UK house prices slipped by 0.2% in January, according to Nationwide, with the annual rise pared down to 0.6% (December 1%). The value of the typical home currently stands at £162,228 but the lender is not surprised by the soft start to 2012 given the challenging conditions late last year, including the contraction in the [...]
Nationwide
Annual house price rises for majority of UK
Nine out of 13 regions in the UK recorded house price rises in 2011, with London the best-performing and Northern Ireland the worst-performing region. According to Nationwide, prices in Scotland are down 0.8% on the year, having remained steady in the final quarter of 2011, while in Wales prices ended 2011 up 1.5% despite having [...]
Annual house price rises for majority of UK
Nine out of 13 regions in the UK recorded house price rises in 2011, with London the best-performing region (+5.4%) and Northern Ireland the worst-performing region (-8.9%). According to Nationwide, prices in Scotland are down 0.8% on the year, having remained steady in the final quarter of 2011, while in Wales prices ended 2011 up [...]
House prices up 1.6% on the year
UK house prices increased by 0.4% in November, taking the annual rate of growth to 1.6% (up from 0.8% in October), according to Nationwide. At £165,798, the value of a typical home has remained “surprisingly resilient” given the bleak economic outlook and the lender expects growth to remain soft, with the possibility of prices drifting [...]
House prices achieve annual growth
UK house prices returned to annual growth in October, for the first time in six months. According to Nationwide, the value of the typical dwelling rose by 0.4% during the month, to £165,650, with the figure up 0.8% on a year earlier. The lender regards October’s data as “encouraging” but cautions that the market is [...]
Annual house price falls slow
Quarterly figures from Nationwide show average house prices falling year-on-year in eight out of 13 regions of the UK. However, the annual rate of decline across the UK lifted from -1.2% in Q2, to -0.5% in Q3, most regions having seen relatively small price movements in the three months to the end of September. During [...]
Nationwide: house prices down 0.6%
Homeowners in fear of negative equity need to brace themselves for the latest index from Nationwide, which shows UK house prices slipping by 0.6% in August, to an average £165,914. July saw an 0.3% gain but the building society points out that August’s decline doesn’t change the overall picture of stability in the market, with [...]
Nationwide: May house prices up 0.3%
UK house prices put on 0.3% in May, having slipped 0.2% in April, according to Nationwide. The lender’s three-month-on-three-month measure registered a 0.6% increase in May, but at £167,208, the value of the typical home had declined 1.2% compared with a year earlier (April: -1.3%). Commenting on the figures, Nationwide’s chief economist, Robert Gardner, says: [...]
House prices slip 0.2%
Nationwide’s latest house price index shows the value of the typical home falling by 0.2% in April, to £165,609. The decline follows a monthly rise of 0.5% in March and leaves the average house price 1.3% down on a year earlier. However, the three-month-on-three-month measure, which is a better measure of the underlying trend, shows [...]
House prices up 0.5% in March
UK house prices increased by 0.5% in March, according to Nationwide, with the rise leaving the typical home worth 0.1% more than a year ago. Prices have now increased modestly in three of the past four months, with the three-month-on-three-month measure (regarded as a better indicator of the underlying trend) putting the value of the [...]
Mortgage brokers optimistic on buy-to-let
A new survey gauging brokers’ expectations of the buy-to-let market paints a positive outlook for the coming year. The study, from Nationwide subsidiary The Mortgage Works, found that a majority of brokers surveyed believe the number of new landlords will increase this year, and that very few professional landlords will be looking to shed part [...]
Nationwide: February house prices up 0.3%
In the first of the house price indices for February, Nationwide reports a monthly increase of 0.3%, prices having dipped by 0.1% during January.
The annual rate of decline improved slightly to minus 0.1% (January: -0.4%), with the value of the typical home standing at £161,183.
Commenting on the figures, the lender’s chief economist, Robert Gardner, says [...]
