Supply of homes at lowest level in history

The UK’s housing inventory has hit an all-time low, according to Home.co.uk’s latest report.

The number of properties for sale in the UK has plummeted 38 per cent since December 2007, Home.co.uk reveals, taking the available housing supply to the lowest levels in history.

With buyer demand increasing, the low supply is driving up prices.

In London, where the shortage and demand are most severe, prices have bucked the seasonal slowdown trend, with values leaping 0.8 per cent in the last month alone.

Across England and Wales, prices slipped by only 0.1 per cent, although prices in the North East of England fell 0.7 per cent over the last year and are down 2.2 per cent in Scotland.

On an annual level, though, average prices in England and Wales have shown a post-crisis record rise of 6.1 per cent.

Doug Shephard, Director at Home.co.uk comments: "With such a low volume of properties for sale, there are concerns about how the market will cope with the impending upturn in buyer interest in early 2014.

"On the demand side, individuals and investors have access to relatively cheap credit and yet, due to the sheer lack of choice, the number of transactions that can actually be realised is very much restricted. Growing demand and diminishing supply will no doubt place further pressure on prices in the coming months, especially in London and the South East."

Rightmove raise house price forecast to 6%

RIGHTMOVE is raising its 2013 forecast again, from 4% to 6%, as high search activity and a fall in stock of property on agents’ books look set to create an autumn price surge.

August saw Rightmove’s traffic up more than 20% year-on-year and average property stock per estate agency branch has fallen from 72 properties to 70 as property coming off the market exceeds the amount coming on.

The average price of new to the market property is down by 1.5% (-£3,704) this month, though remains up by 7.2% (+£16,506) so far in 2013.

Miles Shipside, Rightmove director and housing market analyst comments: “We forecast the national average increase in new seller pricing for the whole of 2013 to be in the region of 6%, partly driven by the strength of southern markets but increasingly contributed to by the more buoyant areas of the north. 

"Potential sellers should note that there is the possibility of this autumn’s market being a better time to sell than 2014 if you are trading up. The price gap to trade up might be smaller now and there may be more competition from other sellers next year if January’s second phase of Help to Buy unlocks the housing market”.

House prices hit a record high in August

Key points from LSL house price index:

·         The number of sales exceed 70,000 for the second month in a row

·         House prices increased £7,275 in the past twelve months, reaching an average of £233,776

·         Number of first-time buyers up by more than 30% over the year

House Price	Index	Monthly Change %	Annual Change %
£233,776	238.0	0.4	3.2

David Newnes, director of LSL Property Services plc, owner of Your Move and Reeds Rains estate agents, comments: “House prices soared to a new record high in August – the fourth record high so far this year. The property market has turned over a new leaf after years of restrained activity following the financial crisis. 

"Prices are up £883 in the last month and are £7,275 higher than a year ago due to a substantial boost in mortgage lending to first-time buyers. 

"The UK’s economy is showing signs of sustained recovery which is pushing the housing market forward. Sales are rising rapidly; in May to August 2013 they have been higher than the equivalent period for the previous three years."

Mortgage lending

“The improving availability and pricing of mortgages is boosting demand for properties. Although prices are rising, competition among lenders has opened up the market for first-time buyers, with growing product choice and competitive rates. 

"There has been a concerted effort by lenders to boost mortgage lending. The Government has been pivotal in providing the aid that the market has been craving for many years. The number of first time buyer mortgages is at the highest it has been in five years. 

"The Funding for Lending Scheme has enabled banks to lend to a wider pool of borrowers thanks to cheaper funding, while the Help to Buy scheme is helping buyers overcome many hurdles such as high inflation and hefty deposit requirements. A vast number of aspiring homeowners have already signed up and many can finally afford to get on to the housing ladder.

“Higher loan-to-value (LTV) mortgages are much more readily available and at lower rates, which has been the catalyst behind the vast improvement in the housing market coupled with increasing consumer confidence. True, those with the largest deposits have access to the best rates, but overall they are falling and those with small deposits are able to grab cheap deals. LSL data shows that the average age of a first-time buyer is 30 and the average deposit is £30,109. 

"First-time buyer activity, proving particularly strong in London, as well as the rest of the UK, has been crucial in opening up many housing chains and in helping boost house prices further up the ladder. The road to recovery is a long way off from the levels of activity seen before the financial crisis, but the rise in first-time buyer activity is sending positive waves of confidence.

Growth across all regions

“As expected, London is fuelling the significant rise in house prices on a national level. But signs suggest price growth is happening across the board. All ten regions in the country showed an increase in the annual rate of house price inflation compared to a month ago showing prices will climb across the whole of England and Wales. 

