Posts with tag: Nationwide

Property industry reacts to latest Nationwide House Price Index

The latest House Price Index from Nationwide reports an annual increase of 12.6% in February. This is up from 11.2% in January.

Month-on-month, prices are up 1.7%, with the average house price exceeding £260,000.

Michael Bruce, CEO and Founder of Boomin, comments: “We’re riding a wave of house price growth at present, driven by a market that is experiencing very high demand for homes that just simply aren’t available. It’s only natural that this wave will start to lose ferocity at some point, but there’s certainly no signs of that happening just yet, despite a squeeze on the cost of living and a double-digit increase in interest rates.”

Jonathan Samuels, CEO of Octane Capital, comments: “Although two consecutive increases in interest rates is always going to be food for thought for the nation’s home buyers, what we’re currently seeing is consideration, not concern.

“While some may have marginally adjusted the sums they are committing to borrowing, the sheer volume of new buyers entering the market remains very high and this is enough to keep house prices buoyant for some time to come.”

Marc von Grundherr, Director of Benham and Reeves, comments: “There’s arguably never been a better time to be a homeowner as, despite all that’s been thrown at it, the UK property market continues to go from strength to strength. This performance really is quite alarming when you consider the wider economic turmoil that we’ve faced for some years now and it proves that there really is no safer investment than bricks and mortar.

“Even across London where market conditions have remained far more muted, values have continued to climb and the capital’s property market is now poised to enjoy an accelerated rate of growth over the coming year.”

Chris Hodgkinson, Managing Director of HBB Solutions, comments: “Although top line market statistics paint a very positive picture, it’s important to remember that the UK property market is extremely fragmented in its nature. The key to a successful sale is understanding your own local market landscape, the demand for homes and pricing in accordance with these factors. 

“Failure to do so and pricing too high will only see your home suffer from a severe lack of interest, a protracted period of time spent on the market and a higher chance of turbulence further down the transaction timeline.” 

James Forrester, Managing Director of Barrows and Forrester, comments: “Yet another increase in property values demonstrates the current strength of the UK property market and the deafening silence coming from the usual band of property market naysayers is no better testament to this overall health. 

“Despite many prophesying the end of the market due to Brexit, the pandemic and the end of the stamp duty holiday, amongst other things, we’re yet to see a chink appear in the armour of what is perhaps the most defiant and dependable property market in the world.”

Average UK house price hits quarter of million pounds in Nationwide report

The average house price in the UK was recorded as £250,311 for October 2021 in Nationwide’s latest House Price Index.

The report states that annual house price growth remained elevated at 9.9%, prices were up 0.7% month-on-month, and the average property price was up by more than £30k since the pandemic struck.

Nicholas Christofi, Managing Director of Sirius Property Finance, comments: “As is often the case in the mortgage space, what comes down must eventually go up again and we may well start to see mortgage rates creep up over the remainder of the year.

“This may be a scary thought for a generation of homeowners and buyers who have only even experienced record low rates and mortgage affordability for over a decade now and we could see the current rate of house price growth slow as many take a more conservative approach to borrowing.

“But this is no cause for panic, mortgage rates ebb and flow and while there may be an increase, this is not a return to the 1990s. Mortgage rates will remain near to historic lows and regulations have dictated for some time that new borrowers are ‘stretch tested’ before being granted a loan to avoid any financial turmoil.”

Marc von Grundherr, Director of Benham and Reeves, comments: “The first look at a post Stamp Duty holiday market suggests that the tapered deadline has helped to negate any market collapse. That and the continued high demand for housing, of course.

“Any signs of a winter freeze look unlikely and with homebuyers continuing to enter the market at mass, market activity will remain high right through until next year.

“We’re now starting to see the London market build a serious head of steam and as the capital starts to find its previous form, this will only impact topline market performance positively.”

James Forrester, Managing Director of Barrows and Forrester, comments: “Any market uncertainty that may currently remain is merely a drop in the ocean compared to the last 18 months and so the chances of a house price decline this side of Christmas are slim, to say the least.