Nationwide: January house prices down 0.1%
UK house prices fell by 0.1% in January, according to Nationwide, taking the annual rate of change to minus 1.1%.
The monthly decline follows a gain of 0.4% in December (when annual house price inflation also stood at 0.4%) and takes the value of the typical home down to £161,602.
The three-month-on-three-month measure, which is a better [...]
Nationwide: “anything is possible” as house prices gain 0.4%
UK house prices rose by 0.4% in December, having recorded declines in the previous two months, according to Nationwide’s latest house price index.
This month’s modest rise means that the value of the typical home ends 2010 with an “unremarkable” gain of 0.4%, as most price increases from the first half of the year were reversed [...]
Nationwide: House Prices Now Less Than 10% Below Their 2007 Peak
- House prices increased by 0.5% month-on-month in May
- Annual rate of price inflation drops from 10.5% to 9.8%
- Prices up 12.2% since February 2009 trough
| Headlines | April 2010 | May 2010 |
|---|---|---|
| Monthly index * Q1 ’93 = 100 | 334.0 | 336.0 |
| Monthly change* | 1.1% | 0.5% |
| Annual change | 10.5% | 9.8% |
| Average price | £167,802 | £169,162 |
* seasonally adjusted
Commenting on the figures Martin Gahbauer, Nationwide’s Chief Economist, said:
“The price of a typical UK property rose by a seasonally adjusted 0.5% month-on-month (m/m) in May, following a 1.1% increase in April. The smoother 3 month on 3 month rate of increase rose from 1.1% in April to 1.7%, as February’s fall in house prices dropped out of the most recent three month average. The annual rate of house price inflation dropped from 10.5% to 9.8%, which reflects the weaker pace of increase in May 2010 relative to May 2009. Since reaching a trough in February 2009 – following a drop of 19.3% from their October 2007 peak – house prices have risen by 12.2% and are now just 9.5% below the October 2007 peak.
“Housing market conditions remain characterised by thin transaction volumes and a relative scarcity of properties for sale, despite a slow return of more sellers in recent months. The current supply-demand balance on the market is still consistent with relatively stable to modestly upward trending prices.”
Impact of capital gains tax changes on house prices depends on timing of implementation
“The coalition agreement between the Conservatives and Liberal Democrats contains plans to increase the rate of capital gains tax (CGT) charged on the disposal of non-business assets, potentially including second homes and buy-to-let investment properties. Currently the CGT rate on such assets is 18%, and the coalition plans are to raise the rate to a level “similar or close to those applied to income.” Precise details, however, will not be known until the Emergency Budget announcement on 22 June.
“With regard to what the short-term impact will be on the housing market and house prices, the key question is around the timing and implementation of any CGT increase. If there is a significant time lag between the announcement of the increase and its actual implementation, then some second home owners and buy-to-let landlords may decide to sell in advance of the higher rate being introduced. Such a development could lead the supply-demand balance to shift more in favour of buyers and relieve the current upward pressure on house prices. However, it is difficult to know with any precision how many people would bring forward a decision to sell.
“The incentive to try to beat the higher tax rate is most pressing for those who have owned their properties for a relatively long period of time and therefore have relatively large unrealised gains. Conversely, those who bought their second homes or investment property within the last five years have little incentive to sell early in order to beat the tax change. House prices have only risen back to their mid-2006 level and the first £10,100 of capital gains is currently tax free.
“If the new rate comes into effect immediately on 22 June, then supply conditions are unlikely to be affected materially as any potential sellers would not have time to react.
“There are some examples of where tax changes have had a significant short-term impact on the housing market. Most prominent was the March 1988 announcement to end double Mortgage Interest Relief At Source (MIRAS) for cohabiting couples. The implementation of the tax change was postponed until August of that year, which prompted a rush of buyers to try to beat the deadline. The result was a temporary surge in property values, with house prices increasing by 18% between Q1 1988 and Q3 1988 alone.
