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2021 house price growth to reach 4%

House prices should inflate by 4% in 2021, Rightmove’s House Price Index found.

The firm said housing will be a high priority for people but price rises for newly marketed properties should be more modest than this year.

Prices this year have jumped by 6.6%, while the first quarter of next year is expected to be very busy due to the stamp duty deadline.

After that however it’s expected that things slow down, though cheap mortgage rates should continue to support the market.

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Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Interestingly, Rightmove is forecasting solid price growth for 2021, despite activity clearly slowing as 2020 draws to a close.

“At the coalface, we are experiencing much the same but expecting a busy first quarter as buyers and sellers rush to take advantage of the stamp duty concession. However, we don’t anticipate a cliff-edge scenario at present.

“Nearly all sales agreed seem to be proceeding to exchange of contract, unless exceptional circumstances prevail and prices are not being widely renegotiated in anticipation of a market fall due to Brexit, the pandemic or potentially worsening economic news.”

The possibility of the stamp duty holiday being extended was discussed once again.

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

Sam Mitchell, chief executive of online estate agent Strike, said: “It’s hard to predict what will happen in the next few months, particularly with so much uncertainty around Brexit deal talks and rising unemployment levels as a result of the pandemic.

“However, people’s increased home working flexibility and desires for more space and rural locations is likely to keep demand ticking by. Plus, the recent breakthrough with the vaccine news has injected a newfound confidence in those who might have been on the fence about buying or selling.

“There’s no doubt that the government will also continue its commitment to the country’s economic recovery with continued support for the UK property market included.

“Who knows, maybe they’ll consider an extension to the stamp duty scheme or turn their focus back to helping first time buyers get a foot onto the property ladder.”

Tomer Aboody, director of property lender MT Finance, said: “What a crazy year it has been for the property market, one which has to go down on record as the biggest rollercoaster in terms of market sentiment, transaction numbers and even a complete standstill.

“Whether we ever see this again, who knows but what is for sure is that buyers’ demands and priorities have changed. Space is at a premium, with families especially prioritising the commuter belt and local village amenities.

“Confidence is set to continue for the first quarter of next year until the furlough scheme ends and possibly stamp duty relief at the end of March. Thereafter, we are at the government’s mercy – will it extend the stamp duty holiday and extend the feel-good factor for the market?”

BY RYAN BEMBRIDGE

Source: Property Wire

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UK house prices grew at fastest rate since 2015 in November

UK house prices grew at an annual rate of 6.5 per cent in November, the fastest rate since January 2015, as the sector batted off the second national lockdown.

According to Nationwide’s house price index, prices also increased on a month-on-month basis to be up 0.9 per cent compared to last November.

As a result, the average house price in the UK now stands at £229,721, up from £227,826 last month.

Nationwide said that despite the second lockdown, which has seen economic activity shrink in other sectors, the housing market has remained “robust” through November.

Property transactions hit 105,600 in the period, the highest since 2016, while mortgage approvals reached their highest levels since 2007.

Robert Gardner, Nationwide’s chief economist, said: “The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy.

“Behavioural shifts as a result of Covid-19 may provide support for housing market activity, while the stamp duty holiday will continue to provide a near term boost by bringing purchases forward.

“However, housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”

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Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: ‘These figures feel like the storm before the calm as buyers and sellers rushed to take advantage of the stamp duty holiday before the March deadline, despite continuing Covid restrictions in October, the possibility of a no-deal Brexit and economic growth stalling.

‘That frenzy has been since replaced by a quieter, but just as determined mood to complete sales previously agreed. We don’t see any signs either of significant price adjustments, irrespective of whether there is an extension to the stamp duty holiday, with activity continuing to be supported by a shortage of listings and longer-term low interest rates.’

Housing market set to come under pressure

EY Item Club’s chief economist Howard Archer warned that the elevated levels of activity in the market were unlikely to last.

“The EY Item Club suspects that house prices could be around 5 per cent lower than now by mid-2021″, he said.

