Scottish house prices up by £2,146 in November – highest monthly rise since June 2007

LSL / ACADATA SCOTLAND HPI

  • Over three quarters of Scottish regions see price rises in November
  • Average prices in Aberdeen set another record high

 

House Price

Index

Monthly Change %

Annual Change %

£146,238

198.3

1.5

2.6

Donald MacLellan, Chairman of Walker Fraser Steele Chartered Surveyors, part of LSL Property Services, comments: “The property market in Scotland is powering on ahead like a freight train. Price rises of £2,146 in November reflect the largest increase in a single month, since June 2007 when prices were up by 1.7%. This is down to the vast influx of first-time buyers, who have stirred up activity from the lower realms of the housing market – accelerating the rate of recovery. Such momentum means there’s cause for renewed optimism in 2014, as the Scottish property market shows it’s making solid progress on all fronts. Prices have picked up at a healthy pace across the country and sales are rising swiftly, as mortgage conditions continue to improve. 

“Strong demand has been pivotal in improving the outlook for the Scottish housing market as confidence has been growing exponentially in the past six months. With lending levels following suit, there are sure signs the Scottish property market is on the fast track to full health. More than three quarters of the country saw price rises in November, showing the recovery has now become nationwide.

“In particular the journey for first time buyers is drastically better than a year ago, reinforced by Government schemes such as Help to Buy. While an enticing circle of mortgage products, low interest rates and higher LTV mortgages have propelled the market to another level, with sale volumes from June to November 2013 up by 22%. The rise in first time buyers has been key as activity from this end of the market has reverberated higher up.

“However, beneath the surface it’s also clear the number of homes on sale falls far short of the level needed to meet demand, which is resulting in climbing house prices. The blatant imbalance between the lack of housing supply and the pent up demand needs to be tackled to allow the market to continue to recover at a sustainable rate.

“Many buyers are understandably unclear over which direction the economy will take over the coming twelve months, with some opting to sit tight in the meantime. The withdrawal of the Funding for Lending scheme is in part responsible for this air of uncertainty. While another obstacle may be the referendum this year on Scottish independence, which could cause a slowdown as potential buyers delay their home purchase in order to await the outcome.”

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LSL England & Wales HPI:

House prices up 5.2% or £11,920 in 2013 – the highest yearly rise since 2007

  • Average prices rise £1,489 in December to £240,134, a new record for England & Wales
  • West Midlands shows second highest regional price growth after London

House Price

Index

Monthly Change %

Annual Change %

£240,134

244.5

0.6

5.2

David Newnes, director of LSL Property Services plc, owner of Your Move and Reeds Rains estate agents, comments: “As we step into 2014, the recovery of the property market shows no sign of slowing down, with buyer demand growing swiftly and competition rising. Average prices reached a new record high in December after a yearly increase of £11, 920, the highest since 2007, along with a monthly increase of £1,489. Without doubt, the market is moving full steam ahead towards widespread recovery. However we’re certainly not in the bubble zone here, with price growth and sales both still some way off their pre-crisis peaks.

“Momentum is sweeping across the board with new record high house prices in areas beyond the capital, ranging from the West Midlands to East Anglia. Attention is moving away from the north south divide and other regions are stepping out of the shadow of London’s more buoyant property market. Now the universal recovery is really taking flight. For the fourth successive month all ten regions in England & Wales witnessed positive price rises over the past twelve months.

“The coming year looks bright for the UK market thanks to the government’s schemes and record low interest rates. Cheaper mortgages, along with an easing of availability of high LTV mortgages and wider product choices to consumers, have made life drastically easier for new buyers looking to get a foot up on the property ladder. The rise in prices is matched by an impressive boost in sales with a 34% increase in sales since December 2012, which is keeping confidence levels up. There are scores of first-time buyers moving towards the market at lightning pace to explore the raft of attractive mortgage deals on offer.

“Record low mortgage rates combined with the boost in activity from first time buyers at the bottom end of the market, has unlocked chains higher up. The rise in activity among second steppers in recent months, with 16% of home movers taking out mortgages compared to a year ago, suggests sales growth will continue at a healthy pace.

