Housing price slowdown in Q1 2019

The Halifax survey of British house price growth shows a slowdown in the first quarter of 2019 in annual terms and a subdued outlook, according to Reuters.

Uncertainty about Brexit and high property prices were cited as key factors behind the trend. Compared to the same period in 2018, prices rose by 2.6% whereas the three months to February showed a 2.8% rise.

A Reuters poll of economists indicated an annual rise of 2.3% could be expected for the first quarter. A recent Nationwide mortgage lender survey found house prices had increased somewhat.

The housing market in London is particularly weak, with Brexit uncertainty poised to have a particularly strong impact in the capital. Shortly before the 2016 referendum house prices were rising by around 10% per year.

Halifax says that in March, in monthly terms prices were falling by 1.6% after a 6.0% increase in February. Halifax’s index has tended to show a more marked variance than other polls in recent times.

UK house prices rise at slowest rate in five years

House prices rose at their slowest annual rate for five years this month, according to figures from Nationwide reported by Reuters.

The mortgage lender said the slowdown was linked to relatively low economic growth and pressure on household spending. UK house prices were 2.0 percent higher in June 2018 than June 2017, a reduction from May’s 2.7 percent rate.

The slowdown is the largest falling off in five years but still lower than a recent 1.7 percent predicted in a Reuters poll. June saw prices rising 0.5% compared to a predicted 0.3% rise.

Nationwide economist Robert Gardner said: “There are few signs of an imminent change. Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.”

Nationwide said it expected house price rises to slow by 1 percent in 2018 as whole. Economists expect the Bank of England to raise interest rates by 0.25% to 0.75% in August, the second increase since the global financial crisis.

Halifax figures confirm UK house price slowdown

The latest Halifax house price figures show that growth is continuing to slow, according to Best Advice.

In the three months leading to February 2018, prices were 1.8% higher than the three months leading to February 2017. This is slower than the annual growth of 2.2% recorded in January 2018.

House prices in December – February were 0.7% lower than in the preceding three months and prices grew only 0.4% on a monthly basis in February, after two consecutive monthly declines.

Managing Director of Halifax Russell Galley said: “House prices continue to remain broadly flat, as they have since the end of last year. The annual rate of growth has slowed from 2.2% in January to 1.8% in February, the lowest rate of growth since March 2013.

“The labour market continues to perform strongly with the number of people in employment rising by 88,000 in the three months to December. Notably, this is almost entirely accounted for by full-time jobs. The strength of the jobs market may finally be benefitting wage growth, with the annual growth rate accelerating from 2.3% in November to 2.8% in December. However, earnings are rising at a slower rate than consumer prices.

“Despite the November rise in the Bank of England Base Rate, mortgage rates continue to stay low by historical standards. While we expect price growth to remain low, the low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months.”

Homes near top English state schools cost 13% more on average

New research from Lloyds Bank released on Friday indicates that average property prices in the postal districts of the top 30 state schools in England have now reached GBP344,446, an average GBP40,728, or 13%, higher than county averages of GBP303,738.

Lloyds Bank figures reveal that properties near the best performing state schools were valued at 9.2 times average gross annual earnings, which is reportedly significantly higher than the average across England of 7.7 times average gross annual earnings. Top schools are defined as those secondary schools that achieved the best GCSE results in 2014.

The banking company’s research found that the postal districts of a fifth of top state schools command a housing premium of over GBP125,000, when compared to surrounding areas. Parents of pupils who attend Beaconsfield High School in Beaconsfield pay the the largest premium for their homes, with properties selling at an average GBP636,132, which is 186% above the average house price of GBP342,166 in neighbouring locations.

House prices in the postal district of The Henrietta Barnett School in Barnet were the second highest, trading at a premium of GBP418,860, followed by St. Olave’s and St. Saviour’s Grammar School in Orpington with an average premium of GBP180,447, then the Tiffin schools in Kingston upon Thames at GBP137,665.

However, the research showed that not all top rated schools are located in expensive areas. Of England’s top 30 state schools, 16 are in locations with an average property price below the average in neighbouring areas. Homes in the postal district of Aylesbury High School trade at a discount of GBP122,506, compared to the county average of GBP342,166. The next largest house price discounts in cash terms, are in Reading, Berkshire, where Reading School and Kendrick School are located, at GBP119,485. The Reading schools are followed by Queen Elizabeth’s School in Barnet, at GBP95,681 and Westcliff High School for Boys Academy in Essex at GBP58,970. 

Andrew Mason, mortgages director at Lloyds Bank mortgages director, commented:”In general, homes close to the nation’s top performing state schools command a significant premium over neighbouring areas. The presence of a top performing state school appears to help support property values in many of these locations as parents compete with other buyers to land the property that gives their child the best possible chance to attend their chosen school.”

