Media coverage highlights from August!
AUGUST 2018 PRESS ROUND-UP
House prices hit a new record average high of £217,000 in July but further rises could be curbed by interest rate hikes, warned Nationwide. Jeremy Leaf, principal of Jeremy Leaf & Co, told The Evening Standard that while ‘relatively few’ mortgage borrowers would be immediately affected by a rise in interest rates, ‘the direction of travel always seems to have an adverse impact on confidence and is likely to reduce low levels of transactions even further’.
A rise in house prices coupled with fewer than ever properties for sale means yet more bad news for first-time buyers. Commenting in The Sun, Jeremy Leaf said: ‘The lack of choice for first-time buyers is a cause for concern, not just because it is hard for them to find somewhere suitable to live but also because it adds to the upwards pressure on prices.’ However, he argued that the raft of new legislation making buy-to-let more expensive means that first-time buyers can find it easier to buy starter homes. ‘What we have found in the last year or so is that various new tax and regulatory measures, which the government has introduced for buy-to-let investors, has meant less competition from landlords for the smaller one and two-bedroom flats and houses.’
However, first-time buyer mortgages fell sharply in the second quarter of 2018, signaling a drop in new homeowners coming into the market. Jeremy Leaf told City AM: ‘The signs are not great as buyers struggle to recover from an affordability crisis and overpricing. Clearly, we need to see more transactions and that will only happen if first-time buyers in particular and home movers generally feel more confident about the future and we see more realism among sellers.’
Meanwhile, another house price index, this time from the Office for National Statistics, revealed that UK house price growth slowed in June to the lowest annual rate in five years, driven by falling prices in London. Jeremy Leaf told The Guardian: ‘House price growth outside of London is being supported by a continuing shortage of stock whereas the capital and the south-east can’t hid behind this excuse any longer.’ He expanded on these comments in The Daily Mail: ‘Price drops are continuing and reflect a new realism in the market – if you want to sell your property, it needs to stand out and price is the obvious way of doing it.’
HMRC figures reinforced this slowdown, showing a slight drop in the total number of completions between June and July. Jeremy Leaf told The Daily Express: ‘Transaction numbers are more relevant when assessing the health of the housing market than property prices, which tend to be more influenced by stock shortages. July’s HMRC data is more encouraging than the previous month’s in that the transaction levels are not declining by as much as they were. This reflects what we are seeing on the ground – a broadly flat market with one month up, one month down, and no clear pattern.’