UK house prices rise again in August - Nationwide

UK house prices continued to rise in August, increasing by 0.6% compared with July, the Nationwide said.

The building society said that property prices were up by 3.5% compared with a year earlier, although August 2012 was a slow month.

The average home was valued at £170,514, it said.

Greater consumer confidence, owing to more employment and signs of economic recovery, helped push up prices.

The building society's chief economist, Robert Gardner, added that greater availability of cheaper mortgages had also increased activity in the market.

The three-month on three-month comparison in prices, regarded as a less volatile measure of property prices, recorded a 1.4% rise.

This was the biggest increase since mid-2010, the Nationwide said.

Robert Gardner, Nationwide's chief economist, said: "A number of factors appear to be contributing to the recent upturn in house price growth. Consumer confidence has increased significantly in recent months, thanks to further modest gains in employment and signs that the UK economy is finally gathering momentum.

"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, is also enabling more people to take their first steps into the property market."

Largest number of first time buyers in Wales since 2007

More first-time buyers were advanced loans in the second quarter of 2013 in Wales than in any other single quarter since the end of 2007, data from the CML shows.

This positive growth saw house purchase loans in Wales up a third in the second quarter compared to the first quarter of 2013. 

First-time buyers

A total of 2,700 loans were advanced to first-time buyers in the second quarter of 2013 which was a significant increase on the 2,000 loans in the first quarter and up from 2,100 in the second quarter of 2012.

The average value of the loans also increased to £93,453 in the second quarter compared to £88,355 in the first quarter. This meant that there was a stronger growth in the total value of lending to first-time buyers in Wales which totaled £270m, an increase of 35% on the second quarter last year and 42% higher than the first quarter of 2013.

The typical deposit of first-time buyers in Wales remains at 15%, something that has not changed since the third quarter of 2011 and lower than the 20% typical deposit size seen on average throughout the UK

Home movers

Growth in lending to home movers was not as strong as first-time buyers although remains positive, 3,400 loans were advanced in Wales, worth £410m, which was an increase of 31% on the first quarter. However, this was actually a decrease of 3% compared to the second quarter of last year.

Lending for house purchase

Total house purchase lending - covering both first-time buyers and movers - in Wales have shown strong growth in comparison to the first quarter of 2013 and last year. Overall 6,100 house purchase loans were advanced in Wales in the second quarter which was an increase of 33% on the first quarter of 2013 and a 9% increase on quarter two last year. This total value of these loans amounted to £680m which was also up by 11% on the second quarter of 2012. 

First-time buyer lending in London at highest level since 2007

First-time buyers accounted for 11,200 loans for house purchase in London in the second quarter of 2013, the largest quarterly number since the end of 2007, according to new data from the CML released today.

Figures from the second quarter show that first-time buyers in London make up a larger proportion of house purchase loans compared to the UK overall. In the second quarter, 56% of house purchase loans were to first-time buyers in London compared to 46% in the UK overall.

First time buyers

In the second quarter of 2013, the 11,200 loans advanced to first-time buyers in London marked an increase of 19% on the previous quarter and a rise of 38% compared to the second quarter of 2012.

Typical loan amounts have also increased, a knock-on effect of strong house price growth in the capital, up 6.9% in the second quarter compared to 2.9% for the UK overall. This results in a larger growth in the value of lending to first-time buyers. £2,490m was advanced to these borrowers in the second quarter, a 33% increase on the first quarter of 2013 and up 47% compared to the second quarter last year.

Whilst first-time buyers took out larger loans (on average £192,600 compared to £183,900 in the second quarter last year) the affordability was almost unchanged thanks to higher incomes and falling interest rates. This meant on average first-time buyers spent 20.8% of their income on mortgage payments almost unchanged from 21% in the first quarter of 2013.

Affordability in London does however remain tighter than in the UK overall with first-time buyers borrowing an average of 3.67 times their income compared to 3.30 for the UK overall in the second quarter. This may be why first-time buyers in London are generally putting down larger deposits than in the rest of the UK. The average loan to value remains at 75% in London compared to 80% for the rest of the UK. In addition, incomes of first-time buyers in London are higher than in the rest of the UK- on average £52,100 per annum compared to £35,400 in the UK overall.

Lending for house purchase

Total house purchase lending in London was boosted by the increase in lending to first-time buyers and showed an increase of 16% compared to the first quarter and 18% compared to the second quarter of 2012.

There were 20,100 house purchase loans advanced in London worth £5.1bn in total, a 23% rise in value compared to the first quarter of 2013 and up by 20% compared to the second quarter last year.

"No sex please, we're British house hunters'

Straitlaced Brits are turned off their dream home by parties and sex over any other form of noise pollution, according to a survey by haart estate agent.