“We’re still seeing an incredibly high level of market activity despite the end of the Stamp Duty holiday and while there are murmurs of an increase in interest rates, this is unlikely to deter the average homebuyer who will continue to benefit from a very favourable cost of borrowing.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, says: “The market remains solid because there are still plenty of reasons to buy now rather than wait. 

“We may be a month on from the end of the Stamp Duty tax break but a near-certain string of interest rate rises over the next 18 months is proving to be a far more powerful motivation to transact than the Stamp Duty holiday ever was. 

“Concerns over rising inflation have eclipsed the handout as a key driver of demand and you don’t have to be a genius to figure out that locking in an attractive 10-year mortgage rate now may be the best financial decision you ever make. First-time buyers are particularly eager to do so. Having only ever known rock-bottom interest rates, there’s a little fear of the unknown incentivising them to act quickly now.

“Buyers are also always reluctant to hold out for a softening in prices that may never appear and that’s shining through in behaviour on the doorstep at the moment. The old investment adage still holds true. It’s time in the market, not timing the market that matters over the long run.

“Waiting for prices to dip 5% means you may be waiting for a day that never arrives. That applies nationally, let alone in London where price growth has been more subdued since the start of the pandemic. Buyers would be foolish to try it in the capital against a backdrop of an overhyped exodus that now looks more like an extended holiday for many than a migration.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “It was business as usual for the property market in October, with the ending of the Stamp Duty holiday having little obvious effect.

“It’s telling that mortgage applications in September were higher than the same time two years ago, indicating that buyers are still keen to move. 

“The growth in prices is driven by the demand for housing, coupled with a shortage of stock on the market. That is unlikely to change soon, although there may be some slowdown in activity as we go deeper into winter.

“Months of continued house price growth mean the average family home now costs a quarter of a million pounds. In November 2011, the average house cost £167,757, meaning that prices have risen by half in ten years.

“While the labour market remains strong, most families will feel secure enough to take on a mortgage, although any future interest rate rise could deter people.

“We’re expecting a busy time in the lead up to Christmas, which is traditionally a hectic period for estate agents, as prospective buyers hope to move into their new home in time for the festivities.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “Finally, we are getting our first glimpse of what the housing market might look like now the Stamp Duty holiday has ended.

“Momentum remains almost unchanged despite many predicting more subdued growth and an end to the giant spikes witnessed earlier in the year.

“What is clear is that the appetite among buyers remains as strong as ever and so far the expiry of the Stamp Duty holiday has had no visible impact on demand.

“Tomorrow the Bank of England’s Monetary Policy Committee takes centre stage as the country braces itself for its first interest rate hike since 2007.

“The boom was powered in part by record low borrowing costs as well as the Chancellor’s tax incentives but already we are seeing high street lenders bump up their rates in anticipation of a Bank of England hike, something which may cause house price growth to dampen.

“Most expect interest rate rises to be incremental so as not to choke off economic recovery, and it may well present opportunities for buyers looking to negotiate on price.

“The dynamics of the housing market may be about to shift slowly once again, but make no mistake, the boom still isn’t over.”

Jonathan Hopper, CEO of Garrington Property Finders, comments: “A boom that many predicted would burn itself out is still in full flow despite the end of the Stamp Duty holiday.

“While on the front line we’re seeing some asking prices being reduced as the market begins to normalise, monthly price growth in October actually accelerated, doing the exact opposite of what might have been expected after the end of the Chancellor’s tax incentives.

“The white heat of price inflation seen for much of this year is still creating sleepless nights in Threadneedle St.

“Money markets are increasingly bringing forward their predictions of rate rises but even if a string of small adjustments do happen, loss of price momentum is likely to still be gradual. In most areas it will be a case of things ‘calming down’ rather than ‘going down’.

