Docklands News

UK house prices are projected to increase by 3.5% this year, driven by lower borrowing costs and a supportive Bank of England, which is expected to cut the bank rate to 3.75% by year-end. According to a poll of 20 housing market experts, prices will continue to rise by 4% next year. Aneisha Beveridge from Hamptons noted: "The slow downward drift in mortgage rates this year should boost prices and sales volumes." However, rental costs are anticipated to outpace house price growth, with a national increase of 4% expected this year. Despite these increases, property values remain constrained by higher taxation and a weak economic backdrop, with inflation projected at 2.8% this year. 

The I (25/02/2025)  

Completion is intensifying among lenders to offer the best mortgage deals to first-time buyers, as the housing market sees strong demand. Mortgage rates have dropped below 4% for the first time since November, following the Bank of England’s interest rate cut to 4.5%. Meanwhile, mortgage rates remain lower than in recent years, with the availability of 95% LTV mortgages fast increasing. Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: "Borrowers with a limited deposit may find it encouraging to see a growth in choice for mortgages available at 95% loan-to-value, now at its highest count in almost five years." 

The Independent (22/02/2025)   The Mirror (22/02/2025)  

New data from the ONS reveals that house prices in London remained stagnant in the year to December, with the average property value stuck at £549,000. This represents a 2.7% loss in value when adjusted for inflation. In contrast, the rest of the UK saw a 4.6% increase in house prices, the fastest growth in 23 months, with an average property fetching £268,000. The capital's high house price to earnings ratio of 8.22 compared to the national average of 6.55 highlights the affordability crisis, exacerbated by rising interest rates and recent tax changes. 

City AM (20/02/2025)   Financial Times (19/02/2025)  

The unaffordability of London's housing market has led to a significant decline in first-time buyers over the last decade, with numbers dropping by 8% from 2014 to 2024, according to Halifax. However, there was an uptick last year, as 44,500 first-time buyers entered the market, a 20% increase from 2023, attributed to improved mortgage affordability. Amanda Bryden, head of mortgages at Halifax, stated: “Last year saw a big increase in the number of first-time buyers, up almost a fifth from 2023.” The average first home in London costs £511,500, with deposits averaging £124,700. The situation is exacerbated by limited housing supply and rising prices, with many young people being driven out of the capital. Simon Gerrard, an estate agent, noted that the Chancellor's decision to scrap stamp duty relief has spurred activity among buyers. He said: “This move has prompted a lot of activity as buyers sought to bring forward their purchases ahead of the change in April this year, to save thousands of pounds in stamp duty.” 

The Standard (16/02/2025)  

Brian Monteith writes in the Daily Telegraph that the economic repercussions of Rachel Reeves' tenure as Chancellor are becoming increasingly evident, particularly in London's prime property market. He cites Coutts' London Prime Property index, which he says indicates a troubling trend, with 76% of prime properties sold at a discount, averaging an 8.9% reduction from asking prices. Monteith notes that the decline has been attributed to the exodus of high net-worth individuals, exacerbated by Reeves' tax increases and the ending of non-dom status. The Adam Smith Institute estimates that the policy could cost the Treasury £6.5bn in tax revenues and 23,000 jobs by 2035. Monteith adds that only Sir Keir Starmer can change the current direction of travel by changing his Chancellor. 

The Daily Telegraph (15/02/2025)  

According to a report by Skipton Group, only 11.5% of potential first-time buyers can afford to purchase a home independently, highlighting a significant reliance on family financial support. Stuart Haire, chief executive of Skipton Group, warned that the "chronic lack of affordability is about to get even worse" due to upcoming changes in stamp duty, which will increase costs for first-time buyers. He urged the government to maintain the current nil rate stamp duty threshold of £425,000 and adjust it annually for inflation, saying: "We know the public finances are tight, but we urge the government not to move the goalposts." 

The Times (18/02/2025)