In another sign of increasing demand across the property market, figures published yesterday reveal that lending by banks for property purchases rose for the fifth successive month in May. The amount being borrowed was, however, still lower than at this time last year.

The Times links the continuing surge in the volume of lending to the "certainty" provided by the election result in May. The increase, from 42,020 approvals in April to 42,530 in May, is the fifth consecutive monthly increase reported by the British Bankers Association and marks the highest level for lending approvals since March last year.

The Daily Telegraph notes that just over £10bn was given out in mortgages last month, up from £9.7m in April and the highest total since November 2014. It is, however, still about 5 per cent below the amount lent out a year ago.

Howard Archer from analyst IHS Global Insight said in the Telegraph it is expecting renewed demand to push house prices up by 6 per cent this year. This would be an increase from the 4.6 per cent growth recorded in May, which left the average UK property valued at a record £195,000.

Steve Bolton, chairman of Platinum Property Partners, told Property Wire that loans to new homebuyers have declined by 3 per cent, and many analysts have argued that first time buyers are being kept out of the market by spiralling prices. John Goodall, chief executive officer of buy to let lender Landbay, agreed that people trading up from one home to another are "turbocharging the market".

House prices 2015: discounts cut as demand rises

23 June

Resurgent demand for property is reining in discounts available to buyers, which are at their lowest level in five years.

Figures from the online property portal Zoopla, quoted in the Daily Telegraph, show that the average property is currently listed at almost 94 per cent of its initial asking price, the highest level since 2010. In Milton Keynes and New Milton, Hampshire, the two areas with the smallest discounts, properties are on the market at more than 95 per cent of their initial asking price.

The data come in the wake of consistent reports of surging demand after last month's general election. Stamp duty changes introduced last year, which removed the cliff-edge 'slab' structure of the levy, are also likely to have relaxed buyer attitudes around valuation thresholds.

A sign of the unequal distribution of house price rises emerged in separate regional data published by Halifax, which show that a square metre of home in London's most expensive borough, Kensington and Chelsea, now costs £11,635, up by almost £800 in a year. "While in Scotland the average price per metre had risen by 152 per cent over 20 years from £592 to £1,490," The Guardian reports, "in Greater London it had leapt by 388 per cent from £907 to £4,426."

Data from Nationwide published earlier this month showed the average price across the UK had risen to a record £195,000.

In happier news for buyers, research published by the Building Societies Association (BSA) revealed the number of prospective homeowners who believe the cost of a mortgage will prove prohibitive has fallen from around half to a third in the past year.

According to trade website Mortgage Solutions, rising valuations are being offset by falling mortgage rates, which have dropped from an average of 3.73 per cent in June 2014 to 3.19 per cent today.

UK house prices 'to rise by 25 per cent' in five years

11 June

UK house prices will rise 25 per cent in the next five years, becoming "ever more unaffordable", a report by surveyors has predicted.

The Royal Institution of Chartered Surveyors (Rics) says an acute shortage of homes for sale will see prices rocket. The supply of homes for sale has fallen to its lowest level since records began in January 1978.

The news appears to have dashed hopes that a "supply bounce" will materialise now that the general election has passed, says The Guardian. It was hoped that a majority Conservative government would see a flood of new homes come onto the market. But the bounce has so far failed to occur, with the north-west and London seeing the sharpest drop in instructions last month compared with April.

The average stock of houses per surveyor has fallen around 12 per cent since the start of the year – standing now at 52. A simultaneous acceleration in new buyer inquiries – the fastest rate in more than a year – saw house prices rise again in May, at a quicker pace than in the previous month.

Simon Rubinsohn, chief economist at Rics, said: "There had been some hope that the removal of political uncertainty would encourage more properties on to the market, but the initial indications are that this is not proving to be the case."

Halifax has also predicted a continuing rise. The building society's housing economist, Martin Ellis, warned that housing supply "remains extremely tight". He added: "The imbalance between supply and demand is likely to continue to push up house prices over the coming months."

