Posts with tag: The Guild of Property Professionals

Latest government UK House Price Index shows growth continues

Published On: July 16, 2021 at 10:18 am

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Treasury loses £1.5 billion since hike in rented housing tax

The latest government UK House Price Index has been released, showing that house prices have increased by 10% in the year to May 2021.

The average price of a UK property during May was £254,624 and there was a monthly price change of 0.9%, the report states.

Marc von Grundherr, Director of Benham and Reeves, comments: “It’s clear that the extension of the Stamp Duty holiday caused the market to rebound immediately from the decline in market performance seen as a result of the original deadline. 

“Of course, it’s simply irresponsible to measure the health of the market based on a metric as erratic as the monthly rate of house price growth and anyone who seeks to do so would do well to retire their crystal ball to the cupboard from which it came. 

“The real proof in the pudding is the extremely strong performance seen on an annual basis and one that continues to defy expectation despite fears the market could soon run out of steam. 

“While London continues to trail the rest of the market in this respect, we’re beginning to see the cogs start to turn, driven by a return to the workplace and pre-emptive demand from foreign buyers in anticipation of a move later in the year. As a result, the London property market will continue to build momentum long after the carrot of a Stamp Duty reprieve has been removed.”

James Forrester, Managing Director of Barrows and Forrester, comments: “The property market continues to move forward at an alarming pace, powered by a full tank of buyer demand and a shortage of housing stock to satisfy this hunger for homeownership. While the end of the Stamp Duty holiday may well act as a slight bump in the road, it will take far more than a marginal decline in homebuyer sentiment to cause the wheels to fall off.”

Matthew Cooper, Founder & Managing Director of Yes Homebuyers, comments: “It’s abundantly clear that the market came to a shuddering halt due to the original Stamp Duty deadline and while we may now see transactions and house price growth yo-yo due to the double-pronged extension, there’s no hiding the fact that a correction is on its way.

“While the government may claim they have successfully kept the market afloat during the pandemic, the reality couldn’t be more different. House price affordability has spiralled and is now even further out of reach for the average homebuyer. Those lucky enough to secure a purchase remain bogged down in lengthy market delays and rather than build more homes, the government continues to feed the furnace to keep property values artificially inflated.

“It’s a real mess and one that will take some time to clean up once it does inevitably hit the fan.”

Ged McPartlin, Managing Director of Ascend Properties, comments: “House prices continue to boom, with the North West sitting on pole and driving market performance in this respect.

“It’s clear that the north-south divide has never been wider and while this momentous rate of price growth must inevitably slow at some point, we expect this vast difference in property pedigree to remain as buyers in the North continue to benefit from a far more affordable market, with, or without the benefit of a Stamp Duty saving.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, says: “The latest UK HPI figures reflect sales that completed in May when buyers were still enjoying the full Stamp Duty holiday. At that time, the atmosphere was frenzied as buyers sprinted to complete sales before the end of June.

“Price growth has cooled a little since the deadline has passed, but the cliff-edge scenario many were predicting hasn’t played out. Prices haven’t collapsed, very few transactions have fallen through and we are seeing a healthy level of new instructions.

“This can be attributed to a number of factors. The race for space in many areas of the country hasn’t abated and demand remains at levels we were seeing several months ago.

“There’s still a lack of good quality stock coming onto the market, which means buyers are less worried about missing out on the full tax benefit as they are on a particular property. If anything, it’s a minor inconvenience for buyers, and not critical enough to derail transactions.

“The Stamp Duty break tapering off, rather than being cut off immediately at the end of June, has also avoided the prospect of a wave of transactions collapsing near the finishing line.

“Buyers don’t feel under pressure to complete and sellers feel more comfortable about listing knowing transactions aren’t likely to fail, and I don’t see that changing even as we approach the end of September, when the tapered relief ends.

“We are also expecting to see a buoyant market over the summer, when typically, activity drops off. With the majority of families holidaying at home this year, and many choosing to delay their holidays, more people will take this opportunity to push through house sales and purchases.

“London may have seen the slowest growth of any area over the past year, but there are also positive signs it’s finally waking from its slumber, as more restrictions have been lifted.

“And while the legacy of the pandemic is likely to see many businesses adopting flexible working policies, and fewer people having to commute into work full-time, the bright lights of the big city, and what it has to offer, still has a tremendous appeal.

“As soon as the Capital opens fully again, we are confident the property market will burst back into life.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “All good things must come to an end, and these figures capture the final frenzy to make the most of Government incentives to buy in the month before the Stamp Duty holiday began to be scaled back.

