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House prices in England and Wales up 0.9%, month on month, latest index shows
House prices in England and Wales increased by 0.9% in April and 5.1% year on year to an average of £179,817, according to the latest index from the Land Registry. But price are still below the peak of the market in November 2007 when prices averaged £181,014. The April data also shows that the London market continues to grow with prices up 2.3% month on month and 10.9% year on year, taking the average price of property in the capital to £474,544. The North East saw the only annual price fall with a decrease of 0.6%. However it is Yorkshire and the Humber which has experienced the greatest monthly price rise with growth of 2.7% while Wales saw the largest monthly decrease with a fall of 1.1%. Overall the number of property transactions has decreased over the last year. From November 2013 to February 2014 there was an average of 73,156 sales per month. In the same months a year later, the figure was 64,196. Government investment in the north of England could be responsible for the boost in some northern regions, according to experts. According to Nicholas Leeming, chairman of national estate agents Jackson-Stops & Staff. ‘London continues to outperform the rest of the country, even though sales levels over £1 million were down year on year in February, probably due to the threat of mansion tax. But increased investment in Yorkshire, Humberside and the evolution of the Northern Powerhouse in Manchester have contributed to a surge in confidence in these areas. Greater Manchester is shaping up to be a great place to invest as major London companies continue to establish a presence in the City,’ he explained. Continue reading
UK housing market confidence falls slightly
Confidence in the UK housing market has fallen slightly despite the fact that interest rates were held again and average house prices continued to increase. According to the latest monthly Halifax Housing Market Confidence Tracker the headline House Price Outlook balance, that is the difference between the proportion of people across Britain that expect the average property price to rise less the proportion who think it will fall, slipped to +58 compared with +64 in March 2015. At the same time the net proportion of consumers who now believe the next 12 months will be a good time to buy has increased from +21 in March to +26 in April. Conversely, the net proportion who think that the next year will be a good time to sell has fallen from +33 to +30. The research found that 63% expected the average property price to be higher in one year’s time which is significantly lower than the 67% who said this in March and this is despite a number of positive short term factors. These include the emergence of record low mortgage rates, falling swap rates, GDP growth falling to its slowest pace in three years and Office of National Statistics figures showing negative inflation of 0.1% in April. MPC minutes also showed a unanimous vote to keep rates on hold at 0.5% in the latest meeting. These, along with other factors, such as rising employment levels, should start to see the consumer housing outlook improve over the next few months, according to Craig McKinlay, Halifax mortgages director. ‘With inflation now at its lowest level since records began, unemployment falling, and the economy still growing, the fundamentals for the housing market remain positive. Going forward the key factor in how consumers adjust to any changes in rates will be the way in which they manage their disposable income,’ he said. Continue reading
UK Building Societies providing bigger share of new mortgage lending
Building societies in the UK lent £12.7 billion of gross new mortgages in the first three months of the year, some 29% of all new lending across the market, the latest data shows. Societies also approved over 91,000 mortgages in the first quarter while net lending by all lenders totalled £3 billion, according to the figures from the Building Societies Association. Paul Broadhead, head of mortgage policy at the BSA, lending by building societies has been strong and without the contribution of this section of the market the stock of mortgage loans across the UK would have shrunk in the first three months of the year. ‘Societies hold a 20% share of mortgage balances, but have had a much greater share of the flow of new lending for some time. In the first quarter they delivered 29% of all new mortgages,’ he explained. ‘This is partly because of competitive products and partly due to the more personal approach they take to underwriting. The trend looks set to continue in the second quarter as around a third of mortgage approvals in the first quarter were from building societies,’ he added. Meanwhile, the latest research by specialist lender Paragon Mortgages shows the majority of intermediaries are seeing stable or growing levels of demand from landlord clients. The Financial Advisor Confidence Tracking survey for the first quarter, shows 91% of intermediaries view landlord demand as growing or stable and just 7% saying demand was weak. In terms of intermediaries’ views on levels of buy to let mortgage business, 53% said in the second quarter they expect the number of cases to remain stable. However, 45% are more optimistic saying they expect to write more buy to let business. Survey results for the first three months of the year also revealed that 23% of intermediaries’ business was buy to let, 18% was for first time buyers and 35% were remortgages. The quarterly survey has also, for the past 20 years, kept an intermediary confidence index taking the average number of mortgage cases completed in the current quarter, measured against expected business levels in the next quarter. Confidence for the first quarter of 2015 has increased with a score of 105.2 from 102.9 the previous quarter. The index recovered throughout 2013 and 2014, after it fell from 2008 onwards and reached its lowest level in the third quarter of 2010 of 63. ‘There were no great movements in this quarter’s survey findings, what is evident though, is intermediaries are feeling optimistic about the buy to let market. Following the results of the general election, it will be interesting to see whether we see an increase in intermediaries’ case load as confidence increases in the wider housing market,’ said John Heron, director of Paragon Mortgages. Continue reading