House prices in London jump 17 per cent after election

27 May

London homes put up for sale since the general election are 17 per cent more expensive than those on the market when votes were cast, sparking fears that house prices could be set to overheat again.

According to new research from the estate agent comparison site GetAgent.co.uk, asking prices in the capital have increased as homeowners, who watched house prices slow in the nine months prior to the election, have decided that now is the time to sell up.

Demand for multi-million pound homes had been reduced by the expectation that a Labour government would introduce a mansion tax on homes worth more than £2m. With that threat lifted by the Conservative win, owners of high-value homes who were keen to sell have rushed their properties onto the market. 

But there has also been a surge in newly listed properties at all price points across the UK's four most popular property search websites, Prime Location, Rightmove, OnTheMarket and Zoopla, the research found.

The market has also been affected by the seasonal increase in what buyers are willing to pay, the researchers said. Property often commands higher prices in spring and summer due to the annual increase in demand for new homes.

Colby Short, co-founder of GetAgent said, "The stability of a majority government has clearly helped consumer confidence and the effect of this on the property market is borne out by these asking price increases."

However, according to Johnny Morris, head of research at Hamptons International, it is unlikely that the current house price growth will be a repeat of the huge increases that occurred between January and September 2014.

"We expected to see an increase in listings and asking price after the election but there are two fundamental differences between this May and 12 months ago," Morris told the Daily Telegraph. "Firstly, mortgage availability is tighter holding back first-time buyers. Secondly we saw a lot of buyers coming to the market last year as the country suffered from a long term slow erosion of stock," he said.

House prices: £2m homes flood back onto market

26 May

The number of multi-million pound houses for sale in the UK has more than doubled since the Tories' election victory effectively ruled out the introduction of a mansion tax.

In the build-up to May's general election, estate agents had reported a slowdown in the number of expensive properties coming on to the market as uncertainty grew over who would form the next government.

Ed Miliband's pledge to levy an annual charge on properties worth £2m or more had sparked anxiety among buyers of expensive homes, and prompted would-be sellers to wait for the result.

According to data from the GetAgent estate agent comparison website, sellers are flooding back onto the market. In the week of 9 April, 246 homes were newly listed for sale at £2m or more. Six weeks later the number had jumped to 639 – an increase of 160 per cent.

The Guardian says that grand properties such as the £3.9m Manor House in Byfleet, Surrey, which stood in for the home of the Dowager Countess Grantham in ITV's Downton Abbey, were joined on estate agents' websites by hundreds of £2m-plus homes.

However, Henry Pryor, a property commentator and buying agent for rich clients, believes that the wealthy are constrained by George Osborne's stamp duty changes, which increased the levy on high-value homes.

"Someone buying a £2m property doesn't face Labour's £250 monthly mansion tax but does have to find £153,750 out of taxed income – 53 per cent more than they would have needed 12 months ago," he says.

"There will continue to be trophy sales that will hit the headlines, but the wealthy still feel under the spotlight."

 

House prices 'will keep climbing' as homeowners stay put

22 May

The reluctance of homeowners to sell up and move on has been blamed for rising house prices, as new figures reveal that people in some parts of the country are staying in their homes for almost three decades. 

Despite reports of a sudden surge of houses put up for sale after the election earlier this month, Britain remains gripped by a chronic shortage of housing stock.

The low rate of property turnover is exacerbating the problem, slowing down the supply of properties to the market and pushing up prices yet further, Richard Donnell from the residential data analyst firm Hometrack told The Times.  The proportion of sales by mortgaged homeowners fell to just 35 per cent last year, almost half of the level recorded in 2007.

Back in the 1980s, homes were changing hands every ten years, says the newspaper. This increased to 14 years between 2003 and 2007 and has now exceeded 20 years in every city in the country.  Liverpool has the lowest turnover, with the average home only being sold only once every 28 years.

