Posts with tag: UK house prices

Where are the most and least affordable locations in the UK?

Published On: February 27, 2017 at 9:52 am


Categories: Property News

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A new report from Lloyds Bank has indicated that the ratio between average city house prices and typical earnings is at its poorest level since 2008.

The data shows that during the past five years, the average UK city house price has increased by 32%, from £169,966 in 2012 to the greatest ever value of £224,926 this year.

In comparison, average yearly city earnings have increased by just 7% to £32,796 over the same period. As a result, average affordability in the cities of the UK has worsened.


House prices have risen as a multiple of average annual earnings from 5.5 in 2012, to 6.9 in 2017. This is the worse level since 2008, where the ratio of house prices to earnings stood at 7.2.

The UK’s least affordable city was Oxford, where the average house price is £358,372, nearly 11 times the level of annual average earnings in the city.

In all, there are five cities with typical house prices over ten times the average annual earnings. Alongside Oxford, these are Greater London (10.5), Winchester, (10.5), Cambridge )10.3) and Chichester (10.0). However, the average figure for London disguises variations in the capital, with boroughs much less affordable in the centre as opposed to the Greater London average.

What’s more, there is a prominent North/South divide. Only Lichfield (8.3), York (7.6) and Leicester (7.6) were cities outside of the South to make the top 20 least affordable locations.

Where are the most and least affordable locations in the UK?

Where are the most and least affordable locations in the UK?

Most Affordable

On the other hand, Stirling in Scotland was found to be the most affordable studio. Here, the average property price is 3.7 times average gross annual earnings. Londonderry in Northern Ireland came in second.

Two other Northern Irish cities, Belfast (4.6) and Lisburn (4.8) are placed in fourth and sixth respectively.

Andy Mason, Lloyds Bank Mortgage Products Director, said: ‘City living is becoming increasingly expensive with average house price at least ten times average annual earnings in five of the UK’s cities. Affordability levels have worsened for four consecutive years as average city house prices continue to rise more steeply than average wage growth.’[1]

‘House prices in the south have generally seen stronger growth than in the north. St Albans has recorded the biggest gains over the past decade, whilst London has been the top performer during the recovery,’ he added.[1]



Steady Start to the Year for UK House Prices, Reports Nationwide

Published On: February 1, 2017 at 10:08 am


Categories: Property News

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Figures for January show a steady start to the year for UK house prices, according to the latest House Price Index from Nationwide.

Over the month, the annual rate of growth for UK house prices fell slightly to 4.3%, from 4.5% in December 2016. The monthly increase in January also slowed, from 0.8% to 0.2%.

Steady Start to the Year for UK House Prices, Reports Nationwide

Steady Start to the Year for UK House Prices, Reports Nationwide

Nevertheless, the steady start of the year takes UK house prices to an average of £205,240, from £205,898 in the previous month.

The Chief Economist at Nationwide, Robert Gardner, comments on the report: “The outlook for the housing market remains clouded, reflecting the uncertainty surrounding economic prospects more broadly.

“On the one hand, there are grounds for optimism. The economy has remained far stronger than expected in the wake of the Brexit vote. Recent data indicates that the economy didn’t slow in the second half of 2016 and the unemployment rate remained stable, at an 11-year low in the three months to November.”

Nonetheless, he continues: “However, there are tentative signs that conditions may be about to soften. Employment growth has moderated, and while wage growth has edged up in recent months in real terms (i.e. after adjusting for inflation), earnings growth has already slowed.

“With inflation set to rise further in the months ahead as a result of the weaker pound, real wages are likely to come under further pressure. Employment growth is also likely to continue to moderate, should the economy slow as most forecasters expect.”

He adds: “On balance, we agree with the consensus view that the economy is likely to slow through 2017 as the squeeze on household budgets intensifies and heightened uncertainty weighs on business investment and hiring.

“Nevertheless, we continue to believe that a small rise in house prices of around 2% is more likely than a decline over the course of 2017, since low borrowing costs and the dearth of homes on the market will continue to support prices.”

Following the release of the report on UK house prices, the CEO of online estate agent, Russell Quirk, says: “Today is the first look at house price movement for the New Year, as the market whirs back into life after Christmas and, on the face of it, the overarching stability and market confidence that was seen throughout 2016 seems to have spilt over into 2017.

“It’s fair to say that as far as external influences are concerned, 2017 has already thrown up its fair share of curve balls, particularly across the pond. But the ripple effects of these distance influences are unlikely to reach the UK property market, unless you own a second home in high-end London.”