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

“The housing market is likely to come under mounting near-term pressure amid rising COVID-19 cases and lockdown restrictions, while there is likely to be a significant rise in unemployment even though the furlough scheme has been extended until March. Meanwhile, earnings have been limited and are likely to remain so.

“There is also likely to be a fading of the pent-up demand effect on housing market activity, while pandemic-related restrictions may also have some dampening impact on the housing market and consumer confidence.

“Indeed, consumer confidence declined further in November to be at a six-month low, which may increase the caution of many people in making major spending decisions.

Nationwide’s figures came after banker Halifax revaled that consumer confidence in the housing market had shrunk last month.

Just 14 per cent of people surveyed by Halifax said that they believed their home had become more valuable this month, compared with 17 per cent in September and October.

Despite the slip, the figure remains high above the four per cent recorded during the first national lockdown in May.

By Edward Thicknesse

Source: City AM

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Less than 20% of Britons think house prices will fall next year

An estimated 19% of individuals believe that UK house prices will fall next year according to the latest ING International Survey.

In contrast, 42% think house prices will rise in next 12 months.

The data also outlined that 35% of homebuyers in the UK offered a lower amount for their house than the asking price, compared with 30% in Europe.

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Over half (54%) of Britons spend three months or less looking to buy a home before purchase.

Additionally, the survey noted that 57% of those in the UK think that it has become more difficult to get on the housing ladder since 2015.

The survey results were based off of 13,000 respondents across Europe.

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

James Smith, economist at ING Developed Markets, said: “The surprising post-lockdown resilience in the UK housing market has translated into relative optimism among British consumers.

“But this sentiment could be tested as we head into 2021.

“The anticipated end to the stamp duty holiday is set to coincide with a rise in unemployment over the winter, both of which are likely to put renewed pressure on house prices next year.”

By Jake Carter

Source: Mortgage Introducer

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UK house prices increase by 2.5%

UK house prices rose by 2.5% over the year to August elevating the average property in the UK to £239,000, data from the Land Registry has revealed.

The latest index, which is based on completed transactions and is published by the Office for National Statistics, offers a picture of the market in the month after the stamp duty holiday was introduced.

It shows average prices were £6,000 higher in August than at the same time in 2019 and highlights the East Midlands as the English region which experienced the highest annual growth with prices rising by 3.6%.

Nicky Stevenson, managing director at estate agents Fine & Country, said: “Here is official confirmation that the market did indeed get up to a canter over the summer months.

“The annual rate of growth soared as buyers frustrated by lockdown and lack of space crammed into the market in search of larger properties. That alone explains this year’s sudden rally, as the stamp duty holiday was only introduced in July.”

Stevenson explained the lag in this data being released would mean any extra demand the stamp duty relief created would not be seen in the Land Registry figures before the end of the year.

The data also showed UK house prices have risen 0.7% since July 2020. In London prices were still on the rise, increasing by 0.9% since July 2020 and by 3.5% annually taking the average property value to £489,159.

Transactions level with 2019

HMRC data also published today revealed UK residential transactions in September 2020 were at 98,010, which were similar to the September 2019 figures. They were just 0.7% lower than the same month last year and 21.3% higher than August 2020.

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Anna Clare Harper, CEO of asset manager SPI Capital and author of Strategic Property Investing, explained transaction data was of interest because it represented a more complete picture than comparable indices.

“What’s interesting about the September 2020 data is that transaction volumes are on a par with transactions in September 2019,” she said.

“This suggests that the temporary changes to stamp duty designed to boost confidence in the housing market have worked well to achieve this goal. There are very few sectors where buyers and sellers feel as confident as they did in September 2019.

“What happens next will be a reflection of policy and economics. Trade bodies such as RICS, as well as government policy makers, will play a significant role in the future of the housing market, as they have in the story that has played out so far in 2020.

“For potential home buyers and investors, the key will be not taking on too much credit, despite the relatively cheap cost of debt at present, as it is very difficult to forecast what will happen next.”