“However, several indicators show the enthusiasm is still thrumming through the property market, with mortgage approvals higher in May than they were in April.

“London has seen the slowest growth in house prices, partly owing to an already inflated market and large numbers of people who have moved out of the capital during the pandemic.

“Meanwhile, the North West has seen the largest jump in house prices as home-movers look for more space and value for money.

“There could be some fluctuation in the months ahead, but we are still anticipating prices to remain high. Lifestyle changes mean high demand will outlast the final closure of the Stamp Duty holiday at the beginning of October.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “The housing market has been running much hotter and faster than anyone expected, and despite a slight softening last month, today’s data shows there’s plenty of momentum still left.

“Low borrowing costs, reduced supply and an insatiable demand for bigger homes has spurred bidding wars and a spike in house values across the country.

“And while we may see growth start to decelerate slightly later in the year as the Stamp Duty holiday is phased out, the dizzying boom we are currently enjoying shows no sign of dipping.

“The remainder of the summer promises more breath-taking annual gains, with price growth in the North West continuing to set the pace.

“While the Stamp Duty holiday helped power the rally, momentum is now so strong that a phased return to full rates shouldn’t signal the beginning of a slump.

“And though growth in London remains the lowest in the country, it too is starting to pick up steam.

“Expect the tail of this boom to go on and on.”

UK house price growth continues, as Nationwide publishes June House Price Index

Published On: June 30, 2021 at 8:18 am

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

The June 2021 House Price Index from Nationwide states that annual house price growth has now increased above 13%, with all UK regions recording a pickup in Q2.

The highlights of the report include:

  • Annual house price growth has increased to 13.4%, the highest level since November 2004
  • Prices are up 0.7% month-on-month, after taking account of seasonal factors
  • Northern Ireland has seen the strongest growth in Q2, Scotland the weakest, closely followed by London

Colby Short, Founder and CEO of GetAgent.co.uk, commented: “Properties are going under offer at an alarming pace at the moment and buyers continue to swarm the market despite the dwindling hopes of a Stamp Duty reprieve. There also remains a severe shortage of stock to meet this demand and so sellers are achieving a very good price for their property, often at, or in excess of the original asking price. 

“While a reduction in buyer demand is expected towards the back end of this year, the scales will remain firmly tipped in favour of sellers due to the imbalance between supply and demand and so we should see a buoyant level of property price appreciation remain for the duration of the year.”

Marc von Grundherr, Director of Benham and Reeves, commented: “We’re currently seeing huge rates of house price growth not seen since some time before the last property market crash. There’s no end in sight where this current market performance is concerned, despite some having predicted a market slump on and off since the pandemic first started.

“It’s important to remember that while the market did show signs of slowing down as we approached the original Stamp Duty deadline, we’re now looking at a very different market altogether.

“People are returning to work and life is gradually returning to a greater sense of normality and so the stimulation of a Stamp Duty saving is no longer required in order to maintain market activity.

“London, in particular, is showing strong signs of a shift in momentum across both the rentals and sales market. This is being driven by a realisation that we can’t work from a secluded countryside bolthole forever and now that we are returning to the workplace, a lengthy commute on a stuffy train is no longer as manageable when it’s required five days a week instead of one or two.”

James Forrester, Managing Director of Barrows and Forrester, commented: “The Stamp Duty holiday isn’t the be-all and end-all where homeownership is concerned and it certainly isn’t the primary factor causing buyers to enter the market at mass. So its tapered expiry is unlikely to cause current levels of market activity to evaporate overnight. 

“Once both the initial and extended deadlines have expired, the fires of buyer demand will continue to be stoked by the availability of 95% mortgage products and very low interest rates. Of course, there will be some period of natural market realignment after such a sustained period of manic activity, but we’re worlds away from seeing a property market crash.”

Matthew Cooper, Founder & Managing Director of Yes Homebuyers, commented: “It’s crunch time for the UK market and we can expect to see a far less positive outlook from here on out where house price appreciation is concerned.

“For far too long, homebuyers have been borrowing beyond their means and offering above the odds in a desperate scramble to secure a Stamp Duty holiday saving. Now that this is starting to slip through their fingers we will see a reduction in transaction levels and the inevitable decline in property prices that will soon follow.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “The market has greeted a largely tax break-free world with an air of indifference that is bordering on animal spirits. 

