UK house prices record biggest month-on-month fall in six years

UK house prices have had their biggest monthly fall for six years, lopping more than £2,200 off the typical price tag, according to Nationwide.

The average property value fell by 0.5% – or £73 a day – in August, the biggest month-on-month decline since July 2012, Britain’s biggest building society said. In July, house prices increased by 0.7% month on month.

The fall takes the annual rate of house price growth down to 2%, though this is still above the 1% increase that Nationwide is pencilling in for 2018 overall. The average house price is now £214,745.

The decline is likely to have been driven by falling prices in London, which is in the grip of a slowdown. Earlier this month, Office for National Statistics data showed prices in the capital were falling at their fastest annual ratesince the depths of the financial crisis.

Nationwide’s chief economist, Robert Gardner, said that despite its slower pace, annual house price growth remained within a fairly narrow range of about 2% to 3% over the past 12 months. This suggested there was little change in the balance between demand and supply in the market, he said.

“Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates,” Gardner said.

He added that subdued economic activity and pressure on household budgets were likely to continue to exert “a modest drag” on house price growth and market activity this year, though borrowing costs were likely to remain low.

Howard Archer, the chief economic adviser at EY Item Club, said the decline showed that increases in the months to August were “a false dawn for house prices”.

“We suspect that any meaningful housing market upturn will remain elusive over the coming months,” he said. “The fundamentals for house buyers are likely to remain challenging, and they will not be helped by the Bank of England hiking interest rates.”

Some estate agents said that while London prices might be in the doldrums, the outlook in parts of the north of England was more positive.

Sam Mitchell, the chief executive of the estate agent Housesimple.com, said: “Walk into an estate agents in Liverpool or Manchester and they will tell you something entirely different from an agent in the capital. Properties are flying out the door, many at near asking price, and there’s a real appetite to buy.”

However, he said the picture was “far more challenging” in London, with large swathes of the capital still out of reach for people on middle and low incomes.

Jonathan Samuels of the property lender Octane Capital said there was “a blanket of uncertainty” over the market.

“While the employment market remains strong, stubbornly high inflation, the potential for another rate rise, overstretched household finances and the growing possibility of a no-deal Brexit are seeding serious doubt in the minds of prospective buyers,” he said.

“A Brexit no deal could hit prices in the capital, especially at the higher end, like a sledgehammer.”

https://www.theguardian.com/business/2018/aug/31/uk-house-prices-record-biggest-month-on-month-fall-in-six-years

First time buyer numbers reached an eight month high in the UK in July

The supply of properties available to buy in the UK increased in July, while demand from buyers fell, according to estate agents.

However, first time buyers were able to take advantage of the trend with the number of sales made to the group rising to an eight month high, according to the latest monthly analysis report from the National Association of Estate Agents (NAEA).

In July, the number of properties available per estate agent branch increased for the third month in a row, rising from an average of 33 per branch in April, to 37 in May, 39 in June and 41 the previous month.

The report points out that year on year this is a 17% increase, as agents had just 35 properties available to market in July 2017.

Overall, the number of house hunters registered at estate agents fell for the second month running with 303 registered per branch in July, the lowest recorded since December 2017 when agents had 268 on their books.

But the NAEA pointed out that this is typical of July, as house hunters put their plans on hold while summer holiday season takes priority. For the last three years, demand has dipped in July compared to June.

Some 30% of all sales were to first time buyers in July, an increase of 1% from June and up 7% from July 2017 when just 23% of sales were made to the group.

‘What we saw in July was typical of the summer. House hunters put their plans on hold as the holiday season takes priority, and demand dips as a result,’ said Mark Hayward, NAEA chief executive.

‘We don’t usually see first time buyers taking advantage of this environment and pushing to agree sales while sellers are on the back foot. In September, buyers typically storm the market in a bid to complete sales in time for Christmas, so first time buyers should make the most of the slower market while they can,’ he added.

https://www.propertywire.com/news/uk/first-time-buyer-numbers-reached-eight-month-high-uk-july/

Buy to let investors in UK are younger than a decade ago

The average age of buy to let buyers in the UK has fallen by 10 years since 2014, according to a new piece of research.

The analysis of the demographics of its buyers over the last four years, yieldit found that the total average age of purchasers had dropped from 52.3 to 42, indicating a shift in the sector.

Whilst property investment has traditionally been viewed as a business for older generations who benefit from already having a foothold in the market, this new data shows that this might well be changing as younger people recognise the strength and rewards of investment in the sector.

Further analysis of the numbers shows that the drop in age is present across both residential and student buy to let, but is more pronounced in residential sales where the average age dropped from 57.5 to 40.9 compared to 52.3 to 44.2 in the student market over the same period.

