The latest figures from Nationwide suggest that not only is the UK housing market bouncing back, but demand for homes in key areas of the country is higher than it has been in some time.

Over the course of the past year, average UK property prices have increased by as much as 7.1%. Nationwide’s newly published report subsequently suggests that UK house prices are now averaging £238,831, up almost £16,000 from the same period last year.

Analysts have labelled the events of the past 12 months a double-edged sword of sorts for prospective buyers. Many first-time buyers amassed significant savings during lockdown, enabling them to more comfortably cover deposit requirements on planned purchases. But at the same time, a growing lack of affordable properties is seeing prices rapidly increase.

Speaking on behalf of James Pendleton estate agents, Lucy Pendleton commented on what could prove to be an extraordinary few months for the UK housing market.

“This market is on the boil,” she said.

“Silly season might be just around the corner. That’s when a seller’s market becomes entrenched against a backdrop of very high demand, and you start to see open houses for properties that are nothing special and a return of gazumping.”

A steep monthly rise in house prices

The figures published by Nationwide also showed a significant spike in property prices between March and April, increasing a further 2.1%. The pace at which property prices are increasing has accelerated over the course of the last year, driven partially by the stamp duty holiday extension in England, Wales, and Northern Ireland.

In addition, movers and first-time buyers across the country are setting their sights on more spacious homes away from busy urban centres.

Robert Gardner, chief economist at Nationwide, believes that this may be an even bigger motivator than the stamp duty savings available for those who act fast.

“Our research suggests that while the stamp duty holiday is impacting the timing of housing transactions, for most people, it is not the key motivating factor prompting them to move in the first place,” he said.

Analysts expect average house prices to continue growing for the foreseeable future, putting a further drain on the already limited supply of affordable homes available. This is unlikely to come as welcome news for first-time buyers, but the reintroduction of the 95% LTV mortgage could help thousands take their first step on the property ladder.

“The fact that around a third of first-time buyers in England in 2018-19 said that friends or family helped them to raise a deposit through a loan or gift suggests that the recent surge in savings will help some, but that the impact won’t be spread evenly,” Mr. Gardner commented.

He also highlighted the possibility of a significant slowdown later in the year if unemployment projections for Q3 and Q4 prove accurate.

Demand for spacious family homes in North West London apparently knows no bounds, with a large uninhabitable property having sold this week for £500,000 more than its asking price.

Three families with their sights on the home in St. John’s Wood entered into a bidding war, ultimately resulting in the dilapidated property selling for a huge £6.25 million.An impressive price in its own right, made all the more remarkable by the questionable condition of the property and its surroundings.

Speaking on behalf of Arlington Residential estate agents, Marc Schneiderman said that the price the property fetched represented further evidence of pent-up demand being unleashed on the housing market in the wake of three consecutive lockdowns.

“The appetite for family houses in North West London is often underestimated by people who feel that the events of the past 12 months have suppressed the sales market,” he said.

“This really could not be further from the truth, with demand currently far outstripping the availability of houses for sale.”

Mr. Schneiderman also stated that bidding wars between two or more buyers have occurred in at least 70% of his agency’s property sales over the past six months.

An ambitious renovation project

The property itself is currently in an uninhabitable condition throughout, though it has remarkable potential as a long-term renovation project.

Located in a desirable corner of St. John’s Wood, the distinctive detached property provides 7,074 square feet of living space, including eight bedrooms, seven reception rooms, six bathrooms, an artist’s studio, and a family kitchen.

According to Arlington Residential, each of the families bidding for the property is local to the St. John’s Wood area and intended to purchase the property for private occupation, not to renovate and resell.

The estate agent also emphasised the growing popularity of the local residential marketplace in and around St. John’s Wood, which is among London’s most active real estate markets for larger detached and semi-detached houses with private gardens.

A major shift in priorities among movers and first-time buyers during the COVID-19 crisis has seen attention move away from compact urban dwellings towards larger homes in less populated corners of the capital.

Private parking, space for home work, and outdoor living spaces are prioritised by more homebuyers than ever before, reflecting the new trend of working from home and spending more time at home than ever before.

Nationwide’s latest house price index indicates a small slowdown in annual house price growth for March, reflecting a temporary drop in demand in the run-up to the original stamp duty holiday deadline. Annual house price growth was 6.9% in February, slowing slightly to 5.7% in March.

Northern Ireland was the strongest performer in the UK throughout the first months of the year, achieving annual house price growth of 7.4%. Scotland and Wales saw growth of 6.9% and 7.2%, respectively, followed by England with Q1 annual price growth of 6.4%. This is down slightly from the 6.9% recorded in Q4 2020, which came as little surprise to the vast majority of market watchers.

The figures from Nationwide also highlighted a series of regional disparities, with the Northwest having achieved the strongest annual house price growth of 8.2%. As predicted by many, London’s performance was the poorest of all in the regional rankings, with annual price growth falling from 6.2% in Q4 2020 to 4.8% in Q1 this year.

