November 2005
Thought about Portugal?
Continuing a trend for we British to move abroad or own another house in a sunny country, the market seems to be turning its eyes on the sunny coasts of Portugal.

With the South of France full of Brits and Spain going the same way, Portugal is looking to be the next solution for a fast expanding trend of warm second and retirement homes.

Novemer 2005
Soaring Mortgage Approval Levels
The value of all mortgage approvals, including those for people remortgaging or releasing equity from their property, also soared to £27.04bn - a level not seen since November 2003 when the property market was still strong.

During September, total mortgage advances reached £24.71bn, the highest figure for just over a year.

Once redemptions and repayments were taken into account, total outstanding mortgage debt rose by £7.7bn, slightly stronger than the average seen during the previous six months.

November 2005
House Prices Rising Fast!
House prices rose in October at their fastest pace in 15 months, the Nationwide Building Society said on Tuesday, in another sign the property market is stabilising after a sharp slowdown in the last year.

The mortgage lender said prices rose 1.3% last month, bringing the annual rate of gain up for the first time this year to 3.3% from a 9-year low of 1.8% in September as the Bank of England's August rate cut boosted confidence.

"This data provides some evidence that firmer housing activity may be starting to bolster prices," said Ian Stewart, economist at Merrill Lynch. "All negative for hopes of rate cuts."

Interest rate futures sold off sharply after the figures were released but soon recovered ground as many analysts suspect slow growth will still prompt the Bank of England to cut borrowing costs from their current 4.5% again in the new year.

October 2005
House market 'turning the corner'
Demand is rising and there are fewer properties on the market. House prices look set to rise for the first time in 18 months, according to a poll of chartered surveyors.

Rising demand from buyers and hopes of more rate cuts roused the market in September, said the Royal Institution of Chartered Surveyors (RICS).
House prices are now expected to rise marginally by the end of the year.
Earlier this month, mortgage lender Halifax said the cost of property had risen 1.8% in the last three months, helped by August's rate cut.

Additionally, the amount of new property coming onto the market fell in September for the first time in a year and a half, RICS said. The upturn in demand and improved outlook on interest rates has led surveyors to predict house price rises for the first time since early 2004.

October 2005
Housing market set to 'flatline'
Sales are down 30% this year but prices haven't followed suit. House price inflation has slowed to a crawl across most parts of the UK but property market experts have said that they do not think a crash is around the corner.

The latest surveys from the Land Registry and Office of the Deputy Prime Minister (ODPM) show annual house price inflation falling from almost 20% a year ago to about 5%.

The last time house price growth was so weak in the UK was between July and September 1996 when prices rose by 5.2% to an average of £73,559, according to the Land Registry.

Recently, mortgage lenders Halifax and Nationwide said that house price inflation was lagging behind the level of wage rises for the first time since 2001. What we are seeing now isn't a prelude to another round of price rises or even a collapse but a flat market

Saxon Brettell, Cambridge Econometrics"The market has slowed quite dramatically. What is happening now is that buyers are sitting on their hands," said Saxon Brettell, director of Cambridge Econometrics.

The Land Registry said that the volume of property sales continued to fall, slipping by 27.7%, but this was smaller than the 34.8% drop seen in the first three months of the year.

At the same time, there are signs that the wider UK economy is slowing, with heavily indebted consumers spending less in the shops.

September 2005
English Tenure Trends

In the last ten years the percentage of owner-occupiers in England has increased, as it has every decade since 1950, when it was 29%. The percentage has climbed steadily to its current level at 70% despite fluctuations in property prices.

Overall levels of owner occupation have continued to rise, and mid-life owner occupation is holding steady at above 85%. However, there has been a notable fall in owner-occupation levels among young entrant households.

In 1994/5, nearly at the bottom of a property-price cycle, the percentage of young entrant owner-occupiers was higher than the overall percentage. By
2001/2, the owner occupation rate for such households was 11% lower than for the overall population, while the percentage of young households in private rental had increased from 20% to 35%.

For both household types, social renting remains the cheapest tenure option and private renting the most expensive. The relative costs of owner occupation and renting have remained fairly stable since 1994/95, with one exception. The cost of private renting for young entrants has increased relative to the cost of owning. .

September 2005
First Time Buyer Problems

Steadily rising house prices have brought increasing affordability problems for first-time buyers; recent figures show that the average age of a first-time buyer in England is now 34. A rise in the age of first-time buyers is not necessarily a bad thing; it may be that some young households are now more satisfied with their options in the rental market than was the case ten years ago, and are less motivated to try to move into owner occupation as early as possible.

The UK has long been unusual in that young households pay more to rent than to own; this difference has widened over the last decade, and the average cost of renting for Young Entrants is now 124% of the cost of owning. This again reflects the affordability problems facing many young households, unable to buy because they have not yet accumulated the necessary deposit, they also pay relatively high rents in the private sector.

September 2005
Europeans Quick to Capitalise on the Strong Euro

The weakness of the dollar has suddenly made the cachet of owning a second home in the U.S. possible for many Europeans and they are snapping up houses across Florida, as well as New York and other locations like Chicago and Colorado's ski resorts.

The euro has risen about 10% against the dollar in the last year and more than 50% in the last three years. Meanwhile, the British pound is up about 35% from three years ago and about 5% in the last year.

Though housing prices in the U.S. have hit record highs and the median price of a single-family home in West Palm Beach-Boca Raton, Fla., rose 36% last year to $361,800, for example, foreign buyers are undeterred because of the strength of their own currencies and housing prices that are often even higher in their own countries.