Monitoring the housing market is very important for many, particularly those doctors and dentists who are looking to purchase their first home or who are investing in buy-to-let properties. Our monthly Property Price Update gives you a summary of what the experts are saying.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
News from the UK Property Market
After a promising performance in July, annual price growth has once again dropped during the month of August. The most recent numbers from Nationwide show a return to the less than stellar figures from a few months prior, dropping to 2.0% – a 0.5% dip from July’s figures – the largest decline in 6 years.
Average house prices in August were also down compared to the previous month, with prices coming in at approximately £214,745. It’s a pretty significant decline from July, where the average property price was £217,000.
August’s price growth is still on par with Nationwide’s forecast for the market this year though, hovering between 2% and 4%, but only just. Overall, these figures are positive for the market as the one year plus trend of staying between 2-3% range continues for yet another month – confirming the stability between supply and demand.
Experts in the property market are holding steadfast with their prediction of 1% growth for the remaining months of 2018. As always, the world economy will have a noteworthy effect on the performance of the market.
Help to buy scheme impact
The help to buy (HTB) scheme is designed to help any potential homeowner get on the property ladder. By saving money into the HTB: ISA, your savings will be boosted by 25% by the Government (capped at £3,000).
An overwhelming percentage (~80%) of participants in the scheme were first time home buyers, but the programme is available to anyone. While a large portion of these loans involved first time buyers, their activity within the overall market only accounts for about 13% of all mortgage transactions.
An analysis of the results of HTB loans revealed that there were approximately 48,000 HTB equity loan completions in the country over a 12 month period (March ‘17-’18) – an increase of 21% year on year. Help to buy loans accounted for roughly 8% of the overall house mortgage figure in England, but the figures were higher in the East Midlands and the North at 9% and 10%, respectively.
While it’s evident that borrowers are employing the scheme, it’s unclear whether this activity is in addition to house buying demand or if it is actually bringing in potential buyers that may not have otherwise been able to afford purchasing a home.
However, the impact is clear when it comes to new build construction. About 37% of new build homes purchased within the last year alone have been bought using help to buy, with this number settling higher in some regions of the country. For example, in the Northwest, over 50% of these purchases were paid for using their HTB funds.
While early outcomes are favourable and the current economic climate would certainly lend itself to this type of scheme to flourish, a decision has not yet been made regarding the continuation of the scheme beyond the original April 2021 end date.
Always remember to visit our site monthly for your regular update on the nation’s property prices.
If you’re planning to buy or sell property this year contact an advisor for personalised advice.
At Dental & Medical Financial Services, our experts are dedicated to helping our clients select the right mortgage deal for your needs. If you’re ready to take the first step toward home-buying, get in touch with us today.