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New combined index for the whole of UK shows prices up 0.6% in April
Property prices in the UK increased by 0.6% in April month on month and by 8.2% year on year, according to the first single index for the whole of the country. It merges previous indices that were published separately for England and Wales, Scotland and Northern Ireland taking data from the Land Registry, Registers of Scotland, Land & Property Services Northern Ireland and the Valuation Office Agency. It shows that the average price of a property in Scotland in April was £138,445, up 3.3% year on year and 1.5% month on month while in Wales prices increased by 1.7% year on year and 1.9% month on month to an average of £139,385. In England, the April data shows an annual price increase of 9.1% and a monthly rise of 0.7%, taking the average property value to £224,731 while in London prices increased by 14.5% year on year and 0.6% month on month to an average of £470,025. A breakdown of the figures show that the North West of England saw the greatest monthly growth with an increase of 2.3% and the North East saw the lowest annual price growth with an increase of 0.1% while the South West saw the most significant monthly price fall with a fall of 2.8%. The number of UK home sales continued to grow in the three months to April 2016, rising by 8.3% relative to the preceding three months although sales fell by 45.2% in April 2016 compared with March 2016. The number of completed house sales in England increased by 1.1%to 56,884 compared with 56,261 in February 2015, the number of completed house sales in Wales increased by 4.1% to 2,796 compared with 2,686 in February 2015 and the number of completed house sales in London fell by 10.5% to 6,926 compared with 7,740 in February 2015. Due to a period of two to eight weeks between completion and registration of sales in Scotland, volume figures for the most recent two months are not yet complete, so they are not included in the index report. The creation of a single index for the UK has been widely welcomed but there is still concerns that the time lag amounts to six weeks. According to Rob Weaver, director of investments at property crowdfunding platform Property Partner, on first viewing, the new single index looks like a fair representation of the market and consistent with current sentiment. But he pointed out that with transaction volumes at historic lows, the sample size for April will be smaller than normal and added that the next one will give a better indication as to whether or not this month’s referendum on the future of the UK in the European Union has affected sales and prices. But with historically low interest rates, strong employment and the continuing chronic undersupply of housing, he believes that the upward trend in prices looks set to continue later in the year. He also pointed out that one official… Continue reading
UK property market boosted by buy to let rush in march, official figures show
UK house prices increased by 9% in the year to March 2016, up from 7.6% in the year to February 2016, according to the latest official figures. House price annual inflation was 10.1% in England, 2.1% in Wales, 6.4% in Northern Ireland but fell by 6.1% in Scotland, taking the average price to £292,000, the data from the Office of National Statistics shows. Annual house price increases in England were driven by growth in London of 13%, followed by 12.2% in the South East and 12.1% in the East of England. However, excluding London and the South East, UK house prices increased by 5.9% in the 12 months to March 2016. The data also shows that on a seasonally adjusted basis, average house prices increased by 2.5% between February 2016 and March 2016 and prices paid by first time buyers were 9.7% higher on average than in March 2015. For owner-occupiers prices increased by 8.7% for the same period. This is the final release of the ONS House Price Index (HPI) which will be replaced by the new UK House Price Index from June 2016. Richard Snook, senior economist at PwC, explained that buy to let investors rushing to complete purchases before the 3% stamp duty charge on additional properties came into effect at the beginning of April has affected the figures. ‘This move undoubtedly drove up demand and prices in March and we would expect demand to soften over the next few months as a result. There are no signs of any Brexit related slowdown in this month’s figures, although the underlying trends are masked by the effects of the stamp duty change,’ he said. According to Rob Weaver, director of Investments at property crowdfunding platform Property Partner, the figures also show that the divide between north and south is widening while in London and the south east first time buyers are finding it harder to get on the housing ladder. ‘But with niggling doubts over the imminent EU referendum, we’re likely to see a short term dip in prices until the end of June. Then the fundamentals of strong demand and scant supply, rock bottom interest rates and healthy jobs market should reassert themselves,’ he added. Randeesh Sandhu, chief executive officer of Urban Exposure, the residential development finance provider, also believes that activity is likely to slow down in the coming months following these changes and also in the run up the EU referendum with consumers remaining cautious against the backdrop of a potential Brexit. ‘However, it is clear that demand for housing remains strong and any impact of a Brexit is likely to be a short term trend with activity returning to normal soon after any decision. Therefore a real focus needs to be given to the housing shortages the UK faces,’ he said. ‘In London, the new Mayor, Sadiq Khan, has the opportunity to inject some fresh policies to the London housing market where house prices are particularly steep. However, Sadiq’s plan… Continue reading
UK property prices fall in April and could soften further ahead of EU vote
Property prices in the UK fell by 0.8% in April and annual house price growth eased to 9.2%, taking the average price to £212,321, the latest index data shows. The figures from lender, the Halifax, also show that house prices in the three months from February to April were 1.5% higher than the preceding three months. Martin Ellis, Halifax housing economist, pointed out that both the quarterly and annual price rates are at their lowest since November 2015. ‘Current market conditions remain very tight as the severe imbalance between supply and demand persists. This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months,’ he said. ‘Weakening sentiment regarding house price prospects and a dip in consumer confidence, however, suggest that annual house price growth may ease,’ he added. The 0.8% between March and April, combined with February’s 1.5% fall has offset March’s 2.2% gain. But according to Ellis monthly house price changes can be volatile and he pointed out that the quarter on quarter change is a more reliable indicator of the underlying trend. Confidence in the UK housing market is at its lowest level in over a year, according to the latest quarterly Halifax Housing Market Confidence Tracker. The latest fall continues the downward trend since a high point in May 2015, and comes as consumers feel increasingly uncertain about the wider economy. Nonetheless, a clear majority of 65% still believe that average UK property prices will be higher rather than lower 12 months from now, double the 32% found when the Tracker was launched five years ago in April 2011. Jonathan Hopper, managing director of the buying agents Garrington Property Finders, believes that double digit annual price rises are unlikely to return any time soon but the cooling of the market may mark an opportunity for buyers, as some sellers are being forced to reassess their overly ambitious asking prices. ‘For the first time in more than a year, we’re seeing many mid-range properties in the most desirable locations selling for below asking price, hinting that the power dynamic is shifting from a seller’s to a buyer’s market,’ he said. ‘But with demand still strong and supply still chronically low, the net effect is likely to be a gradual return to more normal rates of price growth rather than a serious slowdown. With the Halifax also finding that levels of confidence in the housing market have fallen to their lowest level in more than a year, sellers must think urgently about pricing competitively,’ he added. On top of the slightly cooling of the market there is also uncertainty over the referendum on the future of the UK on the European Union on 23 June. Mark Posniak, managing director at Dragonfly Property Finance, thinks prices are likely to edge down further. ‘People are starting to understand the magnitude of the Brexit vote and that will lead many to… Continue reading
