house prices

Average house prices in the UK rose by 0.5% to £286,489 from March to April, Government figures show.

The Office for National Statistics (ONS) house price index for April showed that this was a 3.5% annual increase or £9,000 higher. The growth has dropped from the 4.1% yearly rise recorded in March. Additionally, average house prices were down £7,000 from their peak in September.

Prices still above pre-pandemic levels

Vikki Jefferies, propositions director at Primis, said the figures were not surprising, “given the strain of higher interest rates and unpredictability of the housing market”.

However, she added: “It is a positive sign that house prices still remain well-above pre-pandemic levels, and the downward trend has been much less pronounced than some predicted at the beginning of the year.

“The main challenge for homebuyers now is a volatile mortgage market, which has seen mortgage rates rise to their highest levels since Q4 2022. With more than 400,000 people seeing their existing fixed deals end between July and September, it is crucial that borrowers seek financial advice as soon as possible to ensure they are getting the best deal.”

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‘May be the last increase for a while’

Karen Noye, mortgage expert at Quilter, said it was a surprise that house prices had risen and added: “However, considering the mortgage storm that is currently battering the country, this is likely the last time we will see an increase in prices for some time.”

“This morning’s flat inflation figure will have been exactly what mortgage borrowers didn’t want to see as those with low-cost deals will be bracing for their mortgage deals to come to an end and sadly find that their monthly payments skyrocket.”

Regional differences

Average house prices in England increased by 0.5% month-on-month to £305,731, which was 3.7% higher than last year.

The greatest increase was recorded in London, where average values rose by 2.1% over the month to £533,687. Meanwhile, prices in the South East dropped by 0.5% to £391,766. These represented annual increases of 2.4% and 3.5% respectively.

At 2.4%, the annual uptick for house prices in London was the smallest growth recorded in April, while the North East saw the biggest jump with a 5.5% rise to £159,900. Compared to March, average house prices in the North East were 1.8% higher.

In Wales, the average house price fell since March by 1.3% to £212,834. Annually, this was a 2% increase.

Houses prices in Scotland rose by 1.3% on average since March to £187,150, which was also a 2% rise. Meanwhile, in Northern Ireland, average house prices fell by 1.8% month-on-month to £172,005 and recorded a 5% annual rise.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Property and buyer type

First-time buyers paid 0.6% more for their homes on average in April, with values coming to £238,114. Former owner-occupiers saw prices go up by 0.5% to £336,056. Annually, these represented rises of 3.3% and 3.7% respectively.

The value of an average detached home increased by 4.2% annually to £453,771, while a semi-detached home’s value rose by 4.5% to £278,729.

The average price of a terraced home went up by 2.1% to £231,525 compared to last year, while the average price for a flat or maisonette increased by 2.7% to £229,752.

By Anna Sagar

Source: Your Money

The latest research by London lettings and estate agent, Benham and Reeves shows that the W1K postcode of Westminster sits top of the table as the nation’s priciest so far in 2023.

Since the start of the year, the average home sold in the postcode has gone for a staggering £8m.

Westminster also accounts for the joint second most expensive, with the SW1X postcode seeing homes sell for an average of £2.45m along with the City of London’s EC4V postcode.

Camden’s WC2A postcode also ranks high with an average sold price of £2.1m so far this year and, in fact, London dominates the top 10 priciest postcodes in England and Wales.

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The priciest property postcode outside of London is currently the GU25 postcode in Runnymede where homes have commanded an average of £1.32m since the start of the year.

The TQ8 postcode in Devon has seen an average sold price of £1.3m with Cornwall’s PL28 ranking third, where the sold price sits at £1.23m.

Buckinghamshire’s HP8 (£1.2m), HP9 (£1.18m) and SL8 (£1.18m) also rank within the top 10, along with IG7 in Epping Forest (£1.09m), KT11 in Elmbridge (£1.035m), TN7 in Wealden (£962,500) and Guildford’s KT24 (£950,000).

Benham and Reeves director Marc von Grundherr, comments:“Much has been said about the London lethargic housing market performance since the start of the pandemic and the capital has certainly trailed other areas of the UK with respect to the rate of house price growth seen in recent years.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“However, it remains the most prestigious pocket of the market when it comes to the nation’s priciest postcodes and by quite some margin, even in cooler market conditions like those that we’ve seen so far this year”.