"It is still too early to predict what impact the economy will have on prices, especially as the Bank’s Financial Policy Committee may apply downward pressure on prices through the controls over mortgage supply and pricing. Thus nothing can be set in stone yet. One thing is crystal clear: the market has become more fluid thanks to the increase in activity from the lower tier of the market.”

First time buyers up 41% on last year

Survey results published by the Council of Mortgage Lenders today show that this growth in July continued to be buoyed by home-owner house purchase lending, in particular by growth in first-time buyers.

The CML data (which, as of this month, includes buy-to-let) shows:

• Total home-owner house purchase lending continued to grow, up 9% on June and 21% on July last year.
• First-time buyers took out 25,300 loans in July, an increase of 5% on June and of 41% compared to July 2012.
• Home movers took out 32,000 loans, an increase of 12% compared to June and up 9% on July last year.
• Home-owner remortgage lending continued to pick up compared to July 2012 and recent months, although the £3.8bn advanced remains subdued compared to historical volumes.  
• Total buy-to-let loans advanced increased to 15,200 in July, up 12% compared to June.
• Within this, 7,600 buy-to-let loans in July were for house purchase, up by 7% compared to June.
• In contrast to the picture in the home-owner market, buy-to-let remortgage lending grew more strongly than house purchase, increasing by 24% compared to June to £1.1bn. 

Lending for home-owner house purchase

Total home-owner house purchase loans (both movers and first-time buyers) continued to show the resilience and growth seen throughout 2013. 57,400 house purchase loans were advanced in July, an increase of 9% on June and up by 21% on July last year. These loans had a total value of £9.1bn, which was an increase of 12% on June and 23% compared to July last year. 

Table 1: Loans for house purchase and remortgage

	Number of house purchase loans	Value of house  purchase loans, £m	Number of  remortgage loans	Value of remortgage loans, £m
July 2013	57,400	9,100	27,000	3,800
Change from June 2013	8.9%	12.3%	5.5%	8.6%
Change from July 2012	21.1%	23.0%	7.6%	15.2%

Lending to first-time buyers

The strong growth in lending to first-time buyers since the beginning of the year has continued, with the number of loans advanced increasing by 5% compared to June. In July, 25,300 loans were advanced to first-time buyers, worth £3.5bn. By value, first-time buyer lending was 6% up on June and 46% up on July last year. 

The typical first-time buyer loan size stayed almost unchanged from June at £117,038, while average first-time buyer household income increased to £36,142 from £35,873 in June.

Affordability improved marginally in July compared to June reflecting the average loan size remaining largely unchanged but a higher income average, alongside a further fall in typical interest rates. Typically, first-time buyers in July borrowed 3.31 times their income in comparison to 3.33 in June and mortgage payments (capital and interest) accounted for 19.2% of income, down from 19.3% in June.

Average house prices in England and Wales hit new record

Average house prices in England and Wales hit an all time high in July surpassing their previous peak of 2008 driven by strong demand in London.

The average home in the two countries now costs £232,969, which is up £5,796 on last year and £1,140 higher than the previous peak recorded in February 2008 at the height of the last housing boom, the report from LSL Property Services showed.

It added that the increase indicated long term recovery in property prices was becoming a reality thanks in part to easier lending conditions since the introduction last year of the Bank of England backed Funding for Lending scheme.

Mortgage lending was 17% higher in May than a year earlier and was up by a fifth on the previous month, while the number of first-time buyers was at its highest level since 2007, the report found.

But LSL warned the rise in property prices continued to be driven by demand in the capital where house prices were rising faster than anywhere else in the country driven by demand from both domestic and foreign buyers.

House prices were up 7.1% on the year. That compared to a rise of 2.6% across the rest of England and Wales - the biggest year-on-year rise since April - underlining the deepening divide between London and the rest of the country.

Without a sudden rush of new properties hitting the market prices will continue to rise over the coming months, LSL warned.

David Newnes, director of LSL Property Services said: "Both the lack of housing supply and rising competition in the property market are supporting prices, but at the same time making it more difficult for first-time buyers. 

"The Government urgently needs to address housing supply if it is serious about boosting home ownership levels. One way would be to remove stamp duty, which is a disincentive to buying for both home movers as well as first-time buyers."

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Prime London house prices tipped to rise 26%

Property prices in the capital's most prestigious postcodes are continuing their stratospheric rise.

Knight Frank, the upmarket agency, began this year by saying prices in London's smartest districts would not rise during 2013, largely because stamp duty on the purchase of homes over £2m was increased from 5% to 7%.

But the firm has just revised its forecast from zero to 6%, saying "in spite of record prices viewings are up 15% compared to 2012". Applicants and sales volumes are also up, Knight Frank says, confounding the idea that more stamp duty would deter buyers.

