Residential Property Review – January 2018

Our monthly residential market review is intended to provide background to recent developments in property markets, as well as to give an indication of how some key issues could impact in the future.

 

UK house prices increased 5.1% to November 2017

In their recent UK Residential Market Survey, the Royal Institution of Chartered Surveyors (RICS) reports that UK house prices increased 5.1% in the year to November 2017, a 0.3% decrease on October figures. Estate agents report that stock levels remained stable and new buyer enquiries stabilised, and for the 23rd consecutive month the net balance for new instructions remained negative in November.

The latest Bank of England Agents’ summary of business conditions, outlined that housing market activity moderated in Q4 2017, following a pickup in activity post-summer. Demand remained weak in the secondary market and in London, particularly for high-priced properties. Demand for new housing showed signs of softening across the UK in the last three months of 2017.

House price growth to slow in 2018

Respected news agency Reuters, reports that their recent poll of 28 housing market participants reveals that residential property prices will increase by 1.3% across the UK in 2018.

Some of the factors behind this prognosis include the possibility of continuing political and economic uncertainty ahead of Brexit in 2019, the possibility of further interest rate rises, weaker consumer confidence, falling real wages and issues surrounding mortgage affordability.

Leasehold sales on new build homes to be banned in England

The Government has announced that people purchasing new build homes will no longer be required to enter leasehold agreements. This follows a consultation where thousands of homeowners criticised leasehold practices. In some instances people have been subject to vastly increasing ground rents, others have had their freehold sold to investment companies, and were required to pay large sums to purchase it.

The Government’s Communities Secretary, Sajid Javid said that: “It’s unacceptable for home buyers to be exploited through unnecessary leaseholds, unjustifiable charges and onerous ground rents. It’s clear from overwhelming response from the public that real action is needed to end these feudal practices.

Given that this initiative from the Government will require new legislation, it will be some time before it can be enacted. It is unclear what relief, if any, there will be for the 1.4 million households in England who already own their house under leasehold arrangements.

Relocation from London reaches 10-year high

According to The Guardian, in the first six months of 2017, 292,000 people left the capital for other parts of the UK. This represents an increase of 14% compared with a decade earlier and is the highest level recorded since 2006. This exodus has primarily been driven by people leaving London’s increasingly expensive residential property market. In addition, London’s financially stretched local authorities are attempting to house their homeless residents in more affordable locations outside of the city.

HOUSE PRICES HEADLINE STATISTICS**

HOUSE PRICE INDEX (NOV 2017)* 118.6*
AVERAGE HOUSE PRICE £226,071
MONTHLY CHANGE 0.1%
ANNUAL CHANGE 5.1%
*(Jan 2015= 100)

  • An annual price increase of 5.1%, which takes the average property value in the UK to £226,071
  • The North East saw the largest monthly fall in value of 1%
  • The West Midland Region saw the largest annual gain in value (7.2%) to Nov 2017

HOUSE PRICES PRICE CHANGE BY REGION

Region   Monthly Change (%) Annual Change (%) Average Price (£)
England   0.1 5.3 £243,339
Northern Ireland
(Quarter 3 – 2017)
  3.0 6.0 £132,169
Scotland   1.1 3.6 £145,992
Wales   -0.7 4.5 £152,855
East Midlands   0.2 6.4 £185,047
East of England   -0.2 6.0 £289,731
London   -0.9 2.3 £481,915
North East   -1.0 2.3 £127,737
North West   1.4 6.2 £159,066
South East   0.3 5.7 £325,270
South West   -0.5 6.2 £251,923
West Midlands Region   1.3 7.2 £192,119
Yorkshire & The Humber   -0.8 3.0 £155,778
Source: The Land Registry
Release date: 16/01/2018 Next date release: 16/02/2018

 

UK UNEMPLOYMENT FIGURES

  • There were 32.08 million people in work, 56,000 fewer than for May to July 2017 but 325,000 more than a year earlier
  • 8.86 million people aged 16 to 64 were economically inactive
Jobless total
1.43m
Unemployment rate
4.3%
Source: Office for National Statistics
Release Date: 13/12/2017**
** Latest data available

 

MORTGAGE ACTIVITY

  • First-time-buyer market performs better than expected
  • Resilience in jobs market strengthens mortgage demand
  • Buy-to-let market remains sluggish


Source: UK Finance (formerly Council of Mortgage Lenders)
Release date:
 28/12/2017

WHY 70% OF BUYERS PREFER TO USE A MORTGAGE ADVISER

There’s an awful lot to think about when you’re looking for a mortgage. It’s not surprising that these days, 70% of buyers are choosing to work with a mortgage adviser to help ensure they get the most appropriate deal for their financial circumstances.

There are hundreds of deals on offer, so how do you find the right, most cost-effective deal? Should you fix the rate, if so, how long for? What about deals offering ‘extras’, would they suit your needs? Making the wrong choice about your mortgage could cost you hundreds, even thousands of pounds more than you need to pay.

By talking to us, rather than trawling umpteen websites and spending hours putting in applications to a range of lenders, you can save yourself stress and time. You’ll also be able to tap into a wealth of good advice that can help ensure you make a success of your property purchase.

GETTING THE BEST ADVICE

We are professionally-trained and know an awful lot of useful stuff, not only about the mortgage market, but about the whole home-buying and selling process. We can also offer tips on everything from finding a solicitor, to getting the right type of property survey

We’ll be able to help you every step of the way, offering advice on making sure your finances are in order before you put your application in, and helping you put in place the right type of insurance policies to protect your mortgage and your home.

MAKING YOUR APPLICATION

Although all lenders operate broadly the same lending criteria, the way in which they interpret the rules will differ. We can ensure that your application is made in the right way to the most appropriate lender.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

GETTING THE MOST FROM YOUR INSURANCE POLICY THIS WINTER

High winds and rain can cause major damage to property, so before winter tightens its grip, it’s worth checking (without putting yourself in danger) that your roof is in good repair, and that gutters are clear of leaves and other blockages. Make sure items like patio furniture and children’s play equipment are stowed safely away in a garage or shed. Clear paths of moss, and keep salt handy to clear ice and prevent falls.

MAKE SURE YOU HAVE THE RIGHT COVER IN PLACE

It’s also a good time to check out the details of your home insurance policy. If you’re not sure what sort of cover it provides, you should check your policy schedule now. Keep a note of your insurance company’s emergency and claims handling telephone numbers in case of need. Check you know what your policy excess is – this is the first part of your claim which you have to pay yourself. Knowing this will help you decide if it’s appropriate to make a claim.

If you want to increase the type of cover you have for home emergencies, then we can help you find the right policy for your needs. Home emergency policies typically cover problems that arise with plumbing and drainage, main supply pipes for water and gas, central heating, glazing and windows, home electrics and home security.

PREVENTING FURTHER DAMAGE

If you suffer damage, you may need to think about carrying out temporary repairs to prevent the damage getting worse. Call your insurer’s emergency number first, and ask for their advice. Keep the receipts for any work they suggest you carry out, as you may need these for your claim.

It’s a good idea to take pictures of the damage, but don’t put yourself at risk of harm by doing so. Don’t rush to get rid of damaged items, as your insurer may want to inspect them.

For advice call 01604 433 035