Nottingham building society
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Nottingham Building Society loosens criteria for contractors

Nottingham Building Society has cut the minimum length of time contractors must have worked on fixed-term contracts to make it easier for these workers to secure a mortgage.

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Nottingham Building Society has cut the minimum length of time contractors must have worked on fixed-term contracts to make it easier for these workers to secure a mortgage.

The mutual says the minimum length of time a contractor must have worked on fixed-term contracts in the same profession is now 12 months.

It adds there is no minimum time required on their current contracts, and contractors working under an umbrella company are acceptable for the firm’s home loans using 46 weeks of income.

Get in touch with us today to speak with a specialist Contractor Mortgage Advisor.

Nottingham Building Society sales director Alison Pallett says: “The world of work is evolving. From construction to health and social care, more and more people work on contracts, and it is imperative that the industry reacts in tandem — especially as contracting allows greater flexibility within the workforce.

“These changes reflect our unwavering commitment to empowering contracted workers to access mortgage financing more easily.

“We hope to have further exciting developments to announce shortly, so keep an eye out for them.”

By Roger Baird

Source: Mortgage Finance Gazette

house prices
Marketing No Comments

House prices surge at fastest pace this year to record £373k despite Bank of England rate hikes

Britain avoiding a much-forecasted recession has helped push house prices up by the greatest amount so far this year to a record high of £372,894, new figures out today reveal.

The average price of a home coming to market climbed 1.8 per cent over the last month, the strongest increase in 2023, according to property search site Rightmove.

Over the last year asking prices have jumped 1.5 per cent.

Britain’s housing market has defied a glut of gloomy predictions tabled at the turn of the year sparked by the country’s economic prospect at the time looking pretty bleak.

Households were forecast to suffer the worst squeeze on their living standards on record, the Bank of England expected the UK to be gripped by the longest recession in a century and unemployment was on course to rise.

However, a combination of international gas prices sliding and the government capping energy bills at £2,500 has put the UK on track to dodge a recession, convincing buyers to snap up a new home and sellers to cash in on their property.

Booming confidence in the housing market is down to the “gloomy start-of-the-year predictions for the market… looking increasingly unlikely,” Tim Bannister, director of property science at Rightmove, said.

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UK house prices are holding up well despite sustained pressure from higher rates

Source: Rightmove

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“Steadying mortgage rates and a generally more positive outlook for the economy are also contributing to more seller confidence, though there are likely to be more twists and turns to come,” he added.

A paucity of homes coming to market has kept prices elevated, although supply could expand in response to increasing home fees.

Sellers on average had to chalk 3.1 per cent off of their initial asking price in order to source buyers in April, Rightmove said.

Last month’s rise illustrates that demand is still holding up well in the face of the Bank of England’s twelve successive interest rate hikes, taking them to a near 15 year high of 4.5 per cent.

Mortgage rates have surged over the last year due to lenders passing on Bank Governor Andrew Bailey and co’s moves, though they are below the sky high levels they reached after Liz Truss’s mini-budget jolted UK debt markets. The Bank is expected to raise borrowing costs at least one more time this year.

London house prices climbed faster than the national average on an annual basis, up 2.8 per cent to nearly £700,000. The only area in the UK which recorded a drop in asking fees was the north east.

Hackney house prices in east London rose the fastest in the capital, up 5.3 per cent over the last year to £724,000. Southwark came second, with prices up 4.3 per cent to £673,000.

By Jack Barnett

Source: City A.M.

house prices
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House prices rise for the first time but analysts still expect a rough ride

The housing market showed “tentative” signs of recovery in April as the price of homes rose 0.5 per cent during the month, however prices remain four per cent below their August 2022 peak.

The Nationwide house price index showed that the annual rate of house price growth improved to -2.7 per cent from -3.1 per cent in March, as buyers remain cautious about their financial position due to rising inflation.

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The average price of a home in April is now £260k up slightly from £257k as the market continues to stabilise following the fall out from September mini budget.

As inflation remains above 10 per cent, Robert Gardner, Nationwide’s chief economist, said that analysts’ expectations that it could fall in the second half of the year would likely further bolster sentiment, especially if the labour market conditions “remain strong”.