“However, the most recent change in CGT rates announced in the 2007 Pre-Budget Report did not have any discernable impact on the supply of property on the market. At the time, the existing CGT rates of 24-40% – depending on taper relief and income status – were cut to a flat rate of 18%. New instructions to sell property remained very low even after the tax changes were introduced, although this may also have been due to the very weak market conditions prevailing at the time.”
Monthly UK House Price Statistics
| Monthly % Change Seasonally Adjusted | 3 month on 3 month % change | Annual % Change | Average Price | |
|---|---|---|---|---|
| May-08 | -3.0 | -3.3 | -4.4 | 173,583 |
| Jun-08 | -1.1 | -4.3 | -6.3 | 172,415 |
| Jul-08 | -1.9 | -5.4 | -8.1 | 169,316 |
| Aug-08 | -2.2 | -5.4 | -10.5 | 164,654 |
| Sep-08 | -1.8 | -5.6 | -12.4 | 161,797 |
| Oct-08 | -1.4 | -5.4 | -14.6 | 158,872 |
| Nov-08 | -0.1 | -4.8 | -13.9 | 158,442 |
| Dec-08 | -2.5 | -4.2 | -15.9 | 153,048 |
| Jan-09 | -1.3 | -3.7 | -16.6 | 150,501 |
| Feb-09 | -1.5 | -4.4 | -17.6 | 147,746 |
| Mar-09 | 1.2 | -3.6 | -15.7 | 150,946 |
| Apr-09 | -0.3 | -2.5 | -15.0 | 151,861 |
| May-09 | 1.2 | -0.1 | -11.3 | 154,016 |
| Jun-09 | 1.0 | 1.1 | -9.3 | 156,442 |
| Jul-09 | 1.4 | 2.6 | -6.2 | 158,871 |
| Aug-09 | 1.4 | 3.2 | -2.7 | 160,224 |
| Sep-09 | 0.9 | 3.8 | 0.0 | 161,816 |
| Oct-09 | 0.6 | 3.5 | 2.0 | 162,038 |
| Nov-09 | 0.6 | 2.9 | 2.7 | 162,764 |
| Dec-09 | 0.6 | 2.3 | 5.9 | 162,103 |
| Jan-10 | 1.3 | 2.1 | 8.6 | 163,481 |
| Feb-10 | -1.0 | 1.7 | 9.2 | 161,320 |
| Mar-10 | 1.0 | 1.6 | 9.0 | 164,519 |
| Apr-10 | 1.1 | 1.1 | 10.5 | 167,802 |
| May-10 | 0.5 | 1.7 | 9.8 | 169,162 |
Nationwide: House Price Inflation Reaches Double Digits
- House prices increased by 1.0% month-on-month in April
- Annual rate of price inflation moves into double digits for first time since June 2007
- House prices are 10.0% below the October 2007 peak
| Headlines | March 2010 | April 2010 |
|---|---|---|
| Monthly index * Q1 ’93 = 100 | 330.6 | 334.0 |
| Monthly change* | 1.0% | 1.0% |
| Annual change | 9.0% | 10.5% |
| Average price | £164,519 | £167,802 |
* seasonally adjusted
Commenting on the figures Martin Gahbauer, Nationwide’s Chief Economist, said:
The price of a typical UK property rose by a seasonally adjusted 1.0% month-on-month (m/m) in April, leaving house prices 10.5% higher than a year earlier. Over the lifetime of the last Parliament (May 2005 to April 2010), house prices have risen by 6.7%. This compares to a 13.5% increase in the consumer price index, the official target measure of inflation.
April’s figures show the first double-digit annual growth in UK house prices since June 2007. The year-on-year rate in this month’s figures, however, received an additional boost from the fact that April 2009 was one of the weaker months last year. Given the very strong performance of house prices from May 2009 onwards, it will take monthly increases in excess of 1% for the annual rate of inflation to be maintained in double digits going forward. The smoother three month on three month rate of inflation edged down further from 1.5% in March to 1.1% in April, which primarily reflects the impact of February’s 1.0% decline in house prices. April’s figures leave UK house prices exactly 10% below the October 2007 peak.