“On closer inspection by regions, East Anglia and the North West saw the greatest rise in sales over the past year, over 26%, but London ranked as the third lowest, despite being the area with the largest rise in prices. This shows the underlying issue that many first-time buyers are unable to afford to live in the capital, as properties are moving into a league of their own. This is not helped by growing demand from domestic and overseas buyers left unmatched due to the gross dearth of housing supply in London.

“The departure of the Funding for Lending scheme, and the arrival of the new mortgage market rules in April, might have a slowing effect further into 2014. However the Help to Buy scheme will become even more pivotal in the coming months and the Government’s ability to stimulate housing development will be crucial to address the chronic shortage of housing supply.”

LSL / Acadata Wales HPI News Release

Welsh house prices rise by £1,125 in October

  • Average house prices up £3,137 since start of 2013
  • Sales at highest level since December 2007
  • New record average price in Cardiff, up 7.4% annually

House Price

Index

Monthly Change %

Annual Change %

£154,696

240.0

0.7

1.4

Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, comments: “The housing market in Wales has turned over a new leaf and is clearly entering a new phase, with pent up demand and strong competition driving house price growth and rising sales. The market is powering ahead, with prices increasing by £1,125 compared to September, representing the third monthly price rise, while prices are up by £3,137 since January 2013. New buyer enquiries, sales and price expectations are all above the three-month average illustrating the strong headway being made.

 “Sales in particular are now standing at the highest level since December 2007, and momentum is building further – thanks to the boost in consumer confidence and the improving economic picture. Now that mortgage rates have dropped to record lows, aspiring homeowners are starting to have more chance to put together the money required for a deposit. As a result there are bursts of first time buyers pouring into the market with much more zeal, with Wales has seen a higher loan-to-value ratio than elsewhere in the UK. While there’s an improvement in the home movers sector of the market too.

“First-time buyer homes are proving particularly popular in Cardiff. Prices in the capital are up 7.4% on the year, setting a new record price, while many other parts of Wales remain more subdued. Without doubt, Cardiff is a different kettle of fish from London and South Wales is no South East of England, but as a whole the housing market in Wales is making strong strides forward nonetheless. Regionally however, some areas do differ more than others in terms of performance due to their local economies. Wage growth is still slow, and across Wales this will prevent prices from rising too quickly.

“What’s key is that we see steady, house price growth to ensure sustainable growth. When it launches on 2nd January, the Help to Buy Wales shared equity scheme will provide a new opportunity for first- time buyers and existing home owners on new-build properties. But as the scheme is geared up at new-build properties, which represent only a smaller proportion of total housing sales, we expect the scheme will not – by and large – drastically affect overall prices.

“However house-building in Wales is still below pre-recession levels and this supply remains an area that needs to be addressed in order to continue the positive growth. While, the UK Government’s decision to withdraw the Funding for Lending scheme indicates that the more recently announced Help to Buy schemes are offering significant support to the sector, more can be done. In the coming year much will be determined by the development of the jobs market in Wales.”

LSL / ACADATA ENGLAND & WALES HPI

House prices up £11,219 from a year ago, fastest rate in three years

  • Prices rise by £1,400 in November, reaching new record
  • On an annual basis prices increase in all regions for the second consecutive month
  • By the end of 2013 sales set to be 16% higher than 2012

 

House Price

Index

Monthly Change %

Annual Change %

£238,839

243.2

0.6

                     4.9

David Newnes, director of LSL Property Services plc, owner of Your Move and Reeds Rains estate agents, comments: “The housing market is almost unrecognisable from twelve months ago. Not only have average prices climbed to a new record high – with an annual rise of £11,219 and a monthly increase of £1,400 – but we’ve seen an increase in every region for the second month running – a true sign that the nationwide recovery is really taking off. The LSL house price index incorporates all transactions including cash.

“Competition is strong through rising demand and supply of new instructions not growing , a factor that will continue to prop up prices in the long term. Confidence is higher throughout the market, with the Help to Buy scheme and record low interest rates contributing to the positivity. Over the second part of this year, consumer confidence has snowballed as the economic picture improves, leading to a significant rise in sales. The increased availability of mortgages, in part thanks to the government’s schemes, and the greater range of mortgage deals on offer has swung open the door to a new host of first-time buyers, making the distant dream of homeownership now a reality for thousands.