He explained: “This, in turn, would also be likely to support a modest recovery in housing market activity.

“But any upturn is likely to remain fairly pedestrian, as it will take time for household finances to recover, since average earnings have been failing to keep pace with inflation, and by a wide margin over the last few years.”

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House prices stabilise as Easter buyers emerge

Matt Thompson, head of sales at Chestertons, said: “Savvy house hunters used the Easter holidays to continue their search online and enquire about properties to arrange a viewing as soon as possible.

“April has therefore been a busy month; particularly as buyers are a lot more aware of today’s competitive market conditions. As a result, most buyers have also been preparing their paperwork as much as they could in order to make an offer and secure a property before the summer.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: ‘Average property prices fell again in April but not as far as in March as the spring market gets into gear and buyers and sellers start to see an end in sight with regard to high inflation and interest rates.

“Swap rates, which underpin the pricing of fixed-rate mortgages, have risen again on the back of short-term volatility. However, lenders continue to reduce their fixed rates, albeit at a slower pace than before, with bigger reductions seen on higher loan-to-value mortgages as they try to attract first-time buyers.”

By LAURA MCGUIRE

Source: City A.M.

self-employed
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Why being self-employed isn’t a barrier to mortgages at 50 or 90

It is generally thought that if a person is self-employed, their mortgage options are limited. And if that person is also aged 50 to 90+, those options become even narrower. Of people we surveyed in their 50s (of all professions), only 4% had any idea they could get a mortgage. For those in their 80s, it dropped to 2%.These are shocking statistics because nobody is ever too old to get a mortgage they can afford, including the self-employed. All it takes is a lender with a can-do approach.

At LiveMore, for example, our mortgages are designed to help people aged 50-90+, including those who are self-employed. We have no maximum age for self-employed, but instead look at occupation and plausibility.

Get in touch with us today to speak with the UK’s Best Contractor Mortgage Broker.

Solutions needed for a huge part of society

It’s surprising that mortgage applications are so challenging for such a significant sector of society in terms of sheer numbers. There are around 4.3 million self-employed people in the UK, and the largest proportion of them – 1.8million – are aged 45-54. Almost 1 million are aged 55-64, and nearly half a million are 65+ *. If they can afford a mortgage, why do lenders make it so tough for them to get one?

Lenders willing to show a can-do attitude can not only reach a large base of great customers, but also make a huge difference in many lives.

Get in touch with us today to speak with a specialist Contractor Mortgage Advisor.

Helping the self-employed aged 50 to 90+

Flexible criteria is essential to helping the self-employed, including the newly self-employed who face a tough time in the mortgage market at any age. That’s why at LiveMore, we can consider applicants with one year of self-employed figures.

This can be a lifeline for anybody who went self-employed during the pandemic. It’s also helpful for people who used the Government’s Self-Employment Income Support Scheme (SEISS), which can go against them in some lenders’ eyes, but a lender that manually underwrites each case should be able to find a way forward.

At the same time, the Covid pandemic affected many self-employed people who were unable to work during the lockdowns, meaning their income might have been lower than in a typical year.

For example, one of our customers, aged 58, wanted to remortgage to buy out his ex-partner and move on after their divorce. But his self-employed income had reduced dramatically because of COVID.

Every high street lender turned him down. However, we considered what his income was likely to be post-covid, based on his previous track record, as well as accepting other income he had in the form of health and grant payments from the Government.

When our can-do approach helped him, he said: “LiveMore saved my life.”

Like this customer, who has various income sources, many self-employed people find income is an issue when they approach lenders who deem the case to be too complex.

However, if a lender considers all forms of income, mortgages often become affordable for many self-employed who may have thought they were running out of options. For example, we’re open to contractor’s income, and we’ll consider day rates or the previous year’s earnings.

The self-employed sometimes have foreign income, which many lenders will not accept but this is where it’s important for an intermediary to know their lender, as lenders like LiveMore will still accept overseas income, as long as it’s not the main source of money coming in. We can also consider net profits or retained earnings in limited companies as well as dividends, even when the borrower is no longer working.

