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UK house prices have hit a record high, with Land Registry data showing the average price rose to £250,000 in November. Property values rose 7.6% in the year to November, with this marking the steepest annual price growth since June 2016. Across UK nations, England saw values climb 7.6% year-on-year in November, reaching £267,000; the average in Scotland rose 8.6% to £166,000; Wales saw growth of 7%, taking the typical value to £180,000; while Northern Ireland’s 2.4% increase took its average to £143,000. Analysts believe the stamp duty holiday has helped drive the market and push up prices, warning that the market and growth may slow once the tax break ends on March 31st.Howard Archer, EY Item Club’s chief economic adviser, said: Elevated housing market activity and robust prices will prove unsustainable sooner rather than later,” adding that prices could fall by up to 5% this year.
City AM (20/01/2021) The Independent (20/01/2021) Financial Times(20/01/2021) The Guardian (20/01/2021) Daily Mail (20/01/2021)
Proposed housing law reforms to abolish ground rents and lease charges could boost house prices by £50,000, according to industry experts. Research by consultancy Capital Economics found that Government plans to change the leasehold system would save homeowners tens of thousands of pounds and boost house prices. The Government reforms include plans to abolish onerous ground rents and extra charges to extend a lease after it passes 80 years, known as “marriage value”. If these planned changes are enacted, leasehold homes sold with a short lease could rise in value, while the cost of extending leases for existing homeowners would fall. David Wadsworth, of JMW solicitors, commented that “The government reforms will make those homes more marketable.”
The Daily Telegraph (21/01/2021)
Rising house prices are pushing more first-time buyers into longer-term mortgages to afford their monthly repayments. About 70% of first-time buyers last year took out a mortgage with an initial term of more than 25 years, according to Nationwide's house price index affordability report. Ten years ago 45% of first-time buyers took out long-term mortgages, typically for 35 years. Andrew Harvey, senior economist at Nationwide, said that higher house prices were a driving factor and that some first-time buyers took out longer-term mortgages to be able to afford "a slightly bigger, better property". A rise in the retirement age has also made people more willing to take on longer-term mortgages. Nationwide also revealed that finding a deposit is still the biggest challenge for first-time buyers as house prices remain high. Outside of London, monthly mortgage payments relative to take-home pay remain affordable. However, trying to find a 20% deposit for a property is still proving to be a major obstacle with the average 20% deposit being 104% of the average income.
The Times (18/01/2021) Daily Express (18/01/2021)
Transport for London has released a new parcel of disused railway land next to Bow Church DLR station in Bow Road, to the Optivo Housing Association. The group is planning to build 150 homes, with half at the “affordable” low end of the rental market. The new site is part of the GLA's London Plan to reduce the housing shortage. Work has been started on 1,500 new homes across London, with thousands more in the pipeline. These are aimed creating revenue for TfL to plough back into the public transport network which is facing a cash crisis because of the pandemic.
East London Advertiser (12/01/2021
UK property prices crept up by 6% last year, according to the Halifax, but the lender is predicting "downward pressure" on values in 2021. The mortgage lender, part of Lloyds Banking Group, said that prices "soared" in the second half of 2020. Pent-up demand, a clamour for more space, and stamp duty holidays led to higher prices. However, the Halifax said the economic realities of 2021 meant activity would slow as the year progressed. Prices were at a record high in December, but growth has already started to slow. There was a 0.2% month-on-month increase in December, but this was significantly less than the 1% jump recorded in November. It was the lowest rate recorded during the six months of growth since the housing market started to reopen in England in May. "With the pace of the UK's economic recovery expected to be constrained by the renewed national lockdown, and unemployment widely predicted to rise in the coming months, downward pressure on house prices remains likely as we move through 2021", said Russell Galley, managing director at the Halifax.
BBC News (08/01/2021) Financial Times (08/01/2021) The Daily Telegraph (08/01/2021) Financial Times (08/01/2021)
HSBC has reinstated its 10% deposit mortgages, and is again offering two and five-year fixed-rates for purchases and re-mortgages with up to 35- year terms. HSBC was one of the few lenders to keep selling low deposit mortgages during the coronavirus pandemic when most lenders became fearful of approving riskier loans. However, the lender pulled out in September after becoming flooded with demand from borrowers seeking loans of 90% of a property's value. Barclays cut the rates and eased restrictions on its 90% mortgages last week, having resumed offering five-year fixed rates for people with low deposits in December. It now also has a two-year fixed-rate deal at 3.55% with a £999 fee for borrowers with a 10% deposit, or 3.75% with no fee.
The Times (09/01/2021)