Recent UK property news headlines hint at a definite tailing off of what has been an unrelenting surge in average house prices – although the city of Bath is currently identified as the country’s top hotspot for increases in the asking prices of homes.
The government has declared an interest in reviving and expanding the Right to Buy enjoyed by tenants in the public rented sector, the size of deposits required by first-time buyers has rocketed, and advertisements indicating a “price on application” of a home for sale are, in fact, unlawful.
House price growth slows as UK cost of living crisis starts to hit market
Although average house prices across the UK grew for the ninth month in a row in April, says a story in the Guardian newspaper on the 29th of April, the rate of growth shows signs of decelerating.
A modest 0.3% increase in April took the average house price to a record £267,620 but that growth was notably less than the increase of 1.1% recorded the previous month. This means that the annual growth in prices to the end of April was 12.1% – only slightly down from 14.3% on the 12 months to the end of March.
The recent surge in house prices was fuelled principally by buyers’ quests for larger homes with gardens in which to weather the successive lockdowns of the pandemic at a time when such housing was already in short supply. With the onset of inflation and increases in the cost of living, however, mortgages too have become more expensive and can be expected to curb any wilder growth in prices.
Bath is the top city hotspot for asking price growth
For all the talk of a slowing down of the housing market, some hotspots continue to fuel bigger than usual price increases.
Topping the list of such hotspots – according to the online listings website Rightmove on the 4th of May – is the city of Bath.
Asking prices of homes for sale in the city have risen faster than anywhere else in the UK, registering a 15% growth in the past 12 months to bring the average cost of a house there to a little more than £558,000.
Second-placed property hotspot for better than average asking prices is Truro in Cornwall and in third place is the Essex seaside resort of Southend-on-Sea.
Government considers giving more tenants the Right to Buy
The Right to Buy Scheme which has been in existence in England since 1980 has given council tenants the right to buy the home in which they live at substantially discounted prices – for those who have lived there for more than five years, the discount could be as high as 70% on the market value.
A story in Landlord Today on the 3rd of May recounts the current enthusiasm of Prime Minister Boris Johnson to take a leaf out of his predecessor Margaret Thatcher’s book and revive the Scheme – this time, to include England’s 2.5 million or so housing association tenants.
Alternative ideas for extending help to first-time buyers eager to get their first step on the housing ladder is to use housing benefits otherwise paid out in Universal Credit payments to subsidise first mortgages.
First-time buyer deposits soar more than 50% in a decade
Today’s first-time buyers are having to find significantly bigger deposits than those that were needed just 10 years ago, according to research conducted by the online listings website Zoopla on the 26th of April.
This revealed that the average first-time buyer now has to put down a deposit of £45,569 compared with the £23,625 that was required just a decade ago – an increase of 54%.
It is not only the amount of deposit that has escalated in this fashion – the proportion of the deposit in relation to the purchase price of that first home has also risen from 17% ten years ago to 20% today.
“Price on application” in property listings deemed unlawful
Any house hunter will have come across the advice “price on application” (POA) for some properties that are listed for sale. It appears that the use of those words may be unlawful, said a story by Property Industry Eye on the 5th of May.
Industry regulators the National Trading Standards Estate and Letting Agency Team (NTSELAT) – in conjunction with the Competition and Markets Authority – have ruled that the use of the term “price on application” stands in the way of the desired disclosure of material information for the listing of properties for sale.
Buyers reasonably expect information about the price of a property if they are looking to purchase a home and POA effectively withholds – or at least masks – that essential information, the regulators ruled.
