House prices up 1.4% in November

Today's figures from Nationwide show that house prices continued to soar in November going up 1.4%.

Prices are up 9.6% compared to the same time 12 months ago, the highest rate of growth since February 2005. The average home is now worth £172,185, up £2,562 since last month, and £15,046 on a year ago.

This shows that The Bank of England's recent rate rise has done nothing to dampen down the booming housing market.

2% increase in Welsh £1m homes

There has been a 2% rise in the number of homes in Wales valued over 1 million pounds. This is in line with the rest of the UK which has also seen a steady growth in million pound houses.

New figures by the Portman Building Society (based on Land Registry data) show that in the third quarter of 2006 the number of property millionaires in the UK rose by nearly 32%, compared to the third quarter of 2005. Across the UK there are now 78,219 people with property valued at a million pounds or more, with the vast majority in London.

In Wales, most of the million pound homes are based in Cardiff or Cardiff Bay, the Vale of Glamorgan and West Swansea with others dotted around the Welsh sea and countryside. Local estate agents believe these areas are such hot-spots because of the new prosperity in Cardiff and the booming house prices there.

October sees house price rise

According to new figures released by the Land Registry, house prices in England and Wales rose by 1.2% in October from the previous month, pushing annual growth up to a 17-month high of 7.0%.

The monthly growth in October was down slightly on September's 1.3 % rise, annual growth however is up from September's 6.3% rise. And the average house price for England and Wales now stands at £171,709.

About-turn for Nationwide

Nationwide is to end its widely publicised policy of giving exactly the same deals to existing mortgage customers as new ones.

In a complete about-turn , Nationwide, the world's largest building society, who's well known tv adverts show exisiting customers getting the same deals as new ones, will change its pricing so that existing customers who want to re-mortgage, switch deals or borrow more will be hit with higher rates than those buying a new home.

A Nationwide spokeswoman said the new range of products reflects the general market trend for "slightly better rates" for home-movers.

1 in 3 first-time buyers would consider buying abroad

According to new research by MRI Overseas Property, one in three first-time buyers would consider buying abroad in order to get onto the property ladder.

It reports that 32% of those looking to get on the property ladder are considering heading abroad for their first home. 71% of those aged between 18 and 29 said they would consider buying abroad, while 21% would consider an overseas purchase as a property investment. And, almost twice as many Londoners (41%) are thinking of buying overseas than Scots (24%).

"With so many young people unable to get onto the property ladder, buying a property abroad can seem an attractive option, either as a means of generating a financial return or to experience living abroad at a time in their lives when they have less ties to home." says Darragh MacAnthony, group chairman of MRI Overseas Property.

Average house prise still rising in Scotland

The latest Scottish House Price Monitor by Lloyds TSB Scotland shows that average house prices in Scotland rose by 2.6% in the three months to October, taking the average price of a property to £145,593 and, on an annual basis, Scottish house prices have increased by 11.6%.

Out of the four main Scottish cities, Aberdeen performed best with average house prices increasing by 14.9% in the third quarter and by 15% annually. The average price is £147,866.

Dundee was next with a quarterly jump of 11% and an annual rise of 12.2%. The average price is £133,357. In Edinburgh, there was a 2.3% drop in the quarter, but over the year prices were up by 10.8 %. The average price is £187,546. Glasgow saw a fairly steep fall of 8.8% on a quarterly basis but still managed a 7.8% annual rise. The average price is £147,866.

Property market bubble to burst

Economist David Miles, chief UK economist for investment bank Morgan Stanley and former advisor to Gordon Brown, has warned that a housing crash is likely in the near future.

'A sharp fall in real house prices is likely at some point in the relatively near future, though it could yet be one to two years away,' his report concludes.

He believes that while just under half of the rise in prices is fuelled by population and income growth, a little over half the rise is driven by speculation that prices will continue to rise rapidly. But these prices are a "bubble", which will deflate rapidly once price rises fail to meet expectations.

Mortgage lending up in October

The Council of Mortage Lenders (CML) have reported that mortage lending rose by a record monthly amount for October.

In October a total of £30.3 billion was loaned to homebuyers, a 12% increase from the £27 billion of 12 months ago and just 8% below the overall record of £33 billion, set in August this year.


CML director Michael Coogan said "For yet another month the housing market is proving itself to be in robust shape. Housing demand and mortgage approvals have been strong over recent months, despite the rise in interest rates."

However he does go on to say there may well be a slight slow down in 2007 " with interest rates rising for the second time in three months, we anticipate a modest slow down in house sales and mortgage approvals as 2007 progresses."

50% rise in London house prices

According to property website Rightmove, house prices in London has risen 50% in a year.

The average asking price in Kensington and Chelsea is now over £1 million, 8.8% higher than last month and 54.9% higher than in November last year.

While house price rises in London have risen more in the last year than anywhere else, it is not the only place where property values are climbing. House prices are more than 10% higher than they were a year ago in the south-east, the south-west, and East Anglia, rising 16.3 %, 17.4%, and 14.4% respectively.

External factors affecting house prices

According to a new survey by Haart estate agents, being close to the tube or railway station will make the biggest difference in your house price.

If your property is within two miles of a mainline station or London underground station it will add 12% to its price on average, the equivalent of around £20,000. However, if your home is next to run-down housing it could take £20,000 off your sale price.