‘Investing in bricks and mortar is as popular as ever and although a small number of our buyers are owner occupiers, the majority are property investors looking for tenanted buy to let,’ said head of sales at yieldit, Ryan Hughes.

‘Rising tenant demand and record house prices continue to attract a broadening number of people to the market, including a burgeoning number of first time investors. The figures just go to show that the classic portrait of a landlord is changing, something that we believe can only strengthen and revitalise the market,’ he added.

https://www.propertywire.com/news/uk/buy-let-investors-uk-younger-decade-ago/

BTL landlords selling up in droves, says Belvoir

There has been a significant increase in the number of buy-to-let landlords selling up, along with a notable reduction in the volume of people investing in the Private Rental Sector (PRS), according to Belvoir.

The letting agency reports in its Q2 rental index that landlords are exiting the market mainly due to punitive tax changes.

Belvoir’s findings compliment various reports that suggest landlords are leaving the market in large numbers.

According to the latest residential property forecast from the Royal Instituted of Chartered Surveyors (RICS), rents are forecast to see strong growth over the next five years as a consequence of the reduction in the number of new properties available for renting.

The trade body predicts that national rents could rise by as much as 15% between now and mid-2023.

RICS warns that many prospective tenants now face having to bid against each other, pushing rents up in the process, as a result of falling supply caused by a jump in the number of buy-to-let landlords exiting the PRS, due to the government’s draconian tax changes.

Belvoir CEO Dorian Gonsalves commented: “Although government policies such as a loss of mortgage tax relief, and increased stamp duty on second homes is hurting landlords, they still have a choice as to how to invest their money, whereas tenants have little or no choice of where to rent due to a reduction in supply.

“Belvoir’s Q2 rental index revealed just a slight increase in average rental inflation across the UK, with a similar number reporting static rents, but if landlords continue to sell up because their business model in the PRS is being continually attacked, it will undoubtedly result in a further shortage of properties, and inevitable increases in rents, as predicted in the latest RICS report, which stated that rents are likely to rise by 15% over the next five years.”

Concerns about the possibility of mandatory three-year tenancies may also deter people from investing in the BTL sector, and this could genuinely lead to an increase in homelessness, according to Gonsalves.

Although many landlords are not actively against three-year tenancies, Gonsalves pointed out landlords do understandably need reassurance that they can gain possession of their property when needed, and will be “protected against tenants who do not pay their rent, or abuse a property or indulge in anti-social behaviour”.

Belvoir is urging the government to do more in the Autumn Budget to address stock shortages in the UK, by incentivising the new build sector with low maintenance homes through more Help to Buy and Buy to Rent schemes to provide more homes to own.

Gonsalves continued: “Landlords also need rewards and incentives to encourage them to remain in the PRS, such as reversing current tax increases and introducing tax breaks, as well as initiatives such as tax incentives for landlords who buy large properties and turn them into several affordable and low maintenance flats suitable for the rental sector.

“It is anticipated that more landlords will make a decision about whether to retain their portfolio in 2019, when tax bills have been calculated and the true extent of any further erosion to their profits is seen.

“The Autumn Budget is the perfect time for the government to introduce the incentives that landlords who offer good quality properties at a reasonable rent really need.”

https://www.landlordtoday.co.uk/breaking-news/2018/8/btl-landlords-selling-up-in-droves-says-belvoir

Halls and university accommodation:how much it costs to rent a room at the UK's top 30 universities

The study shows students living near Imperial College London pay nearly £700 a month more than those studying at Durham University.

Students up and down the country received their A-level results this week, with those who got the grades now busy planning their university lives.

The sky-high cost of tuition fees is well-known but living costs, especially accommodation, also sets students and their parents back thousands, affecting where they choose to study.

Flatshare site SpareRoom researched the average monthly rent of a room in a shared house at the UK’s top 30 universities and found that students living near Imperial College London pay nearly £700 a month more than those studying at Durham University.

Over the course of a three-year degree, this totals a massive £24,000.

Dundee is the most affordable university town, with average monthly rents of just £345 for students choosing University of Dundee.

Those studying at the highly-regarded University of St Andrews in Fife also get one of the best-value deals, paying £349 a month, as do students at Durham and Newcastle (£370 and £371 respectively).

Unsurprisingly, London students face the most eye-watering rents.

Prices near the aforementioned Imperial College London in South Kensington average at £1,056 a month - the highest of the top-ranked unis - while students at King’s College London and the London School of Economics and Political Science must fork out £1,039 to live on the doorstep of their central London lecture halls. 

Students heading to the University of Surrey in Guildford, 30-minutes from London by train, pay the highest rents outside the capital at £599 a month on average.

Those who survived Oxford and Cambridge’s rigorous interview process will also need to battle high rents in their university towns - £568 and £576 respectively.

