This weeks news 16th Feb 2023

UK house prices fall for fifth consecutive month.

Drop of 0.6% in Nationwide survey comes as higher mortgage rates squeeze prospective buyers.

UK house prices fell more than expected between December and January and for a fifth consecutive month, marking the longest decline since the 2008-09 financial crisis, as higher mortgage rates hit prospective buyers.

Property prices dropped 0.6 per cent between December and January, mortgage provider Nationwide said on Wednesday, worse than the 0.3 per cent fall forecast by economists in a Reuters poll.

The average price of a house in the UK declined for the fifth time since September last year to ￡258,297, down from a peak of about ￡274,000 in August. Such a prolonged decrease has not been registered for 14 years.

Gabriella Dickens, senior UK economist at the consultancy Pantheon Macroeconomics, said Wednesday’s data showed house prices were “continuing to buckle under the pressure of elevated mortgage rates, squeezed real incomes and weak consumers’ confidence”.

The annual rate of house price growth also declined, dropping from 2.8 per cent in December to 1.1 per cent in January, the lowest level since June 2020 and below economists’ expectations.

Robert Gardner, Nationwide’s chief economist, said it would “be hard for the market to regain much momentum in the near term” as real earnings are forecast to decline further, and the labour market is widely projected to weaken as the economy shrinks.

He added that the biggest change for prospective buyers over the past year had been the rise in the cost of servicing the typical mortgage, because of the increase in mortgage rates.

?

Rents hit another record, but tenant competition starts to ease.

National average asking rents outside London have hit a record of ￡1,172 per calendar month (pcm), taking average rent increases for newly listed properties to 9.7% for 2022: o London also reaches a new record asking rent of ￡2,480 pcm and Inner London rents surpass ￡3,000 pcm for the first time.?

There are signs that competition between tenants for the homes available to rent is starting to ease as more properties become available, but the imbalance between demand and supply is still very high. The number of available homes to rent is up by 13% compared with last year, the biggest annual jump since May 2013, while new properties coming up for rent are up 5%.?

The number of people enquiring about a rental property is up by 7% compared with last year and up by 53% compared with pre-pandemic 2019. Owing to more properties to rent, competition between tenants for available properties has dropped by 6% compared to this time last year, and a third (33%) compared with September’s peak.?

Rightmove predicts national average asking rents for newly available properties will rise a further 5% in 2023 unless there is a significant addition of available homes to rent.?

?

Fixed rates continue to fall as mortgage choice recovers.

There has been a notable rise in mortgage product choice, surpassing 4,000 options on Moneyfacts records the first time since August 2022.

The overall two- and five-year fixed mortgage rates fell for a third consecutive month, with the average five-year fixed resting at 0.24% below the average two-year equivalent.

According to the latest Moneyfacts UK Mortgage Trends Treasury Report, product choice stands at 4,341 options, up from 3,643 in January 2023.

The latest product count sits above 4,000 for the first time since August 2022, a positive sign of stability in the aftermath of plummeting product choice surrounding the mini-Budget in September 2022. Within the individual loan-to-value (LTV) tiers, following a rise of 122 to 606, availability within the 60% LTV tier is at its highest level in three years (February 2020 – 611).

The data also reveals that the average shelf life of a mortgage product rose to 28 days – the joint highest since March 2022, a drastic change from 15 days seen a month ago. This activity could be a result of further stability among lenders, as repricing has been rife over recent months.

Both the average two- and five-year fixed rates fell month-on-month for the third month running, down to 5.44% and 5.20% respectively. The difference of 0.24% between these two rates is now the largest margin seen in almost 15 years (March 2008 – 0.31%).

Also, the average ‘revert to’ rate or Standard Variable Rate (SVR) continued to climb. At 6.84%, this rate is now the highest on Moneyfacts records since October 2008 (7.01%).

Meanwhile, the gap between the average two-year fixed rate mortgage from two years ago (2.53%) and the current average SVR continues to expand (a difference of 4.31%).

?

Agents urged to back Turkey-Syria earthquake appeal.

Estate agency leaders have partnered to raise vital funds to support those affected by the devastating earthquake that hit Turkey and Syria last week.

The death toll has surpassed 21,000 with masses of people still trapped under rumble and rescue workers putting their own live at risk trying to free as many survivors as possible. Thousands have been injured and displaced from their homes, desperate for essentials such as fresh water and food, as food stocks and supplies run low and many on the brink of starvation.

Industry charity Agents Giving in conjunction with The Guild of Property Professionals are urging the property industry to join them in collecting funds to be able to send urgent live-saving supplies to those who have lost everything.

David Newnes, Agents Giving chairman, said: “We are supporting the DEC charities and their local partners to scale up their response and reach more people.?

“The Government is matching our donations pound-for-pound up to ￡5m, so we are eager to spread the word to anyone within the property sector, asking for help to raise as much money for the cause as possible.?

“A ￡10 donation could provide blankets to keep two people warm, while ￡25 could provide emergency food for a family for ten days, ￡50 will provide much-need emergency shelter for two families.”

Iain McKenzie, chief executive of The Guild of Property Professionals, added: “We are asking everyone within the sector to band together to assist those who are in desperate need. Masses have been impacted by the earthquake and the need for aid continues to grow as the as the situation unfolds.”

The industry fundraising target is ￡10,000.

Have a great week,

#Entrepreneur #Business #Property #Venturecapital

#Economy #Entrepreneurship