 1:36 pm


Categories: Landlord News

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House Price Growth Slow, But Demand is Still Surging

House Price Growth Slow, But Demand is Still Surging

House price growth is slowing down, reveals the latest Halifax House Price Index.

Property prices were 8.6% higher in the three months to September than in the same period in 2014. This is down on the 9% annual rise recorded in the three months to August.

The data also shows that in the three months to September, prices increased by 2% compared to the previous three months, down from the 3% growth witnessed in the three months to August.

Between August and September, prices dropped, with the average home now costing £202,859, down from £204,722.

However, Housing Economist at the Halifax, Martin Ellis, sees no reason for house price rises to continue slowing.

He explains: “Housing demand has been strengthening recently, underpinned by economic growth, rising real earnings and very low mortgage rates.

“Increasing demand is combining with very low growth. There is little reason to expect any fundamental shift in the key market drivers over the coming months.”1 



















Over Half of People Expect Interest Rates to Rise

Despite an increase in the amount of people expecting interest rates to rise, confidence has remained strong for house price growth, reveals the latest Halifax Housing Market Confidence Tracker.

The Halifax found that 58% of people now think that mortgage interest rates will be higher in 12 months’ time, up from 48% in the second quarter (Q2) of the year. Furthermore, 35% predict that savings interest rates will rise, compared to 26% in the previous quarter.

Over Half of People Expect Interest Rates to Rise

Over Half of People Expect Interest Rates to Rise

House price inflation is currently standing at 9% and 68% of respondents expect the average property price to be higher this time next year, with just one in 20 thinking prices will be lower.

Craig McKinlay, Mortgage Director at Halifax, comments: “While economic optimism appears to have tailed off in the last quarter, house prices have continued to increase and the underlying pace of house price growth is strong.

“This has helped to maintain the expectation that house prices will continue to rise, despite more people expecting interest rate rises in the next 12 months.

“The factors behind the upward pressure on house prices include the continued lack of second-hand properties for sale on the market and the availability of low mortgage rates.

“Without an increase in supply, it’s likely to mean that house price growth continues to be robust in the short-term, even if interest rates eventually begin to increase.”1

Despite the clear stability in property price expectations, there has been a decline in selling confidence, with the amount of people thinking the next 12 months will be a good time to sell dropping from 59% to 52%.

There has also been a decrease in the proportion of Britons that believe it will be a good time to buy in 12 months’ time, from 56% to 53%.

Only 40% of Londoners think the next year will be a good time to buy, compared with 77% in Scotland and 58% in the north of England.

Additionally, 64% of people in London said the next 12 months will be a good time to sell, with 48% of those in Scotland agreeing, 47% in the north of England and 43% in the Midlands.

The main barrier to buying a home is raising a deposit, at 57%, despite the availability of higher loan-to-value mortgages and the Help to Buy scheme.

The amount of people naming job security as an obstacle has dropped to its lowest ever level, at 42%, but it is still the second highest factor, ahead of household finances, at 36%.

Although house prices continue to increase, the proportion of people mentioning rising prices or prices being too high has fallen from 35% to 31% over the past quarter.

And despite an increase in the number of people expecting to see an interest rate rise in the next year, the amount of people who claim interest rates are a barrier to homeownership is fairly unchanged from Q2, from 16% to 14%.





House Price Growth at 2% in July

Published On: September 15, 2015 at 1:48 pm


Categories: Finance News

Tags: ,,,

In July, house prices rose by 2%, according to the Office for National Statistics (ONS).

Surprisingly, the East and South East of England experienced the strongest growth, rather than London.

The average property price increased by over £1,000 per week, from £277,000 to £282,000 – a new record high and 16.7% above the pre-recession peak of 2007.

House Price Growth at 2% in July

House Price Growth at 2% in July

However, on a seasonally adjusted basis, average house price growth dropped to 5.2% from 5.7%, partly due to price falls in Scotland and the North East of England.

The ONS data corresponds with more recent figures from Halifax, which reveal a 2.7% increase in prices during August. The two sets of statistics will cause fresh concern regarding housing affordability.

The new shadow housing minister in Jeremy Corbyn’s cabinet, John Healey, tweeted on his appointment: “Housing is now a national crisis, so delighted housing now has full status in shadow cabinet and to take on job.”1

Labour’s new London mayoral candidate, Sadiq Khan, has also made housing a priority, putting “an affordable and secure home to rent or buy”1 as his main priority in his acceptance speech.

Affordability is currently worst in the East of England. The ONS found that the annual rate of house price inflation is at 8.3% in the region – the highest in the UK. Second, at 7.4%, is Northern Ireland, which is slowly recovering from a difficult period. The South East’s house prices are up 6.7% over the last year.

However, the figures also highlight a severe north-south divide, with the North East of England reporting its first annual price decrease since 2013. The average house price in the region dropped by 0.7% over the past 12 months.

Prices in Scotland also fell by 1.3%, while in Wales, prices rose only slightly, by 0.3%.

