House prices are rising at the slowest pace for five years – but homes still cost £10,500 MORE than a year ago

House price inflation has fallen to its lowest level in five years, but buyers will still find that the average home costs almost £10,500 more than a year ago.

The price of the average UK home rose 2 per cent in the year to June to a new record of £215,444, according to the Nationwide house price index.

But this masked a continuing slowdown, with house prices expected to rise just 1 per cent this year and struggling London property sales dragging on the market.

Britain’s biggest building society forecast a ‘subdued’ property market in the near future.

However, patches of the UK are doing better than others, with house prices in the Midlands up by more than 4 per cent annually, while London fell by 1.9 per cent.

Robert Gardner, Nationwide’s chief economist, said: ‘There are few signs of an imminent change. Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.’

Figures show the cost of the average home is near record highs when compared to wages.

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-5890967/Nationwide-house-prices-rise-slowest-pace-five-years.html

August interest rate rise moves step closer

he Bank of England has held interest rates but signalled an August rate rise is more likely than previously thought.

In a decisive move, Andrew Haldane, the Bank’s chief economist, joined two other Monetary Policy Committee members in voting to raise rates to 0.75%.

The nine-member MPC was split 6-3, with Bank governor Mark Carney leading the group who voted to hold rates at 0.5%.

The last time three people “dissented” from the overall view, in June 2017, rates rose the following November.

But economists believe that if the economy does show signs of picking up, an August rise is in play. Government borrowing figures published on Thursday boosted hopes among some economists that the economy may be gaining momentum.

The pound jumped by about a cent against the dollar following the Bank’s decision, climbing back above the $1.32 level, as the possibility of an August rate rise appeared to increase.

The MPC said that the poor economic growth figures of the first three months of a year was likely to prove “temporary” and that the speed of growth would pick up.

As economic momentum improves, fears over rising inflation grow and pressure increases for interest rates to rise.

The level of interest rates is the Bank’s main tool for controlling any increase in prices.

“A key assumption in the MPC’s May projections was that the dip in output growth in the first quarter would prove temporary, with momentum recovering in the second quarter,” the committee said.

“This judgement appears broadly on track.

“A number of indicators of household spending and sentiment have bounced back strongly from what appeared to be erratic weakness in Q1 [January to March], in part related to the adverse weather.

“Employment growth has remained solid.”

The MPC said prospects for global growth also remained strong, despite some weakness across Europe.

It is the first time Mr Haldane has “dissented” from the majority view on the MPC since he joined the Bank in 2014 and is significant given his role as the leading economic expert at the institution.

Before today’s decision the markets were split 50/50 on whether there would be a rate rise at the MPC’s next meeting in August.

After the news that Mr Haldane has joined those pressing for a rise – MPC members Ian McCafferty and Michael Saunders – it is likely the market expectation for a rate rise will strengthen.

Via: https://www-bbc-co-uk.cdn.ampproject.org/c/s/www.bbc.co.uk/news/amp/business-44562162

Property market to become ‘flooded’ as 380,000 landlords look to sell-up

Experts have predicted that the property market could be flooded by homes for first time buyers as 380,000 buy-to-let landlords are looking to offload their property in the next year.

A survey conducted by the National Landlords Association (NLA) said that around a fifth of the UK’s landlords were looking to sell, and that nearly half (45 per cent) of those selling would be offloading a flat or apartment.

The NLA explained that this flooding of the market would be good news for first time buyers and bad news for renters, as it may lead to a fall in the number of homes available to tenants.

Importantly, only seven per cent of landlords looking to get rid of a property said they intended to sell to other landlords, which will be welcome news for first-time buyers.

“These findings sound like positive news for potential new homeowners, but the reality is not everyone wants, or is in a position financially, to buy,” said Richard Lambert, NLA chief executive.

“In fact, if all these homes are sold as planned then it will lead to a significant fall in the supply of property available to those who choose to rent, or have no other option but to rent.”

Via: http://www.cityam.com/286067/property-market-become-flooded-380000-landlords-look-sell