Russell Jervis, managing director of haart estate agents, says "It is widely known that factors such as good transport links can push property prices up and derelict houses can drag them down, but many homeowners do not realise the extent house prices can be affected"

See below for the full list:

Top value adding external factors:
Mainline tube / railway station - 12%
Top state school - 11%
Motorway / dual carriageway links - 9%
Open countryside / park - 9%
Vibrant social scene - restaurant / pubs - 6%
Quality food store (Waitrose / M&S) - 4%
High street facilities (e.g. banks and newsagents) - 3%
Sports club / exercise facilities - 2%
Good NHS hospital - 2%
Cinema / entertainment - 1%

Top value decreasing external factors:
Run-down / derelict houses - 12%
Late licence music venue / takeaway venues - 11%
Derelict land - 9%
Airport flight path - 9%
Waste / refuse station - 8%
Busy road - 8%
Nightmare neighbours - 7%
Poorly-rated comprehensive school - 6%
Railway line - 5%
Mobile phone / telecom masts - 4%

Rise in French holiday home mortgages

People buying holiday homes in France are increasingly taking out French mortgages rather than buying with cash, reports Assetz Finance. France is the number one British choice when it comes to buying a second home.

Traditionally, the majority of British purchasers of French holiday homes have purchased their property outright, without any loans, using savings, inheritance or equity release on their UK property to finance the purchase.

However, over the last twelve months, Assetz Finance has noted a rise in the number of British holiday home buyers opting for a French mortgage, from approximately 33% in 2005 to 50% in 2006, as people begin to recognise that they are both readily available and easy to use as a viable method of finance.

Katy Hepworth, Overseas Mortgage Manager at Assetz Finance comments:"In the past French mortgages were less widely available and were renowned for being difficult to secure, meaning most holiday home buyers did not even consider using them and instead struggled to finance a cash purchase from the UK. "This is no longer the case, however, and a considerable number of British purchasers in France are starting to take advantage of French mortgages which are consistently 1 - 1.5% cheaper than in the UK."

North East house prices

House prices in the North East have seen the fastest increase in the country over the last five years according to a new report from the National Housing Federation.

In 2005 house process in the region rose by nearly 9.5%, faster than any other region in England. The average North East houseprice is over £126,000, 6.4 times the average regional income of just under £20,000. The report contains figures from the Oxford Economic Forecasting (OEF) suggesting prices are set to rise faster than any other region, by a staggering 67% meaning the average house price in the North East in 2011 will be over £210,000.

The report also highlights the extremes in the region, with two distinct housing markets forming. For example house prices in Hartlepool and Sedgefield are half that of the national average house price. In attractive rural areas such as Alnwick and Tynedale the average house price is nine times the average salary. In Castle Morpeth house prices are almost 20% higher than the national average

Bank of England lifts interest rates to 5%

The Bank of England has lifted interest rates to 5% - the highest level in five years.

Interest rates are now at their highest point since August 2001 and come amid evidence that more households are folding under the strain of higher overheads, such as council tax bills and energy prices.

Soaring property prices are believed to be one of the reasons the Bank has acted. Today the Halifax reported a 1.7% rise in house prices in October and said the average UK home now costs 8.6% more than it did 12 months ago.

Hips trial launched

The trial of the home information packs (Hips) scheme has been launched in six locations in England in an effort to make buying and selling of property simpler for those involved.

Each location testing the trial, which includes Bath, Cambridge, Huddersfield, Newcastle, Northampton and Southampton, has received a proportion of the £4 million in funding pledged to the Hips scheme by Housing Minister Yvette Cooper, earlier in the month.

Speaking to the BBC, Stephen Hayter, a chartered surveyor, said that "many" property buyers and sellers preferred to have information "early in the process" of a purchase. "It takes the emphasis away from the buyer and makes sure the seller puts information up front," he remarked.

Market towns more pricey

Three in four market towns have higher property prices than their county average, new research has shown.

Halifax found that the typical house in 73% of English market towns was higher than that of other towns in its county. Colin Kemp, managing director of Halifax Estate Agents, said: "Homebuyers continue to be attracted to the high quality of life offered by market towns and are prepared to pay a premium to live there".

Nine of the 10 most expensive market towns are located in the South East or South West, with only Bakewell in Derbyshire breaking the South's dominance. Beaconsfield in Buckinghamshire was found to be the priciest market town with a typical house costing £574,211.

Tourists more important than locals

Potential new guidelines being drafted in by Anglesey council would mean young people desperate to buy a home will be prohibited from living in holiday chalets.

The Welsh council says high-quality holiday homes should not be turned into permanent homes because holidaymakers are better for the local economy than all-year residents.

Figures from the Halifax show that house prices in Anglesey have quadrupled in a decade, the average is now over £160,000. Salaries, however, are still amongst the lowest in Wales and many people who live and work in the area simply cannot afford to buy a home, and so have turned to alternative accomodation such as good quality holiday homes.

The proposed guidelines have angered many locals, who feel that wealthy tourists are being given priority. Carole Richardson, who teaches at an Anglesey primary school, said, "It's gut-wrenching. I'm giving a service to the community but it seems they (the council) only want to look after the people with lots of money. They're not interested in the people who are doing their best in life."

Anglesey Council feel however, that tourism is more profitable to the area "With the increase in house prices in the local housing market, there is a need to ensure that holiday accommodation bed stock is not lost to more permanent types of holiday/second homes or even permanent homes which have fewer beneficial effects."

Abbey to offer 5x salary

Abbey, Britain's second-largest home loans provider, has raised the standard amount it will lend to house buyers to five times their single or joint salaries for those with an annual income of £50,000 or more.

Abbey says that it is responding to soaring house prices and has raised its multiplier in a bid to help first-time buyers get on the property ladder.

However, there are fears that buyers could over-burden themselves with debt by borrowing five times their salary. A couple on a joint income of £50,000 who borrowed £250,000 would have to meet monthly repayments of £1,400.

Abbey defended its lending policy "Lending five times salary may sound high but really is something we have to do given what is happening with house prices."