House prices 2015: UK first-time buyers hit in buoyant August
08-20-2015
Property website says summer lull is lowest for eight years as annual rises remain high
The Times reports the figures show a decrease across the UK of just 0.8 per cent, "compared with an average August fall after the credit crunch of 1.5 per cent". Sky News adds this is the strongest price performance for the month since 2007 "when there was a 0.6 per cent increase in asking prices". Valuations are up 6.4 per cent this month compared to August 2014.
Miles Shipside, director of Rightmove, said buyers can normally pick up bargains in August, "as sellers who are marketing their homes when they should be holidaying often have a pressing need to sell and mark their prices down pretty aggressively". While buyer asking prices were down compared to July, discounts are reduced as demand is currently soaring and the number of properties coming to market has fallen by 8 per cent.
The company pointed to the "vicious cycle" identified by the Royal Institute of Chartered Surveyors in a report last week, whereby a shortage of housing and excessive prices is holding back those who want to move and preventing them from coming to market, further contracting sales.
Regional disparity in the data means prices actually increased from July to August by 1.2 per cent in the northeast and 0.5 per cent rise in the northwest of England, while they fell by 1.2 per cent in the east and southeast of the country and 1.4 per cent in the East Midlands and southwest England.
In London, asking prices fell by 1.3 per cent month-on-month but were up 9.7 per cent on an annual basis. City AM focuses on London's figures to highlight the disproportionate challenge being faced by first-time buyers as the average cost of a property that might enable them to get on to the first rung of the housing ladder in the capital rose by 11.3 per cent.
House prices surge due to 'vicious cycle' on supply
13 August
House prices rose more consistently across the country than at any time in the past year in July, and could be set for even faster acceleration in the coming 12 months as the housing market is gripped by a "vicious cycle" of dwindling supply, according to the Royal Institute of Chartered Surveyors.
Rics' latest monthly survey found that 44 per cent of surveyors recorded rising house prices last month, up from 41 per cent who reported an increase in June, and the largest differential for a year.
It also found that the average number of properties listed with each member had fallen to 47, with new listings down in nine out of twelve regions, while demand has risen for four consecutive months and shows no signs of abating. This could create conditions for even faster price rises over the next year.
The Guardian says the surveyors across the UK "agreed the lack of properties for sale was causing a vicious cycle, as the limited choice on offer is deterring would-be movers and therefore further restricting new instructions". It said prices were expected to surge in particular in East Anglia and Northern Ireland.
House prices across the UK have hit record levels in recent months amid widespread reports of a shortage of supply, with demand being propped up by rock bottom mortgage rates .
There is, however, a growing sense that mortgage rates could be about to turn ahead of an expected interest rate rise, while increasing prices have been cited as a reason for a decline in the number of transactions. Despite the supply issues, this could yet begin to act as a drag on price rises in the medium term.
House prices 2015: UK affordability improves but rate rise looms
12 August
Lending for house purchase bounced back in June after a sluggish start to 2015, according to latest figures from the Council for Mortgage Lenders (CML).
The data show an increase in particular to first-time buyers, with the number of loans up 22 per cent in June according to trade website FTAdviser. The value of loans was also higher than in May at £4.2bn, bringing to an end a slump in new buyer issuance that began with a 27 per cent decline in January and has persisted through the first half of the year, The Guardian notes.
CML said the figures were the result of improved affordability due to cheaper mortgage rates. First-time buyers were putting the "smallest proportion of their income towards their mortgage payments since its records began in 2005", down to 17.9 per cent in June. This correlates with figures published by the Daily Telegraph earlier this month.
But the Financial Times notes lending to first-timers is still down on last year, reflecting a reality that high house prices and corollary higher deposit demands are still proving prohibitive for many. With a potential rise in interest rates in the near future and mortgage rates already on the turn at many high street lenders, the affordability improvement might dissipate soon.
Fears over an impending move by rate-setters is already driving a huge surge in remortgage activity, the BBC says, pointing to a 30 per cent increase in June and the highest volume of borrowing by existing owners since September 2013. During June 31,600 households changed their mortgage deals, compared with 24,300 in May.
A boom in buy-to-let borrowing by private landlords also continued, despite moves by the chancellor at the Budget to restrict the tax breaks offered, for example, on mortgage interest.
UK house prices 2015: squeeze hits owners trying to upgrade
10 August
It is not just first-time buyers that are being squeezed out of the housing market, according to new data.
Homeowners seeking a larger property are facing an increase in costs that is as prohibitive as getting onto the ladder in the first place.
A report by Experian said moving from a one-bedroom to a two-bedroom flat or from a three to four-bedroom house can be as expensive as buying a first property in almost all of 276 UK towns studied across the UK, The Times reports.
Homeowners need to find an extra £70,000 deposit to buy homes which cost on average 42 per cent more than smaller properties in the same area, with the largest difference in areas within commuting distance of city hubs where existing local residents are being priced out.
The biggest disparity is in Scotland’s 'central belt', especially around Glasgow, where the "cost of a larger property is at least double that of a one or two-bedroom home in five locations, including East Kilbride, Clydebank and Paisley".
Other hotspots include Burnley in Lancashire and Abergavenny in south Wales, where larger homes are around double the price, and a number of southeast towns such as Farnham in Surrey, High Wycombe in Buckinghamshire and Tunbridge Wells in Kent, where prices are around 90 per cent more.
A shortage of supply is again cited by the report's authors – and is also given as a potential reason for an overall fall in property sales across the UK in the first half of this year, revealed in a separate report by Lloyds Bank. The Daily Telegraph says there were 155,000 purchases in the first half of this year, down from 171,700 in 2014 and less than half the market peak in the first six months of 2007.
But the steep increase in house prices in recent years is also said to be weighing on demand, which could act to reduce inflation in the months and years to come.
In particular, Lloyds says more are being caught in the stamp duty net which starts for homes worth more than £125,000: the proportion of home movers paying stamp duty is 83 per cent, compared with 76 per cent in 2005.