Property News of the Week

Welcome to this week’s property news roundup. Here are the top property stories from across the web to keep you up to date and informed.

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UK house prices creep up across the board while London continues to slow

Leading lettings and sales agent, Benham and Reeves, has released the latest of its very own quarterly house price index based on data from the top four existing indices, looking at where the average house price sits and how the gap between buyer and seller expectation and actual sales has changed.

The Benham and Reeves house price index combines data from the four leading industry indices to give a singular figure of how the UK market is moving based on both buyer and seller sentiment, as well as looking at the difference in these indices and what they reveal about the state of the current market.

Current property values

The latest index from Benham and Reeves shows that the current overall average UK house price is sitting at £252,487 having increased by 0.3% on the previous quarter, up by 0.9% on an annual basis.

In London, the average property value climbs to £513,180, up 0.2% on the previous quarter although values in the capital are still down -0.8% on an annual basis.

Sellers remain over expectant

The latest quarterly data from Nationwide and Halifax shows that the amount UK buyers are committing to borrowing has fallen -0.7% to an average of £224,490.

Tough market conditions have also caused the average asking price expected by UK home sellers to fall quarter to quarter, although the drop has been more marginal at -0.4% and at £306,321, the average UK asking price is still some 36.5% higher than the mortgage approval sum.

This over expectation is also evident when comparing asking prices to sold prices, with the current average sold price coming in at £234,075, -23.6% lower than the current average asking price, although sales prices themselves have crept up 2.1% on the previous quarter.

A tougher time for the London market means this gap between seller expectation and market reality is smaller, although the difference between the average price approved by Nationwide and Halifax and the average asking price is still at 33.1%, while sold prices in the capital are still some -21.9% lower than the current average asking price. Although, again, sold prices have increased by 2.6% quarter to quarter.

Director of Benham and Reeves, Marc von Grundherr, commented:

“An over-inflated asking price is a common occurrence in the market and one often driven by a seller’s emotions coupled with the tendency for an agent to overvalue in order to win business.

However, with political uncertainty causing a large degree of market turmoil, we’ve seen many sellers lower their asking price expectations in order to secure a sale. As a result, there has been a slight uplift in sold prices as buyers agree to meet in the middle, however, the deficit between what we believe our homes are worth and what buyers are actually paying remains rather large.

As we enter a new decade we may see this gap continue to close, but the likelihood is that as market activity heightens we will once again see asking prices increase as buyer activity returns and UK home sellers chance their arm at a higher price point.”

Tongue twisters home to higher house prices

The latest research by leading estate agent comparison site, GetAgent.co.uk, has looked at the cost of buying in pockets of the nation’s property market with the hardest to pronounce names.

GetAgent.co.uk looked at 10 areas that cause the most confusion when it comes to pronouncing the name, the cost of getting on the ladder in these areas, and how it compared to the wider local area.

The research shows that despite the difficulty in actually saying their names, these areas are home to an average house price of £271,167, 19.9% higher than the average cost of buying in the wider districts in which they are located.

The biggest difference is in Beaulieu, or Bew-lee, where the average property costs £605,181 compared to the wider average in the New Forest of £340,135 — a 77.9% difference! Beaulieu is also the tongue-twisting location with the highest average property price of the lot.

Ballachulish (Ball-a-hoolish) is home to the second-highest increase at 46.5%, with the average property going for £247,221 compared to £168,705 across the rest of the Highlands.

Homes in Quernmore (Kwor-mer) go for an average of £235,367 which comes in at 45.3% higher than the average across Lancaster as a whole, while Bicester (21.5%) and Omagh (20.4%) are also considerably higher than the wider area despite the hard to say place names.

It’s not all good news if you live in a tongue-twisting property market though. Ynysybwl (An-is-abull) in Rhondda Cynon Taf is home to the lowest average property price at £116,963 and is also some -2% lower than the wider regional average, while Godmanchester (Godmunchester) is home to the biggest difference and the only other drop when compared to the wider area of Huntingdonshire at -53.7%.

Borrowing a rental deposit can add thousands to tenant costs

Research by Hamilton Fraser’s deposit alternative scheme Ome, has looked at the real cost of a tenancy deposit for those that have to borrow the money in order to overcome the initial financial hurdle of renting.

For many, the average tenant deposit cost of £1,299 is manageable but the issue is the requirement to pay the full sum upfront, leading many to turn to family for a loan. But for many more, this isn’t a possibility and so they are forced to borrow the money from a lender and stomach the additional interest on top of the deposit itself.

Ome looked at the additional costs of a credit card, personal loan and payday loan and found that the interest ranged between £44 to £2,794 depending on rate and credit score over a year long term.

Credit card

Using a credit card with a low rate of interest is the most cost-effective way to borrow a rental deposit and at an average rate of 6.4% it would set you back £112 a month to pay back over 12 months, with £44 in interest.

A medium rate at an average of 18.9% would set you back £119 a month with £126 paid in interest, while a higher rate at 36.3% would come in at a monthly cost of £128, paying £231 in interest.

Personal loan

If you have a good credit score, a personal loan at a rate 11.4% would cost £115 per month with just £78 in interest, the second most affordable route to borrow a rental deposit.

An average credit score would cost you £118 a month at a rate of 16.7% paying £112 in interest, but a poor credit score would cost around £122 a month, paying £163 in interest. For those with medium to poor credit scores, a credit card, while still fairly expensive, would see you pay less interest in the long run.

Payday loans

Notorious for their high rates of interest and by far the worst route to go down when borrowing a tenancy deposit but unfortunately the only route for some. Borrowing £1,299 and paying it back over the course of a year would see you hit with a rate of 292%, paying a hefty £341 a month and a huge lump of interest at £2,784.

Property of the Week — A Georgian home in the heart of London

If you’re going to invest a cool £4.75million in your next property then you will love this Georgian era house in East London.

The house in the heart of Spitalfields has been transformed into a live/work space by its owner, the architect Chris Dyson, who has lived in it with his family since 2006.

The 4,000-square-foot home features a ground floor with two office rooms, which lead out to a glass-covered raised walkway above a lower-ground floor terrace, and beyond it, a double-storey studio/gallery space.

The lower ground floor is a self-contained one-bedroom flat. Whilst the first, second and third floors include three bedrooms, a bathroom, a toilet, a drawing room and a kitchen opening onto a terrace, which is covered in a glass roof.

The main house was built in 1719 and, following some unsympathetic 20th-century interventions, a full rebuild of the front facade was undertaken by the architects, restoring its original Georgian appearance.

View the original listing here.