Posts with tag: housing market

First Time Buyers Rushing to the Prime London Market

Published On: May 8, 2015 at 2:17 pm

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The number of first time buyers is almost even with the amount of investors in the prime London property market, found estate agent Marsh & Parsons.

Investors are still making the most home purchases in prime London, but the gap has closed in after first time buyers rushed into the market in the last three months.

Marsh & Parsons’ London Property Monitor found that around one in three (29%) of prime London property sales were made by investors in the three months to March 2015. This fell from 37% at the end of 2014.

In the same period, the number of first time buyer sales rose from only 21% in the last quarter (Q4) of 2014, to 28% in Q1 2015. This increase has boosted the total number of sales in the prime market funded by mortgages to 17% in the last three months.

First Time Buyers Rushing to the Prime London Market

First Time Buyers Rushing to the Prime London Market

In Q1 2015, demand for prime London homes grew by 20%. This has caused added competition for available properties on the market and increased the amount of registered buyers per home from ten in December 2014 to 12 in March 2015.

CEO of Marsh & Parsons, Peter Rollings, says: “First time buyers have been riding a wave of fortuitous circumstances recently, with almost unheard of mortgage rates, reduced up front Stamp Duty costs and support schemes like the Help to Buy Isa inflating confidence.

“Combined with a more accessible pace of property price growth so far in 2015, many more have been able to take the plunge into the property market. Prime London property has always been a bastion of investment, but it’s encouraging to see the drawbridge being lowered for everyday Londoners who live and work in this city.

“However there is, and has always been, some aspirational prime central areas that are out of grasp for new buyers, and will remain an investment stronghold. Addresses like Kensington and Chelsea resonate around the world, and will forever entice buyers looking for unparalleled capital returns.”

One-bedroom properties

Due to the high demand for starter homes, one-bedroom properties in prime London have experienced the largest increase in value in the last year, with the average price up 5% compared with the 1.7% annual growth in the whole market.

The price of the average one-bedroom home in London has increased by £75 a day in the last 12 months.

Likewise, buy-to-let investors favour one-bedroom properties, as rents on these homes have risen at the fastest rate of all house types. The average weekly rent on a one-bedroom property has increased 5.8% year-on-year in the cheaper parts of outer prime London. Young professionals are particularly keen on renting these homes.

Rollings adds: “With more and more young professionals climbing onto the property ladder, one-bedroom properties have outperformed the market across prime London.

“Historically, buyers rated property on the number of bedrooms and a check list of desirable features. But the speed at which the London property market has moved in recent years has shifted the goalposts.

“Today’s Londoners are far more likely to prioritise location, overall square footage and well-thought through living space, compromising on that second bedroom accordingly. For the same reason, savvy investors who find the right one-bedroom property have the golden ticket to rental returns.”1

1 http://www.landlordexpert.co.uk/2015/05/07/first-time-buyers-flying-through-the-prime-london-property-market/

 

 

 

 

 

 

Property Market is Strong Despite Election

Published On: May 7, 2015 at 11:29 am

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Categories: Property News

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Activity in the UK’s property market was stronger in every sector last month than a year previously, despite uncertainty surrounding the general election.

Research from Connells Survey and Valuation indicates that there were 13% more property valuations in April than a year before, although April’s total dropped by 32% compared with March 2015.

The company’s Corporate Services Director, John Bagshaw, says that for all areas, from first time buyers to remortgages, valuations are up compared to last year. He states that this proves the housing market has momentum and he predicts this will continue into the new Parliament.

However, Bagshaw also notes that there could be an unclear election result from today’s poll, which will affect confidence.

Property Market is Strong Despite Election

Property Market is Strong Despite Election

“The latest monthly dip from March is generally a seasonal effect at this time of year so if this monthly slowdown continues further we’ll know that something has changed more fundamentally. Yet so far, there is no sign of a serious housing market slowdown.”

The study also found that in April, remortgaging surpassed the overall property market with a 25% increase on April 2014, overcoming a 34% drop from March 2015.

Bagshaw thinks that the outperformance of remortgaging is down to record low mortgage rates, which are expected to stay down for the near future: “Inflation is at zero and there’s little sign that the Bank of England [BoE] will need to raise the base rate imminently. In the meantime, mortgage rates have plummeted to the lowest level in over four years.

“Thus, many households may be capitalising on this period by refinancing to a fixed mortgage.”

The buy-to-let sector has seen the greatest month-on-month drop compared to other areas of the market, falling by 36% in April. However, it has grown the most since April 2014, up 29%.

Bagshaw explains that this could be due to rent control and three-year tenancy plans: “Some would-be landlords are perhaps waiting to see whether and how these policies will be implemented before looking to invest further. Yet the long-term picture is extremely positive.

“Over the past year, landlords have benefitted from a booming jobs market, which has led more people to move within commuting distance of work, thus increasing demand for rental properties in certain hot spots.