“There are still thousands of would-be buyers and the market remains broadly in good health but an increasing number of house hunters are starting to find they have the will, if not quite the way, to buy.

“The chronic shortage of homes for sale is the most obvious problem. But with average house prices hitting ten times average earnings in hotspots like Oxford, Cambridge and Bristol, first-time buyers are seeing their affordability stretched to breaking point. And with mortgage rates starting to creep up, some buyers are pausing for thought – and this is forcing sellers to recalibrate.”

Annual house price growth slowed in September, Nationwide reports

Published On: October 1, 2021 at 8:11 am


Categories: Property News

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The first Autumn House Price Index from Nationwide in 2021 shows annual growth slowed in September but remains in double digits.

The highlights of Nationwide’s latest report include:

  • Annual house price growth slowed to 10.0%, from 11.0% in August
  • Prices only changed slightly month-on-month, after taking account of seasonal factors
  • Wales and Northern Ireland were the strongest performing regions in Q3, and London was the weakest

Iain McKenzie, CEO of The Guild of Property Professionals, comments: “Autumn is traditionally a time that estate agents see a rush to buy as buyers try to get settled in a new home ahead of the festive season.

“It offers hope to buyers that we are seeing a slower pace in house price growth compared to last month, but the annual rise is still staggering compared to last year, when there were more financial incentives available.

“London still remains the area with the slowest growth, perhaps owing to the city already priced out of reach for many first-time-buyers, as well as a smaller demand to buy. That could change though in the coming months, as we reach the tail end of the pandemic and workers and foreign investment return to the capital.

“Much of the growth we see around the country though is largely driven by a shortage of stock, as many estate agents are still trying to entice homeowners to sell.

“If you are looking to sell, now is still a good time to put your home on the market, with some of our members seeing instances of houses being both listed and sold on the same day.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, says: “The market is turning a corner and the froth has come off. It is certain that the rally will dip below the 10% annual growth threshold as we head further into winter.

“London continues to look relatively unenergetic compared to the rest of the country, even slowing significantly on a quarterly basis, but those high valuations in the capital continue to make wider comparisons unhelpful.

“A reality check was probably needed nationwide, and it’s London that is probably more ready to take its medicine. Vendors in the capital have been forced to compose themselves over the past month and more sensible asking prices will ultimately help to underpin demand and transaction levels as we move into 2022.

“The air was sucked out of the room in September for those sellers who’d come to market thinking they call the shots. Only around one in ten properties is now achieving agreed sale prices that could be described as sitting at the optimistic end of the range, despite that being a common occurrence only a couple of months ago.

“Property is still in short supply but that factor no longer appears capable of producing a bubbly market. Chancing your arm with a 10% premium at listing is no longer a sensible strategy. Stories we heard of people queuing up outside estate agents during the mini-boom so they could be first in the door are now a distant memory.

“Any vendor chasing a golden ticket is quickly realising they need to be realistic if they actually want to transact. It’s in environments like this, as the market puts its serious face back on, that more agents start turning away instructions in greater numbers. Greedy owners of homes that don’t sell are a serious waste of agents’ time and resources.

“While this game that over-excited vendors play with asking prices is fading, average agreed sales prices are still not falling. Buyers wanting to flip their lifestyles with a move to a new and different home are still coming through because not everyone felt they needed to act immediately.

“There are still plenty of people registering to buy and they still have the same motivation to move that they did six months ago.”

Karthik Srivats, co-founder of mortgage lender Ahauz, says: “The house price rally has clung onto double-digit growth but it is slowing. First-time buyers will be paying particular attention to the much softer monthly performance, which shows house price growth at a virtual standstill in September despite a sturdy 2% advance in August.

“This will come as a relief for first-time buyers who have been caught totally by surprise over the past year as the market has taken off. They’ve seen their budgets hammered in real terms and, while they’ve been helped by low rates and government support over the past year, gains in property values across the country have more than outweighed that leg up.