So, whatever the profession of your self-employed clients, they may be more eligible for a mortgage than you think. We welcome most income and property types, and we always look for ways to say yes – even in ‘not your average’ cases.

By Phil Quinn

Source: Best Advice

ONS
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Annual house price growth slows but market ‘resilient’ – ONS

Figures from the Office for National Statistics (ONS) show that average UK house prices have risen 5.5 per cent since this time last year.

The annual percentage change for average UK house prices was 5.5 per cent in the 12 months to February 2023.

The average UK house price was £288,000 in February 2023, which is £16,000 higher than 12 months ago.

Average house prices increased over the 12 months to £308,000 (6 per cent) in England, to £215,000 in Wales (6.4 per cent), to £180,000 in Scotland (1 per cent), and to £175,000 in Northern Ireland (10.2 per cent).

However, the average UK house price decreased by 1 per cent between January 2023 and February 2023. This caused the UK annual inflation rate to slow this month.

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Regional differences

In England, the February data shows that, on average, house prices have fallen 0.8 per cent since January 2023. The annual price rise of 6 per cent takes the average property value to £308,365.

The West Midlands experienced the greatest annual price rise, up by 8.6 per cent, while London saw the lowest annual price growth, with an increase of 2.9 per cent. Prices in the capital have fallen 1.1 per cent since January 2023.

Wales shows, on average, house prices have fallen by 0.6 per cent since January 2023. An annual price rise of 6.4 per cent takes the average property value to £215,343.

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‘The housing market is proving to be resilient’

Jeremy Leaf, north London estate agent, said: “Despite another small fall in prices month-on-month, the housing market is proving to be resilient. These are the most comprehensive of all housing surveys but the figures are a little dated, inevitably reporting on activity from a few months earlier when the market was in the doldrums.

“Since then, confidence has slowly improved in response to more choice and stabilising mortgage, if not base, rates. However, worries about inflation persist and buyers want to see value so are flexing their muscles before making decisions.”

Nick Leeming, chairman of Jackson-Stops, noted that a stability may be returning to the market.

He said: “The property market has turned into a marathon from a sprint. While there is still a long way to go, the market has cleared the first jump relatively unscathed. Today’s figures show a soft repricing, which marks a more stable period for house price values following the supersonic heights reached this time last year.

“Even in the last two months, the economic picture is becoming much more stable. Mortgage deals are also returning to the market after a short hiatus in the immediate aftermath of Trussenomics.

“Market conditions and an under reliance on outside funding has left cash buyers in a fortunate position, able to push ahead with quick completions and benefit from the increasing number of properties entering the market.”

Tomer Aboody, director of property lender MT Finance, was alos optimistic that the market could get ‘back on track’ in the coming months.

He said: “Fewer properties for sale tends to result in higher property prices, which seems to have been the case over the past year or so, with demand in the regions and for houses particularly strong.

“With mortgage rates fluctuating, particularly towards the end of last year, many buyers stalled, which meant a reduction in the number of transactions.

“Hopefully, as inflation falls and rates continue to stabilise, we will see more sales proceeding as buyers return and get their purchases back on track.”

By Emma Lunn

Source: Mortgage Solutions

house prices
Marketing No Comments

Where will house prices go in 2023?

House prices experienced rapid growth throughout the pandemic thanks to a combination of stamp duty cuts, low-interest rates and the “race for space.”

But as interest rates started to climb in the second half of 2022, the mood changed.

Rising interest rates and the cost of living crisis are now having a clear impact on the housing market according to the most recent data.

According to Nationwide, in February house prices dropped at their fastest rate since 2012, Meanwhile, HMRC data shows UK property transactions are down by nearly 20% and a survey by the Royal Institution of Chartered Surveyors seems to confirm the market’s bearish sentiment.

And while Rightmove’s house price index is slightly more upbeat, reporting a £3,000 increase in asking prices in March, it’s important to remember asking prices and the price paid by buyers are two very different things.

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Where will house prices go in 2023?

The Office for Budget Responsibility (OBR) published a fresh forecast for the property market alongside the Spring Budget – saying it estimated prices would fall further than previously expected.