By Kate Saines

Source: Mortgage Finance Gazette

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UK house prices stage rapid recovery in third quarter

UK house prices enjoyed their strongest quarterly increase since before the financial crisis in the third quarter as lockdown restrictions eased.

Prices rebounded quickly in the third quarter after the broadbased closure of the market during the previous quarter.

Prices rose 3.3 per cent in the three months to September, according to the Halifax Property Index, the strongest increase recorded since the end of 2006. On an annual basis prices were 5.5 per cent higher, the sharpest rate of inflation since the final quarter of 2016.

The housing market has been buoyed by government interventions such as the stamp duty holiday introduced over the summer.

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And last week Boris Johnson announced plans to turn “generation rent” into “generation buy” by allowing people to purchase homes with a five per cent deposit.

Paul Smith, economics director at IHS suggested the resurgence in prices was also due to “strong demand driven by a desire for more space – either as a reaction of the lockdown or the structural economic effects of increasing home working”.

The upturn in prices meant the standardised house price edged close to the £250,000 mark during the third quarter. Price inflation has picked up across all buyer and property types, with existing property inflation – 5.8 per cent – outstripping that of new houses – +4.1 per cent.

Properties in greater London remain comfortably the most expensive, with the typical house now costing more than £500,000 and around 1.5 times higher than in the South East.

Wider economic issues, particularly the rise in unemployment due to coronavirus, suggest activity and the rapidly rising prices are unlikely to be sustained.

The recent rise in prices has led to a tightening of affordability constraints, with the house price-to-earnings ratio reaching a record high level of 6.5 by the end of the third quarter.

It surpassed the previous records of 6.4 set prior to the financial crisis.

Unsurprisingly London has the highest ratio of close to 9, and the immediate regions surrounding the capital, with ratios all above 7, where affordability remains a key issue.

By Angharad Carrick

Source: City AM

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UK house prices jump again in September as market defies gravity

UK house prices rose at the fastest pace in four years in September despite the raging coronavirus pandemic as people working from home sought more space, according to the Halifax house price index.

Yet the lender said it is “unlikely” that the British housing market will “remain immune” to the historic economic slowdown.

House prices grew 1.6 per cent month on month in September, Halifax said, after climbing by the same amount in August. The rise took the average price to a new record high of £249,870.

Properties were worth 7.3 per cent more on average than they were a year earlier, the biggest year-on-year rise since June 2016.

However, Halifax said the annualised figure was flattering because the property market was subdued a year ago due to worries over Brexit.

Russell Galley, managing director at Halifax, said the housing market had been “extremely strong” since restrictions on it were lifted in May.

“There has been a fundamental shift in demand from buyers brought about by the structural effects of increased home working and a desire for more space,” Galley said.

He added that “the stamp duty holiday is incentivising vendors and buyers to close deals at pace before the break ends next March”.

Rising house prices are the UK’s ‘iron lung’

Chancellor Rishi Sunak in July raised the threshold at which stamp duty is paid to £500,000 until the end of March 2021. Analysts say the policy has combined with demand that built up during lockdown to fuel buying.

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North London estate agent Jeremy Leaf said: “These figures very clearly show the impact of pent-up demand, the stamp duty holiday and low interest rates on the market post lockdown.”

Lucy Pendleton of estate agents James Pendleton said: “The often frothy Halifax index has lived up to its reputation and is pushing the bounds of credibility here.

“However, it underlines just how much the housing market has become the economy’s iron lung of late, while its other vital signs flash amber at best.”

Yet Leaf said that “demand has lost a little momentum over the past few weeks”. He put this down to “the resurgence in Covid-19 and new restrictions on businesses… making some buyers a little more nervous”.

Coronavirus cases have risen sharply in the UK in recent weeks. It has caused the government to put vast swaths of the country in local lockdowns.

Sunak produced a new package of economic support in September. But he confirmed that the furlough scheme – which has supported around 10m jobs – would end this month.

Economists say rising Covid cases and unwinding government support are likely to weigh on UK house prices towards the end of the year.

House prices could fall by five per cent

Halifax’s Galley said: “It is highly unlikely that the housing market will continue to remain immune to the economic impact of the pandemic.”