Continued price growth follows already massive gains for this top slice of the market, generally referred to as "Prime Central London" (PCL) and comprising the fashionable areas of Kensington, Knightsbridge, Belgravia, Regents Park and Chelsea. Prices here are 60% higher than in March 2009 when the global financial crisis was at its peak.

Now prices are tipped to rise even further fuelled by foreign buyers.

"PCL prices are expected to increase by a further 26% in sterling terms between 2013 and 2018 but at a much slower rate for international buyers," according to Knight Frank researcher Liam Bailey. He reckons for US dollar-denominated buyers, prices will rise a smaller 15% over the same period as the dollar strengthens against the pound. Since Asian buyers use US dollars for these types of transaction, they would experience a similar benefit.

House prices tipped to rise as easier access to mortgages tempts buyers back to market

Housing market pundits are moving the year’s property price forecasts upwards, after largely predicting they would stay flat.

 Vicky Shaw looks from the Press Association looks at how house prices are defying expectations.

At start of the year, housing market experts generally agreed that any increase in prices across the country would reach 2% at most.

But now, property search website Rightmove has doubled its forecast for 2013 to 4% after seeing three months in a row of house sellers asking record prices. The hat-trick was completed over May, June and July.

Everywhere you look, there are reports of a return to confidence in the housing market, with sellers appearing more bullish about sticking to asking prices as demand strengthens among would-be buyers – many of whom are now finding they can get a mortgage after years of struggling to be accepted by lenders.

For their part, banks and building societies have said that their “risk appetite” is returning too.

Evidence of this was shown in recent figures released by the Council of Mortgage Lenders, which said that first-time buyer numbers have hit their highest levels for five and-a-half years.

As well as freeing up some stuck housing chains, some analysts say that the increase in first-time buyer numbers is putting an upward pressure on house prices.

The number of homes on the market is in relatively short supply at a time when “pent-up” demand from buyers is being unleashed thanks to mortgages becoming easier to obtain.

By basic definition, first-time buyers do not increase this supply as they are not bringing any homes to the market to sell.

Much of the focus on house price growth has been on London, which has seen a 12% increase in asking prices over the last year to reach an average of more than half a million pounds.

But while there are still strong regional variations, some commentators are starting to talk about a broader recovery across the country.

Rightmove says asking prices are now up year-on-year in all regions across England and Wales for the first time in nearly three years.

Several initiatives introduced by Westminster have boosted buyer numbers and competition among mortgage providers has become fiercer since the Government launched a scheme called Funding for Lending last August, giving lenders access to cheap finance to help borrowers.

Lenders have been trumpeting some of their lowest-ever rates and mortgage availability has generally increased.

Other Government schemes, such as NewBuy and Help to Buy, have been aimed at giving a helping hand to borrowers with deposits as low as 5%.

Some innovative deals which have recently come to market include one from Leeds Building Society, which allows people to delay the interest on their mortgage payments for up to six months, allowing them to cut their initial costs so they can spend money on furniture or redecorating.

Halifax had more than 13,000 takers for a recently-closed offer it was running which reimbursed first-time buyers for their stamp duty.

People are also becoming more convinced that house prices are rising rather than falling.

Research released by Halifax found that confidence among Britons believing house prices will rise in the next 12 months is at its highest in at least two years.

The news of these rising house prices has fuelled fears that efforts to kick-start the housing market could lead to another property bubble, with mortgage borrowers trying to stretch their finances too far.

The Government’s flagship Help to Buy Scheme, which from next year will allow lenders to use Government-backed guarantees to offer £130bn of low-deposit mortgages, has generated particular controversy.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics), believes it is too early to rush to any conclusions though.

He highlights stricter rules about mortgage lending due to come into force next year, which could help to put the brakes on.

Some analysts have also suggested that despite the growing confidence, would-be buyers feeling the pinch of high living costs are still “price-sensitive”.

Any indication that sellers are coming to market with unrealistic expectations about what price they will achieve could result in a stand-off between sellers and buyers, bringing sales juddering to a halt as some sort of compromise must be reached to get the market going again.

Halifax’s housing economist Martin Ellis also believes prices in 2013 could surpass his original predictions of up to 2%, but he also cautions that sluggish wage growth and house prices already being high compared to earnings will dampen the market.

Factors like this, he says “are likely to prevent a sharp further acceleration in house prices”.

Rubinsohn also points out that the housing market needs more “oil on the wheels” to get going in some parts of the country than others.

“What’s right for Blackpool is not necessarily right for (London suburb) Blackheath,” he said.

