LSL / Acadata: Wales House Price Index News Release

Welsh house prices rise for first time in seven months

  • Prices increased £1,563 in September
  • Average price now £1,219 higher than start of 2013

House Price

Index

Monthly Change %

Annual Change %

£152,779

237.0

1.0

0.5

Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, comments: “The economy is racing along and the rise in confidence, underpinned by better access to mortgages, is fuelling the property market in Wales. A shift in gear towards growth has become much more obvious: prices have moved into positive territory for the first time in seven months, with a rise of £1,563 in September compared to August.

“Hordes of first-time buyers are coming out of the wood work, providing renewed strength which will help the Welsh market gather momentum. Record low interest rates have meant mortgage payments for new borrowers are their most affordable for over a decade. As a result the mortgage market is bustling with potential buyers. Since the summer the increase in first-time buyers has helped unlock property chains higher up, allowing sales to soar. The slight drop in September is a reaction to the record high peak in August, reflecting a return to a more sustainable level on the barometer.

“The Government’s Help to Buy Cymru scheme has provided much needed support to people in search of affordable new build housing. It’s incredible to see that demand has leapt up and activity in Wales has become more even across all tiers of the property market. Prices have risen now that the distribution of sales is no longer primarily from the lower end of the market. However, there are concerns that interest rates may rise and a slowdown in wage growth could put pressure on aspiring buyers, eager to step on the ladder.

“On a smaller scale, the north and south divide is fading as the average price changes in north, south and central regions are almost identical in September reflecting the uniform recovery across the country. Cardiff is a hotspot having the largest total number of sales, and represents a substantial proportion of the Welsh property market. Often prosperous areas benefit from the upswing in buyer interest, as stronger local economies attract new buyers looking to settle down and find employment. Cardiff, boasts more green space per person than any other UK city, which is a key factor enticing more and more buyers into the region.

“With an influx of people into Wales, the market will hit a roadblock if the lack of housing supply in Wales is not addressed. The spotlight will be shone on the new Housing Bill to boost the supply of affordable homes. While the possibility of the Government’s New Buy mortgage guarantee scheme with builders and lenders will also provide a further foundation for growth.  These schemes will be crucial for the Welsh economy to stay on track and for the recovery to reach the finish line.”

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LSL/ACADATA SCOTLAND HOUSE PRICE INDEX

Scottish house prices up £647 since September 2012 

Prices rise by £952 on a monthly basis
House prices in Aberdeen hit record high
Sales in Q3 2013 22% higher than last year

House Price

Index

Monthly Change %

Annual Change %

£144,253

195.6

0.7

0.5

Donald MacLellan, Chairman of Walker Fraser Steele Chartered Surveyors, part of LSL Property Services, comments: “The Scottish housing market is being revitalised: for the first time since January 2011 the annual change in prices has been positive, marking a significant step change. Stable price levels are helping the market recover; prices have risen by £952 in the past month and are £647 higher than a year ago. Sales levels are also following suit, now at their highest level for five years – a dramatic boost that is helping propel the property market upwards.

“The main driver of this increase is down to the phenomenal rise in first-time buyer activity at the lower end of the market. Lenders have eased conditions, banks are more confident and generally the mortgage market is buzzing. First-time buyers have witnessed a plethora of top mortgage deals, greater product choice, and low interest rates are giving people more confidence to buy. The Government’s launch of its own version of the Help to Buy equity loan scheme, has given the market a real helping hand.

“The general economic recovery has restored and renewed consumer confidence, and many would-be movers in Scotland are now more optimistic in their ability to sell their existing home and buy elsewhere. As a result the whole market has become far more fluid. Before the average house price of £97,000 paid by first-time buyers was lower than the average price for the market as a whole and movement at the bottom end caused prices to fall. Now it’s activity from second time buyers and other movers that is placing upward pressure on prices and this will drive the recovery forward. With sales up by 22% over the last three months compared to last year, green shoots are emerging in the property market left, right and centre.

“Before we get swept away with the positive news, it is important to stress that the Scottish property market has a long way to go. For instance, there’s the possibility that interest rates will rise and a concern that higher stamp duty on the most expensive properties could put a brake on activity. All eyes will be on the Scottish Government’s plans to focus on affordable housing across Scotland which is vital if the market is to progress further.”

Value of one-bedroom properties in Prime London rises by over £60,000 in a year

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  • One-bedroom properties in Prime London have appreciated by 6% in the last quarter, and by 14% in the last year
  • One-bedroom properties are very popular with first-time buyers and buy-to-let investors, spurred on by low interest rates and Help to Buy
  • Prime London property overall has risen by 1.6% in the past quarter, 10.3% in the past year

 The average value of one-bedroom properties in Prime London has risen by over £60,000 in the past year, following a 14% annual growth, according to estate agent Marsh & Parsons’ latest London Property Monitor.