“With the ratio between take-home pay and house prices stretching at the seams in most UK regions, it’s unlikely that first-time buyers will see their buying power restored any time soon.

“There is still just so much demand, and so little stock, that any potential decrease in house prices might never come to pass with inflation pressures stealing more headlines by the day. All they can hope for is to have more disposable income, but with the gas bills that we are likely to face this winter, even that might be a wish too far.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “The market has been running white hot for most of the year, and that remains the case as we enter the autumn.

“The slowdown in annual growth is so modest it barely registers and, looking ahead we expect the impact of the stamp duty holiday ending to be muted.

“While exuberant spending may soften if the economic outlook becomes more uncertain, the housing market, with its dual function of necessity and investment for most households, shows no signs of vulnerability. Underlying factors suggest annual house price growth will remain solid into next year.

“A desire for more space with greater amenities has become a necessity for many families and first-time buyers are more anxious than ever to get a foot on the ladder.

“Record low interest rates, an imbalance in supply and demand, and government incentives should ensure the market remains buoyant.”

Average UK house price hits almost £250k in August, Nationwide figures show

Published On: September 2, 2021 at 8:06 am


Categories: Property News

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The latest House Price Index from Nationwide shows that annual house prices increased to 11% August.

Prices are up 2.1% month-on-month, which is the second largest gain in 15 years, the report states.

The average house price during August was £248,857.

Robert Gardner, Nationwide’s Chief Economist, comments on these figures: “Annual house price growth increased to 11% in August, from 10.5% in July. Prices rose 2.1% in month-on-month terms, after taking account of seasonal effects. House prices are now around 13% higher than when the pandemic began.

“The bounce back in August is surprising because it seemed more likely that the tapering of Stamp Duty relief in England at the end of June would take some of the heat out of the market. Moreover, the monthly price increase was substantial – at 2.1%, it was the second largest monthly gain in 15 years (after the 2.3% monthly rise recorded in April this year).

“The strength may reflect strong demand from those buying a property priced between £125,000 and £250,000 who are looking to take advantage of the Stamp Duty relief in place until the end of September, though the maximum savings are substantially lower (£2,500 compared to a maximum saving of £15,000 on a property valued at £500,000 before the Stamp Duty relief in England tapered). 

“Lack of supply is also likely to be a key factor behind August’s price increase, with estate agents reporting low numbers of properties on their books.

Iain McKenzie, CEO of The Guild of Property Professionals, comments: “The remorseless rise of house prices continued through August, with the value of the average home now nudging a quarter of a million pounds.

“Even the scaling back of the Stamp Duty holiday hasn’t put the dampers on the demand we are seeing for property across the country.

“First-time buyers with a deposit in the bank are itching to get their foot on the ladder and incentives such as the extended Help to Buy scheme and the 95% government guarantee mortgages are making it all the more appealing to buy now. 

“The main obstacle to intended buyers is the lack of properties on the market, and that lack of supply is likely to keep prices moving upwards in the short term.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “It turns out that, for all the posturing, the Stamp Duty discount wasn’t doing any of the pushing after all.

“This is a timely lesson that it’s the fundamentals of the market that are all-powerful still. Sunak’s generous state handout has turned out to be more a demonstration of misdirection than crisis management.

“The market didn’t need his money and, with hundreds of billions tucked away in accidental savings, Britons are continuing to satisfy a deep-seated determination to move after a traumatic 18 months.

“First-time buyers have had their patience sorely tested and are now being pulled back into the frenzy in increasing numbers. Where, once, most of them would have bet on the market cooling and giving them a chance to seek better value, fears that rising inflation will put a protective arm around this bull run are cutting down those numbers. This readout for August has relegated a strategy of ‘wait-and-see’ to wishful thinking.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “This latest spike is stunning given that most analysts expected prices to decelerate as the Stamp Duty holiday entered its final throes going into the autumn.

“Those forecasts have now all proved wrong, and after a bumper summer which featured record borrowing, growth in Britain’s housing market still shows no sign of dampening.