“The right properties are still selling very fast and there’s still not enough of them to meet demand. Stock levels are down while transactions are relatively high. This imbalanced cocktail is not just keeping prices where they are, it’s driving them on to ever dizzying heights. The result is that the average house price has surged £29,000 in 12 months which is a boon for consumer confidence among homeowners and a staggering rise. 

“If the market was the slightest bit dependent on the Stamp Duty relief, a yawning gap would have opened up in the performance of the market over the past quarter but that chasm is entirely absent. The near-complete raising of the Chancellor’s drawbridge already feels like a distant memory.

“Even in London, which has been trailing the performance of the country at large recently, growth has jumped this quarter despite prices being significantly higher. The capital has shrugged off the withdrawal of Stamp Duty relief as confidence from buyers, who can almost smell the end of Covid restrictions, finally sense a return to normality. There’s a sense that this is now giving people the opportunity to make a longer-term commitment to the capital which is helping sales across all property types.

“As restrictions are eased, the only way is up for London which may not feel the chill of an expected autumn slowdown in quite the same way as the rest of the country.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “As the nation bites its fingernails ahead of England versus Germany, take solace in one battle with a predictable result – the relentless growth of the housing market.

“With only days to go until the deadline to take advantage of the Stamp Duty holiday in full, the market is seeing a last-minute scramble to complete sales.

“The 13% price rise compared to last June – the highest since 2004 – looks impressive, but it’s important to remember that this time last year the market was mired in lockdown.

“More noteworthy is the three consecutive months of price rises, and a sign of underlying consumer confidence and strength of the housing market. 

“All parts of the UK have seen house prices increase, but the good news for many is that mortgage payments remain stable and affordable.”

David Westgate, group chief executive, Andrews Property Group, comments: “Buyers trying to take advantage of the extended Stamp Duty holiday and the race for more space are pushing house prices into the stratosphere.

“It’s starting to feel like prices are freewheeling with buyers snapping up properties, particularly those with generous outside space, as soon as they come onto the market.

“The end of the full Stamp Duty holiday tomorrow may see activity cool a little, but not significantly, as there are plenty of buyers who still have time and the motivation to complete before the tapered relief ends on 30th September.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “The housing market continues to see an unconstrained rally which may well be going into overdrive as the economy continues to unlock.

“Annual house price growth of this magnitude is something no one thought they’d see, particularly with the Stamp Duty holiday now tapering out.

“Despite that additional cost to buyers, this remains a relatively frenzied market and desirable properties are not staying on the shelf for very long.

“The market is shifting away from short term factors to long term trends caused by the pandemic, which at first were totally underestimated in their influence and staying power.

“If the hunger for larger properties represents a permanent shift, and never reverts to its pre-pandemic norms, then a much-heralded snapping back of prices is going to prove rather elusive later this year.

“The final closure of the Stamp Duty scheme at the end of September may have no impact at all because other factors are so much more important, namely the race for space, low supply, accidental savings and low interest rates.

“London, too, shows signs it may finally be emerging from its slumber, and all eyes will be on the bright lights of the capital as offices and workspaces continue to re-open.”

House prices hit another record high in latest Halifax House Price Index

Published On: June 8, 2021 at 8:01 am

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Average UK house price rises again, Halifax House Price Index reports

The May 2021 House Price Index from Halifax reports that UK property prices continue to rise in 2021 as we head into the summer.

The highlights from the Halifax report include:

  • Annual house price inflation is now at its strongest level in nearly seven years
  • The average UK property price is £261,743, which is a new record high
  • Wales continues to be the region with the strongest price growth

Nationwide’s May House Price Index also reports house price growth is at the highest level in almost seven years.

George Franks, co-founder of London-based estate agents Radstock Property, comments: “May was a month of two halves. The first half was extremely busy as there was still a chance to purchase before the June Stamp Duty deadline. The second half of May and first week of June have been quieter, perhaps due to sunny weather, half term or everyone fleeing to Portugal. More likely, though, it is because there is no urgency as people have resigned themselves to missing the Stamp Duty deadline.

“Buyers now appear to be waiting to see what happens to the market after the end of June, possibly in the hope that prices will start to fall. This is especially the case in the sub-£800k bracket. It might take a few months to see how things pan out from July onwards. It will not be as simple as reducing asking prices, or indeed offers, by £15,000, as the Stamp Duty holiday was about sentiment as much as money and the fundamentals remain strong. 