Britain’s young people to struggle to get on the property ladder

The UK’s dwindling stocks of affordable housing has often been called a crisis. But in the report Housing options and solutions for young people in 2020 the Joseph Rowntree Foundation (JRF) says things will only get worse without drastic action.

While the bond traders and investment bankers of tomorrow are likely not to feature among the predictions made in this report, the less well remunerated in society will be be increasingly unlikely to secure a decent place to live. And this will have deeper democratic implications: socially essential, but poorly paid, jobs will attract fewer people.

The report makes grim reading for anyone not earning a large salary.  Grimmer, too, if you are young and not earning big bucks.

It rams home the stark fact that young people are going to suffer. From those in education to those leaving it, the future for a generation is bleak.

Bad enough knowing they will be job hunting during the worst depression since the 1930s. But this report is unflinching in describing the grim realities of the housing market in eight years time.

Buying a house will be even harder. The Council of Mortgage Lenders say the average age of first time buyers was 31 in 2009.

On current projections the National Housing Federation says if an average 21-year-old today saves regularly, does not have other financial support and has no children, they will be 43 when they are able to afford to buy their own home.

By 2020 demand will have risen on all forms of housing – home ownership, private renting and social housing. As a result almost 5 million people aged between 18 and 30 will be living with their parents.

People with low-paid jobs, young families, disabilities, and the so-called ‘chaotic young’ who have spent time homeless and in and out of social housing – all will be marginalised.

By JRF estimates, an extra 6,000 people aged 18 to 24 will fall into the ‘chaotic’ category in 2020, unable to find stable housing.

Supply and demand

Why the youth of Britain face waiting as long as 22 years to buy a home is simple. There will not be enough houses for everyone.

Demand will beat supply and prices will rise.

This report underlines the need to increase the supply of housing. But it also shows that schemes to help first time buyers is only a short term answer.

Without more houses, it makes little difference how easier you make buying for some. The end result is that it will only serve to inflate the property prices still further.

Not increasing housing supply by 2020, the report warns, will only increase pressure on the private renting sector and social housing – with both these sector needing to increase supply.

There are many positives in renting for young people, not least the flexibility of short term leases. But the report identifies a clear need to increase supply and improve the quality of rented accommodation by driving investment into the sector. The report advocates using the tax system to provide incentives to individuals and institutions to invest in homes to rent.

A result of reduced investment in the social housing, the report says, means that housing stock is also likely to have decreased by 2020. A distressing possibility identified by the authors is the likely increase in the number of young people deliberately becoming homeless to secure social housing.

Not resolving the shortage in housing will mean young people will be increasingly marginalised in the housing market. This in turn will impact the opportunities they can pursue.

Roles integral to society but with poor pay packets will become less and less attractive.  This will have an impact on many professions.  And from the Bureau’s own rather myopic perspective this is of concern to journalism.

The home of the media

We hold journalism to be fundamental to democracy.  But as old media crumbles, journalist’s pay packets are looking less and less attractive.  Fewer will be able to afford to enter this profession – particularly those who do not come from well-off homes.

And without a wide social panoply of journalists holding the powerful to account, corruption and incompetence will flourish and the public will be disenfranchised.

The lure of working in the well-paid worlds of public relations and press offices is already too strong for many in the profession.

Unless the housing crisis is averted this trend will only increase.

Written by Jack Serle of TBIJ.

UK House Prices to Rise Following Slow but Steady Economic Recovery

London Row HousingWith the economy on the rise, prices in the housing sector are creeping upwards, prompting what many real estate experts believe could be a major crisis in the cost and accessibility of housing to Britain’s employee base. Despite a fall in net exports, Britain’s economy has slowly recovered over the last year to a point of relative stability, although not everyone is reaping its gains.

City employees have been praised for improving economic stability – an unusual situation given then immense criticism many leading UK banks had been given just months before the economy began to improve. Yet with major banks and employers leading the UK out of its biggest trouble period in recent history, many believe that increased housing costs could hit employees hardest.

The average cost of a home rose from £166,351 to £167,425 in July – an increase that, if continued, could see the domestic housing market become one of the most costly and relatively inaccessible in Europe. Housing prices in the greater London area – one of Britain’s most important economic areas – are even greater, prompting many real estate experts to worry about a second housing ‘crisis’.

Property economists have highlighted the volatility made clear by such sudden increases, claiming that the UK’s housing sector will continue to attract rapid changes in value over the next year. July marks a high point for property investors – it appears that prices may begin to decrease towards the end of 2010.

For many first-time homeowners, that would be a very good thing. With unemployment still at high levels and Britain’s economy recovering slowly, higher housing prices will put property out of reach for hundreds-of-thousands of employees. Should price instability take over, many of Britain’s most enthusiastic real estate investors could see a lucrative, or disastrous, end to the year.