House prices increase in all UK regions say Rightmove

Seven monthly rises on the trot and two consecutive record months as the price of newly marketed

property increases by 0.3% (+£860) in July boosting year-on-year growth to 4.8% (+£11,561)

 - Signs of a broader-based recovery: all regions up year-on-year for the first time in nearly three years contributing to the positive national picture - Confidence on the up: the proportion of people expecting average prices to be higher a year from now doubles compared to this time last year, now at 62% from 31%

- More movers and more to come: transactions already up 5%1 year-to-date and lead indicators suggest more in the pipeline – Rightmove email enquiries to agents and developers up 18% on

20122, new sellers up 5%3, mortgage approvals up 6%4 and surveyors ‘struggling to cope’

- Positive borrowing window: markets do not expect a base rate rise for three years, Funding for Lending competition easing rates and availability, plus ‘brick-shortage success’ of Help to Buy!

Annual change by region

Wales +2.4%

South West +2.4%

West Midlands +1%

North West +4.5%

North +1.2%

Yorkshire & Humberside +1.5%

East Midlands +4.4%

East Anglia +1.9%

South East +4.6%

Greater London +12%

Rightmove reports a seventh consecutive monthly rise in the price of property coming to market, up by 0.3% (+£860), and the second successive national record. New sellers are now asking 4.8% (+£11,561) more than a year ago, a big jump from the 2.7% annual rate recorded in June. With all regions showing a year-on-year increase for the first time since September 2010, several factors suggest this is a broader-based recovery fuelled by the ‘aggregation of marginal gains’.

Miles Shipside, Rightmove director and housing market analyst comments: “The market is currently benefitting from the ‘aggregation of marginal gains’ where incremental improvements across a range of key market drivers compound to slowly but surely build momentum.

"Rightmove’s lead indicators show increases in enquiries, new sellers and marketing prices. An important milestone for a broader-based and sustainable recovery is that all regions of the country now have higher prices than a year ago firmly on the record”.

Confidence on the up: early findings from Rightmove’s latest Consumer Confidence Survey, which has already received more than 25,000 responses from home-movers, show that 62% expect property prices to be higher a year from now, double the 31% recorded a year ago.

Shipside observes: “The price optimists have doubled compared to just 12 months ago and now outnumber the price pessimists ten to one. Consumer confidence is key to the housing market and on this front there has finally been a year of minimal bad news, with a reasonable amount of good, after four years of pretty consistent doom and gloom. A combination of apparent economic stability internationally – or at least, less widely-reported turmoil and uncertainty – and some positive signs of an economic upturn nationally, mean more home-movers are willing and able to increase their financial commitments. Barring a raft of bad economic news, we expect the positive impact of this on the property market to continue.”

Osborne dismisses fears of house price bubble

Chancellor George Osborne played down concerns that house prices might rise too quickly because of government measures to help mortgage lending. Recent surveys suggest government support is stoking Britain's housing market, which in recent decades has been characterised by dramatic price surges followed by strong corrections. Prices nationally are rising at their fastest pace in three years and hot-spots have emerged in parts of London where property inflation is running well into double digits. Osborne dismisses fears of house price bubblesborne told a parliamentary panel the Help-to-Buy scheme was unlikely to be extended but would not be wound up before the three-year term was up. He said the scheme, which offers subsidies to riskier borrowers finding it hard to buy a house, was a targeted response to a malfunctioning mortgage market and dismissed concerns property prices had become a one-way bet. "I don't think in the current environment a house price bubble is going to emerge in 18 months or three years," he said. The International Monetary Fund, former Bank of England officials and some serving policymakers have been critical of the government's intervention. Osborne, facing tough questioning from the Treasury Committee, said the ideal scenario would be for property prices to rise in line with earnings but the scheme would not end prematurely even if prices rose faster. "You have to provide some kind of timeframe to mortgage companies and banks which are going to be investing in systems to deliver the scheme," he said.

Northern Ireland house prices at strongest level for almost 6 years

The price balance of the latest RICS and Ulster Bank Housing Market Survey for Northern Ireland was at its highest in almost six years in June.

It is only the second time since July 2007 that the price balance - which gives an indication of whether average house prices are rising or falling – has been in positive territory.

A net balance of 21% of respondents said that prices were up in the three months to the end of June (28% saying that prices were up in the period, 65% saying that they remained the same and 7% saying they were down).

The only other positive reading since July 2007 was in March 2013, when the price balance was 9.

Surveyors were also upbeat about transactions and transaction expectations in the June survey. A net balance of 44% said that transactions rose in the April, May, June period (56% said that they were up, 33% said that they remained the same, and 11% said they were down).

With regard to the outlook for prices, 89% of respondents said that they would remain the same in the three months ahead (July, August, September), with 11% saying they would be up - giving a net balance of 11.

The net balance for transactions expectations was 67. (67% said that they would be up in the three months ahead and 33% said they would remain the same).