The bulk of this increase was gained in the last three months, after a strong 6% quarterly rise increased the average value of one-bedroom properties by an extra £29,140. This follows three strong quarters of growth in the past year, contributing to a 14% annual growth – equivalent to £62,063 in a year.

The average price of a one-bedroom property in Prime London now stands at £502,139. In Prime Central London, covering the most expensive areas of Chelsea, Kensington, Notting Hill, Holland Park and Pimlico, the average value of a one-bedroom property has risen to £583,036 – a 9% increase in the last year, equivalent to £48,703 in a year.

Peter Rollings, CEO of Marsh & Parsons, comments: “With returns like these, it’s no surprise that people are queuing up to buy Prime London property. Competition for one-bedroom properties in particular is fierce. Spurred on by the rapidly improved availability of mortgages and low interest rates, first-time buyers are flooding the market in competition for the best properties in this price bracket.

“In addition, one-bedroom properties generate the best rental yields, making them a popular purchase for buy-to-let investors. We have noticed many young, would-be buyers adopting more European attitudes to renting, with many choosing to become long-term renters, rather than saving up for a deposit. As a result, the value of one-bedroom properties in Prime London is shooting up the scale.”

One-bedroom properties have risen in value at a faster rate than properties of other sizes in Prime London. The overall rate of growth in Prime London, reflecting all sizes of property combined, was 1.6% in the past quarter and 10.3% in the past year.

By comparison, two-bedroom properties have appreciated by 10% in the last year in Prime London, and by 7% in Prime Central London. Three-bedroom properties have appreciated by 12% in the last year on average across both Prime and Prime Central London.

Property Type Breakdown

   

Prime Central London

Non-Central Prime London

All Prime London

1 Bed

 £     583,036

 £        429,756

 £        502,139

2 Bed

 £  1,302,125

 £        615,495

 £        895,770

3 Bed

 £  2,298,161

 £        923,559

 £     1,523,116

4 Bed

 £  2,925,556

 £     1,364,599

 £     1,976,985

Strong price growth continues

In Prime London as a whole, property values have continued to rise, with prices climbing by 10.3% in the past year and by 1.6% in the last quarter.

However, for the first time in five quarters, the more expensive areas of Prime Central London have outpaced Prime London as a whole by experiencing a higher quarterly rate of growth. The rate of growth in Prime London was 1.6% in Q3, while in Prime Central London this figure was 1.7%.

Prime London Property Price Movements

 

Average value

Quarterly Change

Annual Change

Prime London

£ 1,426,243

1.6%

10.3%

Prime Central London

£ 2,040,387

1.7%

8.2%

Supply and Demand

The number of registered buyers has increased by 6% in the last quarter, but for the first time this year, there has also been an increase in the supply of property to the market. While the volume of supply remains at a historic low – there are still 17% fewer properties on the market than at the same time last year – the ratio of supply to demand is beginning to stabilise.

Peter Rollings continued:The ratio of supply and demand is the key factor which determines prices on the London property market. While interest rates remain low, Prime London property will continue to be seen as an attractive investment opportunity for both UK and overseas buyers, and prices will remain high.

“However, rather than create a bubble, we may find that Help to Buy actually stabilises prices by encouraging first-time sellers to put their properties on the market and take their next step up the property ladder. For the past three quarters, a lack of available property has created a high premium for those on the market, but the gradual increase in supply, which we are beginning to see now, combined with the wide volume of property development taking place, may start to initiate more ‘normal’ market conditions.”

LSL/ACADAMETRICS SCOTLAND HOUSE PRICE INDEX

 

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Return of first-time buyers drives up Scottish house sales

  • Sales in 2013 are 10% higher than 2012
  • First-time buyers account for the majority of increase in sales
  • Prices down by 0.3% on an annual basis

House Price

Index

Monthly Change %

Annual Change %

£143,278

194.3

-0.2

-0.3

Alan Penman, of Walker Fraser Steele chartered surveyors, part of LSL Property Services, comments: “First-time buyers are making a comeback in Scotland. But it is a much more muted recovery compared to south of the border. Falling housing prices have put a dampener on the Scottish housing market. The sluggish rate of growth, shown by the drop in prices by £303 monthly and by £480 compared to a year ago, adds to the many uncertainties facing the Scottish housing market. Yet there are several signs that things are changing. The mortgage market is perking up now that the economy is on the mend, with figures showing sales are up by 10% in January to August this year compared to 2012. This is due to the bounce back in first-time buyers which has kick started the market.