He goes on: “That said, this year is probably the year we see some form of the knock-on effect from the turbulence of 2016 where price growth is concerned. But this is likely to come in the form of a slower rate of escalation rather than a negative movement.

“Despite this potential marginal slowdown, it is widely predicted that the market will remain robust throughout the coming year, and prices will maintain their upward trend, which certainly seems to be the case based on today’s numbers.”

He concludes: “A New Year and another increase in house prices will provide a positive outlook for UK homeowners in 2017, perhaps not so positive for those still struggling to buy.”

Do you believe UK house prices will continue growing this year?

London House Price Growth Back in Double Figures

The north-south divide in house prices has widened, as London’s growth has moved back into double figures, according to recent data from Nationwide.

The latest quarterly figures from the building society show that across the UK, the average house price increased by 1% in the third quarter (Q3) of 2015 and rose by 3.7% annually to reach £195,733.

Nationwide’s statistics are based on mortgages it arranged between July and September. The figures highlight a significant difference in price growth and average prices around the country.

London House Price Growth Back in Double Figures

London House Price Growth Back in Double Figures

London has seen the strongest housing market recovery in recent years and its annual rate of increase has returned to double figures, up from 7.3% to 10.6%.

As a result, the gap between house prices in the capital and the rest of the UK is at its widest yet. The typical property price in London, £443,399, is more than three and a half times the average of £124,345 recorded in the north of England.

London’s surrounding area has also experienced strong growth, with an annual price rise of 9.5% in the commuter belt outside the capital. Prices in this area average £326,785.

The growing divide in house prices mirrors the Land Registry’s latest report for completed sales in August. It reveals that prices in London increased by 1.7% over the month, whereas in the North West, they dropped by almost as much.

However, the data shows that the greatest annual growth was experienced in the cheapest parts of the capital, indicating that buyers are unable or unwilling to afford some areas.

Nationwide’s figures suggest that Northern Ireland is seeing the highest yearly price growth, after recording a 6.5% increase since last year. However, at an average of £127,562, they are still 44% below their pre-recession peak.

Prices rose by 6% in England, to £239,842, by 1.9% in Wales, to £146,854 and Scotland saw a 1.3% decline, taking prices down to £140,402.

Regionally, prices vary hugely. In eight areas, a slowdown in the annual pace of growth was recorded, while five regions experienced acceleration.

Nationwide has also released its latest monthly index, which shows a 0.5% price rise in September and an annual growth rate of 3.8%.

Chief Economist at the building society, Robert Gardner, says there are signs that growth is hitting more ordinary levels across the UK.

He continues: “The data in recent months provides some encouragement that the pace of house price increases may be stabilising close to the pace of earnings growth.

“However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.”1

Chief UK Economist at IHS Global Insight, Howard Archer, expects house prices to rise by 7% this year.

He explains: “We expect house prices to see solid increases over the coming months amid firm activity.

“Given that house prices were soft in the latter months of 2014, this is likely to see annual house price inflation on the Nationwide’s measure move higher over the coming months.”1

He adds that a shortage of homes on the market could fuel higher growth.


UK Property Market Hardest for First Time Buyers

Published On: September 7, 2015 at 2:12 pm


Categories: Landlord News

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UK Property Market Hardest for First Time Buyers

UK Property Market Hardest for First Time Buyers

First time buyers in the UK are facing some of the most difficult market conditions in Europe, according to new research.

Almost nine out of ten (89%) surveyed in a poll said it was getting harder for first time buyers to afford a home, making those in the UK the second most negative about getting on the property ladder, with those in Luxembourg the most downbeat.

The ING International study questioned almost 15,000 people in 15 countries.

The research also found that house prices in the UK increased by 8% between 2014-15 – eight times the European average.





















House Prices Rise 0.3% But Annual Growth Slows

Published On: August 27, 2015 at 1:49 pm


Categories: Finance News

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UK house prices rose by 0.3% in August, but annual growth has slowed from 3.5% to 3.2%, according to the latest residential property index from the Nationwide.

The figures reveal that the average house price is now £195,279 in the UK, and the lender’s chief executive, Robert Gardner, says that the drop in the annual growth rate was caused by a particularly high price increase in August 2014.

However, the annual rate of growth was the weakest since June 2013. Gardner explains: “This month’s data provides further evidence that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%.

“However, survey evidence cautions that this trend may not be maintained unless construction activity accelerates. Surveyors reported the lowest ever number of properties on their books in July, whilst new buyer enquiries picked up.”