Tom McClelland, RICS Northern Ireland housing spokesman, said : "We expect the summer months to provide an improvement, but, more significantly, what we are seeing is an overall trend of stabilisation in the market, which we expect to continue over the year as a whole. There will be bumps along the way, but we still expect 2013 to see an overall trend of easing price falls and increasing activity. The stabilisation in prices is encouraging greater activity, albeit we are still some way off what would be considered healthy transaction volumes."

Derek Wilson, Head of Lending Products at Ulster Bank, said: "There are a number of positive indicators in the market. Ulster Bank remains strongly committed to providing mortgage lending in all sectors of the market . We have provided more than £1.5billion of mortgage lending in the Northern Ireland market since the property price peak and continue to introduce initiatives that support demand and increase choice for borrowers."

Buyer denand fuelling rise in UK house prices

The UK’s housing market continued to show signs of recovery during June, with rising house prices and increased demand, says the latest report from surveyors group RICS.

21% more chartered surveyors reported prices rose rather than fell in June, making this the strongest month for house prices since January 2010. The outlook for future prices is also strong with 23% more respondents reporting that prices will rise rather than fall over the coming three months.

This rise in prices has mainly been fuelled by increasing numbers of prospective buyers returning to the market. 

Last month, a net balance of 38% more chartered surveyors reported a rise in new buyer enquiries. In a clear sign that market confidence is gradually being restored, and that funding schemes are making a difference, demand from prospective buyers has now risen month on month since January and is currently showing its fastest rate of growth since August 2009.

Reflecting this slightly more positive mood, surveyors also expect home sales to rise over the coming three months, with a net balance of 45% more respondents (from 36% in May) predicting sales will increase. This is the most positive reading in this series’ history, which began in April 1999.  

Despite the increasing appetite to purchase property and the added support to do so, the rental market continues to be important in providing housing. Overall demand for rented property actually rose slightly during June, to a net balance of 27% (from 21%).

Peter Bolton, RICS Global Residential Director, said:

After what has seemed like a very long wait we are finally starting to see what looks like the beginning of a recovery in the housing market. It is important to remember that activity levels still remain depressed by historic standards but the various initiatives designed to encourage the provision of finance into the market do appear to be paying dividends.

Despite the increased interest in buying a property, our numbers continue to show that demand from would-be tenants remains firm and that rents are likely to continue to edge upwards over the next twelve months. As the cost of shelter moves higher, it is absolutely critical that the government continues to focus on its role in supporting the delivery of more new homes into the market.

Pundits revise UK house price predictions

Pundits had forecast that, at best, house prices would tread water in 2013. Now they are rising and experts are scrambling to revise their predictions predictions prices are up 4% already.
Here is what the the experts predicted for 2013 (source: The Guardian)

Halifax
The bank said in December that prices were likely to end 2013 "close to where they begin", and forecast anything between a 2% fall and a 2% rise. The mortgage lender's chief economist, Martin Ellis, now admits that the rate of house price inflation may exceed that by the end of the year, although he says he has no imminent plans to formally change his forecast.
He says the stronger than anticipated growth was the result of numerous factors: signs of improvement in both the economy and housing markethave boosted confidence, a shortage of properties for sale, and the Funding for Lending and Help to Buy schemes. 

RICS
Rics forecast a 2% rise in prices over the course of 2013. Simon Rubinsohn, Rics chief economist, was optimistic about the impact of Funding for Lending, but felt the uncertain outlook for the economy would keep a lid on prices. "As it turns out, Funding for Lending has been increasingly effective in lowering the cost of secured lending while increasing the availability of housing-related loans," he says now. "On top of that, economic newsflow has strengthened a little more than envisaged, and the government has also introduced Help to Buy." As a result, he says the 2% headline forecast appears to be "on the low side", and Rics is set to push this up "to the 4% area".

Nationwide
The building society's chief economist, Robert Gardner, said at the start of the year that he expected the housing market to "be characterised by low levels of activity" in 2013, "with prices remaining flat or modestly lower". He admits growth "has been a little stronger than we might have expected", but at 1.9% – the current annual rate of price growth – it is not far from his prediction, and cautions that a higher figure than that in July would be a result of prices falling in the same month last year. As for the rest of 2013, Gardner says: "We knew Funding for Lending and Help to Buy would provide support for the market, but if things like employment and wages pick up, they could lead to things being stronger than expected." Housing supply will be key, he says, and there are few signs that it is improving: new-build completions for England were down by 8% in the first part of the year. "If we get more demand but no more supply then there is a danger that will push up prices further," he says.

