UK annual house prices increase below 5% on average

Annual house price growth across the UK’s major cities increased to 2.9% in October as southern markets showed signs of recovery.

Property values in London rose by 1% in the past year, the strongest pace of growth for two years and reversing the 1.1% dip recorded during the previous 12 months.

There was also evidence of firmer pricing in cities across southern England, according to the latest Zoopla Cities House Price Index for October.

But it was not all good news, with the rate at which house prices are rising slowing to below 5% in the most buoyant cities for the first time since November 2012.

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The housing market is currently at an interesting crossroads. During the past two years, the market has been characterised by subdued or falling prices in London and southern regions, where affordability has become increasingly stretched, and rising property values in cheaper northern markets.

But there are signs the situation is now changing. House prices in London registered their strongest gains in two years, while less than a quarter of London postcodes suffered falls in October, compared with 85% a year ago.

The shift in house price momentum in the capital has been driven by a decrease in the number of new properties for sale, which has restricted supply.

At the same time, there are signs that demand is picking up, which, combined with the falling supply, is pushing prices higher.

By contrast, although growth in property values is still strongest in northern cities, there are signs that the pace of gains is beginning to slow, with no city posting annual house price inflation of above 5%.

Meanwhile, the announcement of the General Election on December 12 is expected to bring forward the traditional seasonal slowdown seen in the run up to Christmas
Source: Zoopla Property News

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Remortgaging soars by about 13% with competitive rates

The number of people remortgaging has soared to a two-year high as homeowners take advantage of lenders’ end-of-year price war to lock into a good deal.

A total of 37,769 mortgages were approved for people switching to a new deal in October, 12.7% more than in the same month of last year, according to industry body UK Finance.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “As we head towards the end of the year, and lenders jostle for what business there is out there, there are some incredible deals on the market to attract borrowers.”

There was also an increase in the number of mortgages approved for house purchase, with these rising 3% year-on-year to 46,631, despite the uncertainty caused by the General Election and Brexit.

End of year competition among lenders is great news for anyone looking to remortgage.

Halifax is currently offering a two-year fixed rate mortgage of 1.08% for people with a 40% deposit, while NatWest is offering a two-year deal of 1.25% for those with a 25% deposit.

Rates ate only slightly higher for homeowners who want to fix for five years, with Virgin Money offering a deal of 1.46% for people borrowing 65% of their home’s value.

Nationwide, Halifax, NatWest and Royal Bank of Scotland all have five-year fixed rate loans with rates below 1.6%

Source: Zoopla Property News

 

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3 out of 10 priceless diamonds stolen from German museum

Burglars have stolen three diamond jewellery sets from one of Europe’s largest treasure collections – the Dresden Green Vault in eastern Germany.

The historic sets consist of 37 parts each, and there are fears the thieves may try to break them up.

Officials are still trying to establish exactly how much was stolen in the break-in early on Monday.

A mother of pearl box

Saxony’s ruler, Augustus the Strong, created the collection in 1723 in what is one of the world’s oldest museums.

“Three out of 10 diamond sets have gone,” said Marion Ackermann, head of the Dresden state museums.

The stolen sets from the Green Vault (Grünes Gewölbe) are reported to also include some rubies, emeralds and sapphires.

The popular German daily Bild said the thieves had grabbed jewels worth €1bn (£855m).

Source: BBC News

 

 

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UK new build prices soars at 10 times more than existing homes

New build property prices are increasing at more than 10 times the rate as those for existing housing stock.

The typical cost of a new build home in England is rising at an annual rate of 4.3%, while property values for existing homes have edged ahead by just 0.3%, according to the latest figures from the Land Registry.

The trend is seen across all regions of England, with the average new build property costing £316,789, compared with £245,173 for other homes.

In many parts of the country property values for the two different property types are moving in opposite directions.

While house prices have fallen year-on-year for existing housing stock in London, the south east, the north east and the east of England, the cost of a new build home has jumped by as much as 3.6%.

Source: Zoopla property news

Thinking of buying a property?

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Dennis Bebo – MSC, BSC, DEA, CeMAP

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Help to Buy: First time buyers overpaying an average of 10%

Thinking of using the Help to Buy scheme? Be sure to weigh up the pros and cons – and check you’re not overpaying – before taking the plunge.

First-time buyers could be paying a premium of up to 22% if they use the government’s Help to Buy scheme to purchase a home, a study has found.

It showed that the average person taking their first step on the property ladder using the Help to Buy equity loan initiative paid £303,450 for their home – 10.3% more than those who bought without using the scheme.

The premium paid by first-time buyers using Help to Buy was more than double this level in Yorkshire and the West Midlands at more than 20%, according to Reallymoving.

Its chief executive, Rob Houghton said many first-time buyers find it difficult to raise a deposit and, as a consequence, are turning to Help to Buy – a scheme which operates only under the new-build sector where homes can command higher prices.

He adds that this is in addition to a premium applied for buying under Help to Buy.

“In many cases, first-time buyers simply don’t have the deposit required to explore other options, such as buying a second-hand home, which may offer considerably better value,” he said.

Source: Zoopla Property News

 

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US tech giants pledge billions of dollars in housing development

As the tech industry has boomed, home prices and asking rents in such areas for example the Bay Area have roughly doubled over the past decade, becoming by many counts the highest in the US.

Last month, the San Francisco Association of Realtors said the median home price in San Francisco had hit $1.4m. The average asking rent exceeded $3,200 per month, according to research firm Moody’s Analytics-Reis.

RVs line Bay Road in East Palo Alto, California

Wages in the area have increased as well, but not as fast as housing costs.

A family needs to earn $126,800 a year to rent a typical two-bedroom property in San Francisco without spending more than 30% of their income – the share typically considered affordable. In 2017, about 40% of Bay Area renters spent more.

The high costs are forcing companies to pay more and work harder to find staff, one reason the tech firms have taken an interest.

For the most part, their pledges aren’t philanthropy.

Apple is lending the state up to $1bn to help finance affordable housing projects and providing $1bn to California’s first-time homebuyer fund.

Painted Ladies in Alamo Square, Victorian-style houses in the residential area of San Francisco with downtown in the background,

Google and Facebook also plan to invest hundreds of millions in new housing. Land owned by the tech companies that will be made available for housing construction accounts for another major part of the commitments – a full $750m worth in Google’s case.

Such large promises are “unprecedented”, but a lack of detail makes them hard to evaluate, says Carol Galante, director of the Terner Center for Housing Innovation at the University of California, Berkeley.

“It’s in their self-interest but it’s also obviously in the community’s interest.”

Multinational businesses all over the world should borrow a leaf from this and invest in housing to solve the global housing crisis.

Source: BBC News

 

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Property Purchase: At what point am I committed and cannot pull out?

In UK property purchase, the key point is when contracts are exchanged – right up until that point any party in the chain can withdraw with no penalty. This can lead to financial lost, tears, anger and lots of frustration.

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Once contracts are exchanged everyone is bound by the terms of the contract – if anyone wants to pull out after that point it will cost them many thousands of pounds, as a starting point it is usually 10 per cent of the purchase price and then any damages that flow from their actions. Because of this, generally the best advice is to buy the property and put it on the market as soon as you can. Depending on the market at that time you may lose a little money, but potentially considerably less than if you’d withdrawn from the sale.

 

For property investment in the UK from start to finish, Please Contact me

Dennis Bebo – MSC, BSC, DEA, CeMAP

TA DenEco Consultancy – www.deneco.co.uk