The OBR now expects house prices to fall 10% by 2024.

Both Lloyds and Halifax expect house prices to fall 8% in 2023, while Nationwide and online estate agent Zoopla are predicting falls of 5%.

However, Tom Bill, head of UK residential research at Knight Frank, argues: “The first rule for anyone predicting the trajectory of house prices in 2023 should be to ignore any data from the chaotic final quarter of 2022.

“The latest data shows two things are happening at the same time. First, the effect of the mini-Budget is working its way through the system, which means that monthly declines are narrowing. At the same time, an annual fall in house prices appears imminent, underlining how the lending landscape has changed irrespective of the mini-Budget.

“As rates normalise, buyers will increasingly recalculate their financial position and house prices will come under pressure. We expect a 10% decline over the next two years, taking them back to where they were in mid-2021.”

Financial market conditions appear to have settled, and the UK is expected to avoid a recession in 2023 despite previous, more ominous forecasts.

But the headwinds facing the property market are unlikely to abate in the short term, especially following the latest interest rate hike by the Bank of England (BoE).

The BoE raised rates to 4.25% on 23 March, their highest level since 2008. This was “disappointing news to borrowers who are not locked into a fixed rate mortgage, as their monthly repayments may rise in the coming months amid a cost of living crisis”, says Rachel Springall, finance expert at Moneyfactscompare.

“Affordability may well be the key challenge for borrowers struggling with the cost of living crisis, as interest rates are higher than prospective buyers, or those looking to remortgage, were perhaps anticipating,” continues Springall. “Whether now is the right time to get a mortgage will entirely depend on someone’s individual circumstances, so seeking advice is vital.

“In the meantime, it would be wise for borrowers to keep a close eye on the mortgage market, housing supply and house prices, particularly for new buyers who are a critical part of keeping the market moving.”

Get in touch with us today to speak with a specialist Contractor Mortgage Advisor.

Why are house prices falling?

A combination of factors is hanging over the UK housing market.

Record high rents are making it hard for first-time buyers to save for a deposit, especially as they struggle with inflationary pressures and rising bills.

But more importantly, mortgage rates have increased exponentially over the last 12 months. They peaked at around 6.65% after Kwasi Kwarteng’s mini-budget pushed up the cost of borrowing.

They have since come down to below 6%, falling over the last two months. The average two-year fix now stands at 5.6%, while the average five-year deal is 5.4% according to Moneyfacts.

But when you consider the average two-year rate was around 2% at the end of 2021, rates are still much higher than they were.

Higher mortgage rates have driven buyers away from the market, while others have been priced out.

And mortgage rates may have further to go. The bank has made it clear it might have to hike rates further to bring inflation under control.

Even though the OBR expects inflation to fall to 2.9% by the end of the year, the latest data from the Office for National Statistics (ONS) showed the figures moving in the wrong direction. The ONS recorded CPI inflation of 10.4% in February, from 10.1% in January.

“If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required,” the BoE said.

This suggests the central bank may hike rates further in the months ahead as it tries to get inflation under control, putting further upward pressure on mortgage rates and, as a result, downward pressure on house prices.

By Nicole García Mérida

Source: Money Week

IR35
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IT contractor jobs agencies plough on with ‘ambiguous, burdensome’ IR35 reform

IT contractors’ recruiters are putting a brave face on Spring Budget 2023 making no tweaks to IR35, leaving them and their clients to struggle on with administering the off-payroll rules.

Agencies appear to be adhering to the letter of the law, even if ‘blanketing’ — all PSCs inside IR35, and ‘banning’ — no PSCs whatsoever, is continuing, typically at large organisations.

‘Flirting’

Even the government “flirting” a few chancellor statements ago with repealing the 2017 and 2021 rules hasn’t affected the status quo, First Point Group’s Phil Jones told ContractorUK.

“Each contractor role is individually assessed within the guidelines and determined as inside or outside IR35,” said a by-the-book Jones, from FPG’s London office.

Viki Dowthwaite, of Trinnovo Group confirms that “the continuation of these rules” by the chancellor sees clients “continue to assess each contractor’s individual working practices.”

