Prime country house growth is at its slowest for two years

Lack of houses coming to the market caused decrease in house prices

Scottish prime country house price growth is fastest in 18yrs

CML says housing market will slow in 2008

Annual rental incomes grown by 6.9%

Prime country house growth is at its slowest for two years

According to Knight Frank, prime country house growth is the slowest for two years. It grew by an average of 1.3% in Q3 2007, which is the slowest rate since the end of 2005.

This result means that the annual rate of growth slipped from 10.4% to 9.4% between Q2 and Q3 2007. The best performing sector of the market was the more expensive manor house market, with growth of 2.4% in Q3 2007 and an annual rate of growth of 11%. In addition, the average price of farmhouses increased by 1.3%, while cottages increased by only 0.3%.

Once again, the South West was the best performing region, with growth for larger properties hitting 4% in Q3 2007. Price growth has been led by the most expensive price brackets as properties worth £4m+ rose by 15.1% in a year, compared to only 8.1% for those priced less than £1m.

Around 42% of properties worth £5m+ in the South East are now bought by overseas buyers, which is the highest on record and well above the 34% figure in September 2006.

Lack of houses coming to the market caused decrease in house prices

House prices fell by 0.1% in October which is the first price fall for two years, according to Hometrack.

The small decline in October follows two months of zero growth with the annual rate of growth falling back to 4.4%. Average prices were down across all regions except for the West Midlands, where values remain unchanged.

Richard Donnell, Hometrack’s director of research, said: “The fall in prices in October is not unexpected. Prices were bound to be affected after several months of weaker buyer confidence, falling levels of demand and declining sales volumes. We expect further small price falls in the months ahead but these are likely to remain limited as there remains no evidence of any increase in the supply of homes for sale. If anything, the current uncertainty appears to be resulting in a decline in the numbers of homes coming to the market which is likely to support underlying prices in the coming months.”

Scottish prime country house price growth is fastest in 18yrs

According to Savills, Scottish prime country house prices have accelerated by 19% year-on-year in September which is the fastest rate of growth for this sector over the past 18 years.

CML says housing market will slow in 2008

House price inflation is likely to remain positive, property transactions are set to remain above one million, interest rates are set to fall by 0.75%, and gross lending will decline but is still set to exceed 2005 levels, according to the Council of Mortgage Lenders’ (CML) 2008 housing market forecasts.

In summary, the CML has forecasted house prices to rise by 7% in 2007 as a whole and 1% in 2008, property sales to total 1.17m in 2007 and 1.01m in 2008, gross lending will reach £360bn in 2007 and £340bn in 2008, net lending will total £105bn in 2007 and £90bn in 2008, the number of arrears cases of over three months will reach 145,000 (1.22% of all mortgages) by the end of this year and 170,000 (1.42% of all mortgages) by the end of next year, the number of repossessions in 2007 will total 30,000 (0.25% of all mortgages) in 2007 and 45,000 (0.38% of all mortgages) in 2008, and lastly base rates will end this year at 5.5% and will decrease to 5% in 2008.

Michael, Coogan, CML director general, said: “The housing and mortgage markets are facing their most challenging period since Labour came to power a decade ago. Luckily, the credit crunch occurred at a time when the UK economy was robust, but even so the effects on the financial sector are significant, and the mortgage market is not immune from them.

Annual rental incomes grown by 6.9%

According to Paragon, rental incomes have grown by 6.9% in the last twelve months, with September’s average rental incomes at £10,718.

Regions achieving the highest rents were London (£20,392), the South West (£11,328) and the South East (10,900).

Average property values have risen from £178,566 in August to £180,067 in September. Over the past year, property prices have risen by 8.2%. The highest property values are in London (£366,428), the South East (£190,443) and the South West (£189,973).

Yields have remained stable at or above 6% for over a year. Those that achieved the highest yields are the North West (6.5%), Wales (6.4%) and the East Midlands (6.4%).

Total annual returns on a property purchased 12 months ago (including capital gain plus rental income) stands at 14.2% in September. Regions achieving the highest total returns are London (25.1%), East Anglia (24.5%) and the North (20.6%).