Property Market Monthly Fact File – November/December 2010

1st December 2010

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 decreased in September to £1.1 billion, but rose slightly in October to £1.3 billion.

Total mortgage approvals for house purchase have been steadily declining over the past few months.

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 £165,505 as at the end of October, 2010.

Source: Land Registry

Percentage Changes of Property Prices in England and Wales

The Monthly change in October in England and Wales was -0.8%.

The Annual change to October in England and Wales was 3.4%.

Source: Land Registry

RICS survey overview.

The RICS Housing Market Survey for October says that more surveyors are reporting prices falling rather than rising. Demand for property continues to fall, and the number of new instructions also fell for the first time in 8 months. Every region of the UK has seen falling prices over the last quarter.

Source: Royal Institute of Chartered Surveyors

New Mortgages granted

Latest data from the Council of Mortgage Lenders shows gross mortgage lending was an estimated £12.4 billion in October, little changed from September’s figure. Compared to last year, it’s down 9% from £13.6 billion in October 2009.

This is the lowest October total since 2000, when it was £9.9 billion.

Source: Council of Mortgage Lenders

Regional trends in Rightmove Estate Agents asking house prices in England and Wales.

The only increase in November is in the North West, where the average asking price is up by 0.7% to £164.515. which is 1.0% higher than November 2009. This region saw the largest decrease last month.

Largest decrease in asking prices by Rightmove registered estate agents in November is in East Anglia, where the average price is down by 6.0% in November to £208.112. The average price is now 4.7% lower than in November 2009, and has seen the largest annual decrease of any of the regions.

Over the year to November 2010, the largest increase in house asking prices has been in Greater London, which has seen asking house prices rise by 3.5% to £417.279.

Source: Rightmove

Halifax House Price Index figures.

The average price of a house is now £164,919. House prices in October were 1.8% higher than in September. The quarterly figure showed a 1.2% drop. However, house prices are still 1.2% 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

November’s figures published on 1st December showed that the average cost of a home in the UK dropped by just under a thousand to £163,398 during November, a fall of 0.3%, as the downward trend in prices continued. The annual rate of increase is only 0.4%.

Source: Nationwide

Rightmove House Price Index figures

Rightmove’s survey shows the price of a typical UK property in November is £229,379, a fall of 3.2% this month, a complete reversal of October’s 3.1% rise. House prices are now only 1.3% higher than a year ago.

Source: Rightmove

Editorial Comment

The market has been a bit subdued this month with a number of short term property sector indicators suggesting only a similar level of, or a slight fall in, market activity.

The longer term indicators have been generally positive, uncertainty with the Euro zone notwithstanding. The wider economic indicators suggest that the base level for the economy is not doom and gloom, with better than expected figures from the Bank of England in terms of Economic Growth in the Third Quarter, and fewer than expected Public Sector job losses forecast over the next 12 months.

Perhaps more important for the longer term is the upgrading of the strength of the British Economy in terms of Credit rating.  This has recently been reinstated to AAA by Standard & Poor, amongst others.  This will mean that the cost to Central Government of the Public Sector Borrowing Requirement is lower than would otherwise be the case.  With more money in the Government coffers, less borrowing is required or fewer cutbacks.  The Government could also afford to keep interest rates down for a bit longer, as long as inflation doesn’t get out of hand.  This is unlikely immediately into the New Year with the VAT rise likely to subdue non-essential expenditure.

The macroeconomic factors therefore are relatively positive but we don’t expect any of this to feed through to the property market until next year. Fundamental changes often come each Spring after Christmas, snow and the quieter period of the depths of Winter.  The snow this year has just arrived a little bit earlier than expected.

1st December 2010

Next Property Market Monthly Fact File will be published at the end of December or beginning of January. It will be entitled January 2011.