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 PRICE INDEX (NOV 2017)* 118.6*
*(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


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



  • 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
Unemployment rate
Source: Office for National Statistics
Release Date: 13/12/2017**
** Latest data available



  • 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:


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.


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.


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.


Buy-to-Let landlords continue to feel the pinch

In their latest ‘UK Cross Sector Outlook’, Savills Research have noted that following the summer budget of 2015, the government’s alterations to Buy-to-Let (BTL) regulations and taxation, have seriously dented the enthusiasm of many potential landlords. Savills report that UK Finance have calculated that the number of BTL mortgages granted in the year to August 2017 was 75,300. This represents a fall of 47% from the year to March 2016. Furthermore, the actual growth in the number of outstanding BTL mortgages is lower still – now standing at 24,800 – which suggests that landlords are divesting in this sector.

October’s data sees a boost to remortgaging

UK Finance have stated in their non-seasonally adjusted data release that loans for remortgaging and for house purchases rose, when compared with the previous month and with the same period in 2016.

Given the current economic climate, both capital and interest payments for new loans are at an all-time low, which reflects the increasingly competitive nature of the mortgage-lending market.

June Deasy, Head of Mortgage Policy at UK Finance said: “Over the last year, the number of loans for remortgaging have been at record levels; this trend looks set to continue further as we head towards the end of 2017 and borrowers seek to take advantage of low interest rates. Mortgage repayments as a percentage of income still remain at, or close to, their historic low point, and despite the recent base rate rise, we can expect monthly mortgage payments to remain affordable for the vast majority of borrowers.

Conflicting data released by the Land Registry

In its latest data release, the UK Land Registry, which collates completion data across the country, has recorded the average residential property price in the UK at £223,807 in October. This represents an annual positive price change of 4.5%, and a slight monthly fall of 0.5%. They stated that the Royal Institution of Chartered Surveyors (RICS), whose members they canvass for the data, reported that headline near-term price expectations slipped to -11% from -8% in September and has now been negative in each of the last three months. The Bank of England found that housing market demand has strengthened overall, but with the usual regional divergence



HOUSE PRICE INDEX (OCT 2017)* 117.4*
*(Jan 2015= 100)

  • An annual price increase of 4.5%, which takes the average property value in the UK to £223,807
  • The North West saw the largest monthly fall in value of -2.0%
  • Northern Ireland saw price growth of 3.0% over Q3 2017



Region   Monthly Change (%) Annual Change (%) Average Price (£)
England   -0.6 4.7 £240,860
Northern Ireland
(Quarter 3 – 2017)
  3.0 6.0 £132,169
Scotland   -0.7 2.8 £143,544
Wales   0.8 4.5 £153,316
East Midlands   0.2 7.0 £184,544
East of England   0.1 6.1 £289,168
London   -0.9 2.1 £481,102
North East   -0.1 2.4 £127,224
North West   -2.0 3.9 £154,056
South East   -0.5 4.6 £322,311
South West   0.2 6.7 £251,376
West Midlands Region   -1.1 5.2 £186,351
Yorkshire & The Humber   -1.1 3.3 £155,281
Source: The Land Registry
Release date: 12/12/2017 Next date release: 16/01/2018



  • 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
Unemployment rate
Source: Office for National Statistics
Release Date: 13/12/2017



  • The number and value of loans for remortgaging and for house purchases rose in October
  • First-time buyers borrowed £5.1 billion, up two per cent on the previous month
  • Home movers borrowed £7 billion, up 2.9 per cent on September

Source: UK Finance (formerly Council of Mortgage Lenders)
Release date:


It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.

UK house prices accelerated in March, as lending hit nine-year high

BBC News – By Brian Milligan

House price inflation across the UK jumped to 9% in March, as landlords rushed to beat stamp duty changes, official figures show.

The Office for National Statistics (ONS) said the figure was up from 7.6% in the year to February.

Separate figures showed the amount of money borrowed for home loans in March was the highest for nearly nine years.

The Council of Mortgage Lenders (CML) said £13.8bn was lent during the month, 59% more than in February.

The figure was the highest for any month since August 2007.

Landlords and buyers of second homes have had to pay an extra 3% in stamp duty since the start of April.

“While the increases are substantial, these supercharged levels of activity are likely to be temporary, and will fall back over the summer months,” said Paul Smee, the director general of the CML.

Landlords borrowed £7.1bn in March, an 87% increase on February.


The ONS figures show that UK house prices have increased five times faster than wages since 2011, according to the Resolution Foundation, which campaigns to improve living standards.

Its analysis of the ONS data shows that house prices have increased by 36% over the past five years.

Average weekly earnings have gone up by just 7% over the same period, it said.

The think-tank said the growth gap between wages and house prices was even more pronounced in London and the South East.

But even in Scotland and the North, house prices have risen at twice the rate of wages.