Centre for Economics and Business Research

The CEBR predicted prices would rise by 0.8% in 2013 to an average of £219,000. It revised that up to 1.4% in April and is just about to make a "small upward revision", although at the time of writing it wouldn't disclose exactly how much.Its economist Daniel Solomon says there are four reasons for the revision: previous forecasts had not taken into account Help to Buy; the Office for National Statistics house price estimates over the last quarter were marginally higher than CEBR had expected; the general economic environment had improved; and the depreciation in the pound this year was making UK houses in prime London more affordable for foreign buyers.

Knight Frank

The upmarket estate agent, was talking late last year of the longest housing market recovery on record, and predicted a 1% fall in prices this year. In June it revised its forecast upwards, saying Help to Buy had already improved buyer confidence, along with the prospect of continued low interest rates. "We see prices rising by 3% this year, just slightly above inflation," says head of UK residential research, Gráinne Gilmore.

Savills

Estate agent, predicted a 0.5% increase across the UK in 2013. Six months in, Lucian Cook, director of residential research, says prices could rise by up to 5% this year. "There are signs of improved sentiment. For example, the Rics survey shows a big uptick in new-buyer inquiries and a gap between that and supply. When that happens, prices are pushed up," he says. 

Rightmove

The property website, said "the slow recovery" would continue through 2013, forecasting a 2% rise in asking prices in England and Wales over the year, assisted by greater competition among lenders. In its latest house price report it says that across England and Wales asking prices have risen by 10.4% in the first six months of the year. Every region has seen growth, from the East Midlands up by 5.8%, to the south-east where sellers are asking for 14.8% more than at the start of the year.

Its director, Miles Shipside, says he now expects asking prices to end the year up 4%.

House prices and sales activity up say Halifax

Key facts

• House prices in the second quarter of 2013 (April-June) were 2.1% higher than in the first quarter of the year (January-March). As a result, house price growth between the latest three months and the preceding three months edged above the 1-2% range that it had been in throughout the preceding five months. This was the biggest increase on this measure since January 2010 (2.9%).
• Prices in the three months to June were 3.7% higher than in the same three months a year earlier.This was the biggest increase in this annual measure since August 2010 (4.6%).
• House prices increased by 0.6% in June. This was the fifth consecutive monthly rise.
• Activity is also picking up. The number of mortgage approvals for house purchases – a leading indicator of completed house sales – increased by 7% between April and May to 58,200; the highest monthly level since December 2009. Approvals in the three months to May were 2% higher than in the previous three months. (Source: Bank of England, seasonally-adjusted figures). Home sales in May were the highest in any month since March 2012 when there was a rush to beat the end of the stamp duty holiday for first-time buyers on properties priced below £250,000. (Source: HMRC, seasonally adjusted figures)
• Supply conditions remain tight. The stock of unsold properties remains relatively low and was 5% lower on an annual basis in May 2013, according to the latest figures. (Source: RICS)
• Commenting, Martin Ellis, housing economist, said: "House prices continue to rise steadily. Prices in the three months to June were 2.1% higher than in the previous quarter, edging above the 1-2% range recorded throughout the first five months of the year. The annual rate is at its highest for nearly three years with prices in the three months to June 3.7% higher than in the same three months last year.
  "Activity has also improved in recent months. Both home sales and mortgage approvals for house purchase – a leading indicator of sales – increased in May.
  "Improved confidence in both the housing market and the economy, combined with a shortage of properties available for sale, appear to be pushing up house prices. The Funding for Lending Scheme is also likely to be boosting the market by helping to reduce mortgage rates. There are also early indications that the Help to Buy: equity loan scheme may be stimulating demand. Despite these signs of improvement in the market, the still subdued economic background and weak income growth are expected to remain significant constraints on housing demand and activity during the second half of 2013."

Key points of the latest Hometrack report on housing market

• A lack of housing for sale remains an important feature of the market and key driver of price increases.
• House prices increased by 0.4% in June, matching the growth in May which was the highest increase in a single month since June 2007. 
• The momentum in house price growth over the first half of the year has been driven by a widening imbalance between supply and demand. The gap stabilised in June with slower growth in demand (up 1.6%). A seasonal slowdown in demand is to be expected as we approach the summer.
• Two factors are adding to the pressure on supply – first is an increase in numbers of first time buyers who add to demand but have no property to sell. Secondly, existing owners are looking to secure a property to buy before putting their homes on the market.
• Prices grew across 31% of postcodes in June – this is the highest level since September 2007. Prices fell in just 3.1% of postcodes, the lowest level for 3 years (June 2010).
• London registered the strongest growth in June with prices rising by 0.9% for the second month in a row.
• While market conditions have improved house prices remained unchanged in four out of ten regions.
• The time on market has fallen to 8.4 weeks on a national basis. In London it is half the national rate at 4.1 weeks - the lowest since September 2007. In the midlands and northern regions the time on market is improving slowly but still stands at over 10 weeks on average.
• The proportion of the asking price achieved is an important lead indicator for house prices. In recent months it has been rising across all regions as market conditions improve. In London the percentage is over 96%, the highest for six years (June 2007).
• Looking ahead we expect prices to increase, though at a slower rate, as we move into the summer months.  While demand is improving buyers remain price sensitive and aggressive pricing of stock is the most likely factor to curtail house price growth in the coming months. 