“Momentum is building in the housing market as the Government is stretching out a helping hand to first-time buyers. Rising first-time buyer lending has boosted sales activity significantly, as first-time buyers can now take advantage of the many attractive mortgage deals on offer from banks and building societies. There has been a swift improvement in the availability of high loan-to-value mortgages which has sent waves of confidence across the board. Banks are being proactive in their approach and are happier to lend to borrowers that lack big deposits. Buyers are open to an improved range of mortgage deals, better pricing and more enhanced product choice due to the rise in competition.

“In fact, the Scottish Government has unveiled its own version of the Help to Buy equity loan scheme, and around £220m has been set aside to help borrowers on to the housing ladder.  First-time buyers are crucial to the housing market’s health, but it is activity from second time buyers and other movers which will put upward pressure on prices and boost the rate of recovery all round. The Scottish Government’s commitment to investment in affordable housing across Scotland will provide a firm foundation for the market’s growth in coming months.”

Paper Summary for 16th October 2013

Economy

According to a new forecast out today, from the Centre for Economics and Business Research, indicates that the UK’s economy will grow by 1.6% this year ahead of the expectations of major international groups, which is above previous forecasts from other groups. And it is thought that UK economic growth will speed up to 2.7% next year. The CEBR predicts that such rapid growth would be among the best in the developed world, bringing the government’s deficit to 4.7% of GDP. These figures come as welcome news, as the UK was expected to grow by only 1% this year.

Property

Prices have risen swiftly to a record quarter of a million pounds after a climb of 4% in the past year. The price of an average house in the UK shot up past its previous nominal peak during August, reaching record levels again according to  the ONS figures. For first time buyers the rise was even more rapid with prices rising 4.9% over the same period. The north south divide is growing: of the UK’s four countries only England’s average property prices have passed their pre-crisis peak in nominal terms. Banks are more willing to lend borrowers with low depsoits and confidence is rising rapidly. The underlying fact is that English prices are driven by London and the South East with every other region still below their 2008 peak levels. David Newnes of LSL Property Services points out that it is crucial that the growing momentum is also met head on by an increased supply of housing if in order to sustain growth in the long term and make certain future generations of home buyers won’t be priced out of the market.

Recruitment

New research shows that men control the highest positions in marketing, even though 75% of marketers are female, according to recruitment marketing specialist EMR. It is said the likely reason for career progression slowdown is due to women having children and the responsibilities of childcare. The most significant difference is between ages of 30 and 49 where 17% more men reach director positions.

Personal Finance

In a recent Lords debate over the Care bill, which is implementing elements of a review of the UK’s care system by economist Andrew Milmot, the Care minister, Norman Minister said that pensioners with £23,250 plus in savings and assets are “quite wealthy” as he defended plans to prevent some elderly homeowners from deferring the cost of residential care. The Government was blamed for ripping people off on a deal after it came to light that a scheme to defer a person’s care costs until after their death may be available only to people with assets, apart from their home, of less than £23,250. The Shadow care minister responded by saying they’ve discovered many older people must use up other savings and assets before they qualify for help and that many elderly people will feel angry that the Government has tried to pull the wool over their eyes about what the plans really mean. 

LSL/ACADAMETRICS SCOTLAND HOUSE PRICE INDEX

 

 Image

 

Scottish house sales at highest level for five years

 

  • Sales in July 27% higher than in June
  • First-time buyers account for the majority of increase in sales
  • Prices are up 0.3% in July – first increase in four months

 

House Price

Index

Monthly Change %

Annual Change %

£143,574

194.7

0.3

-1.1

 

Alan Penman, director of Walker Fraser Steele, the chartered surveyors who are part of LSL Property Services, comments:

 

“House prices haven’t been increasing in Scotland anything like as quickly as they have in England. But they did rise for the first time in four months in July, which could be the start of a prolonged period of house price increases. Sales have been increasing, and confidence is gradually seeping back in to the market. First-time buyer lending in Scotland was at its highest since 2007 in the second quarter of the year, which has driven sales up to their highest in five years. Sales are up 27% compared to June, and first-time buyers are accounting for a much higher proportion of sales than they have done previously. The improvement is down to a significant improvement in the availability of high loan-to-value mortgages. Banks are much more willing to extend an olive branch to borrowers with small deposits, which has opened the door to thousands of buyers who were previously locked out of the housing market.

 

“And the improvement looks like it should be long-lived. The economy is brightening by the day, and confidence is spreading quickly. Further growth in the market is expected to continue as new buyers are keen to enter the market and potential sellers will start to put their homes up for sale to benefit from rising prices. The surge in activity from the bottom end of the market has sparked a revival in the market. It’s up to the Scottish government to continue to help first time buyers as they are the key to healthy, long term recovery.”