House prices in UK cities are outpacing wage growth by 11%, according to Lloyds Bank, which found that the ratio of average prices across 62 cities to average city earnings has reached 7.2, the highest level since 2007. The new report reveals that the average house price has risen over 37% from 2013 to its highest ever level of £248,233 in 2018. Greater London is the fifth least affordable UK city, with average house prices of £503,000 now 10.3 times the average earnings of £48,604.
The Mail on Sunday (03/02/2019) City AM (03/02/2019)
UK construction sector growth slowed to its lowest level in 10 months in January, prompting warnings that the industry could slip into recession in the event of a "no deal" Brexit scenario. IHS Markit's purchasing managers’ index slipped to 50.6 in January, down from 52.8 in December and just above the 50-mark that divides growth from contraction. Homebuilding was the strongest sector, in a potential reflection of the state support provided by the help-to-buy scheme for first-time buyers. Duncan Brock, group director at CIPS, warned that the construction sector “only needs a small nudge to tip it closer to recession”.
The Times (05/02/2019) The Guardian (05/02/2019)
Failing to shop around for a mortgage can leave homeowners paying an extra £550 a year, the Financial Conduct Authority has warned, estimating that around 1m are overpaying on their mortgage. The regulator said consumers struggle to find the best value among more than 7,000 mortgages on the market, and estimates that 30% of customers could have found a cheaper deal just as good as the one they agreed to.
Daily Mail (01/02/2019)
UK house prices grew at the slowest annual rate for nearly six years in January, according to Nationwide, with prices up by just 0.1% from a year earlier, and down from a rate of 0.5% in December. However, month on month prices grew 0.3% at the start of 2019 compared to a 0.7% slip between November and December. The average property price is now £211,966, just £210 more than a year ago. Nationwide said it was likely that the recent slowdown in the market was due to "the impact of the uncertain economic outlook on buyer sentiment". Robert Gardner, Nationwide's chief economist, added: "However, if the economy continues to grow at a modest pace, with the unemployment rate and borrowing costs remaining close to current levels, we would expect UK house prices to rise at a low single-digit pace in 2019."
BBC News (31/01/2019) Financial Times (31/01/2019)
Mortgage approvals dropped to an eight-month low, to 63,793 from 63,952 the previous month, amid falling household confidence and heightened uncertainty in December, according to the Bank of England. Mortgage lending rose by £4.1bn in the same month, down from £3.6bn in November. “Weak mortgage approvals reflect the very high level of house prices, which, combined with rising interest rates, have been suppressing demand. However, the data suggests that Brexit uncertainty is increasingly weighing on lending volumes,” said Hansen Lu, economist at Capital Economics. “On the demand side, new buyer inquiries are falling, while house price expectations have dropped sharply – pointing to weakening buyer confidence”.
The Times (30/01/2019) City AM (30/01/2019)
Lloyds Banking Group is to offer 100% mortgages to first-time buyers in a return to lending last seen before the financial crash. The Lend a Hand mortgage requires a parent, grandparent or other close family member to lock away enough money to cover the equivalent of a 10% deposit. In return, they will earn a fixed 2.5% interest on this sum.
The Guardian (28/01/2019)