House prices, mortgage rule changes, activity by first-time buyers, or energy efficiency targets – they’re all property news items likely to be dear to your heart if you’re a homeowner or a buy to let landlord.
Since these are also featured in some of the latest UK property news stories, let’s take a brief look behind the headlines …
Nationwide house price index: May
The house price index maintained by the Nationwide Building Society showed a slight increase in UK house prices in May compared with the previous month.
Average house prices rose by 3.5% in May compared with only a marginally smaller increase of 3.4% in April. The results show a 0.5% month by month increase in UK house prices.
Perhaps one of the more notable findings of Nationwide’s latest index is the 23% increase over the past five years in the price of homes in mainly rural areas. Homes in largely urban areas, on the other hand, have risen by just 18%.
Another feature of recent market activity is the marked increase in the sheer number of property transactions in March. The increase reflects the rush by buyers to beat the introduction of additional stamp duty charges. As a result, there were roughly twice the number of residential property purchases – the highest volume since June 2021.
Landlords tell PM – your energy efficiency targets can’t be met!
A warning to the government from the National Residential Landlords Association (NRLA) was carried by Landlord Today on the 5th of June. The NRLA warned that there is simply not enough time to achieve the government’s targets on energy efficiency in private rented dwellings.
Under the current timetable, the government is expected to confirm its energy efficiency targets late next year – so that all new tenancies in the private sector will be required to have an Energy Proficiency Certificate (EPC) of at least a C rating by 2028 and that all existing tenancies will meet this standard by 2030.
To meet any such timetable points out the NRLA, private sector landlords would have less than two years in which the thermal efficiency of a total of 2.5 million homes will need to be upgraded.
Study says relaxed mortgage rules will boost FTBs but send house prices up
Recent changes to the Bank of England’s rules for mortgage lenders will certainly help first-time buyers, said the money pages of the Daily Mail newspaper recently, but this will be at the cost of escalating house prices.
Thanks to a change in the lending rules, mortgage providers no longer have to stress test applicants according to the lender’s standard variable rate plus 1% – provided the borrower arranges a loan with a fixed rate of interest of less than five years.
The relaxed rules mean that an extra 80,000 buyers may be able to purchase their first home – an increase of some 24% – and a boost to the volume of such purchases of between 14% and 24%.
At the same time, however, property prices are likely to rise by between 5% and 7.5% as a result.
Lender sees BTL loans jump 25%
In closely related news, Mortgage Strategy on the 4th of June, reported that mortgage lender Paragon Bank has increased its lending to first-time buyers by more than 25% (to more than 812 million) during the first half of this year compared to the same period last year.
