Tag Archives: europe
UK property prices up in August despite Brexit worries
House prices in the UK increased by 0.6% in August and are now 5.6% above a year ago, according to the latest index figures to be published. This continued growth takes the average price of a home to £206,145, the data from the Nationwide shows, indicating that an expected fall due to Brexit has not yet materialised. The pick up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months, according to Robert Gardner, Nationwide's chief economist, saying that this includes a softening of new buyer enquiries to the introduction of additional stamp duty on second homes in April and the uncertainty surrounding the EU referendum. Meanwhile, the number of mortgages approved for house purchase fell to an 18 month low in July. ‘However, the decline in demand appears to have been matched by weakness on the supply side of the market. Surveyors report that instructions to sell have also declined and the stock of properties on the market remains close to 30 year lows,’ Gardner explained. ‘This helps to explain why the pace of house price growth has remained broadly stable. What happens next on the demand side will be determined, to a large extent, by the outlook for the labour market and confidence amongst prospective buyers,’ he pointed out. He believes that it is encouraging that the unemployment rate remained at a 10 year low in the three months to June, though labour market trends tend to lag developments in the wider economy and it is also positive that retail sales increased at a healthy rate in July, up almost 6% compared to the previous year, even though consumer confidence fell sharply during the month. ‘However, business surveys suggest that the manufacturing, services and construction sectors all slowed sharply in July, and, if sustained, this is likely to have a negative impact on the labour market and household confidence,’ he said. ‘Most forecasters, including the Bank of England, expect the economy to show little growth over the remainder of the year. Indeed, these concerns prompted the Bank’s Monetary Policy Committee (MPC) to implement a range of stimulus measures at the start of August, which will provide support to economic activity and the housing market. Monetary policy measures will provide some support for households and the housing market,’ Gardner commented. ‘The MPC’s decision to lower UK interest rates from 0.5% to a new low of 0.25% will provide an immediate benefit to many mortgage borrowers, though for most the boost will be fairly modest. The MPC’s stimulus measures will also provide indirect support to the housing market, and not just by boosting wider economic activity,’ he added. According to Nicholas Finn, executive director of Garrington Property Finders, the data reveals a property market that is still unsettled rather than upbeat. ‘On the front line we’re seeing some strong intent but a lack of clarity among buyers. The cut in interest rates and resilient… Continue reading
More people in UK want to buy a home but ownership levels are falling
The appetite amongst people in the UK to own their home has risen steadily over the past four years but ownership levels have also been falling, new research shows. Some 73% of non-home owners now say they would like to own their home compared to 69% last year, 68% in 2014 and 65% in 2013, according to the annual survey from the consumers group the HomeOwners Alliance. But despite more people wanting to own the roof over their heads, home ownership levels have been declining for the past decade after peaking in 2002 at 69.7% and the report says this is because the high demand for homes is pushing house prices to unaffordable levels. It explains that the mismatch between house prices and wages is worsening, average house prices have risen five times more than wages in the last five years and this is exacerbated by an inadequate supply of new homes. It also points out that despite a series of measures announced by the government aimed at supporting first time buyers, such as the Starter Homes Initiative, extension of the Help to Buy loan scheme and introduction of a new Help to Buy ISA there are still difficulties in first time buyers finding affordable homes. One issues is that in dealing with the housing crisis, much of the focus has been on helping first time buyers, but there is growing recognition that solutions need to go further, it suggests, adding that with availability of homes for sale at a record low, last time buyers in under occupied homes have become a focus for freeing up housing stock for younger families. ‘Despite a blizzard of government initiatives aimed at helping homeowners, the housing crisis is deepening across the country, with ever more non-homeowners wanting their own home, and ever greater concern about the lack of housing,’ said Paula Higgins, chief executive of the HomeOwners Alliance. ‘Many government policies have boosted demand for homes, but what this survey shows is that the real problem is the desperate shortage of houses. Until the government tackles the fundamental issue that we just don’t have enough good quality homes, the housing crisis will continue to deepen and a generation will continue to have their dreams of home ownership crushed,’ she added. It explains that so-called last time buyers, could help ease the housing crisis in the UK freeing up under occupied properties. There are an estimated 11.4 million home owners age 55 and over and 10% of them have considered a move in the past two years but did not. Some 23% of home owners aged 55 or over who considered moving say lack of suitable housing was the main reason they did not do so, this equates to more than 500,000 home owners. Stress and upheaval of moving is also more likely to be a barrier for those moving later in life with 30% saying so compared to 21% of home owners… Continue reading
More UK home owners remortgaged in July due to falling rates
Home owners who remortgaged their properties in July lost no time in taking advantage of falling mortgage rates following the UK’s decision to exit the European Union (EU), a new report shows. Some 63% of remortgagers lowered their mortgage rates last month, up by 7% from May and 43% acted to reduce monthly payments as cheaper deals appeared on the market in the wake of the Brexit vote, according to data from LMS. With the exception of two-year variable products at 75% loan to value (LTV), Bank of England data shows average mortgage rates were lower across the board in July than was the case in May before the EU referendum took place with many falling to record lows. The rate cuts meant that more home owners who remortgaged to reduce their payments enjoyed substantial savings. Just 28% of those who took this course of action in May saved £200 or more each month from their new deal. In comparison, 35% who remortgaged to reduce their payments in July reported a monthly saving of £200 or more. The report says that the appetite for securing lower rates and reducing monthly payments in July came despite growing speculation of a base rate cut from the Bank of England, which ultimately occurred in August. For the first time since tracking began in December 2014, LMS data shows that there were higher expectations of rates falling than rising in July. Among the 13% of remortgagers who expected rates would change in July 59% expected rates would fall compared with just 18% who felt this way in May and 29% in June, when the EU vote took place. Despite widespread speculation over the economic impact of the UK’s vote to leave, the July data from LMS also shows little sign of a drop in consumer confidence in the remortgage market. The percentage of remortgagers increasing the size of their loan rose from 26% in May to 28% in July, while the percentage increasing their loan by more than £10,000 was unchanged from May at 19%. Similarly, the percentage remortgaging to pay for home improvements increased slightly from 19% in May to 21% in July, while there was a two percentage point increase in those remortgaging to pay off other debts from 7% to 9%, potentially in a bid to stabilise their finances in the face of an uncertain economic environment. ‘The aftermath of the vote to leave the European Union has seen many mortgage rates tumble to record lows, a fact that has not been lost by home owners as many seek to take advantage of low rates. July’s figures show many people were keen to press ahead with plans to remortgage, regardless of growing speculation that a base rate cut might be on the cards,’ said Andy Knee, chief executive of LMS. ‘The Bank of England’s reduction of the 0.5% base rate to 0.25%… Continue reading
