Posts tagged ‘Halifax’

UPDATED: House prices edge up to five times salary

House price growth slowed to 0.6 per cent in September as affordability became increasingly stretched, figures showed today.

House prices 3

The rise, which followed no change in August, added more than £1,000 to property prices, leaving the average value of a UK home at £187,188, the highest level since April 2008, according to mortgage lending Halifax.

Recent strong house price gains, combined with slow wage growth, have pushed the typical cost of a home up to 5.04 times average earnings.

The price to earnings ratio is now at its highest level since June 2008, and close to the 5.83 peak reached in July 2007 when house prices stood at £199,084.

The increase leaves consumers on average earnings needing increasingly big deposits or equity stakes in order to comply with Bank of England guidance under which lenders should not advance more than 4.5 times a borrower’s income.

Unsurprisingly, the deterioration in affordability is beginning to act as a brake on the property market.

Halifax reported that the annual rate of growth eased for the second consecutive month in September to stand at 9.6 per cent, down from a recent peak of 10.2 per cent in July.

The figure is in line with data reported by Nationwide Building Society, which showed a slowdown in annual house price inflation slowdown to 9.4 per cent in September, with prices dipping by 0.2 per cent during the month itself.

Meanwhile, property sales fell below 100,000 in August for the first time since November 2013, according to HM Revenue & Customs.

The number of mortgages approved for house purchase, a leading indicator of market activity, also dropped for the second month running in August.

Martin EllisMartin Ellis, Halifax housing economist, said: “The recent rapid rise in house prices in some parts of the UK, earnings growth that remains below consumer price inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand.

“This weakening in demand has led to a modest easing in both house price growth and sales.”

He added that annual house price inflation may have peaked at around 10 per cent.

“A moderation in growth looks likely during the remainder of 2014 and into next year as supply and demand becoming increasingly better balanced,” he said.

Matthew Pointon, 
property economist at Capital Economics, said: “The cooling in house price inflation is being driven by a sharp drop in housing demand.”

He said demand should recover as mortgage lenders got used to the new regulations, more homes came on to the market and there was a return of real earnings growth.”

But he added: “It is unlikely buyers will be willing or able to accommodate yet another burst of house price inflation, which suggests we are set for a prolonged period of far more subdued house price gains.”

Meanwhile, consumer confidence about house price growth has fallen to a 15-month low, according to Zoopla.

Around 88 per cent of homeowners think property prices will rise in their area in the coming six months, down from 92 per cent six months ago and the lowest level since July 2013.

The survey of 6,746 homeowners also found that 39 per cent of people thought it was now more difficult to get a mortgage than it had been three months ago.

Zoopla’s Lawrence Hall said: “With the lengthier funding approval process following the Mortgage Market Review and fewer homeowners predicting that house prices will continue to rise in the short term, the coming months will be crucial to determine if the housing market recovery has stalled or simply paused for breath.”


October 8, 2014 at 9:16 AM Leave a comment

Flats increase in price at ‘double the rate’ of other properties

The typical cost of a flat has soared at double the rate of other types of property during the past 10 years, spelling bad news for first time buyers, research showed today.

22.09.14 Flats 1

The average price of a flat has increased by nearly £51,000 – the equivalent of £425 a month – since 2004, to stand at £208,169, according to mortgage lender Halifax.

Flat values have soared by 32 per cent during the period, more than double the 15 per cent rise recorded for all residential properties.

The price of flats has risen at nearly three-times the rate of prices for detached homes, which have increased by just 12 per cent since 2004.

The performance of flats has been particularly strong since 2009, with values soaring by 43 per cent in the five years to 2014, compared with a 15 per cent price gain for bungalows.

But Halifax said some of the steep price rises for flats were due to the booming London property market, with flats account for a relatively high proportion of the housing stock in the capital.

It added that in five regions of Britain, terraced houses had actually been the best performing property type since 2004.

All types of home suffered substantial price falls during the housing market downturn in 2007 to 2009, with terraced houses and flats the worst affected, recording price drops of 33 per cent and 32 per cent respectively.

The group said the steep drops for these property types, which are popular with first time buyers, was likely to be the result of the tighter lending criteria employed by lenders during the period, which made it harder for people to buy their first home.

Martin Ellis, housing economist at Halifax, said: “There has been a significant increase in the number of first-time buyers since 2010 compared with a modest decline in the number of those moving home.

“This difference is reflected in a bigger rise in prices over the past five years for those property types that are most popular with first-time buyers: flats and terraces.

“Since 2009, larger property types – such as detached homes, semis and bungalows – have underperformed flats and terraces.”

Despite the steep price rises seen for flats, semi-detached homes and terraced houses have actually remained the most popular types of property purchased during the past 10 years, with these property types collectively accounting for 60 per cent of all sales so far in 2014.

For first-time buyers, semi-detached homes have increased in popularity, accounting for 29 per cent of purchases this year, up from 25 per cent in 2004.

But while 21 per cent of homes sold in 2004 were detached, these properties accounted for just 16 per cent of transactions this year.

Flats are cheapest to buy in the East Midland, where they cost an average of £94,518, followed by the North at £101,883.

Unsurprisingly, flats are most expensive in Greater London, where they sell for an average of £328,771.

It is cheaper to buy a terraced house than a flat in Scotland, Wales and the North West.

Strong house price growth has left the average home in Britain costing £265,022, according to Zoopla.


September 22, 2014 at 11:23 AM Leave a comment

First time buyers ‘save’ by buying rather than renting a home

First time buyers could save more than £1,300 a year by purchasing a home rather than renting one, research showed today.

First time buyer 3

It typically costs first time buyers just under £110 a month less to live in a three bedroom property they own than they would have to pay to rent a similar home, saving them a total of £1,316 a year, according to Halifax.