He adds: “In fact, very few postcodes outside of the M25 can rival the might of London, but that’s not to say that there aren’t some very valuable postcodes dotted elsewhere around the nation.”

By David Burrows

Source: Mortgage Strategy

According to Rightmove, the average asking price for homes coming to market is now £373,894 – nearly £7,000 more than the previous month.

The UK housing market continues to make waves as the average price tag on a home hit an all-time high in May, according to property website Rightmove. With a significant monthly jump of £6,647 or 1.8 per cent, the average asking price for a home coming to market now stands at £372,894.

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This substantial increase marks the largest month-on-month surge so far this year, hinting at growing confidence among sellers. However, while the market shows signs of recovery, it remains hyper-local and price-sensitive, with buyer affordability still stretched, as highlighted by Rightmove.

Tim Bannister, Director of Property Science at Rightmove, said: “This month’s strong jump in new seller asking prices looks like a belated reaction and a sign of increasing confidence from sellers, as we’d usually see such a big monthly increase earlier in the spring season. One reason for this increased confidence may be that the gloomy start of the year predictions for the market are looking increasingly unlikely.

According to him, the market will continue its transition towards a more normal level of activity this year, following the exceptional activity observed during the pandemic years. “Steadying mortgage rates and a generally more positive outlook for the economy are also contributing to more seller confidence, though there are likely to be more twists and turns to come, ” Tim said.

“The market is still very price sensitive and it is important that new sellers do not damage their prospects of a sale by overpricing initially and reducing later, with agents reporting that it’s the realistically priced new instructions that are selling best.”

While the market displays encouraging signs, Rightmove notes that the average discount from the final asking price to the agreed sale price has stabilised at around 3.1 per cent, aligning with pre-pandemic levels. Moreover, the number of potential buyers inquiring about homes for sale has increased by 3 per cent compared to 2019, particularly among those taking their first or second steps on the property ladder.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

However, there are signs of some over-optimism in the “top of the ladder” property sector, Rightmove said. While larger properties are still selling faster typically than in 2019, it is now taking an average of 67 days to agree a sale, nearly double the 35-day average at this time last year, the website added.

Tim added: “This month’s record price is a strong indication of sellers’ confidence, and we can see from activity levels and the still relatively limited choice of property for sale that this confidence is justified in some segments of the market.

“More discretionary sellers at the top end may be prepared to price high and wait for the right buyer, and whilst it is positive that they appear to feel no financial pressure to sell, the data suggests that some sellers in this sector will need to price more competitively if they want to find a buyer in the current market.”

By Vicky Shaw

Source: In Your Area

The housing market showed “tentative” signs of recovery in April as the price of homes rose 0.5 per cent during the month, however prices remain four per cent below their August 2022 peak.

The Nationwide house price index showed that the annual rate of house price growth improved to -2.7 per cent from -3.1 per cent in March, as buyers remain cautious about their financial position due to rising inflation.

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The average price of a home in April is now £260k up slightly from £257k as the market continues to stabilise following the fall out from September mini budget.

As inflation remains above 10 per cent, Robert Gardner, Nationwide’s chief economist, said that analysts’ expectations that it could fall in the second half of the year would likely further bolster sentiment, especially if the labour market conditions “remain strong”.

He explained: “This, in turn, would also be likely to support a modest recovery in housing market activity.

“But any upturn is likely to remain fairly pedestrian, as it will take time for household finances to recover, since average earnings have been failing to keep pace with inflation, and by a wide margin over the last few years.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

House prices stabilise as Easter buyers emerge

Matt Thompson, head of sales at Chestertons, said: “Savvy house hunters used the Easter holidays to continue their search online and enquire about properties to arrange a viewing as soon as possible.

“April has therefore been a busy month; particularly as buyers are a lot more aware of today’s competitive market conditions. As a result, most buyers have also been preparing their paperwork as much as they could in order to make an offer and secure a property before the summer.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: ‘Average property prices fell again in April but not as far as in March as the spring market gets into gear and buyers and sellers start to see an end in sight with regard to high inflation and interest rates.

