Posts with tag: property prices

Property sales at 16 month high

Published On: October 9, 2015 at 11:19 am

Tags: mortgage finance,property market,property prices

Property sales across Britain reached a 16-month high during September, according to the latest report from the Royal Institution of Chartered Surveyors. (RICS).

In addition, data from the investigation shows that the last month saw an increase in property prices and mortgage availability. However, there was no improvement in supply, with buyer demand continuing to be higher than instructions to sell.

Highs

Across the UK, sales rose at the greatest pace since May 2014, with 14% more chartered surveyors experiencing an increase. This represented the fifth consecutive month in which sales have increased.

Regionally, the North, East Anglia and Scotland saw the sharpest rises in monthly activity, with the East Midlands the only region to see a small drop. However, this followed an increase in sales during August.

The report suggests that the increase in sales in Britain is reflective of spiral in demand that has been visible since the Spring. What’s more, the number of new buyer enquiries increased for the sixth consecutive month, with 18% of chartered surveyors saying they had seen an increase in demand.

There was good news too for mortgage approvals, which stand at an 18-month high and are up by 12% on the same time on year ago.

Increases

With mortgage finance availability seemingly improving, the average perceived LTV ratio given by respondents nudged up to 79.3%. This said, the ongoing lack of new instructions and the limited stock on the market is still the most serious issue for the sustainability of the market. The number of new instructions has fallen in 13 out of the last 14 months.

RICS said that 40% feel the greatest factor behind the negative trend in instructions is the lack of stock already fore sale. This is in turn deterring would-be homemovers as they struggle to locate a suitable property to move to.

As a result of the constant supply/demand imbalance, the national house price indicator continues to increase, which is likely to be highlighted in key house price indices over the rest of 2015.

In the lettings market, tenant demand increased once again, continuing a trend seen since December 2014.

Property sales at 16 month high

Replenishment

‘Activity is now picking up which is encouraging but unless the stock being sold is replenished, there is a limit to how sustainable the modest improvement in market turnover will prove to be,’ said Simon Rubinsohn, RICS chief economist. He went on to say, ‘unfortunately, the indications are that we are locked in a cycle where the lack of available properties on agents’ books is itself deterring some potential vendors from thinking about putting their own property on the market.’[1]

‘Against this backdrop, it is hard not to see prices continuing to move higher over the coming months and into the early part of 2016, notwithstanding the present concerns regarding the affordability of housing in some areas of the UK that are being highlighted by respondents,’ Rubinsohn added.[1]

[1] http://www.propertywire.com/news/europe/uk-property-prices-sales-2015100911075.html

House prices in England and Wales up again

Published On: October 9, 2015 at 9:15 am

Author: Em Morley

Categories: Property News

Tags: annual property growth,property market,property prices

Property prices across England and Wales rose by 0.4% in September, taking the average property price in the two countries to £284,742. What’s more, this was the 9^th successive month of increased property values.

The new LSL property price index also shows that yearly, prices have increased by 4.2% and by an average of £11,500.

Solid foundations

In London, prices rose at their highest level since June 2014, with the South East seeing the strongest year-on-year rise of any region. According to Richard Sexton, director of e.surv chartered surveyors, this growth is being driven by continuing demand and solid activity towards the bottom of the property ladder.

‘The most frequently paid property price across England and Wales is just £125,000, mirroring the level at which stamp duty becomes payable and reflecting the impetus that has been injected in the first-time buyer market recently,’ he stated.[1]

‘It is also the lower to mid-range properties priced between £180,000 and £360,000 which are seeing the fastest increases in value, while the shift in stamp duty bands continues to slow growth at the higher end of the market and prices above £600,000 are largely stationary,’ Sexton added.[1]

Capital confidence

Mr Sexton went on to point out that a price surge in London during the last month has stopped its stalled market. Sexton said, ‘as in the rest of the country, it’s the more affordably priced London boroughs which are behind this renaissance, as the strengthening of sterling, rising stamp duty rates and moves again the non-doms take their toll on the high end market.’[1]

Data from the index shows that the ten capital boroughs with the lowest average house prices all set new record highs during August. Barking and Dagenham, at the foot of the price rankings, recorded the quickest year-on-year increase in property values of 15.7%.[1]

House prices in England and Wales up again

‘While London is once again leading the pack in terms of monthly price growth, the South East region has soared two places in the rankings to top the charts with the highest annual increase in property values,’ Sexton continued. ‘Average house prices in the South East have grown 5.8% over the past twelve months.’[1]

‘Combined, these two regions are now having a much greater influence on national measures of price growth. Compared to July, when they were only pushing up the overall annual change by 0.1%, this has grown to 0.7%. As house price growth becomes more southern-centric again, the London commuter belt is spurring some of the fastest rates of change with Luton witnessing the steepest price rise compared to last year, jumping 14.9%,’ he concluded.[1]

Regional divides

The regional spread of home sales shows a distinctive north/south divide with cheaper northern regions seeing the quickest growth in property sales. However, a shortage of properties available on the market in the South is slowing activity.

