Category: Blog

Housing activity in March has picked up, with valuations activity returning to levels not seen since March 2007, according to the latest Housing Market Activity Report by Connells Survey & Valuation.

The total number of residential valuations conducted in March showed growth of almost a quarter (24%) from the same month last year. This represents a sixth consecutive month of annual growth.  On a monthly basis, the number of valuations grew by 29%.

First time buyer activity in March was also the strongest for six years, as 26% monthly growth brought the number of first time buyers to the highest level since March 2007. Of all sub-sections of the market, valuations on behalf of new buyers showed the fastest year-on-year growth, at 33%. This represents the seventh successive month of annual growth for first time buyers.

UK house prices moved into positive territory, on an annual basis, for the first time in over a year after 0.8% growth in March. Figures from Nationwide today show the typical UK home is valued at £164,630 – up from £163,327 in March 2011. Prices flat lined on a monthly basis as no growth was recorded between February and March.
Nationwide chief economist Robert Gardner says: “In recent months buyer demand has been supported by healthy rates of employment growth, as well as the Funding for Lending Scheme, which has helped to reduce mortgage costs and increase credit availability. At the same time housing supply has remained relatively constrained. The outlook for the housing market is unusually uncertain at present, in part because the prospects for the wider economy are unclear, but also as the impact of a number of policy initiatives is hard to gauge.”

The average UK property asking price rose 1.7 per cent in March, from £235,741 in February to reach £239,710. These latest results from the Rightmove house price index reveal the highest ever new seller asking prices in the month of March. The average asking price is at its highest level since October 2012 when it was £243,168.

Asking prices rose 1.2 per cent on an annualised basis, up from £236,939 in March 2012. The average time properties are spending on the market is currently 80 days, down from 90 in March 2012.

Rightmove director and housing market analyst Miles Shipside says: “In today’s turbulent world where economic crises seem more likely to re-appear than disappear, any market upturn will take longer to build home-mover confidence to the point that it starts to feed through to actual transactions. Even those who truly believe that the market has turned a corner may be unable to do anything about it due to lenders’ cautious risk profiling, a significant factor limiting the speed and strength of the recovery.

“However, with new sellers asking more than ever before as we enter the traditionally busy spring market and an expectation among home-movers of price stability or growth, there is now bedrock upon which confidence and momentum appears to be building.”

The strongest monthly performance on a regional basis was registered by the South East where asking prices rose 4.2 per cent from £215,037 in February to £215,120.

The RICS February 2013 Housing Market Survey highlights a broadly stable price picture at the national level. While the failure of buyer enquiries to rebound in a meaningful sense after January’s snow-related slowdown provides a note of caution, for now surveyors remain optimistic. Indeed, sales and prices are expected to rise moderately over the next three months with surveyors far more upbeat on both fronts at the twelve month horizon.
The ‘headline’ national price balance marginally deteriorated from -4 to -6 i.e. 6% more surveyors reported price falls rather than rises over the last three months. Readings in this ballpark have typically been associated with a generally stable trend in the main price indices. This is also consistent with the fact that around two thirds of respondents to the latest survey are reporting that prices have not changed over the previous three month period.
January’s snowfall had predictably taken its toll on market activity, with both enquiries and instructions falling. February’s results disappointingly point to a levelling off of these indicators instead of a rebound, potentially undermining the current positive trend in transactions.
Nevertheless, surveyors remain of the view that the current weakness in enquiries is likely to be transitory and market conditions will strengthen particularly during the second half of the year. Indeed, the sales expectations net balance at the twelve month horizon recorded +53.
Underscoring this optimism, at least in the first instance, are improvements in part of the lending environment. Indeed, average quoted borrowing rates on some key benchmark fixed term mortgages have come down sharply over the last six months or so thanks to an improvement in banks’ wholesale funding conditions. For example, the average quoted 2-year 75% LTV mortgage rate is down by 64 basis points to 3.1 % and the 5-year 75% LTV mortgage rate is down by 54 basis points to 3.76%.
At the regional level, in terms of current prices, the London market remains the standout performer, with surveyors seeing more modest price gains in the South East. Elsewhere, surveyors are still a little negative albeit only by a small margin in Wales, the North West as well as the East and West Midlands. Prices in Scotland and Northern Ireland continue to fall, but likewise, the pace of decline has slowed dramatically recently.

It’s cheaper to buy than to rent by £120 a month – and the gap is widening as rents soar, according to a survey. In its latest review of comparative costs, Halifax revealed that buyers pay less than renters across the UK. The average monthly cost of buying a three bedroom house was £621 in December 2012 – 16% lower than a typical rent of £741. Over a year the saving is £1440.
Buying costs include mortgage, income lost by funding a deposit and repair and insurance costs. The gap between buying and renting grew by £21 a month over the past year. Rents have risen by 4%in the past 12 months – and by 14% since three years ago.
By contrast, in 2008 buying cost £935 but monthly rent was £719. The shift is largely due to drop in house prices and mortgage rates.

