Tuesday, 13 December 2016

Annual house price growth slowed in October, dropping from 7.0% in September to 6.9%.




The data from the Office of National Statistics revealed that on a monthly basis prices edged up just 0.1% to £217,000.
This followed an increase of 0.4% in September and a drop of 0.4% in August.
The East of England is the region which showed the highest annual growth, with prices increasing by 12.3%.
Growth in the South East was second highest at 9.1%, followed by London at 7.7%.
The biggest price rises were in commuter towns surrounding London, as buyers look outside of the capital for affordable property.
The local authority showing the largest annual growth in the year to October 2016 was Basildon, where prices increased by 19.9% to stand at £302,000.
This was followed by Slough with growth of 19.6% and Barking and Dagenham, where prices rose 18.2%.
The lowest annual growth was recorded in the City of London, where prices fell by 8.8% to stand at £713,000.
Howard Archer, chief economist at IHS Global Insight, said that with housing market activity coming off its recent lows and the economy currently resilient, house prices look likely to rise “modestly” in the near term.
“However, we suspect that house prices will come under increasing pressure as 2017 progresses and will likely be essentially flat over the year. Indeed, we would not rule out a marginal drop,” said Archer.
Richard Sexton, director of e.surv, said: “Today’s results show a slight monthly downturn in house prices, with the most acute changes in London, and in particular prime property, which can in part be attributed to the changes in stamp duty rates.
“Annually, however, prices have continued to rise, with strong growth in areas such as the East of England and the South East, pricing many buyers out of the market completely.
“This situation is not desirable for those hoping to enter the market. The hugely regional picture also highlights the challenges the government is facing as it prepares its Housing Policy White Paper. However, with careful and progressive changes, the housing market could once again be accessible to all those hoping to get on the ladder.”

Wednesday, 18 May 2016

UK house prices accelerated in March, as lending hit nine-year high


House price inflation across the UK jumped to 9% in March, as landlords rushed to beat stamp duty changes, official figures show.
The Office for National Statistics (ONS) said the figure was up from 7.6% in the year to February.
Separate figures showed the amount of money borrowed for home loans in March was the highest for nearly nine years.
The Council of Mortgage Lenders (CML) said £13.8bn was lent during the month, 59% more than in February.
The figure was the highest for any month since August 2007.
Landlords and buyers of second homes have had to pay an extra 3% in stamp duty since the start of April.
"While the increases are substantial, these supercharged levels of activity are likely to be temporary, and will fall back over the summer months," said Paul Smee, the director general of the CML.
Landlords borrowed £7.1bn in March, an 87% increase on February.

Wages

The ONS figures show that UK house prices have increased five times faster than wages since 2011, according to the Resolution Foundation, which campaigns to improve living standards.
Its analysis of the ONS data shows that house prices have increased by 36% over the past five years.
Average weekly earnings have gone up by just 7% over the same period, it said.
The think-tank said the growth gap between wages and house prices was even more pronounced in London and the South East.
But even in Scotland and the North, house prices have risen at twice the rate of wages.
However the ONS data shows that prices in Scotland fell by 6.1% in the year to March 2016.
Recent surveys by both the Halifax and Nationwide have suggested that house price growth has already cooled since the stamp duty changes came into effect.
The ONS said house price growth in March was particularly driven by London, where the cost of a house or flat rose by 13% over the year.
In its last survey using the current methodology, the ONS said the average cost of a home in the UK reached £292,000 in March.

Friday, 13 May 2016

A Brexit vote could send house prices crashing, warns IMF

A vote to leave the EU could send house prices crashing and severely damage the UK economy, the International Monetary Fund has warned.
In its annual report on the British economy, the IMF predicted house prices could plummet and London’s status as a global financial centre could also be eroded.
The report said: “Another risk is that markets may anticipate such adverse economic effects, provoking an abrupt reaction to an exit vote.
“This could entail sharp drops in equity and house prices, increased borrowing costs for households and businesses, and even a sudden stop of investment inflows into key sectors such as commercial real estate and finance.
“The UK’s record-high current account deficit and attendant reliance on external financing exacerbates these risks. Such market reactions could sharply contract economic activity, further depressing asset prices in a self-reinforcing cycle.”
Speaking at a press conference in the Treasury, IMF managing director Christine Lagarde, said: “Depending on what hypotheticals you take, it’s going to be pretty bad to very, very bad.”
Lagarde said that a Brexit vote could pose a significant downside risk and cause interest rates to rise
Commenting on the report, Chancellor George Osborne, said: “The IMF also put to rest the fallacy that has been peddled by those who say Britain will have more money for public services if we are not paying into the EU budget.
“The IMF are very clear today – the hit to growth we could expect from a vote to leave would cost our public finances more than the amount we would gain from no longer contributing to the EU budget. Put simply, the IMF says a vote to leave costs us money.”
The report noted that economic uncertainty surrounding the referendum may already be having an impact on economic activity.
It said: “Such concerns may have already begun to affect UK markets in recent months. In the commercial real estate market, transactions plunged about 40% in the first quarter of 2016. Although the residential real estate market remains buoyant, this may reflect temporary effects due to tax changes, as discussed in more detail below.”
The comments by the IMF about the impact of a Brexit vote follow similar ones made yesterday by the Bank of England.
The Bank warned that leaving the EU could tip Britain into recession, send house prices crashing and force up interest rates.
Mark Carney, the governor of the Bank of England, said that leaving the EU could have “material” consequences for UK growth. He went on to say that this could result in interest rates being raised in order to bring inflation under control.
He said a range of outcomes were possible, including a “technical” recession – defined by two successive quarters of negative growth.
“A vote to leave the EU could have material economic effects – on the exchange rate, on demand and on the economy’s supply potential – that could affect the appropriate setting of monetary policy,” Carney said.
The Bank’s Monetary Policy Committee said that in the event of a Brexit vote it could potentially raise the base rate in order to bring inflation under control.
“The MPC would take whatever action was needed, following the outcome of the referendum, to ensure that inflation expectations remained well anchored and inflation returned to the target over the appropriate horizon.”