‘Ambiguous, burdensome IR35 rules’

She made no mention of the agency’s high-growth technology sector clients engaging in blanketing or banning, but there was a hint of sympathy should they feel they have no choice.

“These rules present a long-term, ambiguous job and a heck of an administrative burden [for clients who must assess] the different IR35 markets, and the legal wording [of contracts]”.

Like clients, agencies have been given a tool by HMRC to test IR35 status but it’s “not fit for purpose,” continued Dowthwaite, contract lead for Trinnovo’s Trust in SODA and Broadgate.

‘Agencies led by their large clients’

“CEST is popping out 20% of [the time with] ‘undetermined’ and businesses have no further support or guidance provided by HMRC to enable them to make the final determination.

“And often,” she continued to ContractorUK, “particularly in the case of large organisations, agencies must be led by the end-client’s approach to IR35.

“We can advise on why they should take a practical approach, engaging outside IR35 contractors where appropriate, but ultimately, it’s up to the end-client and HMRC to adopt a more user-friendly approach.”

The angst behind her comments will be recognised by the 52% of agencies somewhat or very “concerned” by compliance with IR35 reform, Cool Company has found.

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‘Four in ten encounter difficulties when recruiting due to IR35’

A further 43% of agencies say that IR35 compliance has caused them “difficulties when recruiting for contract [opportunities],” adds a Cool survey of January 2023.

Fresher findings on IR35’s impact will be released shortly by the Association of Independent Professionals and the Self-Employed (IPSE).

A poll from IPSE asking for contractors’ input on IR35 is still open and accepting both tick-box answers and comments on the framework.

‘Some end-users moving away from blanketing, but not all’

The association’s Andy Chamberlain is hoping to see an improvement on the one in five contractors who were subject to a blanket inside IR35 determination (as of October 2021).

“We’re hearing some clients are moving away from blanketing, while others, particularly in financial services, continue to insist on the umbrella route,” Mr Chamberlain told ContractorUK.

Ahead of the IR35 poll closing soon, the IPSE policy director added last night: “It feels like the picture overall is getting better. But that’s not the experience of every contractor out there.”

‘Blanketing is beyond me’

Indeed, one limited company contractor confesses to no longer being ‘out there’ out all, directly due to ‘blanketing’ and despite beating IR35 in a high-profile case against HMRC.

“I stopped contracting because one of the [well-known] companies blanket-banned PSCs,” posted Elaine Richardson, whose ECR Consulting defeated the Revenue in 2011.

“[Blanketing] is entirely beyond me…[but I hope with skills shortages or similar it] comes back to bite those clients who just blanket ‘assess’ as inside for their own convenience.”

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‘HMRC to look for opportunities to improve off-payoll rules’

Responding to a ‘Reverse IR35’ petition this month, HM Treasury said the government has “continued work to understand…how improvements could be made to the way the rules work in practice.”

Adds the response of March 9th 2023: “The government very much values the contributions of flexible workers, including the self-employed, to the UK economy and is committed to the tax system becoming simpler and more dynamic to help reduce burdens on businesses and individuals.

“HMRC will continue to provide support and guidance to individuals and businesses operating the rules and will continue to look for opportunities to improve the way these rules work in practice.”

‘Sense’

At Trinnovo, Dowthwaite believes the improvement is to revert to what the rules stated for 20 years; where they previously placed responsibility, and where the rules today place the decision-making responsibility for PSCs whose clients are small companies.

She told ContractorUK: “Surely it would make more sense, if the person conducting those working practices and contracted by any agreement advises on their own status.”

By Simon Moore

Source: Contractor UK

Bank of England
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How will the rising Bank of England rate impact the UK property market?

James Quinn, founder of GB Home Surveys, looks at the measures the Bank of England has taken to tame inflation and its effect on the property market.

It is undeniable that the last 12 months have been incredibly difficult for families and businesses across the UK. From soaring energy food prices brought by the ongoing conflict in Ukraine, to the aftereffects of the UK’s departure from the European Union, not to mention former Prime Minister Liz Truss’ disastrous mini-budget, many recent events have spawned significant volatility in the national economy.

