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Western Telegraph
16-07-2025
- Business
- Western Telegraph
Annual house price inflation accelerating but rental price growth cooling
Property values rose by 3.9% on average in the 12 months to May, reaching £269,000 typically. The annual growth rate increased from 3.6% in April. £269,000 Average UK house price in May ONS The figures were released as a separate ONS report showed that Consumer Prices Index (CPI) inflation rose to 3.6% in June, up from 3.4% in May and the highest since January 2024. The increase was unexpected, with many economists forecasting inflation to remain unchanged at 3.4%. Today's news could take a bit of momentum out of those (mortgage rate) reductions but may not be enough to make a major reversal in those mortgage rate improvements David Hollingworth, L&C Mortgages David Hollingworth, associate director at L&C Mortgages, said: 'General anticipation had been that the rate of inflation would remain steady in June, so the increase to 3.6% is an unwelcome surprise. 'That will raise the question of whether it's enough of a surprise to force the Bank (of England) to consider a delay to any further cuts in base rate. 'The recent tone has been consistent in its suggestion that interest rates should continue to fall but it's been harder to be sure when those cuts may come, when data doesn't follow the expected path. 'The Bank's focus is on reducing the rate of inflation to its target of 2% but it may see enough reason to look through today's figures to reduce rates in the August meeting.' The Consumer Prices Index (CPI) rose by 3.6% in the 12 months to June 2025, up from 3.4% in the 12 months to May. Read the full article ➡️ — Office for National Statistics (ONS) (@ONS) July 16, 2025 Mr Hollingworth continued: 'Mortgage rates have been reflecting the market's confidence in more cuts to come, as lenders have been quick to take advantage and trim back fixed rates. 'Lenders have been locked in an attritional rate battle that has seen frequent, albeit small, reductions made to fixed rate mortgage pricing. Today's news could take a bit of momentum out of those reductions but may not be enough to make a major reversal in those mortgage rate improvements. 'However, with recent changes in regulatory approach, lenders will have more flexibility when offering higher multiple mortgages and that is already feeding through into lender criteria. 'That and the promise of further rate cuts should still give mortgage borrowers room for optimism but today's unexpected data is a reminder of just how hard it is to second-guess where rates may head.' Average house prices increased to £290,000 (3.4% annual growth) in England, £210,000 (5.1%) in Wales, and £192,000 (6.4%) in Scotland, in the 12 months to May, according to the ONS figures. The average house price for Northern Ireland was £185,000 between January and March, up by 9.5% annually. It's still likely that we will see at least one rate cut this year, if not two Andrew Montlake, Coreco Andrew Montlake, chief executive at mortgage brokers Coreco said: 'During the first half of 2025, the property market was definitely skewed by the stamp duty changes, with a lot of activity brought forward to secure the savings on offer. Now, things are now getting back on track. 'Even though inflation ticked up slightly this morning, making the Bank of England's tightrope walk between curbing inflation and promoting growth that little bit harder, it's still likely that we will see at least one rate cut this year, if not two. 'The economy is stalling and desperately needs an injection of life, which will boost sentiment in bricks and mortar and see increased buyer activity. The second half of the year could be busy if the Bank of England delivers a rate cut in August.' Jonathan Handford, managing director at Fine & Country, said: 'The volatility that we saw in the spring – largely down to changes in stamp duty – is fading, and buyer sentiment is clearly recovering.' Iain McKenzie, chief executive of the Guild of Property Professionals, said: 'The increase in the average UK house price over the last year underscores a return to sustainable, confidence-driven growth.' Mark Harris, chief executive of mortgage broker SPF Private Clients, said: 'Rate reductions have been playing their part in encouraging buyers and sellers to take the plunge and the markets still expect a further cut in (the Bank of England base rate) next month, even though inflation ticked up in June. 'Lenders have plenty of liquidity and are keen to lend, with mortgage rates fairly steady on the whole, while some lenders continue to reduce rates.' Richard Donnell, executive director of research at Zoopla, said: 'Lower, single digit house price inflation is positive for the market as there is just enough price growth to encourage sellers to list their homes and buyers to make offers on property without the fear that prices may fall or suddenly surge higher. 