“Swap rates, which underpin the pricing of fixed-rate mortgages, have risen again on the back of short-term volatility. However, lenders continue to reduce their fixed rates, albeit at a slower pace than before, with bigger reductions seen on higher loan-to-value mortgages as they try to attract first-time buyers.”

By LAURA MCGUIRE

Source: City A.M.

A new report by Octane Capital has revealed that house prices in 21% of UK local authorities in the UK are growing at a rate higher than the current consumer price index inflation figure of 10.1%.

The study shows the Shetland Islands have seen the highest increase in house prices, with a 24.5% growth rate in the last year.

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Other areas that make up the top ten among 75 inflation-busting areas of the UK property market include Carmarthenshire, Fylde, Forest of Dean, Broxtowe, Pendle, Bolsover, Rochford and Charnwood.

Jonathan Samuels, CEO of Octane Capital, commented: “Despite the wider economic landscape the UK property market continues to hold its own and while the high rates of house price growth seen in recent times may have returned to normality, homeowners continue to see a return on their bricks and mortar investment across many areas of the market.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

“In fact, in some areas, prices have continued to climb at a substantial rate and so much so that they’ve outstripped the current high rate of inflation that continues to push up living costs.”

Samuels added: “Of course, with the Bank of England seeking to curb inflation via a string of interest rates, it looks likely that the cost of homeownership could set to become that little bit more expensive next month.

“However, for those who can achieve it, a bricks and mortar investment continues to be one of the safest you can make, even in the current economic climate.”

By Jerome Smail

Source: Property Industry Eye

Santander UK says that it expects house prices to jump 10% this year, falling back to 2021 levels.

The high street bank says UK consumers face a difficult year ahead, with inflation and interest rates touching 40-year highs, at 10.1% and 4.25%, respectively.

It says: “The economic outlook for 2023 remains uncertain. Inflation is forecast to be above the 2% target rate for 2023 putting further pressure on real disposable income.

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“We expect house prices to decrease by 10% in 2023, falling back to 2021 levels.” 

The bank’s comments come as it posts first-quarter pre-tax profits up 11% to £547m, largely due to the impact of higher base rate charges, rising net interest income and banking net interest margin – the difference between what it pays out to savers and what it charges lenders. 

However, its mortgage balances fell 2.2% to £183m in the three months to the end of March compared to the previous quarter, as home loan applications across the market have slumped 37% year-on-year, according to Bank of England data.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

The high street lender adds that the “mortgage market trends we saw at the end of 2022 have continued into 2023”.

Santander UK chief executive Mike Regnier says: “Following rises in the base rate, we have seen the most competitive ISA period for several years and a further slowdown in the mortgage market.”

He adds: “The economic outlook for 2023 remains uncertain with inflation predicted to remain above the 2% target meaning many households and businesses will continue to face difficult decisions in the months ahead.”

By Roger Baird

Source: Mortgage Strategy

Figures from the Office for National Statistics (ONS) show that average UK house prices have risen 5.5 per cent since this time last year.

The annual percentage change for average UK house prices was 5.5 per cent in the 12 months to February 2023.

The average UK house price was £288,000 in February 2023, which is £16,000 higher than 12 months ago.

Average house prices increased over the 12 months to £308,000 (6 per cent) in England, to £215,000 in Wales (6.4 per cent), to £180,000 in Scotland (1 per cent), and to £175,000 in Northern Ireland (10.2 per cent).

However, the average UK house price decreased by 1 per cent between January 2023 and February 2023. This caused the UK annual inflation rate to slow this month.

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Regional differences

In England, the February data shows that, on average, house prices have fallen 0.8 per cent since January 2023. The annual price rise of 6 per cent takes the average property value to £308,365.

The West Midlands experienced the greatest annual price rise, up by 8.6 per cent, while London saw the lowest annual price growth, with an increase of 2.9 per cent. Prices in the capital have fallen 1.1 per cent since January 2023.

Wales shows, on average, house prices have fallen by 0.6 per cent since January 2023. An annual price rise of 6.4 per cent takes the average property value to £215,343.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

‘The housing market is proving to be resilient’

Jeremy Leaf, north London estate agent, said: “Despite another small fall in prices month-on-month, the housing market is proving to be resilient. These are the most comprehensive of all housing surveys but the figures are a little dated, inevitably reporting on activity from a few months earlier when the market was in the doldrums.