The group said the monthly cost of living in a three bedroom property you owned added up to around £677, including mortgage repayments, maintenance costs and insurance, compared with average rent of £787 on a comparable property.

The savings that can be made by buying rather than renting are a considerable turnaround compared with five years ago, when buying a home typically cost £37 a month more than renting one.

The fall in the associated cost of buying a property has been driven by the decline in mortgage rates seen since 2009.

The average interest rate paid by a first time buyer borrowing 90 per cent of their home’s value had dropped to 3.09 per cent at the end of June, down from 4.92 per cent in June 2009, reducing typical monthly payments by £57.

Halifax also pointed out that although the cost of buying a home had actually increased by £25 a month during the past year, this had been more than offset by a £42 a month jump in rents.

It added that the fact that it was now cheaper to buy a home than rent one, may have contributed to a 29 per cent jump in first time buyer numbers during the past year.

Buying a property is cheaper than renting one in all regions of the UK apart from the East Midlands, where it is still £15 a month cheaper to rent, and East Anglia, where being a tenant costs £9 a month less.

The biggest savings that can be made by being a homeowner are in London and the West Midlands, where first time buyers could save an average of £82 a month by living in their own home rather than a landlord’s, followed by Wales at £45 a month.

Craig McKinlayCraig McKinlay, mortgage director at Halifax said: “It is clearly encouraging that since 2009 there has been a significant decline in the cost of buying a home for those for those trying to get on the housing ladder.

“The improvement is due to a combination of lower mortgage rates and rising private rents. Buying costs have been remarkably stable for much of the past five years making home ownership a more attractive option.

“With greater availability of mortgages that require smaller deposits, the property ladder has also become even more accessible for those who can afford the monthly costs of owning but had previously not been able to save the necessary deposit.”

August 23, 2014 at 7:00 AM Leave a comment

Bank Holiday DIY plans suffer amid lack of skills among younger generation

Bank Holidays are traditionally a time to get out the hammer and nails to address some of those DIY projects that have been put on the back burner. But homeowners are being urged to take care as the number of accidental claims hits 30,000, with each claim costing £339, according to new research.

19.08.14 DIY

DIY skills are particularly low among the younger generation, according to the survey by insurers Halifax. It suggested more than half of over 55 year olds are confident they can put up wallpaper, while only 28 per cent of 18 to 24 year olds feel confident about doing so.

At the same time, more than eight out of 10 older people said they can paint, while just over six out of 10 under 24 year olds feel able to use a decorating brush.

Martyn Foulds, senior claims manager at Halifax, said: “It seems that DIY skills are fading with each generation, which is a worry as home improvements can easily go wrong for those who don’t know what they are doing.

“We’d recommend homeowners check they have the right tools for the job, avoid taking on too much and call a qualified tradesman for gas and electrical work.”

Last year, Halifax recorded more than 32,000 accidental damage claims, while more than £1m was paid out in such claims in August alone. In total, the insurer paid out more than £11m for such claims last year, with each costing an average of £339.

The survey suggests almost a quarter of people asked their parents for help with home improvement jobs.

Top DIY tips from Halifax:

  • Preparation is key – make sure you have all the correct tools and equipment for the job before you start to avoid coming unstuck later
  • Plan a budget beforehand and stick to it
  • Call a professional for jobs involving gas, electrical or plumbing work. When choosing a tradesman, ask for references and certificates to demonstrate that they are competent
  • Contact your insurer if any work is being carried out which may alter the structure or layout of the home such as an  extension or garage, etc
  • For major building works, you may need to seek planning permission

August 19, 2014 at 2:32 PM 2 comments

UPDATED: Average house prices rise by more than 10%

House price growth hit double digits in July as values rose at their fastest rate for nearly seven years, figures showed today.

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Annual property price inflation reached 10.2 per cent during the month, the highest level since September 2007, according to mortgage lender Halifax.

Prices rose by 1.4 per cent in July itself, to leave the average British home costing £186,322.

The quarter-on-quarter change, which is considered to be less volatile than the monthly figure, showed prices shooting ahead by 3.6 per cent – the biggest jump since December 2006.

The Halifax figures are at odds with ones released by Nationwide, which showed house prices inching ahead by just 0.1 per cent during July, while the annual rate of growth slowed to 10.6 per cent, down from 11.8 per cent.

The Land Registry also said house prices stalled in June, the latest month for which it has figures, with property values falling in seven regions of England and Wales.

Stephen NoakesStephen Noakes, mortgages director at Halifax, said: “While supply remains low, housing demand continues to be supported by a continuing economic recovery, growth in employment, improving consumer confidence and low mortgage rates.”

But other surveys have pointed to a slowdown in demand from potential buyers, as well as an increase in supply as homeowners put their properties on the market in a bid to cash in on the recent price gains.

The Royal Institution of Chartered Surveyors (RICS) said new enquiries from potential buyers had continued to ease in June, as people balked at high house prices and became more cautious in the face of future interest rate rises.

Both RICS and the National Association of Estate Agents also reported seeing an increase in the number of sellers coming to the market, further easing the mismatch between supply and demand.

Matthew Pointon, property economist at Capital Economics, said: “The month to month changes have been pretty volatile from Halifax recently, so we do not read too much into that.

“It is surprising that the three-month-on-three-month measure has picked up after being stable for a while.

“But given other signs of a cooling in housing market activity, we expect house price gains to slow over the coming months.”

He added that he expected mortgage approvals to continue to increase going forward, but at a slower rate, as new measures to cool the mortgage market came into force.

Strong house price growth has pushed up the average cost of a home in Britain to £263,705, according to Zoopla.

August 6, 2014 at 9:17 AM Leave a comment

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