“While the Stamp Duty holiday savings on big homes is quickly vanishing, a greater proportion of market activity is now in the mass market sector, buoyed by the resurgence of buy-to-let investing and first-time buyers.

“It is these sectors that continue to power double digit growth across the country.

“Based on this latest data, the market may well be running red-hot for some time to come, fuelled by low cost of borrowing, shrinking housing supply and government incentive schemes for first time buyers.

“The boom goes on.”

UK renters could be pushed into poverty by government benefit cuts

A joint statement warning about the impact the UK Government’s benefit cuts could have on renters has been released this week.

The Big Issue Ride Out Recession Alliance, Crisis, The Mortgage Works, Nationwide Building Society, the National Residential Landlords Association (NRLA), Propertymark, StepChange Debt Charity, and Shelter have together released this statement:

The UK Government must complete and publish a full assessment of the impact on renters of their decisions to freeze Local Housing Allowance and cut Universal Credit, which risk pushing many households into poverty, problem debt, and homelessness.

In the wake of the pandemic, we saw bold and swift action from the Government to prevent a housing debt crisis including restoring Local Housing Allowance rates to the 30th percentile of market rents and increasing the Universal Credit Personal Allowance.

With the economic impact of the pandemic increasing the financial strain on families, across the country the number of private rented households in receipt of the housing element of Universal Credit increased by 107% between February 2020 and February 2021. Over 55% of these households have a shortfall between the housing support they receive and the rent they have to pay. 

The UK Government has confirmed that where such shortfalls exist, the median amount is £100 a month. This points to a need for continued support for families and individuals to cover the cost of rents. Yet since April this year, Local Housing Allowance has been frozen in cash terms, and later this year, Universal Credit will be cut by £20 a week. 

Whilst the Institute for Fiscal Studies has described changes to Local Housing Allowance as “arbitrary and unfair” we have seen no assessment from the UK Government of the impact either of these policies will have on the capacity of recipients to cover rent payments. 

As organisations representing landlords, letting agents, tenants, people facing homelessness, and debt advice services, we are united in calling on the UK Government to complete and publish a full assessment of the impact of both of these policies on the ability of renters to meet their housing costs.

We believe that the UK Government should reverse its decisions to cut Universal Credit and to freeze Local Housing Allowance. To apply policies like these without doing any meaningful impact assessment is, we argue, lacking the necessary foresight and consideration of the impact they will have on people’s security of tenure and well-being and for many will threaten their chance of recovery.

Annual house price growth remains in double digits but down month-on-month

House price growth in the UK is slowing down, but currently remains in double digits, according to the latest Nationwide House Price Index.

The July report on UK house prices from Nationwide states the following highlights:

  • Annual house price growth remained in double digits, but fell back to 10.5%
  • Prices are down 0.5% month-on-month
  • The average house price is now £244,229

Robert Gardner, Nationwide’s Chief Economist, comments within the report: “Annual house price growth slowed to 10.5% in July, from the 17-year high of 13.4% recorded the previous month. In month-on-month terms, house prices fell by 0.5%, after taking account of seasonal effects, following a 0.7% rise in June.

“The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6% a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.

“The tapering of Stamp Duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June (it will revert to £125,000 at the end of September). This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties. For those purchasing a property above £250,000, the maximum Stamp Duty saving reduced from £15,000 to £2,500 after the end of June.”

Colby Short, Founder and CEO of, comments: “It’s probably fair to say that while an extension was welcomed, the Stamp Duty holiday is starting to linger over the market like a bad smell.

“For the vast majority, the intended benefit has now been nullified thanks to the huge rates of house price growth seen since launch. With the long delays that have also ensued as a result of such unprecedented levels of buyer demand, it’s arguably never been less appealing to embark on the archaic process of buying a home.

“Despite this, homebuyers have, and will, continue to flock to the market in order to realise their dream of homeownership and this will help maintain the upward price trends seen of late.”

