The United Kingdom (UK) has implemented a “Help to Buy” program for homebuyers to get them into the country’s real estate market and statistics show the scheme is working. Studies show that there are now seven prospective buyers for every property that enters the market and data from analysts at Sequence confirm the program helped boost sales by as much as 4% in October. The rate of first-time homebuyers as up as is the rate of mortgage applications. As a result, the increased activity is acting to raise sales volume and real estate prices in many markets across the country. For more on this continue reading the following article from Property Wire.
There are almost seven buyers for every new property on the market in the UK as London house prices rise by £7,430 in a month and nationwide prices rise by £5,583, the latest price index shows.
The government’s flagship Help to Buy scheme is credited with boosting the market last month as sales also increased, up 4% in October, according to the data from real estate analysts Sequence.
It means that the average price of a house in the UK is now £209,923, up 3% month on month and 11% annually while sales are up 33% annually, a three year high.
Average prices in London hit a new high of £404,199, up 4% month on month and 10% annually while London’s sales transactions increased by 9% month on month and 57% annually.
While there are almost seven buyers to every new property across the UK, the highest level since records began, in London this are 14 people competing for every property.
But there are regional variations. In Scotland average house prices fell 2.35% month on month to £116,619 but they are up 10.11% annually. In the Midlands they fell 2.32% to £140,817 but are up 6.78% on an annual basis.
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The north west also saw prices fall last month, down 2.3% to £141,249, taking the annual increase to just 0.54%, as did the south west where prices fell 2.48% month on month to £186,477, but with an annual rise of 6.95%.
In the north east prices increased marginally last month, up 0.57% to £133,504 and up 4.09% annually. There was also only a modest month rise in East Anglia, up 0.35% to £174,177 but with an annual increase of 5.29%.
Wales saw average prices rise by 1.65% to £169,422 with annual growth slightly less at 1.58%. And while the south was saw monthly price growth of 1.53% taking the price of an average property to £233,097, the region has seen prices fall year on year by 1.5%.
At the same time the number of mortgage applications has increased 6% month on month and 45% annually as buyers continue to flood into the market. This is in line with the recent data from the Council of Mortgage Lenders which shows an annual increase of 37% in mortgage lending in October.
There has also been a rise in the number of first time buyers entering the market, with applications increasing by 8% month on month and 37% annually, highlighting the increasing appetite to get on the ladder.
‘The appetite to buy property across the UK has risen to record levels. This has impacted on property prices as competition for every new instruction intensifies,’ said David Plumtree, chief executive at Sequence, owners of 300 branches, including Barnard Marcus, William H Brown and Fox & Sons.
‘In spite of rising prices, there has been a surge in mortgage applications across the board, demonstrating that buyers are still willing and able to buy. Increasingly attractive mortgage rates and incentives such as Help to Buy are fuelling the drive in demand and as long as this continues, we can expect to continue to see prices rising,’ he added.
The index also shows that across the UK new buyer registrations have risen by 9% month on month and 34% annually, with the number of new property instructions remaining flat month on month and rising by just 5% annually.
In London the number of new buyer registrations has grown by 16% in one month and 68% annually, and the report says this is a reflection of new government buyer incentives and attractive mortgage rates. By contrast the number of new properties coming onto the market in London has increased by just 1% on month and 17% annually.
The number of viewings across the UK rose by 3% month on month and 16% annually. The number of offers has also increased, by 4% month on month and 25% annually. The report points out that this dual growth has left the ratio of viewings to offers at 8.3 viewings to ever offer, slightly below last month, demonstrating that buyers are having to move more quickly to make an offer.
In London the number viewings has grown by 5% in October and 30% annually, which pales in comparison to the increase in offers, up 11% on month and 47% annually. This disparity has caused the ratio to drop to 11.3 viewings to every offer, from 11.9 last month, a sign of a more competitive market for buyers.
The volume of offers and sales has also increased substantially with offers rising by 4% and sales rising by 4%. That means that the ratio of offers to sales has remained constant at 1.8 offers for every sale. The picture is much the same in London, with the ratio remaining constant at 2.7 offers to every sale, highlighting just how competitive the market is, with buyers making attractive offers to avoid missing out.
This article was republished with permission from Property Wire.