This instability has, in turn, caused inflation to shoot up considerably, and it currently stands at approximately 10%. As such, on Thursday 2nd February, the Bank of England announced that it was raising its interest rate by 0.5 percentage points to reach 4%, explaining that this was the best solution for bringing inflation back under control.

While the increase will likely be welcomed by savers, who will experience a healthy boost to their bank balance as a result, it means others will face higher borrowing costs, making an already challenging financial situation even harder for many people.

With economists forecasting that rates will increase further in 2023 – with a potential rise set to be made on 23rd March – it is understandable why many are concerned about the potential impact that high-interest rates will have on the UK’s property market. So far, however, the market has proven itself to be far more buoyant than many had expected it to be.

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Confidence and competition

When the BOE was forced to hike interest rates to 3.5% in the latter stages of 2022, this naturally fed through to mortgage rates as well, making it considerably harder for first-time buyers to secure the funds needed to purchase a home. While the situation was already gloomy for borrowers at this point, Liz Truss’ now infamous mini-budget made things even worse, ramping the level of volatility up to unexpected new heights.

In the wake of the mini-budget, mortgage providers pulled nearly 1,000 products from sale, leading to a significant rise in the cost of a mortgage. Despite this, in the early stages of 2023, it appears that inflation may now have peaked, which is helping to build confidence in the financial markets.

This is highly encouraging for the mortgage market. Confidence means lenders are willing to lend, and borrowers have access to the products that they need as a result. Considering the hole that the mini budget left in lenders’ mortgage books, it is surprisingly positive that lenders are now lending on fixed-rate mortgages below the BoE base rate for the first time in a long time. With more and more lenders starting to do this all the time, a healthy level of competition has resumed in the market, which is advantageous for borrowers who have a wide range of products to choose from.

Property prices remain high

In addition to the signs of positive activity for the benefit of prospective buyers, high-interest rates are also proving advantageous to many homeowners.

The UK property market has long been marked by supply and demand issues, with the number of people looking to get on or move up the housing ladder far outstripping the number of homes available.

This has already kept property prices high and, as of November 2022, the average house price in the UK stands at £294,910, which is a 10.3% rise from the previous year. With interest rates now having risen to 4% as well, it is unlikely that there will be a significant drop in house prices or value any time soon – particularly with experts predicting a lower peak in the BOE rate at 4.5%.

While average house prices have come down a little, they have not fallen as far as many had first anticipated they would. In fact, in some parts of the country, such as the East Midlands and the North West, prices have actually risen slightly. With supply and demand issues persisting – given that the UK is not building homes quickly enough – and interest rates proving better than expected, house prices may not actually decrease by as much as some are predicting.

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Things are looking up

While inflation remains high, the BOE is anticipating that it will fall over the course of 2023, as wholesale energy prices continue to drop. As such, the rate of inflation is not likely to reach the level that many had feared it would. This is not only positive news for businesses and households who have been hit by hefty bills and day-to-day expenses in recent months, but also for the stability of the UK’s property market.

Given the renewed confidence in the financial markets, the healthy level of competition in the mortgage market, and the fact that house prices remain steady across the country, the outlook for the property market is fundamentally positive despite rising interest rates, which is itself a positive signal for the UK’s economy as a whole.

By JAMES QUINN

Source: Property Reporter

housing market
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There is still appetite for lending in the housing market, says top property lawyer

Without a doubt, 2022 was a turbulent year for the UK housing market. House prices may have hit record levels, but the Bank of England created havoc. By December, the base rate had been increased nine times over the previous 12 months, depressing market activity and putting the brakes on property prices.

According to optimists, there will not be a price crash but a soft landing thanks to a 25% fall in mortgage rates over the course of this year. They argue that forbearance measures from big lenders will help struggling borrowers as they switch to interest-only or competitive fixed-rate deals without the need for affordability tests. Since nearly two million people will need to re-mortgage as their fixed-rate deals expire in 2023, this will cushion the blow and reduce the volume of distressed/repossession sales.

