Asking prices for property declined by 0.6% on average in July (£236,332), following a 0.3% rise in June (£237,767), according to property website Rightmove. This is the first month in 2010 that new sellers have dropped their asking prices. The trend looks set to continue with gains of 7% in 2010 so far expected to be entirely eroded by the end of the year, with new sellers outstripping new mortgage approvals by a ratio of 5:2. Figures show that over 30,000 properties are coming to the market each week, up by 45% on July of last year. Miles Shipside, commercial director of Rightmove, said that sellers are going to have to price at bargain levels and heavily promote their homes to secure a sale.
July 20, 2010
Gross Mortgage Lending Up 15% In June
Gross mortgage lending in June was an estimated £13.1bn, a 15% increase from £11.4bn in May and a 7% increase from £12.2bn in June last year, according to new data from the Council of Mortgage Lenders. Gross lending in the second quarter of 2010 was an estimated £35bn, up 17% from the first quarter of this year and up 7% from the second quarter of 2009 when it was £32.7bn. Lending in the first half of 2010 remained unchanged from the first half of 2009 – £65bn
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July 13, 2010
UK Inflation Falls To 3.2% In June
UK inflation fell to 3.2% in June, down from 3.4% in May. The Consumer Price Index is still above the Bank of England’s 2% target. Falling petrol and diesel prices are by far the main drivers to the downward pressure to CPI annual inflation between May and June. The largest upward pressures to the change in CPI inflation between May and June came from miscellaneous goods and services and air transport. In the year to June, Retail Prices Index’s annual inflation was 5.0%, down from 5.1% in May. The main factors affecting the CPI also affected the RPI. Additionally there was upward pressure to the change in the RPI annual rate from housing. This was driven by house depreciation, which rose this year but fell a year ago. RPIX inflation – the all items RPI excluding mortgage interest payments – was 5.0% in June, down from 5.1% in May.
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July 12, 2010
Rate Rise Predicted For 2012
The Bank of England might not increase interest rates until 2012, according to the centre for economics and business research (cebr). The think tank suggests newly appointed Monetary Policy Committee (MPC) member, Dr Martin Weale, could follow Governor Mervyn King’s lead in wanting to keep interest rates lower for longer to accommodate fiscal tightening, rather than focusing on rising inflation expectations when inflation is actually falling back. Noting the MPC’s remit is to focus on inflation two years down the line, the cebr said: “Given this is exactly when public sector cuts will really be starting to bite, adding to the slack in the economy and, in particular, the labour market, we see little reason for an interest rate rise this year or next.”
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July 8, 2010
House Prices Drop 0.6% In June
House prices have dropped 0.6% in June but are still 6.3% up on last year, according to the Halifax House Price Index. Prices for the April to June quarter remain largely unchanged from the first quarter at 0.1% lower. Martin Ellis, housing economist at Halifax, says: “This continued the slowdown in house price growth since the beginning of the year following the moderate recovery in prices during much of 2009. This pattern is in line with our view that house prices will be broadly unchanged over 2010 as a whole.” The average house price stands at £166,203 which is 17% below its August 2007 peak. An increase in house sales meant the ratio of house sales to the stock of unsold properties on surveyors’ books fell for the fifth time in the past six months. In separate research Halifax reveals the cost of owning and running a home has dropped by 6% over the past two years by £544 to £9,020 due to a 19% fall in mortgage payments.
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Base Rate Held At 0.5% To Protect Recovery
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.
The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.
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June 30, 2010
House Prices Rise 3% In First Half Of The Year
The month of June presented a picture of broad stability for the housing market, say Nationwide. The price of a typical UK property rose by a seasonally adjusted 0.1% month-on-month (m/m), following a 0.5% increase in May. The smoother 3 month on 3 month rate of change rose marginally from 1.7% to 1.8%. By contrast, the annual rate of house price inflation dropped for the second consecutive month from 9.8% to 8.7%, reflective of the fact that house prices were increasing at a faster pace this time last year. Barring a significant pick-up in house prices over the next few months, the annual rate of inflation should continue to drift lower, in light of the very strong price increases recorded during the summer of 2009. Over the first half of 2010, UK house prices have risen by a cumulative 3.0%. Recent indicators point to an increase in the supply of property coming to the market for sale, perhaps in response to the abolition of HIPs in the opening days of the new coalition government. With the level of demand remaining broadly stable, this would in part help to explain the recent slowdown observed in the rate of house price inflation.
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June 28, 2010
House Prices Up 8.2%
The May data from Land Registry’s flagship House Price Index shows an annual price increase of 8.2 per cent. This is the seventh month in a row in which the annual figure has been positive and takes the average property value in England and Wales to £165,314. It is also the first time since March 2009 that the annual change figure has not increased from the month before. The monthly change from April to May is a decrease of -0.2 per cent. This is the first negative monthly movement since April 2009. All regions in England and Wales experienced increases in their average property values over the last 12 months. The region with the highest annual price change is London with an increase of 14.2 per cent. The region with the smallest annual price rise is the North East with a movement of 1.8 per cent.
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Drop In Mortgage Rates Predicted
Mortgage rates could fall even further before the end of the year, according to predictions made by the centre for economics and business research (cebr). Following the emergency Budget, the consultants said they were more bearish about the economy than the Office for Budget Responsibility. With a lower growth forecast, cebr suggested the base rate of interest could remain unchanged at 0.5% until the end of 2012 and, as a result, it expected mortgage rates to fall from around 4% at present to 3% by early next year. “These low interest rates will drive an export and investment led recovery and will boost the housing sector,” it added. “But it will not start to pick up speed until 2013.”
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June 24, 2010
Repossessions Continue To Drop
Home repossessions in the first quarter of 2010 dropped to a two year low, according to the latest official data from the Financial Services Authority. The regulator revealed the number of new repossessions totalled 10,500 in the first three months of the year, 11% down on the previous quarter. The number of new arrears cases also continued the downward trend started last year, with a further reduction in the number in the first quarter to 40,500. The proportion of the residential loan book that is in arrears, and therefore not fully performing, also fell for the third successive quarter, to 3.23%. New advances for home loans totalled £32 billion over the period, 22% lower than in the fourth quarter of last year.
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