FT: house price increases slow
7th September 2007

House prices in England and Wales increased by 0.5 per cent during August, according to new research released today.

The average house price now stands at £224,930, up from £223,780 in July, according to a report released by the FT today.

Acadametrics, the organisation which carried out the research on behalf of the FT, now estimates prices are increasing by 9.3 per cent annually.

"House prices increased by 0.5 per cent in August with annual price inflation at 9.3 per cent, continuing the broad pattern of a stable rate of annual increase which we have been reporting since the beginning of the year," commented Dr Peter Williams, chairman of Acadametrics.

The annual trend showed no change from July, but is slightly lower than the 9.4 per cent recorded in June.

"However, even at this level it is high in relation to average wage increases and in that sense is unsustainable in the long term," continued Mr Williams.

"The shortage of supply along with the continued growth of the economy are key drivers of this continued trend."

Increases in house prices were recorded across the country but Greater London once again lead the way.

The region recorded the largest increase, with prices up some 16.8 per cent over the previous month.

The south-west also registered a large 10.3 per cent increase.

The smallest average house price increases were recorded in the north and West Midlands, which recorded increases of 4.7 and 4.8 per cent respectively.

"As we go on to show, regional differences in England are considerable, and stripping London out of the analysis would bring the annual rate of house price inflation down to 7.2 per cent.

"We note the London effect is getting greater over time reflecting the fact that the market there is out of kilter with the rest of England and Wales. The London ‘effect’ is now over 2 percentage points," concluded Mr Williams.



Top Tips for First Time Buyers
April 2007

However, one estate agent is offering first-time buyers advice on how to find a bargain, though it warns that flexibility is the key.
Haart is advising first-time buyers to sacrifice more on location to bag a bargain and pay below the £125,000 stamp duty threshold.
The key factor to look for is future growth. Signs of regeneration, government designated growth points, expanding universities, improved road links and fast rail services to the nearest town or city should all be considered when buying.
Haart says Balham and Stratford in London are prime examples of unpopular and cheap places to buy four years ago that are now desirable, experiencing price increases of 33.5 per cent and 44.2 per cent respectively.
Other examples can be found in Leeds and Bristol, which have also had big house price rises, with buyers spotting future growth by finding areas on the edge of more established hotspots, benefiting from the ripple effect.
The estate agent currently sees areas such as Swindon and Ipswich as top first-time buys with many one or two-bedroom properties on the market in Swindon below the stamp duty level. Additionally, buyers will benefit from above average investment returns from the regeneration schemes.


One in five homebuyers are paying the 3 per cent rate of stamp Duty
March 2007

For properties valued between £125,000 and £250,000 stamp duty is one per cent on the entire house price, but between £250,000 and £500,000 this rises to three per cent. Above £500,000 a four per cent rate must be paid.
The bank's study also shows there has been a 281 per cent rise in the number of properties in England and Wales entering the three per cent stamp duty band in the last five years.
It also reveals there has been an 89 per cent rise in stamp duty revenue raised by property sales above £250,000, with the minimum amount paid £7,500.
"Halifax believes the current thresholds at which stamp duty is levied should be adjusted to reflect the significant rate of house price inflation seen over the past decade," the bank explained.
The study, which looked at over 2,000 postcode districts, finds London and the south-east have the highest number of homes valued above £250,000, representing 64 per cent of homes in the three per cent band and 77 per cent of homes in the four per cent band (£500,000 plus).
The postcodes worst hit by the three per cent band of the tax were BR4 in West Wickham, London, IG4 in Ilford, London and GL19 in Gloucester.
Buyers faced the biggest increase in their stamp duty bills in YO62, York, where the average bill went from £1,087 in 2001 to £7,620 in 2006, a rise of 601 per cent. Other big increases were WN8 near Pemberton in the north-west, and TR26 in St Ives in the south-west, up 585 and 583 per cent over the same period respectively.
Those looking to avoid stamp duty are best off in M38 in Manchester, HU3 in Hull and CF41 in Bridgend, Wales, where the proportion of sales below the one per cent stamp duty threshold is between 99 and 98 per cent.


Desperate buyers paying over the asking price
March 2007

Hamptons International finds there has been frenetic activity in the housing market since the start of 2007, with an "astonishing" number of chain-free buyers going for properties.
This has seen sensibly priced properties sold in hours or days rather than weeks and months, the estate agent says, with an emphasis on compromise over perfection.
In the Thames region Hamptons International finds there has been "huge wave" of activity in the property market, with valuations up 69 per cent, offers up 90 per cent and viewings up 35 since the same time last year.
"The best outcome prospective buyers can hope for is that values 'plateau' at a level that still meets some of their main criteria for moving," explained Giles Soutry, Hamptons International's regional sales director for Surrey/Kent.
In London, the number of properties being valued has also increased, up 21 per cent on last year.
Marc Goldberg, Hamptons International's regional sales director for London commented: "There has been an acute shortage of properties for sale in prime areas of the capital for several months, while demand from buyers has reached record levels.
"Our stock of available property is 33 per cent lower than last year, whilst demand is 22 per cent higher. This is resulting in some very aggressive buying behaviour."
However, in the west of England the estate agent says there are early indications of more of a balance between housing supply and demand in 2007.
"Properties in the West Country continue to provide good value for money and there is an expectation that with an exceptionally strong London market showing no signs of abating, many purchasers will be forced to find a home further afield, seeking out areas that offer excellent road and rail communications," concluded Ursula Sadler, Hamptons Internationl regional sales director for western England.


First Time Buyer levels Drop
February 2007

The number of first-time buyers taking out mortgages has dropped in January after peaking in December, new research reveals.
Mortgages taken out by first-time buyers dropped by ten percentage points to 38 per cent Mortgages Direct's latest study finds.
The drop may be due to the surprise increase in base rate in January, which "knocked the confidence of the group" Mortgages Direct explained.
"As expected, the last interest rate rise has not been good news for first time buyers who are still having difficulty getting onto the property ladder," commented Peter Gladdy, director of Mortgages Direct.
He added: "Although the market is performing well, borrowers are showing signs of heightened sensitivity to changes in interest rates and speculation of a further rate rise in the first half of the year is making buyers and property investors think very carefully before committing to purchasing a property."
The study also finds the number of high loan to value mortgages hit a 12-month low in January, reaching eight per cent after making up 13 per cent of new mortgages in December.
This decrease is a result of first-time buyers pulling back and all other borrowers exercising caution in the wake of the rate rise, Mortgages Direct said.
The most popular choice of mortgage were two-year fixed-rates, an indicator of homeowner's confidence that the recent rises in interest rates will be short-lived.