A buoyant six months ahead

Commenting on the figures, Nationwide’s chief economist said that the slowdown was to be expected and that the sector is anticipating a strong spring and summer season.

“Given that the wider economy and the labour market have performed better than expected in recent months, the slowdown in March probably reflects a softening of demand ahead of the original end of the stamp duty holiday before the Chancellor announced the extension in the Budget,” Robert Gardner said.

“Recent signs of economic resilience and the stimulus measures announced in the Budget, including the extension of the furlough scheme and the stamp duty holiday, as well as the introduction of a mortgage guarantee scheme, suggest that housing market activity is likely to remain buoyant over the next six months.”

“The longer-term outlook remains highly uncertain. It may be that the recovery continues to gather momentum and that shifts in housing demand resulting from the pandemic continue to lift the market. However, if the labour market weakens towards the end of the year as policy support is withdrawn, as most analysts expect, then activity is likely to slow nearer the end of 2021, perhaps sharply.”

His sentiments were echoed by SPI Capital chief executive Anna Clare Harper, who suggested that many current home buying trends are likely to perpetuate throughout the year.

“This slight slowdown reflects the originally proposed end to the temporary stamp duty reduction and practical restrictions: Christmas, then lockdown, which reduced people’s ability to transact. Yet people want to buy while stamp duty is reduced,” Ms. Harper said.

“Stamp duty has a more than proportionate impact on transactions because affordability is heavily influenced by mortgage lending. Investors and homebuyers can borrow against the property price, but they cannot use finance to fund transaction costs.”

“Reduced stamp duty has not been the only driver of house price growth over the last year. We also have cheap debt as a result of very low interest rates, which give buyers a ‘discount’; the release of pent-up supply and demand and the desire to improve surroundings amongst existing homeowners; and the ‘flight to safety’, since in times of uncertainty, people want to put their money in a stable asset with low volatility. These trends are likely to hold up throughout 2021.”

From brokers to banks and everything in between, those who work in the financial sector tend to be pretty savvy with sector-specific jargon. With the public, it is often an entirely different story.

More consumers than ever before are taking an active interest in their finances, but they often admit that a lack of specialist industry knowledge can be daunting.

For the benefit of those within the sector, Uswitch recently conducted a survey involving just under 4,000 Brits. Their aim was to find out which financial terms are most confusing for the average UK citizen, which brought to light some interesting findings.

The following may therefore prove useful for brokers and financial service providers, who are likely to encounter customers unfamiliar with this terminology.

‘Blended finance’ and ‘cornerstone investment’ top the table

Right at the top of the rankings in terms of lack of understanding, the survey from Uswitch found that just 4% of people were familiar with the terms ‘Blended Finance’ and ‘Cornerstone Investment’. The rest had no idea what either referred to.

Next on the list came’social enterprise’ and ‘Fintech’, both of which were recognised and at least partially understood by 13% of respondents. The lack of understanding with ‘Fintech’ in particular proved interesting, given how ‘Financial Technology’ refers to various everyday consumer staples like mobile banking.

While bridging finance activity in the UK may be hovering at an all-time high, just 14% of respondents were familiar with the term ‘bridging loan’ and the fundamentals of how bridging finance works.

Slightly further down the list came ‘CHAPS’ and ‘Hedge fund’, both of which were familiar to around 18% of respondents, while ‘annuity’ followed closely behind, with 20% of people saying they know what it refers to and how annuities work.

Despite the fact that most of those taking part in the survey are likely to have savings accounts, only 23% knew that ‘AER’ refers to and means the ‘Annual Equivalent Rate’ applicable to a savings account.

This was followed in the rankings by ‘Equity Loan’, understood by just 27% of respondents.

The most widely recognised and understood financial terms

At the opposite end of the table, the Uswitch survey also revealed which financial terms are most widely understood by the British public.

At the top of the rankings was ‘Pension’ with a score of 78%, though this suggests that a worrying 22% of Brits do not understand what a pension is or how it works. ‘Interest rates’ followed closely with 76%, though again, this suggests that 24% of respondents are unfamiliar with what interest rates are.

An impressive 73% of respondents were familiar with ‘Crowdfunding’, which has become a popular activity for funding innovative projects over the last few years. 71% of respondents understood the term ‘credit score’ and its meaning, while 68% were familiar with what an ‘ISA’ is.

Slightly further down the rankings, ‘Investing’ achieved a score of 64%, followed by ‘Stock’ at 61%. ‘Net worth’ was also a relatively widely understood term, with a score of 59% in the survey, followed by’repossession’ with 56% and ‘depreciation’ with 55% of respondents.

The report from Uswitch also revealed that the most commonly searched-for financial term online (by monthly average) was ‘stamp duty’, with around 7,300 people per month using the search term ‘what is stamp duty?”