In the three months to August 2015, the North and North West of England saw the largest year-on-year increase in sales, while East Anglia, London and the South East saw the most substantial falls.

[1] http://www.propertywire.com/news/europe/england-wales-property-prices-2015100811069.html

House price confidence unwavering

Published On: October 5, 2015 at 12:29 pm

Author: Em Morley

Categories: Landlord News

Tags: homeowners,interest rates,property prices

An encouraging new report from the Halifax indicates that house price confidence is undeterred by the threat of interest rate rises.

The number of people who expect both mortgage and savings rates to be greater in 12 months time increased during the third quarter of 2015. Latest Tracker data shows 58% of homeowners believe mortgage interest levels will be higher, in comparison to 48% in Q2. 35% expect savings interest rates will also rise in the next year, up from 26% in the second quarter of this year.[1]

Optimism

Annual house price inflation currently stands at 9%, with the average UK house price at £204,674. House price optimism has risen slightly, from 63% in Q2 to 64% in Q3. 68% of Britons now expect the average property price to be higher in 12 months’ time, with just 5% believing that it will be lower.[1]

In addition, there has been a drop in the proportion of British property owners that think it will be a good time to buy in one years’ time, slipping to 53% from 56%. There has also been a fall in selling sentiment, with people who feel that the next 12 months represents a good time to purchase homes down to 52% from 59%.[1]

Barriers

Raising a deposit was still found to be the top barrier for those looking to purchase a home, with 57% citing this as the main reason. Job security (42%) and household finance (36%) were the next most common barriers.[1]

Despite house prices continuing to rise, the percentage of people stating that house prices are too high has dropped to 31% from 35% during the last three months. Homeowners who cite possible interest rate rises as a barrier to buying a new home have dropped to 14% from 16% in Q2.[1]

By region, Londoners have a low buying sentiment, with just 40% saying that they feel the next year will be a good time to buy. By contrast, 77% of people in Scotland and 58% in the North of England feel that the next 12 months represents a good period to purchase property.[1]

House price confidence unwavering

However, 64% of Londoners believe that the next 12 months will be a good time to sell, in comparison to 48% in Scotland, 47% in the North and 43% in the Midlands.[1]

Expectations

Craig McKinlay, Mortgage Director at the Halifax, stated that, ‘while economic optimism appears to have tailed off in the last quarter, house prices have continued to increase and the underlying pace of house price growth is strong. This has helped to maintain the expectation that house prices will continue to rise, despite more people expecting interest rate rises in the next 12 months.’[1]

‘The factors behind the upward pressure on house prices include the continued lack of second-hand properties for sales on the market and the availability of low mortgage rates. Without an increase in supply, it’s likely to mean that house price growth continues to be robust in the short-term, even if interest rates eventually begin to increase,’ McKinlay added.[1]

[1] http://www.propertyreporter.co.uk/property/house-price-confidence-remains-high.html

Gap in prices between London and UK regions increases

Published On: October 1, 2015 at 9:15 am

Author: Em Morley

Categories: Finance News

Tags: average house values,property prices,UK housing market

A new report from leading lender Nationwide has shown that the gap between London house prices and the rest of the UK is continuing to rise.

Overall, UK property prices rose by 0.5% in September, with annual house prices up by 3.8%, according to the research.

Rises

On a quarterly basis, London property prices increased to 10.6% in the third quarter of 2015, rising from 7.3% in the second quarter. This is in comparison to the average property price rise in England of 1.8% in the third quarter of 2015.[1]

Regionally, house price growth soared in Southern England in and London, but slowed in the Midlands and the North. Unsurprisingly, the capital was the strongest performing region, with prices in the neighbouring Outer Metropolitan area rising from 6.8% to 9.5%.[1]

The price of an average home in London is £443,399 is more than double the UK aggregate and more than three times the price of the average property in the cheapest British region.

Regional rates

Performing weakest is the North of England, with prices down by 0.6% year-on-year. However, house prices continued to recover in Northern Ireland, with annual growth of 6.5% recorded in the third quarter. This said, average prices are still 44% below their pre-recession peak.[1]

Wales saw a year-on-year increase of 1.9% in property prices, while Scotland recorded a fall of 1.3% in the same period. In the South, price growth exceeded that in the North for the 26^th consecutive quarter. Property prices in the South were up 8% year-on-year, but in the North, prices rose by just 1%.[1]

In monetary terms, the gap in average property prices between the South and East of England is at a record high, exceeding £150,000 for the first time. Average prices in the South are now twice as high as those in the North.

