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Property prices in England and Wales up 0.5% month on month, latest index shows
Residential property prices in England and Wales are £34,000 above their pre-crisis high of February 2008, according to the latest house price index to be published. With a monthly rise of 0.5% the average prices stands at £273,528 with the annual rate of growth at 6.8% but sales have fallen, down 9% compared to a year ago, the data from Your Move and Reeds Rains shows. When London and the South East are excluded from the calculation then the average annual change is 4.6% with London still boosting overall averages, the data also shows. Adrian Gill, director of Reeds Rains and Your Move estate agents, pointed out that while average house prices are currently 6.8% or £17,340 higher than they were last year, this is the smallest annual increase witnessed for 14 months. He also said that while home sales are down 9% year on year, there is still plenty of demand and February still marks a 4% improvement on January activity levels, and in recent weeks agreed sales have climbed above 2014 levels. He also explained that market conditions have calmed in London and the South East. Their combined lead on the rest of the UK hit a summer peak in July 2014 when these areas increased the wider England and Wales annual change to 5.4% higher than it would have been otherwise. But in February this growth gap has fallen to less than half at 2.2%. ‘London has already had the first taste of added pressure placed on prime property in the form of revised Stamp Duty, and the £1.5 million to £5 million sector of the market has also been hit by cold feet in the run up to the general election with the threat of a potential mansion tax,’ said Gill. ‘This let up of high end activity has brought down the average London house price, but beneath the surface, the lower rungs of the ladder are thriving. For instance, the borough of Newham, where the typical property value currently stands at £273,727, saw an enviable 2.1% monthly price rise, more than double the overall 1% average London price jump,’ he explained. He also pointed out that in terms of annual growth, more affordable areas like Barking and Dagenham with growth of 16.5%, Bexley up 15.6% and Waltham Forest up 16.8%, are doing well, coming in ahead of the year on year improvements seen in high end areas like Kensington and Chelsea, where prices have fallen 7.4% in the past 12 months. ‘In the south of the country overall we’re seeing a very orderly market, with buyers and sellers on more of an even keel. Rates of annual growth have slowed across the board in England and Wales, but it is regions with the lowest average property prices which are dragging their feet,’ Gill added. The North saw the smallest annual uplift in January, with home values just 1.9% higher year on year, while in Yorkshire and The… Continue reading
Home lending in the UK rebounds in February, latest data suggests
Home lending rebounded in February for borrowers in the UK requiring smaller deposits and total home purchase approvals increased for the third month in a row, according to the latest figures. Higher LTV lending represents 16.9% of February house purchase approvals, the largest proportion since September 2014 and there were 10,300 higher LTV loans, a 10.7% month on month increase compared to January. The mortgage monitor report from e.surv chartered surveyors suggests that the lending market is regaining its momentum. A breakdown of the figures shows that higher LTV house purchase approvals, that is loans to borrowers with a deposit of up to 15% of the total value of their property, made up 16.9% of house purchase approvals in February, a significant proportional increase from 15.3% in January and just 13.9% in December. Higher LTV approvals formed the largest proportion of total house purchase lending since September 2014 and as a result, the absolute number of higher LTV approvals has bounced back. There were 10,298 higher LTV loans in February, 10.7% more than 9,300 in January. February also marks the third consecutive month of growth in higher LTV approvals. The report says that the rise was partly driven by rising property prices. The average purchase price for first time buyer homes climbed to a new record of £160,304 in January, 12% higher than January 2014, according to the latest First Time Buyer Tracker from Your Move and Reeds Rains. ‘Lending to lower deposit borrowers is back on track, which is encouraging as the mortgage market moves into spring. Higher LTV borrowers took a nosedive in October as a proportion of the market after the introduction of loan to income caps became a challenge for first time buyers,’ said Richard Sexton, director of e.surv chartered surveyors. ‘But these buyers are evidently returning to the market to take advantage of low mortgage rates and cheaper stamp duty charges. And after the tricky bedding in phase that accompanied new mortgage legislation, first time buyers are now once again accessing a market restructured for long term viability,’ he added. He pointed out that the Mortgage Market Review has ensured that all future borrowers are subject to comprehensive affordability checks and given plenty of advice, and so the danger of them defaulting has been reduced. ‘Many prospective borrowers are unable to save up a massive sum for a deposit but they often still have strong monthly incomes and make attractive customers for lenders. Low deposits do not necessarily need to mean high risk,’ he said. House purchase approvals grew 0.2% month on month in February, with 60,935 approvals, compared to 60,786 in January and 60,349 in December. This improvement comes after a series of drops stretching from July to November 2014, suggesting the market is settling back into sustainable growth. ‘The mortgage market is beginning to warm up, with three months of improvements under… Continue reading
UK property valuations up 50% month on month
Valuations in the UK property market last month increased across all sectors with the total number 50% higher than in January, according to the latest research. There was a strong surge in activity across the housing market but home movers led the way with a 59% rise in activity on a monthly basis, the data from Connells Survey and Valuation shows. However, despite the strength of this upsurge, this leaves home mover valuations in February 8% lower than 12 months before. ‘After an extended period of fairly subdued activity it is encouraging to see the market rebound. It is especially positive that all the sectors posted big gains. The first quarter is normally a strong one so after a relatively weak January it is reassuring to see February come back so strongly,’ said John Bagshaw, the firm’s corporate services director. ‘Previously activity among home movers was sluggish, reporting weak growth throughout the final quarter of 2014 and at the beginning of this year. However, supported by a sunny economic outlook and record low mortgage rates we are beginning to see a shift in consumer behaviour,’ he added. The data also shows that first time buyer activity reached an eight month high in February with the sector posting the second highest monthly growth after home movers. The number of valuations rose by 52% compared to the previous month, while on an annual basis it saw the smallest fall of just 3%. Bagshaw pointed out that the last time the sector saw such a boost in activity was in the rush before the Funding for Lending Scheme (FLS) stopped mortgage funding at the end of January 2014 and he added that the recently announced Starter Homes project should provide more additional support to the sector. ‘Although the scheme is fairly moderate in size the 20% discount being offered to first time buyers under the age of 40 provides a welcome sign that the government is keen not to be seen to turn its back on first time buyers,’ he said. The number of buy to let valuations followed up on January’s climb of 37% with a further monthly rise of 41% in February. Spurred by these monthly increases the sector posted an 8% year on year gain making it the only sector to post an annual increase. Bagshaw explained that continued weak inflation has further dampened fears of an upcoming hike in interest rates. ‘As a result we’re seeing increasing confidence among both lenders and borrowers alike as low mortgage rates carry on posing attractive deals. Whilst inflation remains low we expect the sector to continue to thrive,’ he pointed out. Remortgage activity followed the overall positive market trend with growth of just under 50% but year on year it was the weakest sector with a 10% drop in the number of valuations. Bagshaw said that remortgaging has… Continue reading
