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Telegraph "uk House Prices Fall For The First Time This Year"

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http://www.telegraph.co.uk/finance/economics/10979391/UK-house-prices-fall-for-the-first-time-this-year.html

Asking prices in Britain have fallen for the first time this year as stricter lending rules, looming interest rate rises, and the distraction of the World Cup cool the rampant housing market.

The advertised cost of a UK home fell 0.8pc from £272,275 in June to £270,159 in July, according to new data from the property portal, Rightmove.

The North and the East Midlands suffered the biggest declines of 1.9pc each, while house prices in Greater London dropped 0.4pc this month, as the Capital hit an affordability ceiling and demand across the country curtailed.

Property values have fallen for the first time in 2014, down by £2,116, with the UK’s annual growth rate slowing from 7.7pc in the 12 months to June to 6.5pc in the year to July, due to tighter regulation on mortgage eligibility, the Rightmove House Price Index revealed.

“A price fall in July is not unexpected as prospective buyers turn their attention to the summer holidays, not the mention the distraction of an engaging World Cup,” said Miles Shipstone, analyst at Rightmove. “Buyer confidence may also have taken a knock with suggestions that mortgages are becoming harder to get, and repayments may get more costly sooner than originally anticipated, should the rumours of an interest rate rise before the next election come true.”

Off-the-back of a string of warnings from Mark Carney (pictured below) that the frenzied London housing market is the biggest threat to the UK economy, the Governor of the Bank of England took steps to prevent reckless lending and curb rising household indebtedness last month.

The central bank told banks and building societies that they should only make 15pc of their total loans at 4.5 times the borrowers’ income and introduced a futuristic interest rate stress test for borrowers.

Such market disruption and additional red tape has slowed the mortgage approval rate and is being felt on the ground by UK estate agents.

Escalating values over the last 12 months, combined with conservative lending policy, have shut many prospective first-times buyers and young families out of the market, meaning the biggest group of movers are likely to be equity rich, third-time buyers, the Rightmove report found. “We forecast a slower-paced second half of 2014. But with bigger-deposit, third-time movers entering the fray and lenders still having lending targets to meet, there is still enough momentum to see an 8pc national average increase in new seller asking prices,” said Mr Shipstone.

This house price wobble is seen by the property portal as a seasonal dip during a traditionally quiet time of the year, that will pick back up in September, driven by a lack of housing stock.

A new report from online estate agent, eMoov, which is backed by former BBC Dragon, James Caan, found that the South-East’s supply crisis is spreading to other parts of the UK.

The latest Hot Spots index found that 75pc of the homes put on the market in the London borough of Bexley, in Q2, have sold, showing that the area is dangerously close to running out of supply.

Over-inflated prices in London, which are not matched by wage growth, have resulted in people buying further out to get more for their money.

The Index, which lists the top 99 most popular areas in which to buy, showed that Bromley has moved from 18th place in the index to sixth, with 62pc of its stock snapped up. Commuter city, Milton Keynes, has also benefitted from the London exodus, and was elevated from 25th to fifth, while the previously-fashionable pockets of Islington, Hackney and Haringey have all slipped in popularity, deemed too expensive.

Following a long term regeneration project, Portsmouth is edging towards a supply issue - with 63pc of its stock bought in Q2, compared to 55pc in the three months of January to March. Bristol showed a similar level of appeal.

“A supply-demand ratio of under 50pc is detrimental. That’s the tipping point between a sellers’ market and a buyers’ market. Conversely, when we see areas achieve ratios of 65pc plus, they tend to be overheating and that impetus is unsustainable which is why we’re seeing just about all London areas cool,” said Russell Quirk, founder of eMoov. “There’s a regeneration theme here too. We see that the old adage 'build it and people will come’ seems very true.”

But development across the UK has slowed in the last few months due to a lack of available land. “When they [good quality sites] do become available there is now a stampede of both domestic and overseas developers wanting to buy...Often overseas investors who don’t know the market so well, overbid for the site, so the domestic developer misses out,” said David Galman, director at Galliard Homes.

“The market has been strong, most of the stock is sold, which has left most London developers now desperately looking for new sites.”

Just a blip claim the VIs, the effects of MMR & expectation of rise in cost of borrowing starting to show in a leading indicator.

Interesting time to sit back and watch this up until the election.

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Do the banks really believe interest rates are going to rise or are they just playing along? Today I read that 90% of new mortgages are fixed, so banks must be raking in record amounts from record high prices at record high spreads.

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We see that the old adage 'build it and people will come’ seems very true.”

More like 'build it, QE it, FFL it, H to B it etcetc etc etc etc etc and so on............................................ and people will come' seems very true.

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Can someone explain the link between a recurrent football tournament & the average price of a house?

Do sellers think...

We'll never get £400,000 this month, there are 64 football matches being played over the course of a month in Brazil. Drop it to £390,000.

?

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Can someone explain the link between a recurrent football tournament & the average price of a house?

Do sellers think...

?

The games were on 24 hours a day 7 days a week for 4 weeks...unless you supported england :lol:

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England's footie team stopped attracting interest for most people after the first week or so when they didn't qualify.

After that there would be no more distraction from the World Cup than the usual mid summer sports like Wimbledon, F1 etc.

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England's footie team stopped attracting interest for most people after the first week or so when they didn't qualify.

After that there would be no more distraction from the World Cup than the usual mid summer sports like Wimbledon, F1 etc.

It started for england on June 14th and was definitely over on the 20th June.

If that was enouhg to cause the housing market to collpase god help all those idiots buying in the last 12 months with the support their own taxes.

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