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☆ UK house prices end six-month losing streak - Halifax
▼ + stars: | 2023-11-07 | by ( David Milliken | ) www.reuters.com time to read: +2 min

Compared with a year earlier, house prices in October were 3.2% lower versus a 4.5% annual decline in September, leaving the average house price at 281,974 pounds ($347,279), nearly 10,000 pounds lower than a year earlier. British house prices surged during the COVID-19 pandemic due to low interest rates, greater demand and temporary tax breaks. Halifax's house price index is still 18% higher than it was in February 2020, despite a 4% fall since its peak in June 2022. Halifax said it expected house prices to fall further this year, with a return to growth in 2025. "The high cost of borrowing alone is not sufficient to trigger the leg down in house prices we predicted," Capital economist Andrew Wishart said.

Persons: Toby Melville, Kim Kinnaird, Huw Pill, BoE, Kinnaird, Andrew Wishart, David Milliken, Sarah Young, Kate Holton, Bernadette Baum Organizations: REUTERS, Halifax, Lloyds Banking Group, The Bank of England, Capital Economics, Thomson Locations: Bristol, Britain, Halifax, British

☆ UK house prices fall by most since 2009, Nationwide says
▼ + stars: | 2023-09-01 | by ( David Milliken | ) www.reuters.com time to read: +2 min

Prices dropped by 0.8% in August alone, the largest monthly fall since March, after a 0.3% decline in July, Nationwide's figures showed. The Bank of England has raised interest rates 14 times since December 2021 to 5.25%, and financial markets expect another rate increase this month to 5.5%. However Andrew Wishart, senior property economist at Capital Economics, said he expected house prices had another 5% to fall, taking the total peak-to-trough decline to 10.5%. "We think the August data marks the start of a significant further drop in house prices," he said, pointing to weakness in the latest Royal Institution of Chartered Surveyors survey, which shows the most widespread price falls since 2009. The poll showed respondents expected house prices to be unchanged in 2024 and to rise just over 3% in 2025.

Persons: Alishia, Robert Gardner, Gardner, Andrew Wishart, David Milliken, Sarah Young, Mike Harrison Organizations: REUTERS, Nationwide, The Bank of England, BBC, Capital Economics, Royal Institution, Chartered Surveyors, Thomson Locations: South London, Britain

☆ Bank of England hikes interest rates to 5%, stoking fears of a ‘mortgage bomb’
▼ + stars: | 2023-06-22 | by ( Hanna Ziady | ) edition.cnn.com time to read: +6 min

London CNN —The Bank of England raised interest rates by half a percentage point Thursday, after data this week revealed surprisingly stubborn inflation. Many mortgage holders due to refinance their loans this year and next bought their homes when interest rates were much lower and mortgage rates were closer to 1% or 2%. Capital Economics is forecasting a 12% decline in house prices between their August 2022 peak and 2024. If interest rates must stay higher for longer to tame inflation, house prices could fall more sharply. “If mortgage rates were to stay at 6% for several years, a house price fall of 25% would be likely,” Wishart said.

Persons: we’ve, Andrew Bailey, ”, Jake Berry, Rishi Sunak, ” Simon Pittaway, Tom Bill, Knight Frank, Bill, Banks, ” Bill, “, There’s, Andrew Wishart, ” Wishart Organizations: London CNN —, Bank of England, ” Bank of England, ” Financial, “, Institute for Fiscal Studies, UK Finance, CNN, Savings, Capital Economics Locations: United Kingdom, United States, Europe, —

☆ British home prices to slip but won't come crashing down, Reuters poll shows
▼ + stars: | 2023-06-02 | by ( Jonathan Cable | ) www.reuters.com time to read: +4 min