House Price Rise 0.3% But Annual Growth Slows

House Prices Rise 0.3% But Annual Growth Slows

He notes that UK house prices have shown strength recently, in comparison with other developed economies.

For example, house prices in the UK did not decrease by as much during the financial crisis, and even when they did fall, they quickly recovered to pre-crisis levels.

At present, UK house prices are around 5% higher than their pre-crisis levels, while prices are still much lower than the pre-crisis peaks recorded in Ireland, down 38%, Spain, down 36%, and the Netherlands, down 18%.

Gardner continues: “Clearly house price trends are determined by a wide range of factors, but labour market developments are amongst the most important. The strength of the UK labour market in recent years is a key reason why house prices have recovered more quickly.

“There is a strong correlation between employment and house price growth since the financial crisis across the major developed economies. House prices remain further below their pre-crisis peaks in countries where employment is also well below pre-crisis levels.

“Supply side developments also play an important role in explaining the divergence in house price performance. The UK experienced a much smaller increase in building activity in the run up to the financial crisis. As a result, there was much less of an overhang of unsold properties to be worked off in recent years.”

He concludes: “However, with UK house building running well below the expected rate of household formation in recent years and with demand for homes rising, a significant increase in construction activity is required if affordability is not to become stretched in the years ahead.”1

Online estate agent HouseSimple’s Alex Gosling says that any belief that vendors are returning to the market is inaccurate.

He claims: “A boost to new stock levels in June suggested that we were finally starting to see some movement from sellers, but that momentum seems to have been short lived. The general election, which the market hoped would provide a catalyst for sellers, is long gone and property stock numbers remain well below normal levels.”

He thinks there are many reasons why people are not moving house, including the fact that they simply can’t afford to, as property prices have soared, or because they are not confident in the market, despite the strength of the economy and the extremely low mortgage rates currently on offer.

He suggests: “Somehow, sellers need to be encouraged back to the market because there are buyers galore waiting when they do. It’s a very attractive market right now for motivated sellers.

“The next few months are going to be important, as the property market looks to gather momentum heading into the last quarter of the year. We fully expected activity to drop off in the summer months, but come the autumn, the market needs to be replenished with stock to realign the supply versus demand balance.”1 




House Prices Rise £3,000 in a Month

Published On: August 19, 2015 at 2:55 pm


Categories: Finance News

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The average price of a home in the UK has risen by £3,000 in just one month, according to the latest data from the Office for National Statistics (ONS).

The ONS revealed that the annual rate of house price growth increased slightly to 5.7% in June, but this covers up huge regional differences. Prices grew by 9% in Northern Ireland over the past 12 months, but dropped by 0.6% in Scotland.

House Prices Rise £3,000 in a Month

House Prices Rise £3,000 in a Month

Annual growth in London is now 5.3%, but just a year ago, in August 2014, it was just under 20%.

The average price of a home in the UK is now £277,000, compared to £274,000 in May. However, the typical London homes costs £513,000, which is over three times the average price in the North East of England, at £156,000.

The ONS claimed its index reached a new record in June, surpassing the previous month’s high. The average house price is now £290,000 in England, £169,000 in Wales, £154,000 in Northern Ireland and £192,000 in Scotland. This was the first annual fall in Scottish prices for around two years.

The ONS states: “Following relatively strong growth during much of 2014, the rate of house price growth appears to have moderated in recent months.

“Despite this moderation, house price growth remains high relative to the movement of prices in general, likely reflecting a mismatch between strong demand and relatively weak supply throughout much of the UK.”1

Shelter’s Director of Campaigns, Roger Harding, explains the charity’s viewpoint: “From families trapped in expensive and insecure private renting, to young people stuck in their childhood bedrooms, a stable future is spiralling further and further out of reach for millions.

“Piecemeal schemes may help a lucky few, but the only way for the Government to turn this crisis around is to urgently invest in the genuinely affordable homes we need. The autumn spending review is their last chance to put real money towards this, and show they’re serious.”1 

Head of Lending at the Mortgage Advice Bureau (MAB), Brian Murphy, says: “In June, there were no shocks or surprises for homebuyers with annual house price growth increasing by just 0.1 percentage point from the 5.6% seen in April and May. Compared to this time last year, when buyers were faced with annual house price rises of 10.2%, conditions are looking far more affordable.

“Growth is also no longer restricted to the south, with a 9.2% annual rise in the East of England being the main driving force behind these figures. At the same time, price pressure in the capital has eased remarkably since last year.”1