Comparatively, few businesses get by without borrowing money. Ranging from the smallest start-ups to the largest multinational conglomerates, on-hand capital is rarely enough to leverage major growth and development opportunities.

Financial products and services for businesses are in short supply, though in all instances they have their unique pros and cons. Listed below are pointers as to why it is important to consider all available options before deciding which lending stream suits your business, your budget, and your objectives.

Borrowing from a mainstream lender

Most major high-street banks offer a variety of loans and other financial products for businesses. As a general rule of thumb, borrowing from a mainstream lender means submitting a convincing application with robust evidence of strong financial performance. How much you can borrow (and whether you will qualify in the first place) is established on the basis of your firm’s turnover, financial position, future projections, and so on. Your own experience and business acumen may also be taken into account, making mainstream lenders a less-than-ideal option for smaller and newer businesses.

Business bridging loans

Bridging finance can be ideal in instances where the funds are needed as quickly as possible. Depending on the size of the loan required and other key factors, a bridging loan can be arranged and accessed within 48 hours. In addition, bridging loan eligibility is assessed nearly exclusively on the basis of security, aka collateral. Specialist lenders are often willing to consider all types of properties and assets that would not be considered eligible by most mainstream lenders. Bridging finance is designed to be repaid within a matter of months, typically on the basis of a monthly interest charge of less than 0.5%.

Commercial property loans and mortgages

It may be possible to secure a mortgage or similar loan against a commercial property that is under your ownership. The amount you can borrow will be determined by the equity you have in your property, i.e., how much of the existing mortgage you have paid off. Commercial property loans can open the door to affordable monthly repayments, though they can be comparatively costly long-term and are typically available exclusively to those with a strong credit history.

Invoice factoring

This can be a surprisingly accessible, affordable, and flexible solution for small and large businesses alike. Invoice factoring essentially places a middleman between the business and its clients. When an invoice is issued by the business, the invoice factoring service immediately pays a proportion of its value, typically around 75%. When the client pays the balance of the invoice at a later date, the business collects the remaining 25% minus the costs of the service. Invoice factoring can be great for both avoiding and dealing with temporary or long-term cash flow issues.

Peer-to-peer borrowing

Lastly, P2P borrowing enables businesses to access competitive loans for all purposes directly from investors. P2P lending platforms eliminate the middleman from the equation, enabling those lending money to businesses to offer small and large sums of cash with much lower overall borrowing costs. P2P borrowing is also a viable option for applicants with a poor credit history, which may not be a key eligibility factor with some P2P lenders.

To learn more about the most competitive business borrowing options available or to discuss your requirements in more detail, contact a member of the team at Bridgingloans.co.uk for an obligation-free consultation.

Average property prices in the United Kingdom grew more in July than at any other time in the past 11 years, suggesting the housing market could recover much faster than predicted. According to the latest figures released by Nationwide, July brought about the biggest single-month increase in average house prices since August 2009.

The lender’s monthly House Price Index detailed annual property price growth in July of 1.5%, along with an equally impressive month-on-month uptick of 1.7%. This improvement in previous months’ performance is credited largely to a surge in activity among buyers and sellers, spurred by the relaxation of lockdown restrictions.

Speaking on behalf of Nationwide, chief economist Robert Gardner spoke with confidence that July’s impressive property price spike “reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.”

“The rebound in activity reflects a number of factors. Pent-up demand is coming through, where decisions taken to move before lockdown are progressing,” he continued.

“Attitude shifts may be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.”

He also highlighted an extract from Nationwide’s report, which suggests that a full 15% of all households across the UK are considering relocation due to their experiences during lockdown and shifting priorities.

“Moreover, social distancing does not appear to be having as much of a chilling effect as we might have feared, at least at this stage,” he stated.

The impact of the stamp duty holiday

Other economists have highlighted the effect of the recent stamp duty holiday introduced by the government, which has the potential to save homebuyers across the UK many thousands of pounds.

“It’s no coincidence that this upturn has come at the same time as the introduction of a stamp duty holiday on purchases up to £500,000 ($627,440),” said MT Finance director Tomer Aboody.

“Brexit and COVID-19 aside, stamp duty has been the biggest negative influence on the housing market in recent times since the introduction of higher rates on more expensive properties.”

“This has to be resolved and dealt with, or whatever bounce we have seen in the past few months will only be a temporary one.”

“The government not only has to look at extending the existing holiday but possibly making it permanent, while also looking at benefiting the higher end.”

As part of the government’s ongoing stimulus plan to restart the UK economy, Rishi Sunak confirmed early last month that the threshold for stamp duty in England will be raised from £125,000 to £500,000 on a temporary basis. As a result, approximately 90% of all home buyers in 2020 will pay no stamp duty at all, said Mr Sunak.

Nationwide’s Robert Gardner also spoke with confidence that the momentum in housing marketing shows no signs of slowing soon, at least.

“These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward,” said Gardner.