Average prices up £1,384 in January, setting a new record high

LSL Property / Acadata England & Wales HPI 

  • Monthly sales set to reach 73,000 – the highest in a January since 2007
  • Sales only 4% below January average in the decade before the credit crunch
  • 90% of Unitary Local Authorities now experiencing house price growth

House Price

Index

Monthly Change %

Annual Change %

£241,101

245.5

0.6

5.2

 David Newnes, director of Reeds Rains and Your Move estate agents, owned by LSL Property Services plc, comments: “The UK housing market is roaring further back to life in 2014 as the recovery weighs in across the board.  Prices are now up 5.2% annually, driving the price tag for the average home to a new high. Mostly this is due to much increased activity, with increased demand for property buoyed by low interest rates and Help to Buy, combined with hot competition for homes. This boost in sales has seen an air of optimism encapsulate the market. While 2013 was a turning point in the recovery, 2014 is set to be a watershed year if the next few months continue in the same vein.

“Last month saw the largest rise in sales over the past year, up 67% annually, with transaction levels crucially only 4% below the January average seen in the decade before the credit crunch. This astounding turnaround can largely be pinned down to the resurgence of the first-time buyer. The wide range of attractive mortgage deals on offer, cheaper rates and wider product choice has been pivotal. Such rises in new buyers has spurred on activity further up the ladder and inspired movement among second steppers, which will prove vital in sustaining a healthy rate of sales activity.

“The recovery has now been rolled out far and wide, with the good news coming in from more and more Your Move and Reeds Rains branches up and down the country. Price rises have now spread to 90% of unitary local authorities – the greatest number since August 2010. With mortgages still historically cheap and interest rates set to remain stable for the time being, we’ll continue to see new buyers will rush to the market nationwide. However, even so, price growth and sales levels are still behind their pre-crisis peaks so we’re still some way from the ill-fated ‘bubble zone’.

“Regionally, we’re seeing a ripple effect emerging from London. Heat from the capital is emanating out further with traditional hotspots being the first to reap the benefits of recovery; particularly southern England and East Anglia before moving north through the Midlands. Although we’re still seeing a North-South divide, this is gradually being eroded. The West Midlands has this month broken the mould as growth has surged past the rate seen in the South West region, with Reeds Rains branches across the region reporting a large jump in prices in January compared to the preceding month.

“With greater economic prosperity, confidence between banks and lenders has been cemented further which will no doubt fuel the engine of recovery in the months ahead. While similarly first-time buyers are set to swim further across the sea of adversity to secure a home. But it is crucial both aren’t scuppered and that the Government’s housing plans come to fore with a continued focus on supply. This will ensure the recovery reaches the finish line and a generation doesn’t get priced out of the market”. 

News Headlines – Sunday 22nd December

Property

The Royal Institution of Chartered Surveyors predicts average house prices will rise in Britain by 8% next year and last Thursday the Council for Mortgage Lending revealed that the amount of money lent to borrowers in November rose to £17bn, up by more than 30% on the same period last year. Andrew Bailey, deputy governor of the Bank of England warned homebuyers there will be a clampdown on house purchases if there is any evidence that rising prices are spiralling out of control. Mortgage lending is overseen by the Prudential Regulatory Authority (PRA) which has the power to make banks hold back more money on balance sheets for every mortgage offered and can reduce loan-to-value ratios, making products such as 95% mortgages more expensive for homebuyers. Mr Bailey said controls could include strengthening the tests buyers have to go through before acquiring a mortgage and increasing the amount of capital banks have to hold against household lending.

Economy

Advanced economies will get their ‘mojo’ back in 2014 as the UK wins back medal as the fastest growing major European economy next year according to recent headlines. PwC said Britains; brighter growth prospects could also move it in line to be the fastest growing economy in the G7. The UK economy is expected to grow by 3% next year which would move it closer in line with America for the title of the strongest growing advanced economy in the world. There’s an air of optimism, as improving consumer confidence is expected to result in higher business investment. Despite the long journey towards recovery, for the first time people feel things are really starting to pick up.

Personal Finance

Shoppers are expected to splash out more than £5 billion in just four days in a boost for flagging retailers. Last weekend was said to be the busiest of the year for the high street with 31 million visits over two days. Barclays predicts that £5.2 billion will be spent on credit cards between yesterday and Christmas Eve and more than £1.1 billion will be spent on Tuesday alone as a vast proportion of people have left their Christmas shopping late due to the fact Christmas falls midweek.