“I don’t believe the property market is in a bubble, but it has certainly benefited from Government meddling in the form of the Stamp Duty holiday and mortgage guarantee scheme. We’ve effectively had two years rolled into one due to Government intervention. Looking forward, the fundamentals have not changed, namely money is cheap, it’s still cheaper to own than to rent and there is a profound lack of stock.”

Andrew Montlake, Managing Director of the independent mortgage broker Coreco, comments: “There is talk that the property market will fall flat on its face the moment the Stamp Duty holiday ends. That’s not going to happen. COVID-19 has triggered a socio-corporate shift that will drive transactions for some time yet as people seek more space to work remotely and proximity to the office becomes less important. The future of the property market, in the short to medium term, will be inextricably linked to our post-pandemic lifestyles.

“The pandemic has thrown the ‘location, location, location’ mantra that applied to the property market for so long into the dustbin of history. In the short-term, the Government’s mortgage guarantee scheme will continue to support demand among first-time buyers, and this will ripple up through the market and maintain a certain level of transactions. We’re not expecting a material fall in prices in the short- to medium-term, as supply is so low and money cheap, but a minor correction may be on the cards.”

Ged McPartlin, Managing Director of Ascend Properties, comments: “It’s great to see a changing of the guard in terms of the regions driving current house price performance. While London and the South East have traditionally acted as the predominant indicators of market health, it’s now the turn of Wales and much of the North to take centre stage.

“This regional acceleration has been largely driven by a far more affordable property price and a Stamp Duty saving that has allowed many buyers to increase their purchasing potential.”

James Forrester, Managing Director of Barrows and Forrester, comments: “Despite the prospect of a Stamp Duty saving now unlikely for many homebuyers the market continues to move forward at pace, driven by an appetite for homeownership not seen since before the financial crisis. While the expiry of the Stamp Duty holiday is expected to have some impact, it’s unlikely to derail a market that continues to see buyers enter in their droves, buoyed by low interest rates and 95% mortgage availability.”

Marc von Grundherr, Director of Benham and Reeves, comments: “It’s probably unfair to say London is lagging behind where the current property market boom is concerned, considering it was already streets ahead of the rest, to begin with. The higher price of property in the capital means that any increase is always going to be more measured but to assume the London market is on its knees couldn’t be further from the reality.

“Transactions are starting to climb, bolstered by both a return to the workplace and an influx of foreign buyers, and these influences will only boost the London market further as the year goes on.”

Matthew Cooper, Founder & Managing Director of Yes Homebuyers, comments: “Enjoy the boom while it lasts because if history has taught us anything, a bust is likely to follow. The government’s insistence on artificially fuelling house prices, not only with a Stamp Duty holiday extension but now in the form of 95% mortgages and a rehash of the Help to Buy scheme, is irresponsible, to say the least.

“With the market already buckling under the pressure, it’s only a matter of time before it gives in, bringing property values down with it.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “House prices have done the treble with a third consecutive month of record highs and the stage is set for a most unusual summer.

“The inability of Britons to go on holiday means there’s no distraction now from executing that ambitious move to a larger home. We’re entering a time of year when school holidays and foreign trips normally force the market to drop to a slightly slower pace.  

“That’s not necessarily going to happen this year and sustained, strong demand over the next few months could have ramifications when the market cools in the autumn, delivering on paper what might look like a more rapid slow down.

“The sluggish figures for London still don’t tell the full story. House price growth in the capital is not exceptional as a whole, but it is still being powered by the same race for space that is driving the national market. Many buyers just can’t get what they want within budget after a relatively strong decade of gains. Location has become less important and space more so. 

“Prices are being routinely bid up on desirable properties and those selling the right home in London are matching the pace of the national market, achieving annual growth of more than 10%. It’s just not happening across the board and homes with as many flaws as ceilings are continuing to struggle. 

“Buyers will pay top dollar but only for the right property, otherwise it’s just not worth moving for many.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “This market is moving so fast that if you blink, it increases in value. It is incredible to watch when desire wrests control away from other factors during periods of exceptionally high demand like this and it could be about to get even busier.

“There are still some nervous homeowners out there who have been waiting for restrictions to ease before making their move, threatening to ratchet up the level of competition even higher over the next couple of months. 

“If the unlocking goes ahead later this month, this new blood, which until now has been cautious due to the pandemic, will enter the market and there will be even more buyers chasing the must-have properties of the year, namely detached homes with plenty of outside space. 

“Stamp Duty relief will be scaled back at the end of June but don’t expect this to have much impact. The behaviour of buyers driving house price growth at the top end nationwide still supports the view that they are solely focused on the horizon and not concerned with saving a relatively small amount of money on a purchase. 

