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House prices up 1.1% in January
The latest Halifax House Price Index shows that house prices rose by 1.1% in January following a small fall in December (-0.5%).
House prices in the three months November 2013-January 2014 were 1.9% higher than in the preceding three months (August 2013-October 2013). This is within the range of 1.8 – 2.1% recorded for this measure throughout the preceding eight months to June 2013.
The Halifax said activity is on an upward trend with housing transactions in 2013 exceeding one million for the first time since 2007.
House prices up 0.8pc
House prices up 0.8pc
British house prices in July grew at their fastest annual rate for nearly three years, the latest Nationwide House Price Index has revealed.
House prices increased by 0.8% in July compared to a 0.3% rise in June and are now some 3.9% higher than they were in June last year.
Robert Gardner, chief economist at Nationwide, said: “Signs of a modest improvement in wider economic conditions and further modest gains in employment are likely to be lifting buyer sentiment.
“An improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures such as the Funding for Lending and Help to Buy schemes, are also boosting the demand for homes.”
Buying 13% more cost-effective than renting
The gap in cost effectiveness between buying and renting a property is narrowing as house prices are increasing once again, according to the latest research by property search website Zoopla.co.uk.
However buying a property remains 13% more cost-effective than renting.
12 months ago, renting in the UK was £993 per year on average more expensive than servicing a mortgage, but this gap has now come down by 3.2% to £961 today. As a result, the proportion of towns and cities across the UK where it is cheaper to buy than rent has fallen from 90% to 86% over the past year.
The main cause of the narrowing gap has been that house prices have climbed at a faster pace over the past year than rents with the cost of renting a two-bedroom flat across Britain is now £84 (1.1%) more expensive on average than last year, whereas the cost of servicing an interest-only mortgage on a typical two-bedroom flat has risen £120 (1.7%) on average.
However, the average rental payment on a typical two-bedroom flat is £8,006 per year, compared to £7,045 per year to service an interest-only mortgage at a 5% rate. Using a 90% LTV interest-only mortgage at a typical Best Buy rate of 4.39%, the rental premium is even higher with the average mortgage at £126,817 and interest of £464 per month, saving an owner £2,439 a year (not including cost of deposit).
Weaker house price growth in the north has meant that northern towns dominate the list of places where it is cheaper to buy than rent with York topping the list and where tenants pay a £3,326 (42%) annual premium over owners.
Higher property prices in the south have led to a number of places where it is cheaper to rent instead of buying with Plymouth topping the list and where tenants in the seaside town pay £845 (15%) per year less than owners on average. Despite the high rents in London, property price rises over the past year in the capital have now made renting 6% more cost-effective than buying.
Lawrence Hall of Zoopla.co.uk said: “Buying remains significantly more cost-effective than renting, but the gap is closing. With increased mortgage availability buyer demand is rising, especially amongst first time buyers, whilst rental demand is falling so house prices are generally rising faster than average rents, although it is clear that large regional differences still exist.”
UK house prices see modest rise, says Nationwide BS.
UK house prices recorded a “modest” rise in May, increasing by 0.4%, according to the latest survey from the Nationwide building society.
It said the increase provided further support for “the view that the housing market is gradually gaining momentum”.
The annual rate of price growth rose to 1.1%, the fastest pace since November 2011.
The increases mean that the average house now costs £167,912,
Regional house price differences:
London: up 6.2%
South West of England: up 0.3%
East of England: 0.7%
North West of England: down 3.7%
South East of England: up 1.4%
Yorkshire and Humber: down 1.2%
West Midlands: up 0.5%
Wales: down 2%
East Midlands: down 1.2%
North East of England: down 5.7%
Source: Land Registry. Annual change to end of April
New record for asking prices
Property coming to market this month has set a new record national average asking price, according to the latest Rightmove House Price Index.
This month’s 2.1% (+£5,135) rise has left the national average just shy of a quarter of a million pounds at £249,841, surpassing the previous high by £3,606. London, the South East and East Anglia have also hit all-time highs, with buyers in the capital facing new sellers’ average asking prices in excess of £500,000 for the first time.
Rightmove said: “The tumbling of records is being driven by the equity-rich generation with a definite southern bias, though agents in most parts of the country are reporting strong demand for well-priced and decent-quality stock. Despite a new national record, it’s not ‘green-shoots of recovery’ across the board, especially for the deposit-strapped mass-market. They must wait patiently until January when the Help to Buy scheme extends to the resale market, unless new homes developers can increase building dramatically this year.”