'We expect price inflation to remain low as there are the most homes for sale in seven years, averaging 37 per estate agent.' On Tuesday, Chancellor Rachel Reeves told City bosses that Britain cannot meet its growth ambitions without a 'fighting fit and thriving' finance sector, as she delivered her Mansion House speech. The Treasury announced a package of reforms on Tuesday aimed at attracting more investment to the UK, to help grow the economy. It is also hoped that first-time buyers will be among those helped by the cutting of red tape, as part of the drive for economic growth. There is recognition that it is a struggle to get on the housing ladder but only time will tell if these measures are enough to make a real difference Jason Tebb, OnTheMarket Jason Tebb, president of OnTheMarket, said: 'With mortgage lending rules being relaxed to assist buyers with affordability and boost first-time buyer numbers, there is recognition that it is a struggle to get on the housing ladder but only time will tell if these measures are enough to make a real difference.' The average private rent in the UK was £1,344 per month in June. This is £84 (6.7%) higher than 12 months earlier, according to the ONS figures. Annual growth in rental prices cooled from 7.0% in the 12 months to May. Commenting on today's house price data for May 2025 and rents data for June 2025, ONS Head of Housing Market Indices Aimee North said: (quote 1 of 1)💬 — Office for National Statistics (ONS) (@ONS) July 16, 2025 The average rent in England was £1,399 in June, up by 6.7% (£88) from a year earlier. In Wales, the average rent was £804 in June, marking a 8.2% (£61) annual increase. In Scotland, the average rent in June was £999, up by 4.4% (£41) annually. The average rent in Northern Ireland was £852 in April, the latest month for which the figures are available, up by 7.6% (£60) from a year earlier. Nathan Emerson, chief executive of property professionals' body Propertymark, said: 'Investors in the private rental market have been deterred from investing in this crucial housing market because of tax and regulatory changes over the last 10 years.'
The Independent
30-06-2025
- Business
- The Independent
Rise in number of mortgage approvals to home buyers in May, says Bank of England
The number of mortgages being approved to home buyers ticked up in May, marking the first month-on-month increase this year so far, according to Bank of England figures. Around 63,000 mortgages were approved for house purchase in May, which was around 2,400 more than in April. The Bank's Money and Credit report said: 'This was the first increase since December 2024. Approvals for remortgaging (which only capture remortgaging with a different lender) also increased in May, by 6,200 to 41,500. This is the largest increase since February 2024.' Stamp duty discounts became less generous for some home buyers from April. Stamp duty applies in England and Northern Ireland. But several lenders have recently made changes to their mortgage affordability assessments, enabling some people to potentially borrow more, following clarification from the Financial Conduct Authority (FCA). Andrew Montlake, chief executive at mortgage broker Coreco, described the uplift in home buyer mortgage approvals as 'a welcome breath of air'. He said: 'A lot of activity this year to date has been skewed by the stamp duty deadline in April, but that is now in the rear-view mirror and this points to growing confidence among borrowers and a realisation that the new norm is here to stay, at least for now. 'Demand for mortgages is still there, even though rates appear to have stabilised for now. We've seen a lot of lender innovation around affordability in recent months and that may be starting to feed through into this data. 'It's a market delicately balanced on sentiment and affordability but if lenders continue to price competitively and inflation holds its ground, we may just see these green shoots become more sustainable.' Richard Donnell, executive director at Zoopla, said a rise in the number of home sales agreed 'has boosted the demand for mortgages from home buyers. 'More homes for sale means more buyers and sales. We expect demand for mortgages to continue to increase as more sales are agreed. The market remains on track for 5% more sales in 2025.' Mark Harris, chief executive of mortgage broker SPF Private Clients, said: 'Remortgaging numbers jumped by 6,200 in the month, suggesting that borrowers are keen to shop around for better deals even if it means the hassle of applying to another lender.' Looking at non-mortgage borrowing, the annual growth rate for consumer credit slowed to 6.5% in May, from 6.7% in April. Within the figure, the annual growth rate for credit card borrowing eased to 9.2% from 9.9%, over the same period. Households' deposits with banks and building societies increased by £4.3 billion in May, following net deposits of £2.8 billion in April. The increase was partly driven by households depositing an additional £3.9 billion into Isas. Mark Hicks, head of active savings, Hargreaves Lansdown, said: 'Savers are continuing to squirrel money away at impressive rates, and cash Isas are still dominating the picture. 'May is always going to see less flowing into cash Isas than the first month of the new tax year, but with another £3.9 billion being saved into cash Isas in May, the appeal of tax-free savings is clearly still a massive draw.' In May, UK non-financial businesses borrowed, on net, £8.6 billion of loans from banks and building societies, including overdrafts, following £1.2 billion of net borrowing in April. This was the biggest amount of net borrowing since April 2020, when £15.9 billion was recorded, the Bank said. Within this, big non-financial businesses borrowed, on net, £8.2 billion, compared to £1.3 billion of net borrowing in April. Small and medium-sized non-financial businesses (SMEs) borrowed, on net, £0.4 billion, compared to flat net borrowing in April. The annual growth rate of borrowing by large businesses increased to 8.4% in May from 5.9% in April, and was the highest since September 2022 (9.1%).
