Property Market Fact File – October 2010

28th October 2010 (November’s Fact File due at the end of November.)

Bank Lending Rate

It has been confirmed that the Bank of England Monetary Committee have decided that the Bank Base Rate is to remain at 0.5% for a further month.  It has been at this level now since 05th March, 2009.

Source: Bank of England

Mortgage Lending by the Major UK Lenders

According to data from the major UK lenders, (which comprises Banco Santander, Barclays, HSBC, Lloyds Banking Group, Nationwide and Royal Bank of Scotland) the flow of net mortgage lending by all UK-resident mortgage lenders increased in August to £1.7 billion, but fell slightly in September, as gross lending for house purchase was little changed, but repayments increased.
Total mortgage approvals for house purchase also declined slightly in September.

Source: Bank of England

Land Registry Average Property Prices in England and Wales

The Average Price of a property in England and Wales is now £166,769 as at the end of September, 2010.

Source: Land Registry

Percentage Changes of Property Prices in England and Wales

The Monthly change in September in England and Wales was -0.2%.
The Annual change to September in England and Wales was 5.2%.

Source: Land Registry

RICS survey overview.

The RICS Housing Market Survey for September shows that prices are falling for the third month in a row. Regionally, Scotland continued to see house prices increase over the past quarter, with the East Midlands showing the lowest figures.

Source: Royal Institute of Chartered Surveyors

New Mortgages granted

Latest data from the Council of Mortgage Lenders shows gross mortgage lending was an estimated £12 billion in September, down 1% from £12.1 billion in August. Compared to last year, it’s down 7% from £12.9 billion in September 2009.
This is the lowest September total since 2000, when it was £10 billion.

Source: Council of Mortgage Lenders

Regional trends in House prices in England and Wales.

Largest increase in October is in Greater London, where the average price is up by 5% to £418,778. which is 0.6% higher than October 2009.
Largest decrease in October is in the North West, where the average price is down by 2.3% in October to £163,390, and is still 3.5% lower than in October 2009. Annually, this is the largest decrease.
Over the year to October 2010, the largest increase has been the North of England, which has seen house prices rise by 7.4% to £151,937.

Source: Rightmove

Halifax House Price Index figures.

The average price of a house is now £162,096. House prices in September were 3.6% lower than in August. The quarterly figure showed a 0.9% drop. However, house prices are still 2.6% higher than this time last year, measured by the average for the latest quarter against the same period a year earlier.

Source: Halifax

Nationwide House Price Index figures

October’s figures just released showed that the average cost of a home in the UK dropped by nearly £2,400 to £164,381 during the month, a fall of 0.7%, as the downward trend in prices seen since the start of the summer continued. The annual rate of increase stands at 1.4%.
In September, the price of a typical UK property was £166,757, a fall of (seasonally adjusted) 0.1% month-on-month in August, making house prices 3.1% higher August last year.

Source: Nationwide

Rightmove House Price Index figures

Rightmove’s survey shows the price of a typical UK property in October is £236,849, a rise of 3.1% this month. House prices are 2.9% higher than a year ago.

Source: Rightmove

Home Builders Federation figures

The net number of new homes built in England in the financial year 2009/10 fell to a record low since the index started in 2000,  of just 128,680 additional homes. This is 23% down on 2008/9. Every region in England saw a decrease, with the North West seeing the biggest decrease of 38%.

Source: Home Builders Federation.

Third Quarter GDP figures.

The Office for National Statistics (ONS) have released a first estimate of the gross domestic product (GDP) figures. They show growth of 0.8% in the third quarter of 2010. Growth of 0.4% had been predicted, so the economy is growing faster than expected. This follows 1.2% growth in the last quarter, which was seen as a bounce-back after the deep recession.
Construction showed 0.25% growth, partly due to the backlog of work not completed due to the bad weather earlier in the year. The results mean the sector has posted quarter-on-quarter growth for the first time since 2007, and has recorded an 11% increase between Q3 2010 and Q3 2009.
In September, retail sales figures were weak, and the housing market is still suffering as a result of fewer mortgage approvals for house purchases.
Howard Archer, chief economist at IHS Global Insight, has warned against reading too much into the figures, because preliminary ONS estimates can often be inaccurate.

Editor’s comment on house prices and the economy.

HM Revenue & Customs figures show that house sales in the UK fell in September for the second month in a row.
The most recent figures from the property website indicate that asking prices have fallen 1.1 per cent in the past month while Hometrack signalled that prices were down 0.4 per cent. The September figures from Nationwide indicated that prices inched 0.1 per cent higher in September but over the past three months – considered a better indicator of market trends – prices are down by 0.9 per cent.
The Royal Institution of Chartered Surveyors says that its survey also shows that house prices have turned decidedly more negative in recent months.
The number of completed sales in September was 78,000, which is down from 82,000 in August and slightly lower than September 2009. Overall therefore there is a minor decrease in activity however this is relatively marginal, possibly partly caused by the concern over several months by the Budgetary Cuts just announced by the Government.
Overall therefore a slight drop in action and confidence but still far more market activity being noted than two years ago.
Cautiously optimistic economic progress still being maintained – the financial markets and commentators are generally positive about the Government budget cuts which in turn enables large companies to take a longer term view and invest for the future. This then feeds through after a time lag to the pound in the pocket of Mr Average who will eventually spend some of it when it outweighs the loss in spending caused by the budgetary reductions themselves. In the meantime, Mr Average will pay off more of his debt on any extra money received which will enable the banks to lend more to the ordinary businesses (when they have stopped paying themselves bonuses!).

November’s Property Market Fact File due at the end of November.