However the ONS data shows that prices in Scotland fell by 6.1% in the year to March 2016.

Recent surveys by both the Halifax and Nationwide have suggested that house price growth has already cooled since the stamp duty changes came into effect.


The ONS said house price growth in March was particularly driven by London, where the cost of a house or flat rose by 13% over the year.

In its last survey using the current methodology, the ONS said the average cost of a home in the UK reached £292,000 in March.

Best fixed-rate mortgages: two, three, five, and 10 years

The Telegraph – By James Connington

Fixed mortgage rates look set to stay low for the year, as expectations of a rise in Bank Rate have been set back significantly.

This February the Bank of England’s Monetary Policy Committee (MPC) voted unanimously to keep Bank Rate on hold at 0.5pc, as the Bank cut its UK growth, inflation and wage rise forecasts.

Rates on two, five and 10-year fixed deals have fallen again following a surge in late 2015, when Mark Carney, Governor of the Bank of England made comments suggesting a rate rise was imminent.

However, expectations for a rate rise have slipped, with market indicators suggesting Bank Rate may not rise until 2018.

Warnings in late 2015 that rising wholesale rates (swap rates) would lead to mortgage cost increases were disrupted by gloomy economic data from around the world, which sent wholesale rates tumbling in early this year.

• Mortgage boom as interest rates fall to record lows

• If rates stay low, would I profit from a ‘tracker’ mortgage?

As a result, mortgage rates have remained low and banks are continuing to aggressively compete for business with cheap deals.

This guide tells you everything you need to know about fixed-rate mortgages and the best deals available. It is regularly updated as events change.

For up-to-date best-buy fixed-rate mortgage deals, go to our mortgage best buy tables. This shows a selection of top rates based around your requirements.

Fixed Rates and Remortgaging

False Dawn?

With the prospect of base rate increases seemingly drawing nearer, fixed rate mortgages should help many households avoid the immediate pain (assuming that any increases are passed through to mortgage rates). Most new mortgages in the UK (88% by number and 81% by value) have a fixed rate period and this has raised the proportion of outstanding mortgage debt on a fixed rate from 32% in 2012 to 49% in the second quarter of 2015. With hindsight, it is worth noting that mortgage rates have followed a downward trend during the same period and so the benefit of a fixed rate may have been piece of mind rather than financial. However, there are now tentative signs that mortgage rates have bottomed out.


Data on the actual length of fixed rate periods is limited (let me know if I’ve missed it), so to estimate this I’ve used data on average mortgage rates for all fixed lending compared to the average rate for different fixed periods. For both new lending and outstanding lending (as per the charts below), the overlap suggests that most mortgages are fixed for a period of five years or less. At a guess, the average is probably closer to two years. That means many recent borrowers are likely to exit their fixed rate period into a market with rising interest rates and tougher lending criteria. That could cause problems for some borrowers and particularly if their mortgage was arranged prior to the introduction of the Mortgage Market Review rules…

British homeowners must remortgage NOW

The Express – By Lana Clements

BRITISH homeowners are being urged to remortgage NOW to escape “bonkers” new EU rules that come into force this autumn.

Personal finance expert Martin Lewis, founder of website, has advised mortgage holders to check they are on the right deal and look for a better rate as soon as possible.

The new EU laws could see UK homeowners stranded on their lender’s expensive Standard Variable Rate (SVR) when their mortgage term comes to an end.

The  EU ‘Mortgage Credit Directive’ officially comes into force in March  2016 but can be backdated by six months.

In effect, the directive is an extension of the mortgage affordability criteria that was introduced into Britain last year.

The stringent rules stress test borrowers to make sure they can afford their mortgage deal, not just now but if interest rates were to rise to six or seven per cent.

Under British rules lenders can bypass the checks when an existing homeowner is remortgaging. But under the EU directive lenders won’t be able to do this…

It’s the best time EVER to take out a mortgage

THE DAILY MAIL By Louise Eccles

The next six months could prove the best time in history to take out a mortgage, experts claimed yesterday.

They said a price war between lenders will make it the perfect opportunity for homebuyers or anyone remortgaging.

Fixed-rate deals have never been cheaper and may even slip below 1 per cent within weeks. Variable rates have almost halved over the past 12 months to 1.64 per cent.

Brian Murphy, of the Mortgage Advice Bureau, said: ‘The next six months are shaping up to be the best-ever window to secure a low interest rate if you are looking to buy or remortgage.


‘Today’s prices have never been bettered in modern times and given that a base rate rise is inevitable at some point, it is unlikely they will be surpassed in the years ahead.

‘Lenders have begun the year with a strong appetite for growth, and newcomers are going head to head with established names to launch attractive new deals.’

Bank of England data shows that a typical two-year fix has dropped from 2.37 per cent to 2.01 per cent over the past 12 months.

On a £200,000 loan with 25 per cent deposit, that would save £420 a year…