“Equally, as real term wages pick up there has been an increase in the rental prices tenants are willing to pay.”

Activity from first time buyers has slowed, with valuations for these buyers falling 33% since March. Since April 2014, first time buyer activity has grown just 7%.

Furthermore, activity by homeowners already on the property ladder was minimal. Valuations for established homeowners fell 27% compared with March, increasing by only 3% in the past year.

Bagshaw adds: “First time buyers have had bundles of extra support over the last five years, but still not quite enough to power any serious growth in the number stepping onto the property ladder for the first time. This might disappoint some, especially with the plethora of Government schemes to boost first timers.

“Yet the greatest squeeze has been among those who already own their home who simply aren’t looking to upsize in the same way as might have been the case a decade ago.

“Householders might have said goodbye to the recession years ago, but the crunch on disposable incomes and aspiration to move to a bigger home might well last a decade.”1

1 http://www.propertywire.com/news/europe/uk-housing-market-activity-2015050710479.html

 

Sales of Properties Worth £1m Have Dropped by a Fifth

Published On: May 6, 2015 at 2:58 pm

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Sales of properties worth over £1m have fallen by almost a fifth year-on-year due to concerns over a possible mansion tax, revealed Land Registry.

Around England and Wales, 851 homes worth over £1m were sold in January, a 19% drop on January 2014, when 1,049 properties worth more than £1m were sold.1

The majority of properties in this price bracket were sold in London.

The uncertainty surrounding the election will be cleared soon when the results are announced, however, buyers are worried about potential mansion taxes and affordability pressure. Experts have found that London’s high-end property market has slowed as a result.

Stamp Duty changes in December 2014 also made this tax more expensive for buyers in the capital’s most expensive boroughs.

Sales of Properties Worth £1m Have Dropped by a Fifth

Sales of Properties Worth £1m Have Dropped by a Fifth

Land Registry research found that property prices in Kensington and Chelsea have had the slowest annual growth of all London boroughs in the past year, with just a 5.2% increase. The average home in this area is worth £1.29m.

Westminster was the only other London borough to record year-on-year price growth of less than 10%, with a 9.9% rise, making the average price £999,687.

In contrast, Newham experienced the highest growth of all London boroughs, with a 19.8% upsurge in prices, to £291,364.

Property Economist at Capital Economics, Matthew Pointon says: “Uncertainty regarding the mansion tax has taken its toll on prices in prime central London.”1 

In all price brackets, the amount of property sales in England and Wales was 53,168 in January, an 18% drop compared with January 2014, at 65,175.

House values rose in England and Wales by 5.3% in the year to March, reaching an average of £178,007. On a monthly basis, they dropped slightly by 0.8%.

The strongest price growth was recorded for semi-detached houses in the past year, with an increase of 6.1%. The average semi-detached home is now worth £169,194.

Regionally, London still has the strongest year-on-year price growth, with an 11.3% rise, making the average property in the capital worth £462,799 in March.

The only region to record lower house prices than a year ago was the North East, with a 2.9% drop to £97,444. In Wales, prices rose 2.7% to £117,828.

This data arrives as estate agents report a slowdown in the market as buyers await the outcome of the general election. The first time buyer sector in particular has experienced a downturn.

The National Association of Estate Agents (NAEA) found that first time buyers bought 22% of properties sold in March. This is down from 30% in February.

Overall, the NAEA found that demand for homes is the lowest in a year. An average of 343 house hunters registered per estate agent branch in March, a drop from 366 in February.

Almost two-thirds (63%) of estate agents noted a slowdown in the market, the NAEA revealed.1

The NAEA also said that the supply of homes on the market has risen slightly to an average of 48 per branch, compared to 43 in February.

Managing Director of the NAEA, Mark Hayward, says: “We may have seen a slight increase in supply this month, but it is not an ongoing trend or a big enough jump to fill the gap for demand.

“Although our agents have seen the market cooling off ahead of the general election, it will inevitably bounce back again at a rapid rate after May 7th, so it is more important than ever that the party elected focuses on increasing the supply of homes.”1 

1 http://www.dailymail.co.uk/news/article-3062946/Sales-homes-worth-1million-plunged-nearly-FIFTH-amid-fears-mansion-tax.html

 

 

 

 

Help to Buy Scheme continues to aid buyers

Published On: April 24, 2015 at 12:18 pm

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Positive new figures have suggested that the Help to Buy Mortgage guarantee scheme is working in assisting new buyers get on the property ladder.