The average price of property coming to market has risen by 9.1% (+£20,852) so far in 2013, the strongest start to a year since the 10.5% recorded in 2004. This is the fifth monthly rise in a row, with all regions in positive territory this month. However, sellers in two northern regions, Yorkshire & Humberside and the East Midlands, are still unable to come to market at higher prices than this time last year.
With London sprinting past the £500,000 milestone for the first time with a 3.1% monthly rise to £509,870, a typical home in the capital is more than twice as expensive as the national average. Outside London and some southern hotspots agents report that the market remains sensitive to price and quality, with buyers willing to take their time to find their ideal home.
Rightmove said: “The recession appears to have precipitated a change in buyer behaviour which has left them more choosy and less willing to settle for second-best. Not only are they looking for value and wary of paying over the odds, prospective buyers are also giving thought to ease of resale, a sign that the pain of this financial crisis has left them more mindful of the liquidity of their assets.”
Lenders are ‘cherry-picking’ in efforts to improve the quality of their future mortgage book by offering some tantalisingly cheap mortgage rates to those with decent deposits, courtesy of the Funding for Lending Scheme. There are fixed rates from 2.34% with a minimum 25% deposit, and even interest only options at 2.19% for those with a 50% deposit of at least £300,000 to put down.
The availability of cheap money is key to driving positive sentiment and, with 84% of respondents to Rightmove’s latest Consumer Confidence Survey stating that they felt prices would be the same or higher in 12 months’ time, this seems to be feeding through to home-movers. However, the pent-up demand is still being frustrated by the restricted supply of fresh property.
March house prices show increase of 0.9%
The March data from Land Registry’s House Price Index shows an annual price increase of 0.9 per cent which takes the average property value in England and Wales to £161,793.
The monthly change from February to March shows an increase of 0.1 per cent. Repossession volumes decreased by 18 per cent in January 2013 to 1,317 compared with 1,602 in January 2012.
The region in England and Wales which experienced the greatest increase in its average property value over the last 12 months is London with a movement of 9.6 per cent.
London also experienced the greatest monthly rise with a movement of 2.5 per cent.
The region with the greatest annual price fall is the North East with a decrease of 5.5 per cent.
The North West saw the most significant monthly price fall with a decrease of 2.5 per cent.
The most up-to-date figures available show that during January 2013, the number of completed house sales in England and Wales decreased by 5 per cent to 41,763 compared with 43,752 in January 2012.
The number of properties sold in England and Wales for over £1 million in January 2013 increased by 28 per cent to 610 from 476 in January 2012.
House prices continue to rise
This month sees the continuation of the trend set so far in 2013 with a 2.1% (+£4,996) rise in new seller average asking prices, the fourth successive monthly increase this year, according to Rightmove.
June 2012 saw the highest ever average asking price of £246,235, and this month’s average asking price is just £1,529 under that figure at £244,706. Furthermore, the average price of a property coming to market is up by 6.9% (+£15,717) so far this year. All regions have seen prices rise month-on-month except London, though this should be put into the context of prices in the capital outpacing the rest of the country over the last 12 months.
House prices rise £6,700 as London brings the average up £5k
House prices rise £6,700 as London brings the average up £5k
House prices in England and Wales have risen £6,700 in the last year according to the LSL/Acadametrics house price index released today.
This leaves the average house price at £230,078 – but, without London, house prices would be just £1,117 higher. This follows a steady increase in house prices, with prices only haven fallen once in the 16 months.
Help to Buy will boost prices more quickly than supply.
Help to Buy will boost prices more quickly than supply.
The Centre for Economics and Business Research (Cebr) predicts an average UK home will cost £227,000 in 2014, surpassing the pre-crisis peak for the first time.
Economic fundamentals push house prices to £267,000 by 2018.
New Cebr forecasts show that a typical house in the UK is expected to cost £227,000 in 2014, surpassing the 2007 pre-crisis peak for the first time.
Next year, the leading forecaster expects house prices to be 2.3% higher than in 2007.
Cebr also predicts the average home price will be £222,000 this year, 1.4% higher than in 2012, but just under the peak achieved immediately prior to the financial crisis.
In the short term, lacklustre wage growth, domestic banks’ ongoing recapitalisation efforts and Eurozone financial unrest are expected to subdue house price growth this year and next.