Category: UK News (6)

Estate agent for sale and sold signs


UK house prices have defied the Brexit gloom by racking up their biggest monthly increase since records began in 1983, adding more than £13,000 to the value of a typical home in only 28 days, according to the Halifax.

However, the scale of the reported increase – 5.9% in February – confounded many commentators, as it appears to contradict the widely held view that the UK’s property market remains in the grip of a slowdown.

Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, cited the Halifax’s index’s extreme volatility – the record-breaking price rise followed a 3% fall in January – and said: “Right now we have little confidence in Halifax’s index as a reliable indicator of the housing market.”

However, others said there was evidence of a pre-Brexit bounce: the Mortgage Advice Bureau, a broker firm, said anecdotal reports from across its network suggested that February “was one of the busiest for the market that we’ve seen for some time in most areas of the country”.

The Halifax said the 5.9% increase seen in February was thought to be the biggest it had ever recorded. It lifted the average property price to £236,800 – up from £223,629 at the end of January. That translates into a £470-a-day increase in value.

However, the lender cautioned against putting too much emphasis on the monthly figure, as that was much more volatile. It pointed out that January was a particularly weak month, so February was something of a correction.

The big monthly rise lifted the annual rate of price growth to 2.8%, which the Halifax said was “fairly subdued” compared with 2015-16, when it was more than 8%.

However, Russell Galley, Halifax’s managing director, said: “The shortage of houses for sale will certainly be playing a role in supporting prices … The overall resilience of the market is still evident.”

The overriding view of many commentators during recent months has been that Brexit uncertainty and a lack of affordability in some areas are continuing to stifle the UK housing market.

Last month, data from the Royal Institution of Chartered Surveyors (Rics) indicated a further weakening of the market, with demand, prices and sales expectations all down. A week ago it emerged that the London estate agent Foxtons had slumped to its first annual loss since its stock market debut, blaming a further fall in the number of homes sold and warning of a prolonged downturn in the capital’s property market.

Lucy Pendleton, a founder director of the estate agent James Pendleton, said: “This market is rattling around like a ricocheting bullet. It’s an incredibly unusual shift, even for monthly prices, which are known to be more volatile.”

He said: “With any direction with regards our imminent departure from the EU still lacking, it would appear some purchasers have gone ahead anyway, supported by a highly competitive borrowing market, hence the ‘growth spurt’ in the market as reported this morning.”

However, Tombs thinks the Halifax index’s extreme volatility, with February’s “gigantic” rise following a sizeable fall, “undermines its validity”. He said: “Like others, the index is seasonally adjusted, but it uses an outdated methodology which potentially is contributing to its excessive volatility. All other indicators suggest that house prices essentially are on a flat trend.”

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UK Properties

House price growth of 1.9% in November was “pretty subdued” given Britain’s labour market is doing relatively well and mortgage borrowing costs are at historically low levels, says Nationwide’s chief economist Robert Gardner.

“I think this reflects the pressure that has been on households from high inflation and weak wage growth, and the fact that the outlook for the economy is still very uncertain,” he told the Today programme.

He says there is a wide range of ways Brexit could affect the housing market, with a shock hit from a “no deal” still unlikely.

“Our central expectation is the UK will eventually reach a deal with the EU and continue to grow, at a fairly modest pace in the near term with this accelerating as the uncertainty lifts… But we’re prepared for lots of different circumstances.”

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properties in UK

British banks approved the most mortgages for house purchase in four months in October and consumer borrowing maintained its steady pace of growth, industry data showed on Monday, suggesting the economy was holding up as Brexit neared.

The number of mortgages approved for house purchase rose to 39,697 from a five-month low of 38,712 in September but was down about 1 percent compared with October last year, the seasonally adjusted figures from UK Finance showed.

Britain’s housing market has slowed since the Brexit vote in June 2016. Most of the weakness has been in London and neighboring areas, which have also been hit by a rise in purchase taxes for property worth over 1 million pounds.

Net mortgage lending edged up to 1.495 billion pounds last month but remained the third weakest reading of 2018.

Unsecured consumer lending held stable, growing by an annual 4.0 percent in October, the same pace as in September.

But lending to non-financial companies was down by an annual 1.9 percent, extending a run of falls seen since April.