Howard Archer, chief economic advisor to the EY Item Club, said the housing market “will come under increasing pressure over late-2020 and the early months of 2021”.

He said there is likely to be “a significant rise in unemployment and waning pent-up demand”.

Archer said UK house prices could be around five per cent lower by mid-2021 than they are now.

“The EY Item Club expects housing market activity to gradually improve over the second half of 2021,” Archer said.

“Very low borrowing costs should also help matters with the Bank of England unlikely to lift interest rates from 0.10% during 2021.”

Source: City AM

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House price growth to reach 14% in November

Reallymoving has predicted annual house price growth to reach 14% by November 2020.

The quote service said the prediction is based on deals already agreed, as pent up demand and urgency to benefit from the temporary stamp duty holiday has driven up activity in the market.

Annual price growth is forecast to reach 4.7% in September, 11.4% in October, and finally 14% in November.

Rob Houghton, chief executive of reallymoving, said: “Buyers are determined to make their move now, despite the fact that the current spike in prices will in many cases wipe out the stamp duty savings.

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“For those higher up the ladder with secure finances, a healthy level of equity in their property and little other debt, gloomy economic forecasts are only encouraging them to press ahead with the move rather than sit tight and wait out what could be a long and painful recession.

“More than ever people’s homes are their castles and their offices – and with borrowing costs likely to be rock bottom for the foreseeable future, paying over the odds on a purchase isn’t too painful if you’re also getting over the odds on your sale and making a stamp duty saving.

“It’s a different story for first-time buyers though, who aren’t benefitting from stamp duty savings in most areas and who have seen low deposit mortgages all but wiped out. This explains why the proportion of first-time buyers in the market has dropped by 19% since May.”

BY RYAN BEMBRIDGE

Source: Property Wire

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House prices rise as appeal of gardens and space grows

Housing market activity in the region continued to rise in August, as those looking to take advantage of the stamp duty holiday continued their search for a new home.

Sixty-three per cent of respondents reported an increase in buyer interest across the West Midlands over the month, according to the August 2020 RICS UK Residential Survey.

However, the longer-term view remains more cautious.

As buyer enquiries continued to rise, the number of new properties listed for sale also increased, with a net balance of plus 26 per cent of survey participants noting an increase in vendors listing property to sell.

Consequently, strong growth in agreed sales was cited for a third successive month, with a net balance of plus 52 per cent of contributors seeing a pick-up.

Looking ahead, near term sales expectations for the West Midlands remain positive, but 12-month sales projections are still in negative territory, with the net balance coming in at minus 12 per cent.

Anecdotal evidence suggests concerns over the broader economic climate continue to drive this subdued assessment.

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Meanwhile, the pandemic is expected to cause a lasting shift in the desirability of certain property characteristics, as eight per cent of respondents, nationally, anticipate demand increasing for homes with gardens over the next two years.

Seventy-nine per cent predict rising demand for those properties near green space, while a net balance of plus 68 per cent foresee a rise in the desirability of properties with more private/less communal outside space.

Turning to house prices, the August survey feedback points to a sharp acceleration in house price inflation.

Across the region, a net balance of plus 52 per cent of respondents reported an increase in prices, the strongest reading since September 2018.

This is up from a net balance of plus 49 per cent in July and marks a turnaround compared to the reading of minus 27 per cent registered back in May.

Simon Rubinsohn, RICS chief economist, said: “The latest RICS survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months.”

By James Pugh

Source: Shropshire Star

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Region’s house price growth at highest level in almost two years

Housing market activity in the West Midlands continued to rise in August, as those looking to take advantage of the stamp duty holiday continued their search for a new home.

A net balance of 63% of respondents reported an increase in buyer interest across the region over the month, according to the August 2020 RICS UK Residential Survey.

However, the longer-term view remains more cautious.

As buyer enquiries continued to rise, the number of new properties listed for sale also increased, with a net balance of +26% of survey participants noting an increase in vendors listing property to sell.