Housing market activity rose to the highest levels in five-years, according to the latest Halifax house price index. Sales increased by 5% in 2012 to reach 932,000 – the highest annual total since 2007 when the figure was over 1.6m. House prices in the three months to January were up 1.9% compared with the preceding three months, representing the biggest rise since January 2010. Approvals for purchase increased by 3 per cent to 55,800 in December.
Halifax housing economist Martin Ellis says: “The signs of improvement in the housing market towards the end of last year continued in January. Prices in the three months to January were 1.9% higher than in the previous three months; the strongest figure in this measure of the underlying trend for three years. Prices were also 1.3% higher than in the same period a year ago, marking the first annual rise for 27 months.
“Market activity has also improved with sales in 2012 at their highest for five years. Rising mortgage approval numbers point to further increases in home sales in the coming months. The Funding for Lending scheme has helped lenders to lower interest rates and improve availability in the past few months. This is likely to have been a factor contributing to the pick-up in both home sales and prices.”
Looking ahead, Ellis says household finances are expected to remain under pressure against a weaker economic backdrop, but that house prices should remain stable in 2013.

The average price of a property in the UK rose to £162,080 in December 2012, up 0.8% on the £161,490 recorded for November, according to figures from the Land Registry today. The annual price change for UK properties is 1.7%.
The best performing region was London where house prices rose 3.1% on a monthly basis and by 8.4% over the course of the year. The Land Registry’s House Price Index for December shows the average price of property in the capital stands at £371,223. The second largest monthly increase was in the North East where prices rose 1.9% while the second largest annual increase was the South East, where prices rose 3%. The region with the greatest annual fall in property prices was the North West with a movement of minus 3.5%. The North West experienced the largest monthly decrease as prices fell 0.9% in December.
Capital Economics property economist Matthew Pointon says, while 2012 finished on something of a high, the market is being held back by a lack of mortgage financing and anticipated weak GDP growth in 2013.
He says: “There are already indications that this strength may be short-lived. The latest data on mortgage approvals for house purchase by banks showed that the recent growth in lending has apparently stalled. Although it is too early to say that the Funding for Lending scheme has run its course, it does serve to highlight that a lack of mortgage finance is the only one factor holding back the housing market.”
 

Lending to first-time buyers increased by 11% in 2012 as the number of loans extended to borrowers with small deposits rose from 57,691 in 2011 to 63,896. The latest figures mark 2012 as the best year for high LTV lending – defined as 85% plus – since 2007, according to e.surv’s Mortgage Monitor analysis.
A similarly positive picture for overall lending also emerged since the number of house purchase loans climbed above the 600,000 mark for the first time since 2007. Purchase approvals rose 3%, from 590,425 in 2011 to 607,058 in 2012.
The end of the government’s stamp duty holiday in March is thought to have been a strong contributor to 2012’s higher levels of lending, particularly among FTBs.

House prices in London fell for the third consecutive month in October, according to figures published by the Office for National Statistics today. Average house prices in London reached a peak of £399,000 in August but have since started to come down in line with the rest of the UK, to reach £388,000 in October.
Independent buying agent Gabby Adler says the downturn is due to a combination of more realistic pricing options and the increase in stamp duty tax introduced in March.
Independent buying agent Gabby Adler says: “London’s strong performance continues to drive the housing market, a trend which is expected to carry on into next year, while in other parts of the country there have been considerable falls in values. Yet even in London we are seeing price reductions as vendors become more realistic on pricing and realise what they have to do to achieve a sale in a difficult market. No price bracket seems immune, with prices cut on high-value, multi-million pound properties, down to entry level homes.
“Properties of up to £1.2m are selling fast but properties above that level are taking much longer to sell, particularly in the £2m band which have been hard hit by the increase in stamp duty in the Budget.”
Chancellor George Osborne announced a 2% increase in stamp duty tax, from 5% to 7%, for homes valued at over £2m in March. The average UK house price peaked at £234,000 in August but has since fallen to £231,000 in October.

New mortgage advances increased 7% in the third quarter of this year to £40bn, up from £37bn in Q2, according to the latest FSA mortgage lending data. New commitments fell 10% from £40bn in Q2 to £36bn last quarter.
The value of outstanding loans totaled £1.23trn, rising marginally from £1.2trn in Q2.
The average interest rate on new advances increased from 3.78 per cent to 3.89 per cent. There was an increase in the rates for both variable and fixed rate lending. Lending for house purchases accounted for 66% of new advances, rising from 62% in the previous quarter.
The proportion of new lending done at 90% loan-to-value remained at 2% for the third consecutive quarter. The proportion of loans to borrowers with an impaired credit history remained at 0.3%, also for the third consecutive quarter.
In Q3, there were 35,900 new arrears cases. This represents a 4% increase on the 34,400 in Q2. The total number of accounts in arrears at the end of the quarter rose 2% to 303,200, up from 296,500 in Q2. This was 7% less than the 324,300 in Q3, 2011.
The proportion of residential loans in arrears rose marginally from 2.45 in Q2 to 2.46 in the third quarter. The number of new repossessions fell 2% to 8,521 from 8,720.