ONS: + 1.1% MoM +9.6% YoY

HAMISH_MCTAVISH

UK house prices increased by 9.6% in the year to March 2015, up from 7.4% in the year to February 2015.

House price annual inflation was 9.4% in England, 5.7% in Wales, 14.6% in Scotland and 7.5% in Northern Ireland. This is the highest annual increase in Scotland since July 2007.

The pace of annual house price growth increased across the majority of the UK.

Annual house price increases in England were driven by an annual increase in the East (11.4%), London (11.2%) and the South East (11.2%).

Excluding London and the South East, UK house prices increased by 8.1% in the 12 months to March 2015.

On a seasonally adjusted basis, average house prices increased by 1.1% between February and March 2015.

In March 2015, prices paid by first-time buyers were 7.8% higher on average than in March 2014. For owner-occupiers (existing owners), prices increased by 10.3% for the same period

http://www.ons.gov.uk/ons/dcp171778_403650.pdf

Also of interest....

The index for Scotland (243.2) in March 2015 is 3.5% above the previous record level witnessed in August 2014 (234.9).

Scotland prices are now 5.5% above the pre economic downturn peak of June 2008 (230.6).

The index for England reached 207.0 in March 2015. This is 0.8% above the the previous record level witnessed in August 2014 (205.3) and 14.5% higher than the pre-economic downturn peak in January 2008

Generali

Expect to see macroprudential measures from the BoE, locking more FTBs out of the market.

michaels

Generali wrote: »

Expect to see macroprudential measures from the BoE, locking more FTBs out of the market.

Yep, volumes continue to fall. I guess most could not now afford to buy their current home so aren't moving and only the very well paid and investors can afford to buy, the latter being buy and hold investors.

Does such a market dynamic result in long term sustainability?

padington

Generali wrote: »

Expect to see macroprudential measures from the BoE, locking more FTBs out of the market.

Why's that Gen ?

HAMISH_MCTAVISH

Generali wrote: »

Expect to see macroprudential measures from the BoE, locking more FTBs out of the market.

michaels wrote: »

Yep, volumes continue to fall. I guess most could not now afford to buy their current home so aren't moving and only the very well paid and investors can afford to buy, the latter being buy and hold investors.

Does such a market dynamic result in long term sustainability?

Before either one of you go too far down that path, the latest CML lending data is interesting.....;)





http://www.cml.org.uk/cml/media/press/4205

No materially significant recent trend up or down in volume of lending to FTB or Movers, and LTV/LTI appear to be well constrained by MMR.

Average Home Mover has an LTV of 72.9% and borrows 3.07 times income.

Average FTB has an LTV of 80.7% and borrows 3.36 times income.

With volume of lending remaining far below historical averages, and both LTV and LTI constrained, there's little cause for further macroprudential measures.

All that's happening is the limited supply of property is consolidating in the hands of a smaller, but more importantly wealthier, percentage of the population exactly as many on here predicted it would after the onset of mortgage rationing.

Or to put it simply.... When you only build a third of the houses you need, only the top earning third of households need to be able to afford them.... The rest can be excluded by price as the market rations goods in short supply exactly as it's supposed to.

purch

padington wrote: »

Why's that Gen ?

It behoves them to do "something" and with the tools available to them, that "something" will most likely have an unintended consequence.

If the tools available to the Bank included being able to build houses then I am sure they would, but unfortunately all they can do is fiddle with lending regulations and criteria which won't help.

HAMISH_MCTAVISH

purch wrote: »

It behoves them to do "something" and with the tools available to them, that "something" will most likely have an unintended consequence.

If the tools available to the Bank included being able to build houses then I am sure they would, but unfortunately all they can do is fiddle with lending regulations and criteria which won't help.

I don't think further significant tightening of lending criteria is on the cards at the moment.... what we have now is already verging on being politically unsustainable via excluding most of the young generation from ownership..... not to mention massively worsening the housing shortage and driving up rents.

Problem is they've backed themselves into a corner.

CLAPTON

the answer to the problem of short supply and too much demand is clearly massive increase in immigration and more levies and restriction on the banks.

HAMISH_MCTAVISH

CLAPTON wrote: »

the answer to the problem of short supply and too much demand is clearly massive increase in immigration and more levies and restriction on the banks.

Nah...Immigration is the answer to a different problem altogether.;)

The answer to a housing shortage is incredibly simple.

Build more houses.

However as that requires reducing planning restrictions and a massive increase in mortgage lending to consumers and bank financing to developers I won't hold my breath...

Generali

purch wrote: »

It behoves them to do "something" and with the tools available to them, that "something" will most likely have an unintended consequence.

If the tools available to the Bank included being able to build houses then I am sure they would, but unfortunately all they can do is fiddle with lending regulations and criteria which won't help.

What he said.

Prices are taking off and all the signs are there for a good old fashioned UK property bubble. The BoE must be seen to do something even if that something is utterly ineffectual.

HAMISH_MCTAVISH

Generali wrote: »

What he said.

Prices are taking off and all the signs are there for a good old fashioned UK property bubble.

An increase in prices caused by a genuine imbalance of supply and demand is by definition not a bubble.

The BoE must be seen to do something even if that something is utterly ineffectual.

Any attempt to materially restrict lending even further is completely politically unsustainable, and will only worsen the housing shortage and drive up rents.

Look how many schemes have been brought in to try and increase the volume of loans issued after the 'unintended consequences' of previous tightening of lending.

They're surely not that daft....

They're backed into a corner now and it's hard to see how they get out...

- Cutting back lending has caused supply to fall and the shortage to worsen

- Rents have soared as a result, attracting older investors, who outbid the mortgage-challenged young

- Property is consolidating in the hands of the income and equity rich who are relatively 'immune' to macro-pru measures

- Generation Rent have been excluded from the market thanks to mortgage rationing

The only way out is to significantly increase lending, letting builders sell as much as they can build, and letting the young have the finance to compete with the old....

But if they do that, prices will soar until building increases.

And if they don't do it, prices and rents will soar anyway as the shortage worsens.

It was blindingly obvious this was where we'd end up..... You can't cure a housing shortage with mortgage rationing..... And so here we are, exactly as predicted.