Inflationary pressures and a fiscal squeeze have made mortgages unaffordable for many people relative to their incomes. Average UK house prices are now eight-times average earnings, according to Schroders. In London, the ratio rises to 11 times. Nevertheless, the economic mood is gradually moving away from ubiquitous gloom. For example, as the leading indicator of where corporate earnings are headed, UK equity markets have been back on an upward trajectory since November 2022.

A notable shift in sentiment can also be seen in reduced rates for two-year and five-year fixed mortgages: after spiking at 6.5% last October, they have now fallen back towards the 4.5% mark. For potential buyers, interest rates matter because they affect both affordability and lenders’ willingness to lend.

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Several commercial retail lenders such as Santander, Barclays, Nationwide, and Halifax have recently announced mortgage rate reductions to an average of around 4.5%.

When big commercial lenders cut rates, the market becomes more attractive and more affordable for domestic buyers, particularly first-time buyers – and not just to overseas or domestic cash buyers as happened when rates recently spiked. Notwithstanding the media hype about banks planning to reduce their mortgage lending, they still have plenty of appetite to lend.

The market has now fully digested everything that happened during the past year, including the “new normal” level of interest rates. These increases are now priced into people’s thinking, enabling industry professionals to advise with renewed confidence about where rates might be heading.

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History shows that whenever the UK property market is reportedly down, it does not stay down for long. Good properties are not always available: in busier markets, people often lose out because of increased competition, so buyers with available funding should press ahead on properties they really want.

But there is a caveat: incomes will need to rise in real terms in order to increase domestic buyers’ purchasing power. Without that boost, the market may still be more attractive and affordable to overseas and cash buyers.

By Goli-Michelle Banan

Source: Today’s Conveyancer

house prices
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Average asking prices for UK homes rose by just £14 in the past month

UK property prices have risen at their lowest-ever rate for February, according to data from the property website Rightmove.

Average asking prices for residential homes rose just £14 between January and February this year.

But the picture was mixed across the country, with prices rising and falling in different regions.

The average increase – effectively zero in percentage terms – is the smallest February rise ever recorded by Rightmove.

Months immediately after Christmas typically see big seasonal price increases, with more people buying and selling homes.

But average prices were still nearly 4% higher compared to a year earlier.

Rightmove said the negligible rise between January and February suggested sellers were realistically pricing their homes in order to sell them in a market that has slowed sharply in recent months.

House prices generally reflect the health of an economy.

Get in touch with us today to speak with the UK’s Best Contractor Mortgage Broker.

Rising prices help fuel economic growth, whereas falling prices can dent consumer confidence and dampen the economy.

This month mortgage lender Nationwide Building Society reported the longest run of monthly falls in selling prices since the 2008 global financial crisis.

Prices rose at different rates up and down the country, despite the average figure.

The North East, North West, West Midlands, East Midlands and East of England all saw decreases of -0.1%, -0.3%, -0.1%, -2.3% and -0.1% respectively.

Property prices in Scotland spiked by 7.5% over the month, followed by London (2.1%), Yorkshire and the Humber (1.9%), South West (1.6%) and South East (0.7%).

Growth in Wales was flat at 0%.

Tim Bannister, director of property science at Rightmove, said asking prices usually increase at this time of the year, which marks the beginning of the spring selling season.

‘This month’s flat average asking price indicates that many sellers are breaking with tradition and showing unseasonal initial pricing restraint,’ he said.

With asking prices remaining flat – rather than falling – Rightmove says this could be a positive sign that the housing market is not crashing as many analysts have predicted.

Economists polled by the Reuters news agency in November believed prices would drop by 5% in 2023, though even bigger falls have been predicted.

Still, there were some positive signs in the market.

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Property demand was recovering after former prime minister Liz Truss’s botched ‘mini-budget’ in September 2022 which sent mortgage rates soaring.

Sales were up 11% in the first two weeks of February compared to the same period in 2019, Rightmove found.

After Truss’s mini-budget, which was widely criticised for recklessly cutting taxes, the number of sales in the housing market crashed by 30%.

The Resolution Foundation calculates the mini-budget cost the nation £30 billion.

Property sales remain down 11% on pre-pandemic levels.

By Josh Askew

Source: Metro