This month we cover remortgages, Brexit’s effects on the housing market, the most affordable ‘expensive’ cities, gazumping and much more.
Homebuyers call for anti-gazumping laws
Some 80% of homebuyers wish for the government to outlaw ‘gazumping’ in England and Wales, according to a report by Market Financial Solutions
Gazumping is the practice of making a higher offer for a property than someone whose offer had previously been accepted by the homeowner. Four out of five buyers want to see laws introduced, with a third having experienced gazumping in the past decade.
Paresh Raja, chief executive of Market Finance Solutions, explained: “With demand for UK property constantly high, the process of buying a home has become incredibly competitive. As a result, a significant number of UK homebuyers are losing out on deals at the critical closing stages.”
“Not only is gazumping a cause for frustration and disappointment, it also can incur significant costs to the prospective buyer. Avoiding complicated chains and having immediate access to finance can reduce the chances of a prospective buyer missing out on a purchase, but it’s clear from [our] research that further measures are needed to prevent gazumping in England and Wales.
First time buyer numbers increase by 1.6% in ‘mortgage price war’
The number of first-time buyers has increased by 1.6% year-on-year, revealed recent findings from banking industry body UK Finance.
The data, released in November, showed that 29,100 new first-time buyer mortgages completed in September 2019, as well as 17,740 new remortgages (an increase of 5.9% compared to September 2018).
One of the biggest factors affecting the uptake in first-time buyer mortgages is the ‘mortgage price war.’ The British public are seeing some of the cheapest mortgage deals, with five-year fixed rates as little as 1.44%.
Shaun Church, director at Private Finance, stated: ‘The current rate war means there’s plenty of choice for borrowers looking to secure an affordable deal. However, cost-conscious mortgage customers should remember to look beyond the headline rate and take all fees and charges into consideration.’
House prices to rise in 2020, predicts Rightmove
House prices could rise by 2% next year, claims Rightmove as part of their latest predictions on the housing market.
The property experts believe that there will be an “active spring moving season” in 2020 as the political climate starts to stabilise. Latest data shows a monthly decrease in housing stock of -0.9%, the smallest recorded since 2006.
Demand is currently overtaking supply, as the number of houses sold in 2019 as decreased by just 3% compared to this time last year. However, the number of properties coming to market as fallen by 8%.
Factors indicating the growth in house prices could potentially include competitive lending, wage growth, improved buyer affordability and low interest rates.
Miles Shipside, Rightmove director and housing market analyst comments: “Rightmove measures the prices of 95% of property coming to market, and we predict that buyers and sellers will on average see a 2% rise in those prices by the end of 2020. While this is over twice the current annual rate of 0.8%, it’s still a relatively marginal increase as it’s a price-sensitive market.”
“There will be regional variations. London is finally showing tentative signs of bottoming out, and we expect a more modest price rise of +1% in all of the southern regions where buyer affordability remains most stretched. In contrast, the largest increases will be in the more northerly regions, repeating the pattern of 2019 with increases in the range of 2% to 4%.”
Leicester tops the house prices growth charts
Leicester at the top of the house price growth tables this year with prices rising by 4.7% year-on-year, according to Zoopla’s UK Cities Index.
The overall average house price in Leicester was £180,000, while Manchester and Liverpool house prices rose 4.6% and 4.1%, respectively. House prices remained the same year-on-year in Oxford, but Aberdeen house prices fell by 5.9%.
Richard Donnell, Research and Insight Director at Zoopla, commented: “While the London housing market has been in the doldrums, market conditions in regional cities have been stronger over the last two years with demand supported by employment growth and attractive housing affordability.”
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