“If the change to the Stamp Duty relief creates even a wrinkle in July that would come as a bit of a surprise.

“The market normally has a lull in the summer months but, now almost all foreign holidays appear to be off, there’s nothing stopping the freight train that is unbridled demand from crashing straight through June, July and August. It would take someone with a lot of courage to bet against this run of records being extended in June and even July.”

Iain McKenzie, CEO of The Guild of Property Professionals, comments: “Britain’s estate agents are almost running out of homes to sell as the moving frenzy continues to gather pace!

“Increased demand coupled with a shortage of properties for sale have caused prices to soar higher than the savings made from the Stamp Duty holiday, meaning many houses are selling for a premium. 

“While you’re enjoying the summer sun, spare a thought for the poor conveyancers who are overwhelmed by an epic backlog of paperwork.

“The slow phasing out of the Stamp Duty holiday is unlikely to calm the market, and house prices are likely to keep rising for the foreseeable future.

“Whatever happens, the rest of the summer has the potential to be a topsy-turvy time for the property market.”

Annual house price growth hits double digits in Nationwide May report

Published On: June 3, 2021 at 8:26 am

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

House price growth is at the highest level in nearly seven years, according to Nationwide’s May 2021 House Price Index.

The latest report from Nationwide highlights that annual house price growth has increased to 10.9%. Prices are also up 1.8% month-on-month, following a 2.3% rise in April. The average house price is now £242,832, a new record that is up £23,930 over the past twelve months.

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “The market is hitting peak exuberance now as we enter summer. In fact, it has hit a rate of growth not seen since the UK market roared back to life from the doldrums created by the Global Financial Crisis.

“Such fierce appreciation is certainly attention grabbing but when property hits double-digit growth like this, it’s normally a brief squint at the sun before falling back down to Earth. That will probably happen in July due to the effects of a two-month interruption of house price growth last year.

“The past 12 months have been extraordinary. Average house prices burst through £220,000 for the first time in April last year, cracked £230,000 in December and have now cruised through £240,000. 

“It feels like buyers have no ceiling to guide them at the moment, however the market is still split in London. The capital has been trailing the national picture on average recently and that has much to do with continued disparity between the performance of houses with gardens compared with flats and maisonettes, of which London has many. 

“It is still landlords trying to cash in with low quality stock and vendors of unremarkable homes who continue to struggle. Meanwhile properties that tick all the boxes are enjoying price increases that are much more in line with the wider market’s bullish flair.

“Families are still feeling the pinch of snug properties and the walls have been bearing in on them for nearly a year and a half now. This is where the growth is coming from and there are still hordes of people chasing the dream of a big move this summer.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “This barnstorming rate of growth is painting a picture of an absolutely wild market. That’s not too far from the truth but you’ve got to look over your shoulder for context now.

“This time last year the average price of a home sank back for the first time since the pandemic began and that’s helping to flatter the pace of growth, and also explains how it has leapt so far in a single month. Set that aside, though, and the market’s move in the past 12 months is still staggering.

“Many current buyers are those who delayed a move last year and would have been forgiven for thinking that competition would have cooled by now. Instead, they find themselves in an even tighter race as demand continues to outstrip supply. The buyers driving the market higher are still those looking for more space. Forever homes are still the order of the day and buyers are more than willing to do everything in their power to secure what they truly desire.

“There just aren’t enough of these larger properties coming onto the market in the right areas and there’s no sign this imbalance is going to resolve itself in time to suppress strong growth over the summer.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “At a time when much of the country seems to be enjoying a sense of normality once again, we would expect the property market to follow suit. Today’s figures show that the market didn’t get the memo. 

“The frenzy to snap up a property at the tail end of a pandemic is showing no signs of stopping, with double digit growth in house prices throughout May – the highest we have seen in the best part of a decade.

“The success of the stamp duty holiday has certainly played its part, as well as the savings many have made while working from home.

“With a record-breaking new average house price, which has grown almost £24,000 over the past 12 months, it’s worth thinking about how your potential savings might not outweigh the inflated price of your new home. 

“It is still crucial that prospective buyers go into the process with a sound understanding of the market and what they want from a new property. 

“As demand in the market increases, the extra competition creates a fear of missing out that can distract buyers from the fundamentals. It’s important not to let the current property frenzy draw attention away from what you are really looking for.”

You can read the full findings in Nationwide’s House Price Index report for May 2021.