The Independent
21-05-2025
- Business
- The Independent
Key reason why the average UK house price has increased
UK house prices surged 6.4 per cent annually in March, reaching an average of £271,000, according to the Office for National Statistics (ONS). This acceleration from February's 5.5 per cent growth coincided with a rush of homebuyers seeking to complete purchases before the April conclusion of a stamp duty holiday in England and Northern Ireland. This surge in the housing market comes as UK inflation hit a 15-month high, adding further pressure on household finances already grappling with rising living costs. The Consumer Prices Index (CPI) revealed inflation jumped to 3.5 per cent in April, exceeding economists' predictions of 3.3 per cent and significantly up from March's 2.6 per cent. This inflationary spike, coupled with various bill increases in what has been dubbed an "awful April", paints a challenging picture for household budgets. The ONS data highlights the interplay of market forces, government policy, and economic trends impacting personal finances across the UK. Andrew Montlake, chief executive at Coreco mortgage brokers, said: 'With inflation edging up sharply this morning, and mortgage rates likely to follow as expectations of further base rate cuts reduce, this could see average values start to retreat again. If prices do start to ease, they will only go so far as there is a fundamental lack of supply.' Jonathan Handford, managing director at estate agent group Fine & Country, said: 'In the months ahead, inflation and still-elevated borrowing costs are likely to weigh on demand, particularly as affordability remains stretched across much of the country. 'That said, a period of softer or stabilising house prices may offer a welcome opportunity for first-time buyers who have been priced out in some areas of the country.' Sarah Coles, head of personal finance at Hargreaves Lansdown, said the 'rush to seal a deal' before the end of the stamp duty holiday provided some extra impetus for the housing market. She added: 'This may well slow again in the next set of figures, which is the usual pattern in the aftermath of a stamp duty holiday. However, we're unlikely to see anything too dramatic. 'This period has been marked by robust price growth rather than stellar leaps, so the hangover from the property party is likely to be less painful. 'Lower mortgage rates should also help support prices. However, with buyer numbers likely to have dropped off fairly sharply, there's going to be some room for negotiation.' Nick Leeming, chairman of estate agent Jackson-Stops, said: 'Encouragingly, across the Jackson-Stops network we are seeing robust activity levels, with demand outpacing supply in popular markets. In April alone, an average of five potential buyers were competing for every new listing, underscoring borrowers' continued commitment.' Jeremy Leaf, a north London estate agent, said some potential buyers and sellers are 'sitting on their hands', adding: 'The recent cut in mortgage rates has restored some confidence but April's sharp rise in inflation will not help.' Average house prices increased to £296,000 (6.7 per cent annual growth) in England, £208,000 (3.6 per cent) in Wales, and £186,000 (4.6 per cent) in Scotland, in the 12 months to March, according to the ONS. The average house price in Northern Ireland was £185,000 in the first quarter of 2025 – a 9.5 per cent annual increase. Iain McKenzie, chief executive of the Guild of Property Professionals, said: 'We cannot ignore the subdued economic backdrop and ongoing geopolitical uncertainties which will likely ensure a more measured pace of growth for the remainder of the year.' Richard Harrison, head of mortgages at Atom bank, said: 'Lenders have been incredibly active in reducing rates.' The ONS also said average UK monthly private rents increased by 7.4 per cent, to £1,335, in the year to April. The annual growth rate eased from 7.7 per cent in March. Average rents increased to £1,390 per month (7.5 per cent annual growth) in England, £795 (8.7 per cent) in Wales, and £999 (5.1 per cent) in Scotland, in April. In Northern Ireland, average rents increased to £843 (7.8 per cent annual growth) in the 12 months to February, the report said. Within England, annual inflation in private rents was highest in the North East region (9.4 per cent) and lowest in Yorkshire and the Humber (4.0 per cent), in April. Nathan Emerson, chief executive of property professionals' body Propertymark, said: 'Overwhelming demand within the rental sector continues to influence price increases for those who rent. We continue to witness, on average, around 10 applicants for every property available to rent and this is a situation that has broadly remained stagnated across the last five years. 'It is imperative that rental supply rises to meet the challenges of demand.'