Matt Hutchinson, director of SpareRoom, got into the University of Leeds through clearing and “had the time of his life”, largely thanks to low average rents (currently at £391 a month) leaving him with more cash to spend on having fun. 

He said: “Choosing where to go to uni is a big decision, a decision that doesn’t just affect the quality of your degree but can also have a huge impact on the size of your graduate debt."

“By weighing up your options based on rents as well as rankings you could save yourself thousands of pounds over the course of your degree," says Hutchinson.

https://www.homesandproperty.co.uk/property-news/renting/halls-and-university-accommodation-how-much-it-costs-to-rent-a-room-at-the-uks-top-30-universities-a123181.html

Average asking prices in Britain down 2.3% month on month in August

Average asking prices in Britain fell by 2.3% or £7,218 this month, and are down by 0.1% compared to August last year at £301,973, the latest index shows.

Sales are also down, with a fall of 0.8%, according to the Rightmove house price index which suggests that it is a seasonal downturn and the market is likely to pick up again in the autumn.

It explains that the fall in new seller asking prices maintains the historical trend of sellers coming to market in the peak summer holiday month pricing aggressively to try and secure quicker sales.

The 2.3% drop is slightly bigger than the 2.1% fall in August 2017, with the major drag on the national average being the more subdued market in London and the commuter belt region of the South East. If those two regions are excluded then the rest of the country has a monthly drop of 1.5%.

‘Sellers who come to market in the peak holiday month often have a pressing need to sell and price down accordingly, and are offering summer sale prices to entice holiday distracted buyers,’ said Miles Shipside, Rightmove director and housing market analyst.

‘The market started its most recent cyclical price upturn in 2010, and since then the average price of property coming to market has gone up by 32%, stretching buyer affordability. More substantial discounts are therefore required to tempt warier buyers, with higher house prices also tightening the purse strings of lenders,’ he pointed out.

‘With lacklustre average wage growth, more buyers are bumping up against the tighter lending criteria brought in four years ago following the mortgage market review, which were intended to prevent another boom and bust cycle,’ he added.

A breakdown of the figures shows that asking prices fell month on month by 3.8% in Scotland to £152,899 but are still 3.8% above a year ago while they fell by just 0.1% on a monthly basis in Wales to £196,278 and are 4.9% up year on year.

The biggest monthly fall in England was in London where asking prices were down by 3.1% to £609,205 and they are 1.2% down year on year. They also fell considerably in the South East, down 2.3% month on month to £402,562 and they are up just 0.6% year on year.

Overall, year on year new seller asking prices are muted at 1.1% higher than a year ago, which Rightmove says helps buyer affordability. Sales agreed numbers are broadly flat, down by 0.8% compared to this time last year, and as 2018 progresses they are improving compared to their position earlier in the year.

Shipside believes that the bad weather in March and April was a factor in sales agreed numbers being down by 5.4% year to date but they are on an upward trajectory and are now 3.5% down year to date.

‘Overall in spite of political uncertainty sales agreed are holding pretty steady and it is usual for there to be an upturn in prices and buyer activity as we head into the Autumn season, especially if sellers maintain their cheaper pricing to attract buyers,’ he explained.

https://www.propertywire.com/news/uk/average-asking-prices-britain-2-3-month-month-august/

Summer slowdown hits lettings market says Agency Express

The lettings sector is in the midst of a summer slowdown with no pick up in activity expected until next month, Agency Express says.

The board company’s Property Activity Index has revealed a slowdown with national month on month figures for properties ‘To Let’ dropping 2.7 per cent compared to June, while properties ‘Let’ are 1.4 per cent lower. 

However, the index’s historical data shows the decline in ‘To Let’ properties to be less than figures recorded this time last year. 

Of the 12 regions recorded by index, four reported increases in new listings ‘To Let’ and five reported increases in properties ‘Let’.

The North East sat at the top of this month’s leader board. Following a slowdown in June the region bounced back with new listings up 15.2 per cent and properties ‘Let’ rising by a remarkable 34.2 per cent - this is the largest increase for July since 2015.

The largest declines in this month’s index were made in Yorkshire and Humberside. Figures for properties ‘To Let’ fell 11.8 per cent and properties ‘Let’ by 19.8 per cent. 

London followed suit with a 13.3 per cent drop in properties coming to the lettings market. 

“This month we have seen slower movement throughout UK lettings market but declines are expected during the summer holiday period. While we do expect to see some increases in August we don’t envisage a real pickup in activity until September” according to Stephen Watson, managing director of Agency Express.

https://www.lettingagenttoday.co.uk/breaking-news/2018/8/summer-slowdown-hits-lettings-market-says-agency-express

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