For further information please see April 2010 report (PDF 64KB).
Nationwide: House prices edge up further in November
• House prices rose by 0.5% in November, the same rate as in October
• Year-on-year house price inflation increased from 2.0% to 2.7%
• Labour market has so far held up better than expected
Martin Gahbauer
Commenting on the figures Martin Gahbauer, Nationwide’s Chief Economist, said:
“The monthly rate of house price inflation was unchanged in November at a seasonally adjusted 0.5%, leaving the average price of a typical property 2.7% higher than a year earlier.
At £162,764, the average house price is at a similar level to where it was in early 2006. The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – dropped to 2.8% from 3.5% in October and 3.8% in September.
This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows.
Labour market has held up better than expected but uncertainties remain.
“The outlook for the housing market remains crucially dependent on labour market conditions, and here recent developments have been somewhat more encouraging than might have been expected. With the UK experiencing its longest and deepest recession since WWII, most economists expected unemployment to increase very sharply in 2009, perhaps breaching the psychologically important three million mark by
the end of the year.
While unemployment has indeed increased noticeably, the rise has not been as rapid and pronounced as previously feared.
Based on the latest labour market figures from September, it now looks unlikely that the jobless total will reach three million before the year is up.
“Part of the explanation for why unemployment has not risen to the levels implied by the recession’s depth is that in many cases employers have opted to reduce working hours and pay rather than make employees redundant. This is reflected in rising part-time employment at the expense of full-time employment , and record low growth in average earnings.
The strategy of cutting hours and pay rather than headcount probably reflects a fear among many employers that they could find themselves short of labour when the economy recovers, thus leaving them less competitive in the longer term. Whether this strategy is sustainable will depend on how quickly the economy recovers.
If output is too slow to recover, then firms may find it necessary to reduce their payrolls further in order to improve productivity and profitability.
Another reason to remain cautious about the future outlook for employment is that the public sector has not yet experienced any significant job losses, but presumably will begin to do so when fiscal policy is tightened from next year onwards.
“Despite continued uncertainties about the future, the better than expected performance of the labour market has probably contributed to the surprise rebound in house prices this year. Even though workers who have been forced from full-time employment into part-time work will have experienced a reduction in income, the impact has been less severe than it would have been if they had lost their jobs completely.
Together with the fact that mortgage rates have fallen sharply as a result of base rate cuts, this has meant that far fewer borrowers have
fallen into arrears than would normally be the case in such a deep recession. In fact, the percentage of borrowers in arrears across the mortgage
industry has even edged down slightly in the most recent quarterly figures (chart 3). As such, the downward pressure on house prices from distressed sales has so far been significantly lower than expected.”
Martin Gahbauer,
Chief Economist
Tel: 01793 655434
martin.gahbauer@nationwide.co.uk
CFA Roy Beale
External Communications Officer
Tel: 01793 655689
roy.beale@nationwide.co.uk
Notes:
Indices and average prices are produced using Nationwide’s updated mix adjusted House Price Methodology which was introduced with effect from the first quarter of 1995. The data are drawn from Nationwide’s house purchase mortgage lending at the post survey approvals stage. Price indices are seasonally adjusted using the US Bureau of the Census X12 method. Currently the calculations are based on a monthly data series starting from January 1991. Figures are recalculated each month which may result in revisions to historical data.
The Nationwide Monthly House Price Index is prepared from information which we believe is collated with care, but no representation is made as to its accuracy or completeness.
We reserve the right to vary our methodology and to edit or discontinue the whole or any part of the Index at any time, for regulatory or other reasons.
Persons seeking to place reliance on the Index for their own or third party commercial purposes do so entirely at their own risk. All changes are nominal and do not allow for inflation.
More information on the house price index methodology along with time series data and archives of housing research can be found at www.nationwide.co.uk/hpi