Over half (54%) of house hunters are unwilling to live next door to a party house and 43% would not put up with neighbours having loud sexual intercourse most nights – even if  they were offered a significant discount on the purchase price to compensate. Other noise pollutants considered far less offensive to potential buyers include train lines (32%) and motorway traffic (31%).

Only a third (32%) of homebuyers are put off by commuter train lines, and even constant animal noises are less of a nuisance, with just 33% unwilling to put up with dogs barking or cockerels crowing. At the bottom of the list of nuisance noises are motorbikes or diesel van start-ups immediately out the front of the house every morning – with only 26% saying they wouldn’t move in to this type of property.

Women are more concerned by troublesome neighbours than men, with nearly two thirds (58%) of female respondents opposed to living next to a party house (compared to 46% of men). The older generation are also particularly apprehensive, with 74% of those aged 65 and over unwilling to put up with party animals next door.

Young adults aged 16-25 proved to be the least cautious, with 17% happy to live next door to neighbours with a steamy love life most nights with no compensation required whatsoever (compared to 0% of those 65 and over).

Would not move in to such a property – no matter what the discount

Noise pollution
Regular (at least once a week) neighbour parties featuring blaring music and/or noisy guests	54%
Loud sexual intercourse most nights	43%
Close proximity to busy airport (i.e. under a low flight path of commercial and/military)	39%
Daily barking dogs or other animals, such as crowing cockerels	33%
Commuter mainline trains running regularly at back of property	32%
Being adjacent to a very busy main road or motorway	31%
Frequent loud DIY involving tools such as drills, chainsaws and sanders	29%
Noisy motorbikes or diesel van start-ups immediately out front every morning	26%

Aside from those who would not move in to these properties for any amount of compensation whatsoever, the remaining would demand a substantial discount, with the highest reduction required to put up with neighbours having regular parties, where people would want an average of 22% off the cost of the property. 

Rightmove infographic gives quick insight into August house prices

Rightmove Ifographic provides a breakdown of how prices are performing across each region and property type.

London's million pound boroughs see £90K price drop

The average asking price of property coming to market in London fell by 2.8% (-£14,312) this month. The peak holiday month of August is traditionally volatile, with price falls recorded every year since Rightmove first published its index in 2002.

 Fewer sellers have come to market, down 9% on July, with discretionary sellers more focused on holidays and content to wait for the busier autumn selling season.

Miles Shipside, Rightmove director and housing market analyst comments:
“A holiday season price dip is the norm in August, though sellers who do come to market during August tend to have a more pressing reason to sell and consequently price more aggressively. Even with this month’s 2.8% fall, the asking prices of property coming to market are still up by an average of £36,000 so far in 2013”.

During the holiday season lull, the top-priced boroughs tend to record the largest falls, as higher-priced property owners show a greater propensity to hold off placing their property on the market.

This is evidenced by new sellers in the ‘million-pound-plus club’ boroughs of Kensington and Chelsea, Westminster and Camden dropping their asking prices by an average of 5.6% compared to July.

Shipside observes:
“The average price drop of nearly £90,000 in the million-pound-plus boroughs is a sign of down-time rather than a downturn. The top-end market remains buoyant, but they’re currently busy bobbing about on their yachts”.

The more affordable boroughs of Tower Hamlets (+2.9%), Ealing(+2%), Waltham Forest (+1.4%), Harrow (+0.9%) and Sutton (+0.4%), priced at an average of half a million and below, maintain their momentum and are the top London performers this month.

Shipside adds:
“While London’s best performers this month recorded comparatively modest increases compared to the heady ones seen earlier in the year, they still bucked the trend of holiday season price falls. It shows that while there is a lot of chatter about international buyers in central London, the bulk of the London market is driven by ordinary boroughs and the housing needs of ordinary people”.

Property asking price discounts falling in UK house market

•             Proportion of discounted properties for sale falls from 37% to 32% over past 12 months

•             Average asking price discount falls to 6.3%, down from 7.6% twelve months ago

•             North lags South with biggest discounts in Barnsley, Rotherham and Wakefield

•             London, Edinburgh and Wolverhampton have lowest level of property discounts

•             Poole has highest average discounts on offer to original asking prices

In another strong sign that the UK property market has entered recovery mode, research released today by property website Zoopla reveals that the number of properties available for sale that have been discounted and the amount of the discount offered from the original asking price have both fallen sharply over the past twelve months.