Welsh house prices fall £2,048 in a year

Fall in Welsh house prices continues: now £2,048 in a year year say LSL Property Services

 Prices now stand 1.3% lower than last year

 Average price almost back to the start of the year 

Oliver Blake, Managing Director of Reeds Rains estate agents, who has branches in Wales comments: “Unlike the rest of Britain, the Welsh housing market remains in slow reverse. Wales has seen the biggest annual average house price fall of any region: prices plummeted £2,048 in the past year. However, outside of Wales, only Londoners saw their houses rise significantly in value in  April. 

Sales in Wales are depressed compared to England, but London is the exception, not the rule, so the dramatic comparison is unclear.

“The torpor in the Welsh market is due to inadequate mortgage availability for first-time buyers. Encouragingly, more Welsh buyers are making enquiries – and plans for new estate agency businesses are also rumoured, so the interest is there. It’s the inaccessibility of mortgage finance for the average buyer that’s reining in demand. High rents and growing inflation are reducing the amount firsttime buyers can set aside to meet the large deposit requirements required by lenders. 

“This has lead to the fall: average prices rolled backwards by £219 in the last month. Despite the positive start to this year prices now stand a long distance away  – 10.8% lower  – from their record peak in 2007. Even by historic standards it’s poor.

 And the sinking prices are bucking the usual summer trend of sales rising as the summer season begins. House sales are low, especially at the bottom end of the market. And strict mortgage requirements and lenders’ caution have made it tough to boost sales activity substantially, which has also slowed down activity at the higher end of the market. 

In April house prices fell in 12 of the 22 unitary authorities. Within the country, there is a clear north/south 

divide. The 14 southernmost areas of Wales saw prices fall almost 19%, standing in stark contrast to the rise of 2.2% in prices in the six northernmost areas. Not only does this point to the population variations in different parts of the country, it also shows parts of Wales remain in post-industrial decline.

Table shows price April 2012/April 2013 followed by annual % price change

1 1 MONMOUTHSHIRE                          228,478 216,151 -5.4%

2 2 THE VALE OF GLAMORGAN                  226,295 207,962 -8.1%

4 3 CARDIFF                                184,848 186,243 0.8%

5 4 POWYS                                  171,414 183,545 7.1%

3 5 CEREDIGION                             186,259 177,289 -4.8%

6 6 PEMBROKESHIRE                          168,081 167,625 -0.3%

7 7 ISLE OF ANGLESEY                       160,447 164,984 2.8%

11 8 WREXHAM                                152,981 157,155 2.7%

10 9 GWYNEDD                                155,664 153,315 -1.5%

12 10 FLINTSHIRE                            150,020 152,084 1.4%

9 11 CONWY                                  156,480 150,348 -3.9%

13 12 NEWPORT                                146,412 149,756 2.3%

8 13 SWANSEA                                156,985 146,182 -6.9%

17 14 CARMARTHENSHIRE                        130,728 143,817 10.0%

14 15 DENBIGHSHIRE                           138,680 139,694 0.7%

15 16 BRIDGEND                               138,655 137,457 -0.9%

16 17 TORFAEN                                132,630 123,110 -7.2%

18 18 CAERPHILLY                             123,615 114,682 -7.2%

19 19 NEATH PORT TALBOT                      110,547 105,947 -4.2%

20 20 RHONDDA CYNON TAFF                     108,742 105,331 -3.1%

21 21 MERTHYR TYDFIL                         97,287 104,644 7.6%

22 22 BLAENAU GWENT                          82,444 85,598 3.8%

Energy saving measures could put 14% on UK house price

Making energy saving improvements to your property could increase its value by 14 per cent on average - and up to 38 per cent in some parts of England - new research released today by the Department of Energy and Climate Change (DECC) reveals.

For an average home in the country, improving its EPC (Energy Performance Certificate) from band G to E, or from band D to B, could mean adding more than £16,000 to the sale price of the property. In the North East, improved energy efficiency from band G to E could increase this value by over £25,000 and the average home in the North West could see £23,000 added to its value.

The report, which took into account over 300,000 property sales in England between 1995 and 2011, is the most comprehensive research in this area to date. It indicates that energy efficiency is now a key factor influencing the sale price of most residential dwellings in England.