“Strong headway is finally being made towards a universal recovery. All ten regions in England & Wales experienced positive movement in prices on an annual basis for the second time in three years. Annually prices have increased in over 80% of local areas up and down the country – the highest percentage since September 2010. The trajectory is clearly upwards. Record high house prices have not only been recorded in the capital, but also in areas of the South East including Oxfordshire, Hertfordshire and Cardiff.

“However, there is still uneven growth in property values across the country. London prices continue to race ahead in a different gear with 9.2% annual growth in the capital vastly outshining the rest of the UK. Between August and October sales in London were up 27% on the same three months in 2012, reflecting intense demand for properties in London, both from domestic and abroad.

“In his Autumn Statement the Chancellor unveiled plans to unleash a further £1 billion to unblock housing development to address the critical shortage in supply. This will play a role in preventing prices rising too far too fast. But this is only the beginning, and it’s vital that house building is given greater attention in 2014 and beyond, in order to ensure the recovery rolls forward at a sustainable level.” 

Marsh & Parsons

2014 FORECAST: LONDON TO SEE HOUSE PRICES RISE BY 5-7%

  • London prices expected to stabilize in 2014 with annual growth of  5-7%
  • Prime London will continue to be a magnet for overseas buyers
  • Business confidence to boost the corporate lettings sectorImage

House Prices

London property prices will continue to dwarf those in the rest of the UK in 2014, but the rate of growth is expected to stabilize, according to estate agent Marsh & Parsons.

They forecast that Prime London house prices will rise by 5-7% in 2014, compared to 10.3% in the last twelve months[1], with the majority of growth expected to take place in the first half of the year.

Peter Rollings, CEO of Marsh & Parsons, comments: “London’s housing market saw a substantial uplift in 2013, and we expect a similarly strong start in 2014 to drive an annual rise in prices – but these won’t be as spectacular as last year. With ongoing support from Government initiatives, the rate of growth will remain sustainable.

“Following improvements in unemployment levels, we’re likely to see modest increases in interest rates next year. But with a general election coming up in 2015, any changes are unlikely to create shockwaves through the housing market.”

Supply and Demand

A lack of supply being met with high demand will continue to drive price increases in the Prime London property market. At the end of 2013, there were 18 registered buyers per available property, compared to 13.5 at the end of 2012[2], and this will ratio will remain high in 2014.

Peter Rollings continues: “Many sellers will remain cautious of putting their property on the market as they are not confident that they will be able to find somewhere to move to, therefore supply is unlikely to improve considerably next year.  As a result, property will continue to sell for close to or at the asking price and we may see our average success rate of 98% of the sale price currently being achieved in Prime London increase even further.[3]

 

Overseas Buyers

Changes in policy announced in George Osborne’s Autumn Statement mean that foreign property owners who sell second homes in the UK will have to pay Capital Gains Tax from April 2015.  But with overseas buyers and foreign nationalities making up just 28% of all Prime London purchases in Q3 2013[4], this change in policy is unlikely to have any dramatic effect on prices in 2014.

Peter Rollings continues: “With the change only being introduced in April 2015, we may find a short-term rush for tax-free sales before the policy comes into effect, helping to boost supply and fluidity at the highest level. However, even with yet more tinkering from the Chancellor, London remains a more attractive and easier place to buy property than many other cities around the world, and providing that the politicians don’t ‘kill the golden goose’, demand for the best properties will remain fierce.”

 

The Rental Market

Based on current trends, Marsh & Parsons expects rents in Prime London to hold steady in 2014, with rises of 2-4% in 2014, as opposed to the generally static rent levels recorded in 2013.

Peter Rollings continues: “The improved economic mood has eased anxiety among city firms and as a result, the corporate lettings sector will flourish next year. Based on current trends, we expect the greatest rental increases to be found in two-bedroom properties in central areas such as Kensington & Chelsea, which are popular locations for visitors from abroad. As competition heats up, void periods will continue to fall, and 2014 tenants will face intense competition for the best properties.”


