UK November Property Roundup – Price Growth Mixed, Mortgage Rates Rise

The UK property market had a few ups and down in November and the news relating to that made for interesting reading. Some reports said UK prices rose, while others said they fell, mortgage lending and rates were also in focus following the Bank of England’s rate hike.

Although we’ve already posted about some of the more interesting news, our November property gives you the chance to catch up on what you need to know.

House prices

Always a popular topic, the latest data on house prices was a little mixed during November.

UK high street lenders, Halifax and Nationwide both reported welcome price gains – for home-owners at least.

Halifax said house prices rose 0.3% on the month, by 4.5% on the year and by 2.3% on the quarter. The annual and quarterly gains were an acceleration from September, signalling an improved appetite for UK property.

Halifax commented that the low level of supply of property continues to underpin prices. Adding: “Increasing pressure on household finances and continuing affordability concerns are some of the factors likely to dampen buyer demand.”

Nationwide’s report was similar, although a little less positive. The Nationwide house price index showed gains of 0.2% on the month, 2.5% on the year and 0.8% on the quarter. Only the annual price measure was higher than in September.

The Royal Institution of Chartered Surveyors, (RICS) meanwhile, said that house price growth across the UK was flat. And, according to its members and survey respondents, the occurrence of lower house prices has begun to spread from London and the South East. Prices also fell in east Anglia and North East England, according to the latest report.

UK household finances

The latest household finances survey from data firm IHS Markit, meanwhile, identified a further squeeze in UK consumer’s ability to spend, in November.

It’s headline balance fell further to 43.4 in November, as consumers were the most worried about their finances since June. And, looking ahead, over 50% of survey respondents said they were anticipating a further BOE rate rise in the next six months.

“November’s survey signalled a further worsening of the UK household budget squeeze,” IHS Markit economist Sam Teague said. “The latest deterioration reflected a reduction in real wages in the face of rising price pressures and a consequent fall in disposable income.”

This is a warning sign for the UK’s housing market. That’s because when UK home-owners feel less wealthy, they’re less likely to spend money on big purchases, such as property.

BOE and mortgage interest rates

As you probably already know, the BOE raised the UK’s base rate by 0.25% to 0.50 in the first week of November. That change consequently drove a number of mortgage interest higher the next day and beyond.

However, the mortgage rate changes weren’t as wide spread as anticipated. That’s because a number of lenders had already made changes to their ranges in the preceding month, when it became clear rates would rise.

And, due to the small BOE rate hike, its impact on budgets, will only likely be minimal. For example, homeowners on a tracker mortgage paying 2% in interest on £250,000 repayment, 25-year mortgage would experience around a £30 per month rise on their around £1,1000 monthly mortgage payment.

However, the November rate hike is not expected to mark the beginning of a rate hike cycle for the BOE. Particularly following the lower economic forecast calculated by the Office for Budget Responsibility and announced by Chancellor Philip Hammond last week.

Budget quickie

As the month was nearing its close, Chancellor of the Exchequer Philip Hammond, delivered his first budget announcement to the House of Commons.

Despite announcing disappointingly lower economic growth estimates for the OBR, Hammond also had something for the housing news enthusiasts. It included:

  • Scrapping stamp duty for first-time buyers of properties worth up to £300,000, which equates to some 80% of all first-time buyers.
  • Commitment to build 300,000 houses by around 2025.
  • £44 billion Government support for housebuilding.

As you can see, there was plenty to keep abreast of during November. Hopefully, some of it was good news for you.


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