The ONS states that summer is usually an active time in the property market and if the figures are seasonally adjusted, the monthly pace of house price growth is 0.8%, not 2%.

Chief Executive of housing charity Shelter, Campbell Robb, says: “Not addressing our dramatic shortage of homes is pushing house prices higher and higher, and a stable home further out of reach for millions of young people and families.

“Instead, they’re trapped in expensive and insecure private renting, or stuck in childhood bedrooms.”1


Surprise Rise in House Prices, Says Halifax

Published On: September 10, 2015 at 1:34 pm


Categories: Finance News

Tags: ,,,

House prices rose by 2.7% in August, the highest monthly increase since May 2014, according to the Halifax.

This surprise growth contributed to a 3% rise over three months and annual house price inflation of 9%. Halifax also reports that the average property price is now £204,674.

Housing Economist at the Halifax, Martin Ellis, says: “The shortage of second-hand properties for sale on the market is resulting in upward pressure on house prices.

Surprise Rise in House Prices, Says Halifax

Surprise Rise in House Prices, Says Halifax

“At the same time, economic recovery, real earnings growth and very low mortgage rates are supporting housing demand.”1

The data for August has surprised some analysts, causing the second group of leading economists in a week to change their house price predictions for 2015 onwards.

Chief Economist at IHS Global Insight, Howard Archer, called Halifax’s August figure a “real eye opener”, especially when compared to Nationwide’s statistics, which recently indicated that house prices increased by a smaller 0.3% in August.

Contrasting to the Halifax, Nationwide’s data indicates that the annual rate of house price growth was the weakest for two years in August.

IHS Global Insight has now revised its forecast on house price growth for 2015, raising it from 6% to 7%.

Archer explains: “Latest data and survey evidence largely indicate that housing market activity is on the up, and we suspect it will be supported over the coming months by largely helpful fundamentals, notably including stronger earnings growth, high employment, elevated consumer confidence and still very low mortgage interest rates.”1

The Royal Institution of Chartered Surveyors (RICS) also revealed that it has changed its UK house prices prediction, expecting prices at the end of the year to be 6% higher than at the start. Entering 2015, RICS forecast a 3% increase.

Chief Economist at RICS, Simon Rubinsohn, says: “House price inflation has now quickened in each of the last seven months following a sustained period of easing towards the latter half of 2014.

“And there is good reason for this trend to be sustained into 2016.”1


House Price Growth in All Regions, Reports RICS

Published On: September 10, 2015 at 11:33 am


Categories: Finance News

Tags: ,,,

House prices are rising in every region of the country, reports the Royal Institution of Chartered Surveyors (RICS), with the trend set to continue.

The RICS monthly residential market survey also found that new buyer enquiries grew for the fifth consecutive month in August.

It adds that after a “sustained period of easing” towards the end of 2014, house price growth has now quickened consistently for the past seven months.

The strongest growth was experienced in East Anglia, Northern Ireland and Yorkshire and the Humber. However, the report adds: “The vast majority of areas are seeing a sizeable increase in values.”

House Price Growth in All Regions, Reports RICS

House Price Growth in All Regions, Reports RICS

Terry Brannen, of Brannen & Partners in Newcastle, reported to the RICS: “Strong sales figures for this time of year proves confidence is still present in the marketplace.”1

Alex McNeil, of Bramleys in Huddersfield, claimed: “Market activity has been maintained during the summer months with stock levels gradually dwindling. The sustained demand has been a recipe for capital growth.”1

The study says that once again, house price inflation is the result of the lasting trend of declining new sales instructions and increasing buyer demand. It predicts that prices will rise by 6% over the rest of the year.

Chris Beeby, of Bletsoes estate agent in Thrapston, Northamptonshire, told the RICS: “A real lack of fresh instructions still stifling the market. Looking forward to the end of the holiday season and hoping for a good autumn market.”1 

New vendor listings dropped for the seventh month in a row, although the rate of that decrease seems to be falling moderately.

This means that there has not been a marked rise in monthly new instruction levels since mid-2013, causing average stock levels to drop to record lows.

The study found that regional sales varied significantly.

The West Midlands, the North of England and the South West all reported solid growth, however, East Anglia and the North West saw a drop in sales volumes.

In the future, the RICS expects to see “significant sales growth”1 in all parts of the UK over the next 12 months, with the estimate looking particularly strong for Wales and Scotland.

In the lettings sector, the RICS found that tenant demand grew for the eighth consecutive month. As a consequence, rents are expected to increase in the near future. It adds that over the next five years, UK-wide rents are forecast to rise by 4.5% per year.

Jeremy Fisher, from The Frost Partnership in Beaconsfield, says: “Beaconsfield is seeing an upturn in both tenant and landlord activity with the quality of both very good.”1

Separately, the latest e.surv Mortgage Monitor revealed that there were 69,220 house purchase approvals in August, up by 9.3% annually.

There was also a 0.7% increase in purchases compared to July this year and 12,000 small deposit mortgages were approved – a post-recession record.