The Independent
21-05-2025
- Business
- The Independent
UK house price growth accelerated as buyers rushed to beat stamp duty deadline
The average UK house price increased by 6.4% annually in March, accelerating from 5.5% annual growth in February, according to official figures. This took the average UK house price in March to £271,000, the Office for National Statistics (ONS) said. The ending of a stamp duty holiday from April onwards sparked a stampede of home-buyers in the run-up. Stamp duty applies in England and Northern Ireland. The figures were released as statistics showed UK inflation surged to its highest level for more than a year last month. Households have been clobbered by a raft of 'awful April' bill increases. Consumer Prices Index (CPI) inflation reached 3.5% in April, up from 2.6% in March and the highest level since January 2024. This was higher than some economists had been predicting, with a rise of 3.3% having been expected. Andrew Montlake, chief executive at Coreco mortgage brokers, said: 'With inflation edging up sharply this morning, and mortgage rates likely to follow as expectations of further base rate cuts reduce, this could see average values start to retreat again. If prices do start to ease, they will only go so far as there is a fundamental lack of supply.' Jonathan Handford, managing director at estate agent group Fine & Country, said: 'In the months ahead, inflation and still-elevated borrowing costs are likely to weigh on demand, particularly as affordability remains stretched across much of the country. 'That said, a period of softer or stabilising house prices may offer a welcome opportunity for first-time buyers who have been priced out in some areas of the country.' Sarah Coles, head of personal finance at Hargreaves Lansdown, said the 'rush to seal a deal' before the end of the stamp duty holiday provided some extra impetus for the housing market. She added: 'This may well slow again in the next set of figures, which is the usual pattern in the aftermath of a stamp duty holiday. However, we're unlikely to see anything too dramatic. 'This period has been marked by robust price growth rather than stellar leaps, so the hangover from the property party is likely to be less painful. 'Lower mortgage rates should also help support prices. However, with buyer numbers likely to have dropped off fairly sharply, there's going to be some room for negotiation.' Nick Leeming, chairman of estate agent Jackson-Stops, said: 'Encouragingly, across the Jackson-Stops network we are seeing robust activity levels, with demand outpacing supply in popular markets. In April alone, an average of five potential buyers were competing for every new listing, underscoring borrowers' continued commitment.' Jeremy Leaf, a north London estate agent, said some potential buyers and sellers are 'sitting on their hands', adding: 'The recent cut in mortgage rates has restored some confidence but April's sharp rise in inflation will not help.' Average house prices increased to £296,000 (6.7% annual growth) in England, £208,000 (3.6%) in Wales, and £186,000 (4.6%) in Scotland, in the 12 months to March, according to the ONS. The average house price in Northern Ireland was £185,000 in the first quarter of 2025 – a 9.5% annual increase. Iain McKenzie, chief executive of the Guild of Property Professionals, said: 'We cannot ignore the subdued economic backdrop and ongoing geopolitical uncertainties which will likely ensure a more measured pace of growth for the remainder of the year.' Richard Harrison, head of mortgages at Atom bank, said: 'Lenders have been incredibly active in reducing rates.' The ONS also said average UK monthly private rents increased by 7.4%, to £1,335, in the year to April. The annual growth rate eased from 7.7% in March. Average rents increased to £1,390 per month (7.5% annual growth) in England, £795 (8.7%) in Wales, and £999 (5.1%) in Scotland, in April. In Northern Ireland, average rents increased to £843 (7.8% annual growth) in the 12 months to February, the report said. Within England, annual inflation in private rents was highest in the North East region (9.4%) and lowest in Yorkshire and the Humber (4.0%), in April. Nathan Emerson, chief executive of property professionals' body Propertymark, said: 'Overwhelming demand within the rental sector continues to influence price increases for those who rent. We continue to witness, on average, around 10 applicants for every property available to rent and this is a situation that has broadly remained stagnated across the last five years. 'It is imperative that rental supply rises to meet the challenges of demand.'
