House Price News - update

House Price News

May2008: House price news

Gloomy news unless you're in Scotland

It's been a few months since commenting on the state of the housing market, which let's be honest is gloomy beyond belief.

In looking at the latest figures, these are pretty disparaging for all concerned. It's interesting that as now that apparently, the worst of the credit crunch is behind us - not that you'd know it - that prices are now falling and some people are actually pleased. The doom mongers who've wanted a house price crash for a while are smiling. Quite why is beyond me as the next issue to hit us will be much higher inflation or as Radio 4 broadcast this morning 'stagflation'. More on this here.

With news that Abbey are reducing their mortgage rates and that Libor is beginning to come down AND with the prospect of further rate cuts over the rest of the year, mortgages should become cheaper. Caution should be exercised however, as what goes down comes up again and interest rates will have to be raised once the full spectre of inflation has manifested itself.

Whatever and however: If you live in Scotland good news! Lloyds TSB Scotland has reported that house prices have risen again.

The Scottish House Price Monitor showed that quarterly figures to the end of April rose by 2.3%, giving an average house price of £163,639. Scottish house prices have now risen by 11.6% in a year.

With little rays of sunshine like that, it'll be brighter later...

January 9th, 2008: House price news

Regional house price growth in 2007

Figures from the Nationwide showed last week that house prices in the southern part of the UK grew by £15,000 compared with the north in 2007, which saw growth in all regions except Yorkshire and Humberside. The figures showed that prices in the south were £90,000 more than in the north and that the gap has widened since 2004: annual growth for 2007 in the south averaged 9% compared to 3.4% in the north.

Their figures show that the London market remains buoyant, which now has an annual growth rate of 12.8% based on figures in the last quarter - down from 16.5% in the previous quarter. This is the second highest performing region after Northern Ireland which now has an annualised growth rate of 24.2% which had fallen 0.2% in the last quarter.

January 8th, 2008: House price news

Land Registry Figures show house price rises

The figures from November have been released earlier this month and show that house prices rose by 0.6%, driven by a 1.1% rise from the cost of homes in London or an average price of £186,009 compared with London homes which cost an average of £355,643.

The Land Registry figures are representative across England and Wales and shows that the annual rate of growth was at 8.1% but that the rate of growth in London was at 15.6%.

But let's get real. The Land Registry is always behind the curve as they report on completed sales and contradict the figures from the Halifax and Nationwide who have both recorded falls in the same period. Falling monthly transaction levels between 2006 and 2007 have dropped between June and September from 119,580 to 108,678 - further evidence of a slow down.

28 December, 2007: House price news

House prices slow down again

The Nationwide have said that house prices have fallen for a second consecutive month in December. Prices have dropped by 0.5%, having slipped 0.8% in November and property prices are up 4.8% on the year.

Fionnuala Early, Nationwide's Chief Economist, said "The housing market has weakened significantly in the closing months of 2007 after holding up more strongly than expected in the earlier part of the year." She said that the interest rate cuts would help the property market recover a little but not a lot as had happened in 2005 as housing affordability is starting from a "higher and more restrictive level."

Dec 27, 2007: House price news

First time buyers pent up demand

The Royal Institution of Surveyors (RICS) in it's latest monthly survey considers the pent up demand of first time buyers who may buy in the softening property market in 2008 and could well prop up falling property prices.

First time buyers are currently struggling with increased affordability (44% of take home pay goes on mortgage payments compared to 30% in 2004). RICS estimated that there are 1.4 million fewer first time buyers since 1999 and commented that this "Gives some feel as to the potential demand for property should prices soften to any extent from those who may in recent years have been squeezed out of the market."

RICS dismissed fears of a crash maintaining that the anticipated interest cuts will provide a cushion against this adding that "2008 is likely to prove a difficult year for the residential property market", reckoning that the number of transactions will plunge by 20%.

6th December 2007

House Price News

Halifax, Britain's third largest lender confirmed yesterday, that house prices fell by 1.1% in November for the third consecutive month in November since 1995. This was the largest monthly drop since December last year.

House price inflation, it reported, is now down to 6.3%, it's lowest level since March last year.

This suggests that the slowdown is now well underway as a result of higher interest rates and stretched affordability.

Other indicators: Nationwide reported last month that house prices fell by more that .8%. Hometrack said prices for November fell by just .2% while Rightmove said they dropped by .7%.

Halifax's comments on the figures were that this was a "typical feature" of a subdued housing market and that monthly price rises and falls between July 2004 and June 2005 occurred as the market slowed as a result of higher interest rates.

Overall, it seems that the byproduct of the credit crunch, with reduced liquidity in the mortgage markets has reduced affordability and tightened up the banks lending criteria. Whilst an interest rate cut is desirable to enhance affordability, it won't be until the credit crunch is resolved and the banks free up their lending criteria.

When that will be is not clear. It is assumed that once the bad news is out of the way then the markets can deal with the credit crunch uncertainty. And as the 'Northern Rock' feature had started in September 07, it will take around a year before company reporting discloses the full picture.

Return from House Price News to House Prices