Price cutting is widespread in the housing markets in England and Wales as they adapt to reduced demand and increasing supply, according to the latest asking price index. The property downturn that began in London continues to creep across the rest of the country, heading North and West and prices have hit new euphoric highs and then begun the inevitable correction, according to the index report from, prices in England and Wales fell by 0.3% in October, dragged down by regions in the South and East of England where supply has overwhelmed demand and was up by just 0.6% year on year to an average of £308,524.

In Scotland asking prices are rising slowly, up 1.8% year on year although the data shows that marketing times have edged down 5% compared to a year ago despite rising supply. Month on month asking prices fell everywhere apart from the North West of England and Wales which also saw year on year growth of 4.5% and 7.4% respectively.

Other regions with strong annual growth included the West Midlands up 4.9%, Yorkshire and Humberside up 4.6% and the East Midlands up 3.4%. The index report says that supply increases across the UK indicate a worsening market for vendors, up by 14% year on year, the highest October total since 2011. The largest rises were 24% in the South West and 21% in the West Midlands. The number of properties that had their asking prices reduced last month at 80,291 was slightly lower than the total for September but remains very high. Meanwhile, rents are rising by 2.3% nationally and by 5.8% in Greater London, the index also shows.

Typical time on the market increased by 12% in London, by 14% in the South East and by 16% year on year in the East of England while for England and Wales as a whole it increased to 94 days, five days longer than in November 2017.‘With growth over five years of 37%, the East looks set to undergo the most severe correction. The Midlands will most likely suffer the same fate, while the South West is looking much less overvalued, hence a smaller correction may be expected,’ said Doug Shephard, director of‘Scotland, Wales and the North have enjoyed relatively moderate growth and look less prone to a major correction. The North East, on the other hand, has yet to show any significant growth post-crisis but perhaps growth will pick up in 2019,’ he added.



London with its stability, transparency, and liquidity remains the compelling destination for international capital. Knight Frank’s Global Wealth Report shows that many ultra high net worth individuals – which will see a further rapid growth of in the next five years globally – rank London as their first port of call for their maiden overseas property investments.”

William Matthews, Head of Capital Markets Research, Knight Frank commented, “As a home for international capital London increasingly enjoys another benefit over its global city competitors, in the form of relative value. One corollary of rising demand for European real estate is that capital has been funneled into continental markets that are traditionally nowhere near as liquid as London, and this has quickly led to exceptionally low yields – 3.00% is a common prime yield across many European cities, not just capitals.

“In a comparative sense at least, London office prime yields can, therefore, seem good value to overseas investors, particularly given prospects of modest rental growth, and the recent movements in Sterling, which provide an added currency advantage.

“Longer-term, this could prove the right mix of attributes to attract global capital targeting Europe, a significant proportion of which comes from experienced overseas investors who are less singularly focused on capital preservation and value the prospect of comparatively healthy income returns”, concluded Matthews.


Uk-GDP-world cup

The UK economy picked up speed in the three months to July, boosted by warm weather and the World Cup. The Office for National Statistics reported on Monday that GDP expanded by 0.3 percent in July, better than the 0.2 percent expected by City of London analysts and up from the 0.1 percent growth rate in June. The dominant services sector, powered by retail sales and wholesale trade, grew by 0.3 percent in the month after stagnating in June. Construction expanded by 0.5 percent, a slight cooling after the sector’s boom in May and June when builders caught up on work postponed due to the snowstorms in the first quarter of the year. However, manufacturing contracted by 0.2 percent in July, after growing by 0.4 percent in June.“Growth in the economy picked up in the three months to July. Services grew particularly strongly, with retail sales performing well, boosted by warm weather and the World Cup. The construction sector also bounced back after a weak start to the year,” said Rob Kent-Smith of the Office for National Statistics. Since July the ONS has been publishing a monthly GDP estimate, replacing its traditional quarterly release. The UK’s GDP growth comes in the context of a growing global economy, fuelled by Donald Trump’s tax cuts in the US and a cyclical recovery in the eurozone. The Bank of England has estimated that the level of the UK’s GDP is still set to be around 2 percent lower by the end of 2018 than it would have been in the absence of the 2016 Brexit vote, which pushed up inflation and hit consumption. That translates into a hit of around £900 per UK household. However, the growth recovery this year since the slump to zero in February appears to vindicate the view of the Bank that the weakness in GDP was predominantly due to the snow disruption, rather than an underlying slowdown.


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