Strong growth in agreed sales was cited for a third successive month, with a net balance of +52% of contributors seeing a pick-up.

Looking ahead, near term sales expectations for the West Midlands remain positive, but 12 month sales projections are still in negative territory, with the net balance coming in at -12% (up from -40% last time). Anecdotal evidence suggests concerns over the broader economic climate continue to drive this subdued assessment.

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Meanwhile, the pandemic is expected to cause a lasting shift in the desirability of certain property characteristics, as 83% of respondents, nationally, anticipate demand increasing for homes with gardens over the next two years. 79% predict rising demand for those properties near green space, while a net balance of +68% foresee a rise in the desirability of properties with more private / less communal outside space.

Turning to house prices, the August survey feedback points to a sharp acceleration in house price inflation. Across the region, a net balance of +52% of respondents reported an increase in prices, the strongest reading since September 2018. This is up from a net balance of +49% in July and marks a turnaround compared to the reading of -27% registered back in May.

In the lettings market, tenant demand continued to rise sharply in the West Midlands, while landlord instructions returned to negative territory following a rebound in July. Rental growth expectations over the near term have now strengthened in each of the past three months, with a net balance of +58% of contributors now anticipating an increase.

Simon Rubinsohn, RICS chief economist, said: ‘The latest RICS survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months. More of a concern is the pick-up in prices which could intensify issues around affordability in some parts of the country. Disaggregated data shows demand generally to run ahead of supply.

“Meanwhile the results provide a further pointer to more substantive changes taking place in household behaviour in the wake of the pandemic. Increased demand for properties with garden and near green spaces has if anything increased since we tested the water in May.’

By Rachel Covill

Source: The Business Desk

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UK house prices hit record high as stamp duty cut powers market

UK house prices hit a record high in August after pent-up demand and the stamp duty holiday combined to power the market upwards, according to lender Halifax.

However, Halifax cautioned that prices were “unlikely” to continue on their current path, with rising unemployment set to catch up with the market.

Prices rose 1.6 per cent month on month despite the UK being hit by the worst recession in modern history. That meant prices were 5.2 per cent higher in August than they were a year earlier, Halifax said.

The surprising surge in prices has now been confirmed by numerous sources. Last week, building society Nationwide said UK house prices jumped two per cent in August to hit an all-time high.

“A surge in market activity has driven up house prices through the post-lockdown summer period,” said Halifax managing director Russell Galley.

He said the rise has been “fuelled by the release of pent-up demand, a strong desire amongst some buyers to move to bigger properties, and of course the temporary cut to stamp duty”.

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Tax cut has desired effect on UK house prices

The rise will please the government, which had sought to boost the property market. It increased the threshold at which buyers pay the stamp duty tax to £500,000 from £125,000 until the end of March.

Britain’s housing market was frozen in April and May. After it reopened in June, many who had scrapped plans to move put them in motion again. The market has also been helped by a rise in savings during lockdown.

The jump in prices now means the average UK house costs £245,747, according to Halifax. That is good news for property owners, but will hurt first-time buyers.

Lucy Pendleton from estate agents James Pendleton, said the figures confirm “the red hot finish to the summer suggested by the Nationwide last week”. She added: “The typically more bullish Halifax index hasn’t disappointed.”

However, Galley warned that the price surge is unlikely to be sustained in the medium.

Prices could fall three per cent by next year

“The macroeconomic picture in the UK should become clearer over the next few months as various government support measures come to an end,” he said.

Economic forecaster the EY Item Club predicted UK house prices could fall by three per cent by early 2021.

Howard Archer, chief economic adviser to the Item Club, said: “Housing market activity may well see a further pick-up in the near term providing some support to prices.”

But he added: “The current marked pick-up in activity and firming of prices will prove unsustainable before long.” He said the “upside for the housing market” will be “limited by challenging fundamentals for consumers”.

Andrew Burrell of Capital Economics said: “Pent-up demand will soon be expended.”

He added: “A weak economy, cautious lenders and the end of the stamp duty cut will weigh on prices.”

By Harry Robertson

Source: City AM