“Since then, confidence has slowly improved in response to more choice and stabilising mortgage, if not base, rates. However, worries about inflation persist and buyers want to see value so are flexing their muscles before making decisions.”

Nick Leeming, chairman of Jackson-Stops, noted that a stability may be returning to the market.

He said: “The property market has turned into a marathon from a sprint. While there is still a long way to go, the market has cleared the first jump relatively unscathed. Today’s figures show a soft repricing, which marks a more stable period for house price values following the supersonic heights reached this time last year.

“Even in the last two months, the economic picture is becoming much more stable. Mortgage deals are also returning to the market after a short hiatus in the immediate aftermath of Trussenomics.

“Market conditions and an under reliance on outside funding has left cash buyers in a fortunate position, able to push ahead with quick completions and benefit from the increasing number of properties entering the market.”

Tomer Aboody, director of property lender MT Finance, was alos optimistic that the market could get ‘back on track’ in the coming months.

He said: “Fewer properties for sale tends to result in higher property prices, which seems to have been the case over the past year or so, with demand in the regions and for houses particularly strong.

“With mortgage rates fluctuating, particularly towards the end of last year, many buyers stalled, which meant a reduction in the number of transactions.

“Hopefully, as inflation falls and rates continue to stabilise, we will see more sales proceeding as buyers return and get their purchases back on track.”

By Emma Lunn

Source: Mortgage Solutions

UK house prices fell by 1.1 percent in the year to February, as higher mortgage rates and the ongoing cost of living made buying a home less affordable, according to Nationwide.

After an increase in house sales during the coronavirus pandemic, where homeowners could make huge savings on Stamp Duty, house prices are said to be falling. According to Nationwide, the 1.1 percent fall was the first annual fall in property values since November 2012, aside from a small drop at the start of the pandemic.

An investment fund manager has warned that house prices could plummet even further.

Temple Bar portfolio manager, Ian Lance, said: “I wrote a white paper last year called Reversion to the long-run mean and it literally just asked the questions that if you take equity valuations, bond yields, house prices and you basically take them back to their long run averages, that has some quite significant implications across all of those things.

“US equities should be down 50 percent or more. The bond yield’s one actually comes true very, very quickly hasn’t it?

“Because bond yields back then were one percent and I was saying you know long-run bond yields are normally about four or five percent.”

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Speaking to the Merry Talks Money podcast, Ian said there is “no reason” why house prices shouldn’t be 30 percent lower than they currently stand at.

He added: “House prices looked very, very expensive on a long run basis and I just said that could be one of those things that eventually mean reversed back to its long run average.

“I have no reason to assume that it won’t and again if it does, house prices should be probably 30 to 40 percent lower than they are today (in nominal terms).

“That’s a prediction, but why wouldn’t they? Why shouldn’t, why shouldn’t equity markets mean revert to their long run average valuations and bond yields and house prices?

“We know what drove these things substantially above their long run averages. It was low interest rates, it was quantitative easing.

“Now to the extent that all those things are now going away, why wouldn’t these things mean revert to the long run averages?”

Demand from buyers has fallen in recent months, which has caused the housing market to cool off.

In January, the estate agent trade body Propertymark reported that 73 percent of transactions were completed below the original asking price, the highest percentage since 2020.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

This trend is said to continue as competition from buyers fizzles out, the opposite of what was going on throughout 2020 and 2021.

Rightmove claimed that it took an average of 57 days to see in February, a huge increase from the 32 days back in May last year.

However, according to one expert, the property market is now seeing a “gradual return” to normality, not fast approaching “cliff edges”.

Managing Director of Barrows and Forrester, James Forrester, commented: “We’ve seen widespread precautions of a property market demise for many months now and yet the UK housing market has continued to defy these naysayers and stand firm in the face of increasing interest rates and wider economic uncertainty.

“Of course, the higher cost of borrowing has brought about a slight adjustment and this is only natural following such a prolonged period of house boom.

“However, we’re very much seeing a gradual return to normality, not a fast approaching cliff edge.

“Even in the wake of the most recent Great Recession, house prices only fell by 19 percent before rebounding and so claims that they could tumble by 40 percent are, quite frankly, laughable.

