Property prices MAPPED: London homeowners will NOT be happy, but the rest of UK is soaring

Property marketGETTY/STOCK

The average UK property purchase price in September dropped just 0.8% from August

Data released this morning suggests that September saw a mixed outlook in the UK property market, with property prices and lending activity maintaining their trajectory from August in some more buoyant areas, yet cooling in others.  

According to the report from Mortgage Advice Bureau, last months’ headline data showed very little change from August, with the average UK purchase price on September 17 just 0.8% lower than August, alongside the average UK remortgage loan size decreasing in September to £175,968, a 0.3% drop on the previous month.  

The Mortgage Advice Bureau report also suggests that the average Loan To Value (LTV) of borrowers for residential purchase held steady both month on month and year on year at 69%, whilst the average LTV for those remortgaging remained unchanged month on month at 55%, up very slightly on September last year when it was 54%.

Other key indicators also remain unchanged month on month and year on year, such as the average age of those borrowing to move home, which in September was 43, and the average age of customers remortgaging, which at 45 also remained unchanged month on month and year on year. 

September regional purchase loan dataMORTGAGE ADVICE BUREAU

In some areas, particularly London and the South East, which have up until now been badly affected by a dearth of first time buyer-friendly properties, are now seeing more properties at entry level coming onto the market

Brian Murphy

Whilst some pockets of the UK, such as the West Midlands, Wales and East of England have seen significant rises both year on year and month on month, according to most recent reports from other sources, for example Rightmove and the Royal Institution of Chartered Surveyors, growth in London seems to be slowing down.

This is probably due to the increased levels of stock available together with new build completions, both of which are impacting on prices.  

The South East is seeing a similarly cooler picture, albeit to a lesser extent. 

Brian Murphy, Head of Lending said: “We continue to see that discretionary buyers are currently sitting out of the market, perhaps instead remortgaging to raise capital to improve rather than move.  

Property marketGETTY/STOCK

The September House Price Index from Halifax suggested annual house price growth is now at 4%

“Investors remain cautious, with many Buy to Let landlords reducing their portfolios, due to the double whammy of increased taxation and tougher lending legislation, although we did see a slight ‘last minute dash’ for some landlords to refinance their properties ahead of the new Buy to Let lending rules introduced on 30th September.

“The silver lining in this particular trend however is that in some areas, particularly London and the South East which have, up until now, been badly affected by a dearth of First Time Buyer-friendly properties, are now seeing more and more properties at entry level coming onto the market. 

“An outcome that has enabled many of those who want to get onto the ladder in these particular areas to take advantage of competitively priced mortgage deals available and purchase in September.”   

Outside of the Capital, property price growth continues to be underpinned by shortages of stock, as documented in the most recent RICS report, a situation which is likely to continue for the foreseeable future.

The September House Price Index from the Halifax, released earlier this month, suggested that annual house price growth is now at 4%, which is at the upper end of the expectations from leading industry bodies for 2017, who had forecast at the beginning of the year that annual house price growth would be between 2% and 4%.  

There will of course be some market commentators who may suggest the current spate of price reductions in London and the South East will probably, given time, ripple out around the rest of the UK, as typically, pricing trends that start in the Capital take six months to a year to prevail nationally.  

Certainly, an interest rate rise, if it does occur either in November, as many predict, or even early next year, may well cause some to rethink plans to buy. 

But that is likely to be a sentiment based reaction, as realistically, if the base rate moves back to 0.50% as is likely to be the case, rates will still be at the historic lows we’ve seen over the last decade, albeit many lenders are likely to reprice mortgage deals, in particular fixed rates, upwards slightly. 

However, whether those who are still waiting to see what the market does over the next few months before purchasing will be rewarded for their patience, potentially by being able to bag a double-whammy bargain of a reduced priced property together with a low fixed mortgage rate, remains to be seen. 

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