Posts with tag: property prices

Property Prices Rise Due to Lack of Supply

Published On: May 15, 2015 at 9:50 am


Categories: Finance News

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The greatest lack of supply of homes for sale in the UK in almost six years has fuelled property price increases in the past month, found new research.

The Royal Institution of Chartered Surveyors (RICS) revealed that every region of the UK has experienced price rises, and that one cause of this could have been uncertainty ahead of the general election. However, the organisation believes there are “deeper underlying problems” regarding the shortage.

In its survey of members, the RICS discovered that a net balance of -21% reported a drop in new instructions and 33% more surveyors saw price increases in April, up from 22% in March.

Additionally, the balance of those studied that reported price growth was positive in every UK region for the first time since August 2014, as prices in London rose again after being stable for a few months.

28% more surveyors witnessed prices in London increase, compared with 6% more in March who saw prices drop. With fewer homes up for sale, agreed purchases were at -3%.

Property Prices Rise Due to Lack of Supply

Property Prices Rise Due to Lack of Supply

The RICS report expects house prices to increase by 2.7% around the UK in the next year, as 72% of respondents predict price rises.

This data will add pressure onto the Conservative Government, which has the task of building more homes. April’s decline in new instructions was the sharpest since May 2009.

Head of Policy at RICS, Jeremy Blackburn, says that the affordability and availability of properties in the UK is now a “national emergency” and the Government need to make it an urgent issue.

“The last time we were building 300,000 homes was in 1963 under Harold Macmillan’s Conservative government, which utilised both public and private building,”1 Blackburn notes.

Private developer construction is now below the long-term average, however, local authority house building is the main problem causing a shortage of homes.

Before the election result was revealed, Chief Economist at RICS, Simon Rubinsohn, commented: “It is conceivable that the decisive outcome to the election could encourage a pick-up in instructions to agents and ease some of the recent upward pressure on house prices, but it is doubtful that this will be substantive enough to provide anything more than temporary relief.

“Alongside an increased flow of second hand stock, it is absolutely critical that the new government focuses on measures to boost the flow of new build.”1 

Furthermore, surveyors are expecting rents to continue increasing, as tenant demand grew in all UK regions in the three months to April, found RICS. Its report predicts rents will rise by around 5% every year for the next five years.

The report claims: “The downward trend in owner-occupation rates across the country is a visible sign that affordability constraints bite ever deeper, as does the squeeze on household budgets from higher rents.”1 

The report reflects recent research from mortgage provider Halifax, which reported a 1.6% increase in property prices in April. The bank also stated the rise is due to the lack of supply of homes for sale.

The average house price in Britain was a record high of £196,412 in April, up £3,084 from March, when prices grew by a slower monthly rate of 0.6%.

Property price growth has steadied since the second half of 2014, however prices were 8.5% higher than last year in the three months to April. This was 8.1% in the three months to March, Halifax found.

However, high-end estate agents expect prices to increase even further, after wealthy buyers returned to the housing market after the election.





House Prices, ‘rose by £100 per day,’ in April

Published On: May 8, 2015 at 4:13 pm


Categories: Finance News

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New statistics indicate that house prices across the United Kingdom continue to escalate at a remarkable rate.

Data released from the Halifax showed that house prices rose at more than £100 per day during April, taking the average value of property in Britain to almost £200,000. This has led to more concern that young professionals and families are being further priced out of the property market.


Despite perceived market sluggishness, due to election uncertainty and more restrictive lending conditions, the report from the Halifax showed that annual growth rate had increased. The increase was to 8.5% in the twelve months up to April, from 8.1% in the year to March. As a result, average house prices rose from £193,328 to £196, 412 in just one month.[1]

Martin Ellis, housing economist at the Halifax, believes that, ‘housing demand is being supported by a number of factors including economic improvement, rising employment and low mortgage rates.’ According to Ellis, ‘this combination has kept house price growth steady in recent months with prices increasing by 2.2% to 2.6% on a quarterly basis and an annual rate of 8-9%.’[2]

Ellis warns however that, ‘at the same time, supply remains very tight with a general shortage of properties available for sale.’ [3]

House Prices, 'rose by £100 per day,' in April

House Prices, ‘rose by £100 per day,’ in April

Election results

With the Conservatives defying predictions and gaining an overall majority win in the general election, the market is expected to make further gains. Johnny Morris, head of residential research at Hamptons International, said that, ‘we should now see the other side of the pre-election slowdown in activity-the recovery.’ He continued by saying, ‘transactions typically end up 15pc above what you would expect in an average year for at least six months after the election. That potentially means a 30pc difference between activity numbers in the 6 months in the run up to the election versus the 6 months after.’[4}

Despite the result of the election only being announced a few hours ago, exit poll results gave some buyers the confidence to push through with substantial deals. Becky Fatemi, managing director of Rokstone Properties, said that, ‘the London property market has gone crazy and I haven’t slept last night. We have already had exchanges on over £26m worth of property, which I anticipate will rise to well over £30m by the close of the day. Today and tomorrow we will see a huge upward adjustment in London pre-election and post-election residential property prices.’ Fatemi believes that the election outcome, ‘is the one the property market wanted.’[5]


Whilst the property industry has widely welcomed the result, there remain grave concerns over the crippling lack of housing within the UK. Guy Grainger, chief executive of property group JLL, commented that, ‘there is a palphable sense of relief in the residential property market because there are no new taxes coming in, however we still need to address the issue of supply. Businesses have a real responsibility to articulate how we can supply more housing and must also help the debate on Europe to help people see it from a trade perspective as well as a community one.’[6]




Buyers Will Need an Extra £12,000 to Move House

Published On: April 17, 2015 at 1:54 pm


Categories: Finance News

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A lot of the focus surrounding the property market has been on house prices recently. However, the cost of moving home has risen significantly in the last ten years.

Buyers Will Need an Extra £12,000 to Move House

Buyers Will Need an Extra £12,000 to Move House

Research has found that moving house costs almost £12,000, a rise of 59% in the past decade.1

Buyers have to pay a huge £11,894 in expenses covering Stamp Duty, estate agent and surveyors’ fees, and removals, the study revealed.

In 2004 the same costs came to £7,475, according to a survey by the Post Office and Centre for Economics and Business Research.1

Head of Mortgages at Post Office Money, John Willcock, says that first time buyers often don’t consider the additional costs and focus more on saving a deposit.

He says: “Although house prices may continue to rise, there are steps buyers and movers can take to reduce the amount they pay on top of this. Planning ahead is essential and potential homebuyers should be setting aside savings specifically for these costs. These add-ons should be considered as part of the overall cost of buying or moving home.”1

The study discovered that London is the most expensive place to move home, costing an average £27,946. Northern Ireland is the cheapest at £6,453.1

It is predicted that moving costs will reach an average of £15,414 by 2020, but the research indicates that aspiring buyers are not saving enough.

1 Shaw, V. (2015) ‘Saved enough for a house? You’ll need an extra £12,000’, Metro, 17 April, p.28