LSL / Acadata Scotland HPI News Release

Scottish house prices up £1,368 since October 2012

  • On a monthly basis prices fall marginally by £206
  • House prices in Aberdeen set another record high
  • Sales over the last three months are 23% higher than last year

 

House Price

Index

Monthly Change %

Annual Change %

£144,084

195.4

-0.1

1.0

Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, comments: “It’s clear the Scottish housing market is being restored to health. Sales are substantially better and prices are entering a period of prosperity, fuelled by rising consumer confidence and demand. October is the second consecutive month in which the annual change in prices has been positive, a trend that has not been visible since early 2011. Average prices have risen £1,368 over the past year in Scotland, while lending levels are improving rapidly as economic conditions perk up as is being seen across the UK.

“With the easing of mortgage lending conditions, first-time buyers are having a much easier ride. There is now a better range of competitively priced products with lower deposit requirements, thanks in part to the backing from the government’s schemes. So far 2013 is seeing the greatest amount of sales recorded over the last five years. Record low interest rates have sent the market into another realm. Sales have shot up by 23% for the three months of August, September and October 2013 compared to the same period last year. At the bottom end, shoots of first-time buyer activity mean the market is blossoming, a factor that’s giving the whole market a lift.

“After a period of slow movement, it is reassuring to see home mover and remortgage lending is also showing a boost in levels. People are now more confident in their plans to sell their current homes and buy somewhere else as signs show the path ahead in 2014 looks stable. The Help to Buy scheme will take on more prominence early next year and will be the main driving force pushing up house price growth and buyer activity.

“The recent news that the Funding for Lending scheme will be axed has created an element of uncertainty. But the underlying fact is that the recovery has only just begun. Lending is still only slightly above half the levels seen at the peak of the market, so there is much space for growth. The referendum next year on independence from the UK could have an impact on Scotland’s housing market. But if investors hold on to see what the effect will be, it may unsettle the market and hamper its ability to create the much needed new housing supply in the meantime.”

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.”

Today’s Paper Summary: 15th November 2013

Property

As the Government’s Help to Buy scheme takes off and the economy grows stronger, house prices will increase across the UK by 7% next year and 5% in 2015. The improving economy is expected to transform the country’s property market. Average prices in London will jump by £76 each day in 2014 but every region will enjoy a rate of growth last seen before the financial crisis, according to a new report by Knight Frank. 

Many first-time buyers feel that buying in London is a struggle and that half the battle is finding out what help is available. Recently it was found that third of wannabe homeowners have lost all hope of buying according to L&Q’s housing association. A study of 2,000 under 35’s revealed that despite government help, up to 70% of those who have been saving had given up and blow the cash on holidays, cars or even to pay bills as the state of the market and the recession eliminated their property plans. In London for instance, prices have risen and it is difficult for a vast majority to find affordable accommodation, which has meant shared accommodation has become an option for many people. Shared ownership is said to be a flexible and affordable route – it was originally launched to help low-paid workers buy affordable homes but the part-buy part-rent scheme is now mainstream. 

 Canary Wharf is getting ready to welcome a 74-floor skyscraper. The tower will be Europe’s tallest purely residential building. Ryan Corporation U.K. Ltd. paid 100 million pounds ($160 million) for the site of the proposed skyscraper, the closely held company said yesterday in an e-mailed statement. The 242-meter (794-foot) high tower would be the tallest in London’s second-largest financial district and the apartments would have a total value of more than 1 billion pounds when it opens in 2018.

Personal Finance

Families could be about to celebrate a drop in the cost of their weekly food shop as Asda fired the opening shots in a new supermarket price war. The company will knock £1 billion off prices over the next five years it said yesterday and accused rivals of ‘gimmicks’ in offering customers vouchers while boosting prices.

Rising energy bills are said to be killing off British poinsettia plants. It is thought the Christmas staple red pot plant will be in short supply this year with growers hit by rising energy costs. For millions of families the plant is as important at Christmas time as the turkey or Christmas tree.  But sadly there may be disappointment as the plant is getting increasingly more expensive to heat, as they need carefully controlled temperatures of between 59F to 68F – and unfortunately soaring fuel bills have driven some growers out of business. 

Economy

News of a slowdown in the Eurozone has created a somewhat a bleak outlook, and has reduced people’s hopes of a rebound as suggested earlier in the year as Europe’s two largest economies stumbled in the second quarter – Germany and France. By contrast, the British economy grew 0.8% in the third quarter this year, it’s most significant level of growth since 2010. The UK economy could reach what the Bank of England officials have referred to as ‘escape velocity’ sooner than until recently expected. The banks Monetary Policy Committee also warned that a global slowdown posed the greatest threat to the recovery. And reports today that disappointing growth figures in the Eurozone and Japan driven by weak export numbers have dashed hopes that a global economic recovery would gather pace in the year’s second half.

 

 

 

LSL/ACADAMETRICS SCOTLAND HOUSE PRICE INDEX

 

Image

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.