[1/3] Partly finished houses are seen on a new housing development under construction in Liverpool, Britain June 2, 2023. Yes, prices will fall this year but by single digits," said Tony Williams at consultancy Building Value. From peak to trough home prices will fall 7.5%, the median in the poll showed. "Persistent core inflation and wage pressures will prevent the Bank of England from cutting interest rates until 2024, which means mortgage rates won't fall any further until next year," said Andrew Wishart at Capital Economics. (For other stories from the Reuters quarterly housing market polls:)Reporting by Jonathan Cable; polling by Mumal Rathore and Anitta Sunil; Editing by Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

Persons: Phil Noble, Tony Williams, Andrew Wishart, BoE, Michael McGill, Barratt, Russell Quirk, Jonathan Cable, Mumal Rathore, Anitta Sunil, Kim Coghill Organizations: REUTERS, Bank of England, Capital Economics, Nationwide, Thomson Locations: Liverpool, Britain, Britain's, London

☆ UK mortgage approvals rose more than expected in February: BoE
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +1 min

The increase follows reports from the Royal Institution of Chartered Surveys and mortgage lender Halifax that show the downturn in the housing market is no longer accelerating, even if conditions remain weak. Britain's housing market slowed sharply after September when former prime minister Liz Truss's economic plans triggered a spike in mortgage rates and a dramatic fall in approvals. "Reflecting the partial unwinding of the spike in mortgage rates following the 'mini' budget, mortgage approvals rose to their highest level for three months in February," said Andrew Wishart, economist at consultancy Capital Economics. "However, with mortgage rates unlikely to fall much further in the near term, lending will remain weak." Net mortgage lending value terms, which lags approvals, fell in February to 738 million pounds from 2 billion pounds in January, the lowest reading since July 2021.

Fueled by a post-lockdown buying frenzy, the average UK house price hit a record £275,000 ($315,474) in December, a £27,000 increase on the previous year’s high. UK mortgage rates have been ticking upwards since spring, in line with rising interest rates. UK house prices fell 0.9% between September and October, the first decline in 15 months, according to data from Nationwide. A drop in buying power makes a significant drop in house prices inevitable, according to Andrew Wishart, a senior economist at Capital Economics. When house prices fall, homeowners feel less confident about their personal finances, causing them to cut back on spending and hold off on making additional investments.

☆ UK house prices could plunge 15% because of soaring mortgage rates
▼ + stars: | 2022-09-28 | by ( Anna Cooban | ) edition.cnn.com time to read: +3 min

London CNN Business —House prices in the United Kingdom could plummet by as much as 15% if the country presses ahead with its tax-slashing economic gamble. Credit Suisse (AMJL) said on Tuesday that UK house prices could “easily” fall between 10% and 15% over the next 18 months if the Bank of England aggressively hikes interest rates to keep inflation in check. Some analysts now expect the Bank of England to raise interest rates to 6% next year, up from its current 2.25%, to prop up the ailing currency. Capital Economics, which likewise forecasts a drop in house prices of between 10% and 15%, warned the slump could be “devastating.”“The resulting drop in buying power makes a significant drop in house prices inevitable,” Andrew Wishart, senior economist at Capital Economics, said in a research note on Tuesday. “Mortgage arrears and default would rise just as house prices likely would be tumbling, placing huge strain on banks’ balance sheets,” Tombs said.

☆ Markets are now treating UK bonds like Greek and Italian debt
▼ + stars: | 2022-09-27 | by ( Julia Horowitz | ) edition.cnn.com time to read: +6 min

The price of benchmark 10-year UK government bonds also increased slightly. “This is a situation where government borrowing costs — and therefore all our borrowing costs — are incredibly vulnerable,” economist Mohamed El-Erian, an adviser to Allianz, told the BBC on Tuesday. It will drive up import costs, adding to pressure on the Bank of England to hike interest rates faster and higher. Previously, markets were absorbing about £100 billion ($108 billion) in UK bonds annually, according to Ross Walker, chief UK economist at NatWest Markets. Yet higher borrowing costs will have consequences for both the government and households.

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