“We’re a nation of aspirational homeowners and the average buyer simply isn’t going to abandon these aspirations due to speculations around equity valuations and bond yields.”

By SOPHIE HARRIS

Source: Express

House prices experienced rapid growth throughout the pandemic thanks to a combination of stamp duty cuts, low-interest rates and the “race for space.”

But as interest rates started to climb in the second half of 2022, the mood changed.

Rising interest rates and the cost of living crisis are now having a clear impact on the housing market according to the most recent data.

According to Nationwide, in February house prices dropped at their fastest rate since 2012, Meanwhile, HMRC data shows UK property transactions are down by nearly 20% and a survey by the Royal Institution of Chartered Surveyors seems to confirm the market’s bearish sentiment.

And while Rightmove’s house price index is slightly more upbeat, reporting a £3,000 increase in asking prices in March, it’s important to remember asking prices and the price paid by buyers are two very different things.

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Where will house prices go in 2023?

The Office for Budget Responsibility (OBR) published a fresh forecast for the property market alongside the Spring Budget – saying it estimated prices would fall further than previously expected.

The OBR now expects house prices to fall 10% by 2024.

Both Lloyds and Halifax expect house prices to fall 8% in 2023, while Nationwide and online estate agent Zoopla are predicting falls of 5%.

However, Tom Bill, head of UK residential research at Knight Frank, argues: “The first rule for anyone predicting the trajectory of house prices in 2023 should be to ignore any data from the chaotic final quarter of 2022.

“The latest data shows two things are happening at the same time. First, the effect of the mini-Budget is working its way through the system, which means that monthly declines are narrowing. At the same time, an annual fall in house prices appears imminent, underlining how the lending landscape has changed irrespective of the mini-Budget.

“As rates normalise, buyers will increasingly recalculate their financial position and house prices will come under pressure. We expect a 10% decline over the next two years, taking them back to where they were in mid-2021.”

Financial market conditions appear to have settled, and the UK is expected to avoid a recession in 2023 despite previous, more ominous forecasts.

But the headwinds facing the property market are unlikely to abate in the short term, especially following the latest interest rate hike by the Bank of England (BoE).

The BoE raised rates to 4.25% on 23 March, their highest level since 2008. This was “disappointing news to borrowers who are not locked into a fixed rate mortgage, as their monthly repayments may rise in the coming months amid a cost of living crisis”, says Rachel Springall, finance expert at Moneyfactscompare.

“Affordability may well be the key challenge for borrowers struggling with the cost of living crisis, as interest rates are higher than prospective buyers, or those looking to remortgage, were perhaps anticipating,” continues Springall. “Whether now is the right time to get a mortgage will entirely depend on someone’s individual circumstances, so seeking advice is vital.

“In the meantime, it would be wise for borrowers to keep a close eye on the mortgage market, housing supply and house prices, particularly for new buyers who are a critical part of keeping the market moving.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

Why are house prices falling?

A combination of factors is hanging over the UK housing market.

Record high rents are making it hard for first-time buyers to save for a deposit, especially as they struggle with inflationary pressures and rising bills.

But more importantly, mortgage rates have increased exponentially over the last 12 months. They peaked at around 6.65% after Kwasi Kwarteng’s mini-budget pushed up the cost of borrowing.

They have since come down to below 6%, falling over the last two months. The average two-year fix now stands at 5.6%, while the average five-year deal is 5.4% according to Moneyfacts.

But when you consider the average two-year rate was around 2% at the end of 2021, rates are still much higher than they were.

Higher mortgage rates have driven buyers away from the market, while others have been priced out.

And mortgage rates may have further to go. The bank has made it clear it might have to hike rates further to bring inflation under control.

Even though the OBR expects inflation to fall to 2.9% by the end of the year, the latest data from the Office for National Statistics (ONS) showed the figures moving in the wrong direction. The ONS recorded CPI inflation of 10.4% in February, from 10.1% in January.

“If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required,” the BoE said.

This suggests the central bank may hike rates further in the months ahead as it tries to get inflation under control, putting further upward pressure on mortgage rates and, as a result, downward pressure on house prices.

By Nicole García Mérida

Source: Money Week