UK house prices up 5.4% say Halifax

House prices are 5.4% higher than last summer as property market activity intensifies, figures from the Halifax showed today.

The lender said prices rose 0.4% in August, the seventh consecutive monthly increase, resulting in an average figure of £170,231.

Prices in the three months to August were 5.4% higher than in the same three months a year earlier, better than July’s 4.6% increase and the highest annual rate since June 2010. The annual rate has picked up from 1.1% in March.

Halifax housing economist Martin Ellis said economic improvement and Government schemes have helped boosted demand, although activity is still being held back by the squeeze on household budgets.

“Overall, house prices are expected to rise gradually over the remainder of the year,” he said.

Halifax’s report follows similar findings from building society Nationwide last week that the housing market revival is gathering pace.

Lenders, surveyors, estate agents and property websites have all been reporting a strong pick-up in activity following the launch of Funding for Lending, which has prompted a big improvement in mortgage availability and rates.

Other initiatives such as NewBuy and Help to Buy have been aimed at giving people with smaller deposits a leg-up.

Average UK house price goes past £250,000

The national average asking price of a property coming to market is over a quarter of a million pounds for the first time. 
The new record was achieved as prices rose 1.2% (+£2,957) in June, the sixth consecutive monthly rise this year. While London sets another new record of £515,243, continuing its upward trajectory, the biggest winner is the South East which sees a record price of £329,968 as a result of a whopping 14.8% increase over the first six months of 2013.

There is also early evidence of a wider recovery as asking prices in the north (North, North West, Yorks & Humber, East Midlands, West Midlands, and Wales) rose by 9.2% , almost keeping pace with the 10.6% seen in the south (Greater London, South East, South West and East Anglia) over the first half of the year.

 Given asking prices reflect the aspirations of both sellers and local estate agents they are a leading measure of market confidence. These increases, along with reports from agents and developers of a pick-up in transactions, suggest a wider and more sustainable recovery as the price buoyancy of the London market shows signs of spreading across the country.

Miles Shipside, director and housing market analyst at Rightmove comments: “While this month sees several new price records, it’s the South East that has really started to lift-off. On top of that, the first half of 2013 saw little sign of the traditional north-south divide with the first-half asking price surge in the north almost equal to that of the south. The good news is that this indicates a wider upturn, albeit at historically low but increasing volumes. 

The bad news for would be buyers is that it has helped propel the average price of a property coming to market through the quarter of a million quid milestone for the first time. It is worth remembering that while the asking price and the eventual sale price may differ by a small margin, the asking price is a very strong indicator of perceived market value and direction.  It will take account of local supply and demand, as well as wider economic forces such as interest rates and consumer confidence.”

The national average asking price of a property coming to market is £252,798, beating the previous record of £249,841 set in May.

 Property market recoveries are traditionally led by London and, belatedly, the trend set in the capital now appears to be spreading as a broader housing market recovery is potentially on the cards. In price terms, this is the strongest start to a year since 2004, with both the south and north playing their parts with increases of 10.6% and 9.2% respectively.

 Unusually, London’s 10.9% (+£50,845) jump year to date has been surpassed by two northern regions; the North region at 11.0% (+£15,134) and the West Midlands at 11.3% (+£19,665). The South East is, however, the main beneficiary of the London boom, with the ripple effect contributing to a 14.8% (+£42,548) hike in the first six months of 2013.

Shipside observes: “London’s new sellers are asking an average of 30% more than they were four years ago compared to those in the South East who are asking less than 15% more. Although the South East has lagged behind the capital in recent years it is the biggest winner so far this year as, frankly, it has become ‘under-priced’. It offers real comparative value for buyers needing access to London but with housing needs or aspirations that leave them priced out of London itself. While some northern regions outpaced London this year, the price gap remains daunting for those looking to up sticks and head to the bright but dazzlingly expensive lights of the capital. The average price of a property in London is still more than three times higher than in the north.”

UK house prices up as supply falls

Thu, 13 Jun 13

The UK’s supply of property for sale dropped 8 per cent in May 2013 compared to May 2012. 

Combined with rising demand, the low levels of housing stock pushed up asking prices in the UK up by 0.6 per cent in May 2013 to £240,238, 3.6 per cent higher than last year.