The proportion of properties on the market in the UK today with an asking price that has been reduced at least once has fallen from 37% one year ago to 32% today. And the average discount to the original asking price has come down from 7.6% last August to only 6.3% now. The North-South property divide remains clearly evident in the Zoopla research, showing all of the top ten areas with the highest proportion of discounted properties being in the North and nine of the top ten areas with the biggest discounts on offer also being in the North. 42.7% of properties currently for sale in Barnsley have had their asking price reduced at least once since being put on the market, with Rotherham (42.3%) and Wakefield (42.1%) not far behind. 

Lawrence Hall of Zoopla.co.uk comments: “A fall in the proportion and level of asking price discounts suggests sellers are feeling more confident and happy to wait it out to achieve their target asking price. First-time buyers are finally getting a look-in due to improved mortgage availability which in turn is lifting the whole market. Banks, sellers and buyers are all more bullish about the state of the economy, which bodes well for the months ahead. And the Bank of England’s forward guidance on interest rates has generated a greater sense of certainty about the future, which should lead to even more activity.”

Top 5 Areas with Highest Proportion of Asking Price Reductions

Rank	Area	% of Homes on Market Reduced	Avg. Price Reduction (%)	Avg. Price Reduction (£)
1	Barnsley	42.7%	8.1%	£11,663
2	Rotherham	42.3%	7.4%	£10,941
3	Wakefield	42.1%	7.2%	£14,029
4	Wigan	40.8%	7.5%	£11,969
5	Sunderland	40.2%	8.0%	£12,157

Source: Zoopla.co.uk (August 2013)

Top 5 Areas with Biggest Asking Price Reductions

Rank	Area	Avg. Price Reduction (%)	Avg. Price Reduction (£)	% of Homes on Market Reduced
1	Poole	9.9%	£51,835	29.3%
2	Liverpool	8.2%	£13,664	37.8%
3	Doncaster	8.2%	£14,186	39.1%
4	Barnsley	8.1%	£11,663	42.7%
5	Bolton	8.1%	£14,945	34.1%

Source: Zoopla.co.uk (August 2013)

Top 5 Areas with Lowest Proportion of Asking Price Reductions

Rank	Area	% of Homes on Market Reduced	Avg. Price Reduction (%)	Avg. Price Reduction (£)
1	London	22.8%	7.3%	£66,575
2	Edinburgh	27.7%	5.3%	£14,722
3	Wolverhampton	29.1%	5.4%	£12,064
4	Bournemouth	29.1%	7.5%	£27,754
5	Poole	29.3%	9.9%	£51,835

Source: Zoopla.co.uk (August 2013)

Top 5 Areas with Smallest Asking Price Reductions

Rank	Area	Avg. Price Reduction (%)	Avg. Price Reduction (£)	% of Homes on Market Reduced
1	Edinburgh	5.3%	£14,722	27.7%
2	Swindon	5.3%	£10,665	32.9%
3	Ipswich	5.4%	£13,677	37.7%
4	Wolverhampton	5.4%	£12,064	29.0%
5	Milton Keynes	5.5%	£14,935	30.0%

Source: Zoopla.co.uk (August 2013)

UK property prices up 3.0% annually and 1.4% in a single month

Haart National Housing Monitor

• UK property prices up 3.0% annually and 1.4% in a single month

• Total new buyers up 27.9% annually but new properties for sale down 4.4%, constraining actual sales to a 3.5% annual increase. First time buyers surge continues, up 76.2% annually
• New buyers in London up 60.3% on last year but new properties for sale down 17.7%, resulting in only a 2.0% rise in sales transactions across the Capital
• First time buyers in London up 109.1% annually – more than doubling

National	July 2013	% change since June 2013	% change since July 2012
Ave UK house prices £ (current listed price)	202,238	+1.4%	+3.0%
First time buyer house price £ (current listed price)	145,171	-1.9%	-2.2%
First time buyer % of all mortgages written	43.2	-1.1%	+6.2%
House sales (exchange)	64,611	+1.6%	+3.5%
All buyer viewings per property for sale	10:1	- 3.5%	+33.8%

Paul Smith, CEO of haart, with a network of over 100 branches, comments:

“Bank of England Governor Mark Carney’s recent promise to keep interest rates at 0.5% until unemployment drops to 7% - drawing on the US and Canadian models -  is fantastic news for the property market. It heralds increased stability over the coming years with lenders able to offer attractive locked in deals.

“Confidence is already creeping back with the number of new buyers up 27.9% annually and first time buyers up 76.2% in the same period. As a result property prices continue to rise steadily, up 3.0% annually and 1.4% on the month. The epic return of the first time buyer is also still in full swing, with a 76.2% annual surge in their registrations (109.1% in London). But we keep hearing it from all corners: far too few properties are coming onto the market. House builders either need encouragement from the centre to build or more existing home owners seeking to buy need to instruct agents now in order to unclog the market.”