James Forrester, Managing Director of Barrows and Forrester, comments: “The recent heatwave may have subsided but the property market is still running red hot and, despite the odd month to month wobble, we continue to see double-digit annual growth which is a phenomenal rate to have been sustained so consistently.

Marc von Grundherr, Director of Benham and Reeves, comments: “Even the apocalyptic wet weather seen over the weekend can’t dampen the UK housing market, with yet more strong upward movement despite the impending expiry of the Stamp Duty holiday.

“Even in London where the rate of house price growth has been less pronounced than the rest of the UK, homes are selling at a rate of knots and homesellers are achieving a far higher percentage of asking price than they were just a few short months ago.”

Ben Taylor, CEO of Keller Williams UK, comments: “A severe shortage of housing stock, the low cost of borrowing and a high level of buyer confidence are the perfect ingredients to maintain what has been a pretty impressive run of house price appreciation.

“The widespread talks of a market cliff edge once the Stamp Duty holiday ends have now turned to hushed whispers and while record rates of growth will inevitably lead to some monthly ups and downs, the long-term health of the UK property market is looking very good at present.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “House prices took a small pause from their breathless race to new heights this month, but there was no sign of a serious slowdown due to the winding down of the Stamp Duty holiday.

“Demand is still strong and, while there has been a slight adjustment in some areas, house prices are still way above the average figures we’ve seen in recent years.

“Let’s not forget as well that prospective buyers looking at properties under £250,000 are still eligible for the break in Stamp Duty and it’s likely that prices will remain high in those areas until the scheme ends.

“Buyers are still desperate to get their hands on those elusive detached family homes away from the big cities, and prices will keep being pushed up while supply lags behind.

“It’s going to be interesting to see how the demand for properties changes as we come into the autumn. This will give us the opportunity to evaluate just how successful the Stamp Duty holiday has been at keeping the property market buoyant since the start of the pandemic.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “Annual house price growth remains at a gallop though it has moderated slightly from last month’s exceptional spike.

“While the Chancellor’s tax incentives have begun to taper, a pronounced dip in housing stock means that demand continues to outweigh supply, and this imbalance should continue for some time to come.

“Going forward, the market will remain buoyant though the dynamics are already starting to shift.

“While the clamour in recent times has been for bigger properties with more outdoor space, we may see luxury apartments start to come back into vogue as the drift back to the office starts to gather pace in the big cities.

“In addition, we are still awaiting the return of international buyers which we expect to happen in the autumn, something that should prove a huge boost for Prime London which has been sluggish of late.

“In the meantime, first-time buyers finally have grounds for greater optimism as they continue to pay no Stamp Duty on properties less than £300,000 while others are now paying much more. This means the balance may finally be shifting back in their favour when bidding on more modestly priced homes, particularly with the added firepower of first-time buyers mortgages behind them.”

Lucy Pendleton, property expert at independent estate agent James Pendleton, comments: “The market’s minor monthly dip shows it was unmoved by the end of the most generous Stamp Duty discounts. Annual growth is roughly back to where it was in May, as prices continue to be pinned to the ceiling by a shortage of property hitting agents’ windows.

“This isn’t a market that agents or the public want to see because this absence of abodes is pushing the market into a doom loop of thinning supply. People are holding off selling their home because they lack all faith they will be able to find something they want to buy, therefore restricting the number of homes available even further.

“This dynamic supports prices but it can’t continue forever. Eventually this paucity of property will prove the trigger for a change of direction, partly because it lends more weight to the activity of first-time buyers who have tighter price pressures than those moving home higher up the chain.

“This tension will have to be released and could spell a rather unusual climax to the bull run, neatly reflecting its unusual beginnings last summer. We’ll look back on this period as one that completely defies the usual rules but basic economics will always win out in the end. Affordability pressures will eventually force the market into a reality check but first-time buyer support and low interest rates should prevent the boom from unwinding too rapidly.”