Gap in prices between London and UK regions increases

Stabilising

‘The data in recent months provides some encouragement that the pace of house price increases may be stabilising close to the pace of earnings growth,’ said Robert Gardener, chief economist at the Nationwide. ‘However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.’[1]

‘Indeed, in recent months surveyors have reported historically low levels of properties for sale and increased new buyer enquiries. Therefore it is unsurprising that most surveyors expect a pickup in house price growth in the months ahead. The slowdown in house price growth since the middle of 2014 has not been confined to, nor has it been driven primarily by, developments in London. The capital has continued to see price growth at or above the rate in the UK overall over the past four quarters and the annual rate of price growth in London is currently the highest in the country,’ he continued.[1]

Concluding, Mr Gardner observed that, ‘taking a wider view, regional house price performance was mixed in the third quarter.’ He went on to say that, ‘eight UK regions recorded a slowdown in the annual rate of growth while five saw acceleration. Most parts of the country continued to see annual house price gains but the exceptions were Scotland and the North West which both recorded small declines.’[1]

[1] http://www.propertywire.com/news/europe/uk-property-market-index-2015093011040.html

Northern Ireland to see largest house price increase in UK

Published On: September 28, 2015 at 4:19 pm

Author: Em Morley

Categories: Landlord News

Tags: Northern Ireland property,property market,property prices

A new report suggests that Northern Ireland is to see the largest property price growth in the UK during 2015.

The latest residential market survey from the Royal Institution of Chartered Surveyors and Ulster Bank indicates that the region is likely to see continued house price rises for the remainder of the year.

Rises

Data from the report shows a net balance of 72% of Northern Ireland surveyors stated that property price increased during August. This represented a higher net balance than all other UK regions, apart from East Anglia.

Surveyors are also confident that these increases seen in August will continue, with 40% of respondents expecting sales levels to actually increase during the next three months.

‘A shortage of new instructions has characterised the Northern Ireland property market this year, with buyer enquiries outstripping the rate at which properties have been coming to the market,’ observed RICS Northern Ireland residential property spokesman, Samuel Dickey.[1]

Northern Ireland to see largest house price increase in UK

Seasonal Stability

Dickey continued by suggesting, ‘as we move into the Autumn, we should see more instructions, helping address this imbalance and ease upward pressure on prices. On the whole, RICS forecasts that average prices in Northern Ireland will have risen by 11% between the fourth quarter of 2014 and the fourth quarter of 2015.’[1]

‘This represents robust growth, but we should remember that this is from a low base, with average prices still someway from their 2007 peak,’ he added.

[1] http://www.propertywire.com/news/europe/rics-northern-ireland-prices-2015092811027.html

Buy-to-let boom could lead to risks

Published On: September 25, 2015 at 12:46 pm

Author: Em Morley

Categories: Landlord News

Tags: buy to let market,Buy-to-Let,property prices

The Bank of England has warned that the booming buy-to-let market in Britain could be a threat to the wider financial stability.

A report from the Bank’s Financial Stability Committee has concluded that buy-to-let mortgage lending had the potential to cause a housing boom and bust.

Lending

In the sector, lending has risen by 40% since the beginning of 2008. The Financial Stability Committee stopped short of calling for any intervention by the government or calling for any regulations to slow this process.

‘The FPC is alert to the rapid growth of the market and potential developments in underwriting standards,’ the committee said. ‘As the market continues to grow, particularly if driven by loosening of underwriting standards, the sector could pose risks to broader financial stability, both through credit risk to banks and the amplification of movements in the housing market,’ said the committee.[1]

Growing

A 40% increase in the outstanding stock of buy-to-let mortgage lending since the beginning of 2008 is in comparison to a rise of just 2% in owner-occupier mortgage lending. In terms of overall mortgage lending, the share of buy-to-let rose to 16% from 12% in 2008.[1]

Buy-to-let landlords are much more likely to sell up should there be a significant drop in property prices, according to the bank. In addition, it feels that a similar effect could occur if prices were to rise sharply.

‘Any increase in buy-to-let activity in an upswing could add further pressure to house prices. This could prompt owner-occupier buyers to take on even larger loans, thereby increasing overall risks to financial stability,’ the FPC stated.[1]

Buy-to-let boom could lead to risks

Changes

Reductions to the amount of tax relief that can be claimed in mortgage interest payments by buy-to-let landlords were announced by the Chancellor in this year’s summer budget.

As a result, the amount that landlords will be able to claim will be capped at the basic rate of tax, currently standing at 20%. This change will be phased in over four years from April 2017.

At present, the FPC said that no intervention was required in the Help to Buy scheme, which sees the Government secure part of a low-deposit home loan, as it poses no risk to stability.

[1] http://www.bbc.co.uk/news/business-34356801?ocid=socialflow_twitter