Experts argue that at least 240,000 homes need to be built each year in order to begin to address the shortage. Britain's leading homelessness charity has warned that number of young adults on the property ladder will halve in the next five years unless the government takes urgent action to deal with the housing crisis.

Shelter predicts that less than a fifth of 25 to 35-year olds will be homeowner by 2020, compared with nearly 60 per cent a decade ago. The proportion of young adults being forced to rent is also expected soar to from 20 per cent to 70 per cent over the same period.

"No matter how hard they work or save, an entire generation is being forced to watch their dreams of a stable future slip through their fingers, stuck in properties where rents eat up their salaries and short-term contracts leave them with no stability at all," said the charity's chief executive Campbell Robb.

 

House sales set to soar in property 'stampede'   

18 May

Uncertainty over the property market appears to be evaporating, as leading estate agents report a "rush" in people putting their homes up for sale.

Rightmove, the property sales website, predicted that the supply of homes to the market will increase by 10 to 20 per cent over the next three months due to the election of the Conservative government and the demise of Labour's proposed mansion tax, The Times reports.

According to Miles Shipside, director and housing market analyst at Rightmove, sales activity went up by 17 per cent after the 2010 election and looks set to increase by a similar amount this time around.

"It's obviously early days but we're hearing from estate agents that a lot of people who'd been holding back are now trying to catch the late spring market in a period of perceived stability," he said. "I'd hope that you could see a 10 per cent increase in sellers over the three months after the election, compared with three months before."

Asking prices fell in April for the first time since the general election in 2010. Some agents believe prices could fall again as the market is flooded with extra properties.

The Tory election win appears to have had a particular impact on the luxury property market. In the week after the election, almost £1bn worth of luxury property either changed hands or was subject to "serious offers", according to the Daily Telegraph.

Since the election results were announced, shares in the UK's major property chains have also risen. Foxtons' stock is up by more than 13 per cent to 264.75p per share. Savills has risen 8 per cent to 904p and Countrywide has risen by 12 per cent to 598p.

Despite the current forecasts, the UK remains in the grip of a long-term housing shortage that is unlikely to be overcome by the increase in sellers, analysts have said. Last week the Royal Institution of Chartered Surveyors warned that the rising cost of property risked becoming a "national emergency".

According to the institute, house prices could climb by as much as 5 per cent each year for the next five years.

 

House prices 'a national emergency', RICS warns

14 May

The Royal Institute for Chartered Surveyors (RICS) has warned that rising house prices are in danger of becoming a "national emergency".

House prices are rising at the fastest rate since August last year while the supply of homes coming on to the market fell more swiftly than any time since 2009.

RICS urged the prime minister to do more to support the construction of new homes "in unusually forceful language", Reuters reports.

"The affordability and availability of homes in the UK is now a national emergency and addressing this crisis must be the priority for the new government," RICS's head of policy, Jeremy Blackburn, said.

He called on the Conservatives to put forward a "coherent and co-ordinated house building" strategy across the public and private sectors.

While rising house prices may come as "good news for property owners, they offer little encouragement for first-time buyers already struggling to get their foot on the property ladder and finding it hard to secure sufficient funds from stringent mortgage lenders," Sky says.

Mortgage lender Halifax said that their figures showed house prices had risen by 8.5 percent over the past year. The average home has risen to a new record of £193,048 – more than five times the average full-time male salary.

Around 140,000 homes were built last year, which fell well short of what is needed by at least 100,000 properties, the Financial Times estimated.

Blackburn urged David Cameron to deliver on his pre-election promise of one million homes by 2020.

Last month, mortgage lender Nationwide said that weak activity in the housing market was most likely connected to uncertainties around the general election.

RICS's chief economist, Simon Rubinsohn, said that the shortage of houses for sale was partly due to homeowners waiting to see the election results before putting their property up for sale. Now that the election has passed, the Conservative government will be under pressure to begin building new homes and take steps to bring rising house prices under control, analysts say.

www.theweek.co.uk/