Indeed, the mix adjusted average asking price has now grown for 19 months in a row in both England and Wales, with Greater London, the South East and the South West recording the biggest rises of 7.9 per cent, 4.4 per cent and 3.9 per cent respectively.

On the surface, an annual price rise of 3.6% appears to be a reasonably strong performance, although it is important to note that virtually all of this growth has been achieved in 2013 and predominantly in London and the South, explains the report.

Looking at price trends around the country, the recovery is only clearly apparent in the South. Average prices across the northern regions of England are essentially static (slightly negative in the case of the North West) in stark contrast with the South which has recorded monthly increases of 0.8%.

Active buyers are chasing ever fewer properties as supply continues to fall. The volume of new stock on the market has now fallen for six consecutive months and, in May 2013, the number of properties was down 8% on May 2012. In addition, a reduction in the typical marketing time for unsold property (currently 104 days, five days less than June last year) has further reduced the total volume of on-market properties, which is down 14% in the last 12 months.

While average house prices continue to recover, vendors seemingly remain cautious about entering the market in any significant volume. For many, bricks and mortar constitute one of the safest investments in today’s uncertain economic climate. The flow of properties into the sales market continues to fall and this has helped to push the total on-market stock is down by 14% vs. June 2012. As buyer confidence gradually improves in line with mortgage availability and economic growth, this restriction in supply will only intensify the competition for property. This is reflected in falling marketing times in areas of the country where demand is higher, and implies that the current stock is beginning to flow through the market at a faster pace.

“The current trends are clearly showing an overall market shift in favour of vendors,” comments Doug Shephard, Director of Home.co.uk. “Prices continue to recover and restricted supply is encouraging more competition between buyers. However, many potential vendors are still reluctant to sell. Relatively cheap mortgages, strong demand in the rental sector and rising values make property an attractive and secure investment, especially in high demand areas which attract relatively high rents and benefit from appreciating capital values.  Until other investment options (shares, bonds, commodities etc.) can offer a premium over and above the yields available in property, the supply shortage will continue, and perhaps worsen.

“As always, the relative strengths of supply and demand will determine the rate of recovery of each local market. Given the current North-South divide, it is already obvious that the turnaround of each area of the UK will differ considerably. London, at one extreme, appears to be operating as a separate entity, bloated by BoE stimulus money and foreign buyers, seemingly immune to the overall economic conditions affecting the rest of the UK. In contrast, Wales and the North East continue to struggle with subdued price performance and typical marketing times that are over 60% longer than the national average.”

House sales in North of England up 9%

• Sales transactions across the north of the country have risen by an average of 9% per month since January. This seasonal growth is much higher than last year, up 10% annually since April 2012. In Leeds transactions increased 25% annually in April, more than double the national average.
• New selling instructions are also up an average of 9% per month since the start of the year, as seller confidence grows again up from last year.
• New buyer registrations in northern England saw encouraging growth at the start of the year, increasing by 10% per month on average since January.
• Property prices across the north remain flat monthly, in line with national prices, but down 3% annually. Lincoln’sproperty prices have bucked the regional and national trend increasing by 9% annually.
• Market activity is buoyant, with the number of offers increasing by 5% annually. York has seen an impressive 35% annual increase in the number of offers made in April.
• Mortgage applications across the UK soar by 28% annually evidencing the effect of the Funding for Lending Scheme.

Jo Whincup, Area Director at William H Brown, part of the Sequence Group which includes Jones & Chapman and Shipways, comments:

“Activity across the north of the country is buoyant, with transactions increasing 10% annually in April, but the number of new buyers coming into the market is subdued, with no annual growth, -4% monthly in recent months. This contrasts strongly with the national picture, up 6% annually. As such, prices remain static and below their peak of July last year (£133,014), creating a buyers’ market for those looking to capitalise on competitive mortgage rates and a greater number of properties on the market.

“National transactions are significantly higher than last year as the number of mortgage applications has shot up by almost a quarter. This suggests that buyer confidence across the UK property market is growing, with national buyer registrations and instructions increasing by a monthly average of 11% and 10% respectively since January.”