Energy and Climate Change Minister Greg Barker said:

“We have long known the benefits of making energy saving improvements to the home, but this study is real evidence of the huge potential rewards. Not only can energy efficient improvements help protect you against rising energy prices, but they can also add real value to your property. This Coalition is committed to helping hardworking families with the cost of living. The Green Deal is designed to do exactly that.

“The Green Deal is helping more people make these types of home improvements, reducing high upfront costs and letting people pay for some the cost through the savings on their bills. The Green Deal is a great option for anyone wanting to improve the look, feel and potentially the value of their home.”

Kevin McCloud, broadcaster and co-founder of the Grand Designs Future Living home retrofit company, said:

“There are some 26 million homes in Britain, most of them about as well insulated as a rabbit hutch, and they need immediate help to be made less wasteful. This timely report tells us what we suspected all along: that people really value the well-insulated, energy-efficient home; that modest investment in measures to make our homes more comfortable, healthier and cheaper-to-run really pays off.

“The Green Deal is now maturing into a helpful way of financing a lot of the retrofit solutions around. Homeowners can now start to make these changes, alleviate the burden of high energy bills and improve the value of their prime asset.”

Nearly half (46 per cent) of properties in England are currently band D – but compared to this, a typical home in the West Midlands in band B is estimated to be valued at nearly £17,000 more. In the North East this could be over £19,000, £3,000 more than the national average.

James Brooks from Brooks Estate Agents said:

“For the majority of the UK we are seeing that there is a new factor dictating a home’s saleability. With fuel bills continuing to rise, buyers are becoming more and more conscious about the energy efficiency of their prospective new homes and are willing to invest more in a property now if they know it will cost them less to run in the future.

“As such, we always try to advise our customers to consider the real S.A.L.E. value – Size, Aesthetics, Location and Efficiency – when buying or selling.”

The Green Deal, the Coalition Government’s flagship energy efficiency initiative to transform the homes of Britain can help people capitalise on these findings. The Green Deal helps households pay for some of the cost of making energy-saving improvements, with the repayments spread out over time and paid back through the electricity bill.

Energy Rating and Dwelling Prices: Potential £ value increase

£ value increase from properties moving from EPC D to B & EPC G to E^*

	EPC D to B	EPC G to E
England average	£16,009	£16,701
North East	£19,265	£25,355
North West	£12,979	£23,155
Yorkshire & Humberside	£15,945	£17,298
East Midlands	£10,936	£10,177
West Midlands	£16,882	£9,282
East of England	n/a1	n/a1
South East	n/a1	n/a1
South West	£16,342	£8,026
London	£1,100	£41,808

House Prices remain "overvalued" in the UK

House Prices remain overvalued and current price rises are only due to lack of supply in London and the South East.

That is the view of respected economic commentator Jeremy Warner, assistant editor of the Daily Telegraph.

Writing in the paper today, he said: "Despite a real-terms fall of around 25pc since the start of the crisis, UK house prices continue to look overvalued in terms of their historic relationship with disposable incomes. Remember that incomes have been falling too in real terms, so the ratio of prices to income hasn't changed as much as inflation-adjusted prices.

As everyone knows, the prime reason for sky high house prices is lack of supply, particularly in London and the South East, but a second reason is our old friend QE, which, as in other markets, is creating major distortions. Cheap money allows households to support much higher debt than otherwise, and has therefore put something of a floor under house prices.

By subsidising mortgages, the Funding for Lending and Help to Buy schemes will further support prices while doing little to improve supply. Upward pressure on house prices is therefore likely to continue as buyers return, threatening an eventual rerun of some of the causes of the original credit crisis. The point at which things turn ugly again depends on how quickly the Bank of England removes support. Central banks think they can engineer a soft landing. They hope for a Goldilocks outcome – not too hot and not too cold – where they can slowly wind down the printing press while keeping the recovery alive. Everyone else has got their doubts.

As for second homes in Europe, there is little cause for optimism on that front. The fall in house prices in the major areas of British ownership – Spain, Portugal, Greece, France and Italy – is far from over. British interest in buying overseas has also soured as a result of a relatively weak pound.

I'm sounding a bit like a broken record here, because the outlook for sterling also depends on QE. The policy goal of rebalancing the British economy away from debt-fuelled private and government consumption to exports and investment requires a low pound, and if it is true that the Bank of England's incoming governor, Mark Carney, is of the "print, baby, print" school, we can expect the pound to go lower still. Still, at least that would help prolong the party in UK asset prices a while longer."

Full article http://www.telegraph.co.uk/finance/personalfinance/investing/10119315/Jeremy-Warner-predicts-house-prices-stock-markets-and-the-pound.html