[1] Annual price in Q3 2013 in Prime London, according to Marsh & Parsons’ latest London Property Monitor

[2] Data from Marsh & Parsons’ London Property Monitor

[3] Marsh & Parsons’ sales data

[4] Marsh & Parsons London Property Monitor, Q3 2013

LSL / Acadata House Price Index: Friday 8th November

Transactions and prices continue to climb across the country

  • Prices rise in all regions in England & Wales for first time in three years
  • Most transactions recorded in an October since 2007
  • House prices up 4.3% from a year ago, setting new record high

House Price

Index

Monthly Change %

Annual Change %

£237,161

241.5

0.6

4.3

David Newnes, director of LSL Property Services plc, owner of Your Move and Reeds Rains estate agents, comments:

“We’re only at a fraction of the heights seen before the credit crunch struck, but still the housing market is a hive of activity. There’s been a tremendous jump in transactions over the past three months – with the most sales recorded in an October since the onset of the crisis. Key to such a surge in activity is the renewed level of confidence seeping back into the market and a plethora of attractive mortgage deals enticing more and more aspiring buyers back into the housing arena. 

“For the first time in nearly three years, all ten regions in England and Wales have seen an increase in prices – an astonishing recovery, one that we can now say is truly national.  Even earlier this year, many regions were still struggling to escape from the resilient grasp of the financial crisis. But in little over six months we’ve seen a drastic improvement in the availability of mortgages and increased lending by the banks to those at the lower end of the spectrum. The increase in demand, in part fuelled by the second phase of Help to Buy having being brought forward, has driven up average house prices across the country by £1,376 over the past month and £9,776 from a year ago. But despite significant rises, the increased availability and competitiveness of mortgages has also opened the door to a new wave aspiring buyers who had previously been persistently locked out. The stark rise in first-time buyer activity in particular has given the speed of recovery an even greater uplift.

“Up and down the country regions are benefiting from the resurgence and experiencing new levels of activity. Up by 26% East Anglia has seen the greatest boost in sales, but even the region with the lowest rise in transactions, the West Midlands, falls only shortly behind rising by 22%. In the face of rises sweeping across the nation, we must ensure that the market doesn’t soar out of reach for those at the bottom of the ladder.

“Over the next year it’s crucial that the Government supports the growth of new house building to meet the growing demand, and prevent properties across the country becoming unaffordable for large portions of the population. But lenders too must share some of the load, as they play a pivotal role in reaching the lower end of the housing market and this can help support a continued and more sustainable rate of recovery into 2014 and beyond.”

LSL/ACADAMETRICS WALES HOUSE PRICE INDEX

Welsh house sales maintain the three-and-a-half year high

  • Prices fall but this reflects increased activity by first-time buyers
  • Prices down by £1,530 from the start of the year

House Price

Index

Monthly Change %

Annual Change %

£150,016

232.7

-0.2

-0.9

Oliver Blake, Managing Director of Reeds Rains estate agents, who has branches in Wales comments: “While the housing market across the UK makes a strong recovery, Wales continues to face an uphill struggle. House prices dropped in August and have fallen in nine out of the last twelve months. They fell by £373 in August and are £1,344 lower than twelve months ago.

“However there is cause for optimism as sales activity is growing and first-time buyer activity has bounced back bringing a whole new burst of energy.  House sales in Wales have continued to rise and for the second month running have reached a three and a half year high. It’s hugely positive to see the increase has been largely universal across all sectors of the market. First-time buyers have unlocked property chains, allowing sales to ripple higher up the ladder.

“First-time buyers now make up a larger part of the property market in Wales, which has caused the fall in average house prices. More first-time buyers mean more properties have been purchased at the lower end of the market, therefore lowering the average value. In the long term the rise in first-time buyer activity will make the market healthier, as sales from second-time buyers and home movers will boost levels and help drive prices upwards again.

“On a regional level, Cardiff had the biggest rise in sales in August due to the boost in the sale of detached and semi-detached properties which is barely the preserve of first time buyers. Demand is rising across the board and it is good to see there has been a rise in sales across all buyer types. The Government’s Funding for Lending and Help to Buy schemes have stimulated the market significantly. An array of attractive mortgage products have entered the market left, right and centre thanks to increased mortgage supply and the rise in competition between lenders. The more progress made in the first-time buyer market, the more likely it is we will see green shoots of recovery and more buyers tempted to step back into the market.

“The Welsh market needs to focus on house building to give it the shot of adrenaline it needs to fuel growth and return to a full recovery.”