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Does House Price Index Data Provide A Clearer Picture Than The Newspaper Headlines Suggest?

Does House Price Index Data Provide A Clearer Picture Than The Newspaper Headlines Suggest?

Does House Price Index Data Provide A Clearer Picture Than The Newspaper Headlines Suggest?

There can be a great deal of contradiction with the rising number of published House Price Indices, (HPI), that attempt to show the general public what is happening in the UK residential property sales market.

Many Spotlight subscribers are already aware that some of the published House Price Index data provided by mortgage lenders only relate to residential property sales, whilst others relate only to property asking prices.

However, property purchasers are often told to use the official published Land Registry data as a true guide to property prices rather than rely on any house price index data, but Land Registry data is a few months out of date because the Land Registry only record actual completed residential property sales.

Consumers need to know if all the HPI data is anywhere near accurate before they decide to part with cash to purchase a property, and with some degree of disparity between different indices the information provided can be confusing.

However, one thing is becoming very clear – UK property price growth is slowing!

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UK Residential Property Prices Only Increased By 0.5% Last Month

UK Residential Property Prices Only Increased By 0.5% Last Month

Residential Property Prices Only Increased By 0.5% Last Month 

New data released by Hometrack shows that residential property prices only increased by 0.5% during May 2014, less than previous price rises recorded in the three previous months, suggesting a slowdown in property sales and price growth.

The data shows that the proportion of UK regions recording property price increases during May had fallen to just 42%, down from the 50% recorded in March and April 2014.

While property prices may have continued to rise in London, there has been an overall slowing in the rate of growth, with property prices only increasing by 0.6% in May, compared to the 0.8% average increase over each of the previous six months.

The main growth in London is in lower priced areas of the capital that are perceived as offering better value for money, however, central London prices only increased by 0.2% in May. 

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2014 UK Property Prices To Increase Further

2014 UK Property Prices To Increase Further

UK Property Prices Extend Best Run Since 2007

There was some good news for property investors looking for capital appreciation this week as it was reported that UK property prices have continued to rise, increasing for the 14th consecutive month in March 2014, the longest run of price growth for nearly 7 years.

Residential property values across the UK increased by an average of 0.6% in March, with the South West and East Anglia regions recording the largest property price increases of 0.8%, according to data supplied by Hometrack Ltd.

Yorkshire & Humberside and the North West regions registered the smallest gains, with property values increasing by just 0.2% in March 2014.

Even independent surveyors are forecasting property prices to increase by a further 6% this year and are including this information on property condition reports for prospective purchasers.

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UK Property Prices Rise Most in Six Years

UK Property Prices Rise Most in Six Years

Residential Property Prices Continue To Increase

UK residential property prices have increased by 0.4% in May 2013, the biggest monthly increase since May 2007, as, according to Hometrack Ltd, a shortage of available residential properties boosted average property values in London.

Average residential property prices in England and Wales have seen a gradual increase in value during the last six months with property prices increasing gradually, while London property prices have jumped 0.9% over the same timeframe.

Demand for residential property in the capital has surged 15% in the past six months alone, while supply of available properties has fallen 0.6%.

Richard Donnell, Director of Research at Hometrack said, “The impetus for rising house prices is originating almost exclusively from London and the South East. Elsewhere housing market conditions are improving gradually, with prices trending slowly upwards.”

The Government initiative to ease the strict lending conditions set by lenders has improved the overall health of the UK property market but the Funding for Lending scheme needs to be backed by more solid initiatives.

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UK landlords with rent guarantee insurance stay happy despite property doom and gloom

Landlords with Rent Guarantee insurance remain happiest

New data released by Nationwide and Hometrack show that overall UK residential property values have fallen when compared to this time last year and the fall has been attributed to the changes in stamp duty.

The average residential property value in March 2012 was £163,327. That is 0.9% lower than property prices were in March 2011, the largest fall in UK house prices since June last year.

Nationwide’s figures showed a fall in nearly every region of the UK, compared with the previous quarter and data from Hometrack shows a clear North – South divide.

However residential property prices increased by 0.6% in the north of England, property values also increased in Scotland, and Greater London.

UK mortgage applications were also affected by Stamp duty changes, approvals dropped to 48,986 in February 2012, some 9,000 lower than the 25-month high recorded in January 2012, the lowest mortgage approval figures for three years, according to the Bank of England.

UK residential property prices may have fallen for the first time in six months, but UK landlords with Rent Guarantee insurance are still smiling.

Buy To Let landlords remain unfazed by the dip in UK residential property prices as they continue to maximise their rental returns, as demand for rental property continues to increase. In fact BTL landlords have been experiencing higher rental yields during the past 6 months than at any other time since the economic crash in 2007.

UK landlords are utilising specialist products and services such as Rent Guarantee insurance to keep the cash coming in, ensuring that the rent is paid, irrespective of any changes to their tenants circumstances.

Residential property values increasingly disparate between North and South in UK

Residential Property Disparity Between The North and South

UK property values posted a monthly price rise for the first time in 20 months in March on the back of increased demand, activity and a scarcity of residential properties for sale.

However, UK Property Prices overall were up in the South and down in the North

According to fresh data released by Hometrack, UK residential property prices are still rising in the South, but property values have seen widespread falls throughout the East Midlands, Wales and the North.

During March 2012, residential property values did dip a little in a few parts of London, the South-West and East Anglia. However, in Yorkshire and Humber, about half the region saw property prices fall. Property values were also down in the East Midlands, North West and Wales,

With such widespread variations, the Hometrack survey shows that nationally residential property prices as a whole are barely moving, up just 0.2% from February 2012.

There was only a 4.4% increase in new buyers registering with agents, compared to 18% in February.

The length of time taken to sell a residential property also varies widely across the country, from 11.6 weeks in the Midlands and North to under six weeks in London.

Hometrack’s Director of Research, Richard Donnell, said: “The housing market is not firing on all cylinders nationally. The divergence in the relative strength in northern and southern England is set to remain. We expect prices to track sideways in the short term, with the outlook for the second half of the year hinging on households’ expectations for the economy and their incomes.”

The Hometrack report does not give residential property prices, but said that in London property prices rose 0.5% in March, the highest monthly increase since April 2010.

However, the increase in London property prices were recorded pre-Budget, when Stamp Duty on properties valued at £2 Million (GBP) plus increased from 5% to 7%, for private purchasers, and 15%for properties bought by partnerships, collective investment funds and companies.

The survey results reveal a clear divide in the strength of the UK property market between southern England and the rest of the country.

Hometrack reckon that all the evidence points to a continued firming up in UK property prices over the next few months as demand for residential property increases and the supply of available properties remains subdued.

Hometrack stated this morning that property buyers fell by the wayside again last month with a drop of 2.6% in applications during September. The number of new sellers also edged down with new listings falling by 0.6%.

Until the end of last week, this year has seen property supply rise at almost twice the rate of demand.

Over 9 months, there was a 22% increase in new instructions, but a rise in applicants wishing to purchase of only 11%.

The average time that a property is on the market has increased to 9.6 weeks.

According to Hometrack, house prices have fallen since July 2010 – That is 15 consecutive months.

London’s average at 0.2% a month continuing growth has propped up the overall UK property market.

Hometrack’s new report also predicts that UK property prices will accelerate downwards before the end of the year.

The report says that its 1,500 agents are under growing pressure from vendors to secure sales before the end of the year. They also highlight an increasing proportion of properties sticking on the market – suggesting price adjustments will have to be in order.

Hometrack’s Research Director, Richard Donnell, said these would “ultimately kick-start a new phase of re-pricing across the market”.

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