Statistics from the Mortgage Advice Bureau show that deposits for house purchases using the Help to Buy mortgage guarantee scheme were at their highest rates for 10 months in February. Users of the scheme put down deposits averaging £9,936 during the second month of the year, up from £9, 099, an increase of £9.2%.[1]

Increases

This rise meant that average Help to Buy deposits now stand at their highest rate since April 2014, where deposits averaged £11,483. Average deposits have also risen for the last three months, following a low of £7, 856 in November 2014.[2]

The Mortgage Advice Bureau estimates that prospective first-time buyers will also be greatly assisted by the upcoming Help to Buy ISA. Calculations indicate that borrowers will be able to reach the current average of £9,936 in just 15 months using this new scheme-10 months quicker than without using it.[3] 

Help to Buy ISA

A person with a Help-to-Buy ISA will see the government give them an additional £50 for each £200 saved, up to a maximum of £3,000. This means that would-be buyers would have to save just £7,500 to reach the current deposit average, as the government would subsidise the additional funds. First-time buyer couples, who both open a separate Help to Buy ISA and save the allotted £200 per month could reach the current average deposit total in 20 months, compared to 25 months if they did not utilise the government’s support.[4]

Help to Buy Scheme continues to aid buyers

Help to Buy Scheme continues to aid buyers

Head of lending at the Mortgage Advice Bureau, Brian Murphy, was quick to stress the importance of the Help to Buy scheme. Murphy said, ‘Help to Buy’s importance to easing affordability pressure is plain to see: the average deposit of those using the scheme remains far below those found in the wider markertplace.’ This, Murphy believes, gives, ‘first-time buyers access to the housing market in a far shorter timescale than would otherwise be possible without parental help.’[5]

He went on to state that,‘ the Help to Buy ISA will provide a further boost to first-time buyers, with the government effectively pledging to contribute a fifth of their deposits up to £15,000.’ Concluding, Murphy said that, ‘the arrival of the new ISA scheme will be another step towards making homeownership a realistic goal for first-time buyers on average incomes.’[6]

 

[1-6] http://www.propertyflock.co.uk/f/093FDFDE3

Poll Suggests Landlords Backing Tories

Published On: April 24, 2015 at 10:38 am

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Categories: Property News

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A recent survey has suggested that the Conservatives can expect the majority of backing from landlords in the upcoming general election.

Despite official You Gov predictions estimating that Labour will amass 35% of the vote and the Tories 33%, research from online letting agent Rentify suggests a much different result.

Conservative Landslide

Rentify’s poll of over 1,200 UK landlords, which covered a range of ages and locations, resulted in 45% of respondents pledging their support for the Conservatives. However, it was a much bleaker story for the Labour party, with just 19% of landlords giving their backing to Ed Milliband.[1]

Poll Suggests Landlords Backing Tories

Poll Suggests Landlords Backing Tories

While support for the Tories has seemingly remained constant, the survey suggests that a number of former Labour supporters are switching to UKIP. One particular respondent went as far to describe Mr Milliband as, ‘kryptonite.’ 17% of landlords surveyed said they planned on voting for Nigel Farage’s party, while just 6% pledged their backing for the Liberal Democrats.[2]

Rentify Chief Executive George Spencer, said that Labour’s focus on the housing market may have backfired. Spencer said, ‘Labour has been hugely vocal on housing policy in the build-up to the election, but these results suggest they may have gone down the wrong path.’[3]

[1-3] http://www.propertytribes.com/labour-are-electoral-kryptonite-for-uk-landlords-poll-t-13920.html

 

Lack of Houses For Sale Could Push Prices Higher

Published On: April 17, 2015 at 1:22 pm

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It is predicted that property prices in the UK could begin to increase again, after a second monthly drop in the amount of houses being put up for sale, according to surveyors and estate agents.

Lack of Houses For Sale Could Push Prices Higher

Lack of Houses For Sale Could Push Prices Higher

Despite the sales and inquiries from prospective buyers figure steadying in March, the Royal Institution of Chartered Surveyors (RICS) says that the amount of its members expecting prise rises in the next year is at the highest level since spring 2014.

This prediction is fuelled by a shortage of homes coming onto the market, it says, as March experienced the second consecutive drop in properties up for sale.

In most of the country, RICS says that the disproportion of supply and demand is forcing prices up. Around the UK, 21% more surveyors saw an increase in property prices in March, up from 15% in February. Additionally, 15% more surveyors predicted price rises in the next three months, compared with 10% in February.1

70% of surveyors expect price increases in the next year with average predictions of 2.5%, which is a ten-month high.1

Simon Rubinsohn, Chief Economist at RICS, says: “The boost that was given to the housing market by the Help to Buy scheme has begin to dissipate and activity levels have slipped back.

“Even more worrying are the tentative signs that price momentum could be set to pick up once again as the supply of stock to the market continues to fall.”

Rubinsohn also mentioned that election uncertainty could be having an affect on the housing market.

However, he concludes: “Underlying the trends visible in the latest survey is a very real housing crisis that will urgently need to be addressed by the next government.”1

1 http://www.theguardian.com/society/2015/apr/16/fall-in-homes-for-sale-could-force-prices-up