Posts with tag: property sales

Annual House Price Growth is Down to 3.8%, Reports Halifax

Published On: April 10, 2017 at 9:50 am

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The annual rate of house price growth has dropped to 3.8% from February’s 5.1%, according to the House Price Index for March from Halifax. This is the lowest annual rate since May 2013 (2.6%) and less than half the 10.0% peak reached in March 2016.

Annual House Price Growth is Down to 3.8%, Reports Halifax

Annual House Price Growth is Down to 3.8%, Reports Halifax

On a quarterly basis, house prices rose by just 0.1% between January and March when compared with the previous three months. This is the lowest quarter-on-quarter increase recorded since October 2016.

Between February and March, house prices were unchanged for the second consecutive month, leaving the average property value at £219,755.

Separate research by Halifax shows that average house prices have increased by more than total average employees’ net earnings in a third (31%) of local authority districts in the UK over the past two years.

The biggest gap between rising house prices and earnings was in Haringey, London. Property values in the borough rose by an average of £139,803 over the past two years, exceeding average take-home earnings in the area of £48,353 over the same period – a difference of £91,450, equivalent to £3,810 per month.

In February, for which the latest data is available, total UK home sales slipped by 1% on January’s figure, marking the first decrease for five months. At 103,910, sales were 2% lower than in February last year. Despite this slight monthly decline, sales in the three months to February were 6% higher than in the preceding three months.

The volume of mortgage approvals for house purchases – a leading indicator of completed sales – dropped by 1% between January and February, to 68,300. Approvals have been in a narrow range between 67,000 and 70,000 per month over the past five months, suggesting that home sales are unlikely to change significantly over the next few months.

Supply also remains very low, with the number of properties coming onto the market dropping again in February. This was the 12th successive monthly decrease, keeping average stock levels on estate agents’ books close to historic lows.

The Housing Economist at Halifax, Martin Ellis, comments on the report: “The annual rate of house price growth has more than halved over the past 12 months. A lengthy period of rapid house price growth has made it increasingly difficult for many to purchase a home as income growth has failed to keep up, which appears to have curbed housing demand.

“Nonetheless, the supply of both new homes and existing properties available for sale remains low. This, together with historically very low mortgage rates, is likely to support house price levels over the coming months.”

Russell Quirk, the Founder and CEO of online estate agent eMoov.co.uk, also responds: “The market had shown positive signs out of the blocks for 2017, but it would seem these green shoots of upward property price growth have stalled in the early springtime frost of Article 50. It is also important to note that some natural adjustment in price levels is no surprise given the rapid level of growth seen over the last year, driven for the large part by a lack of housing stock to meet buyer demand.

“The triggering of Article 50 may lead to some further uncertainty in the market as, once again, UK buyers let the dust settle before committing to a property sale. But this should soon subside and it is likely that the initial upward trend in property price growth seen at the start of the year will continue to blossom over the coming months.”

UK Property Market Gains Momentum in March, Reports Agency Express

Published On: April 6, 2017 at 9:51 am

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The UK property market gained momentum in March, according to the latest Property Activity Index from Agency Express.

The monthly data shows a nationwide increase in both new property listings, which rose by 21.7%, and the number of properties sold, which was up by 18.0%.

UK Property Market Gains Momentum in March, Reports Agency Express

UK Property Market Gains Momentum in March, Reports Agency Express

These increases appear consistent with recent reports from the Council of Mortgage Lenders, which stated: “The housing market has been slowly building up momentum over the last few months, largely getting back to activity levels we saw in the beginning of 2016.”

Assessing property market activity across the UK, Agency Express found that all of the 12 regions included in the index experienced growth in both new property listings and the amount of properties sold.

March’s top performer was the West Midlands. Setting the pace for the rest of the UK, the region recorded robust rises in new property listings, which were up by 31.7%, and properties sold, which increased by 22.6%.

This surge in activity was also highlighted by Rightmove in its latest House Price Index. Dubbed the “Mighty Midlands”, figures sat at record highs, with house prices up by 2.1% on a monthly basis and 4.2% annually.

High levels of activity were also recorded in central England. Following a dip in the property market during February, new property listings bounced back, up by 29.4%, as did the number of properties sold, which rose by 28.8%.

Other regional hotspots in this month’s Property Activity Index included:

The number of properties sold 

  • North East: +28.0%
  • South West: +23.1%
  • London: +20.1%
  • Scotland: +19.5%

Amount of new property listings

  • East Anglia: +31.7%
  • East Midlands: +28.3%
  • South West: +26.8%
  • North East: +23.6%

Stephen Watson, the Managing Director of Agency Express, comments on the figures: “The month-on-month increases revealed by March’s Property Activity Index have reported positively across the nation.

“However, year-on-year, we are seeing a decline in properties sold, which is a reflection of the increasing affordability issues. Looking forwards into April, we traditionally experience a seasonal slowdown over the Easter holidays, but we would expect the current trend to resume promptly after.”

Prime Central London Prices hit an All-Time High

Published On: April 5, 2017 at 8:11 am

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Prime central London prices hit an all-time high at the end of last year, as buyer sentiment improved, reports London Central Portfolio (LCP).

Prime Central London Prices hit an All-Time High

Prime Central London Prices hit an All-Time High

Despite turbulence in 2016 as Brexit uncertainty and Stamp Duty changes affected the market, prime central London prices showed signs of growth in the fourth quarter (Q4) of 2016.

The year ended with prime central London prices at a record high. According to data from HM Revenue & Customs (HMRC), the average house price in prime parts of the capital exceeded £1.8m at the end of 2016 – the highest level on record and 2.7% higher than the previous peak in Q3 2014.

This was spearheaded by a rally in Q4. Despite declines in annual price growth in the first three quarters of the year, Q4 recorded a 14% rise in quarterly prices, bringing 2016 price growth to 3.75%.

Transactions, however, dropped to an all-time low. Compared with the previous year, sales were down by 29%, with just 3,330 taking place – equivalent to just 64 per week. This is the lowest number on record – lower even than the depths of the financial crisis.

However, there is a reason for optimism, says LCP. As with prime central London prices, sales numbers saw a marginal recovery in the final quarter of 2016. Q4 experienced a 19% increase in sales compared with Q3. This is notable, as it bucks the seasonal trend of volumes typically tailing off in the pre-Christmas period.

It is LCP’s expectation that transactions will continue to rise gradually as the initial shock of Brexit and tax changes wash through.

The renewed activity in the London market appears to have continued into 2017, as investors’ confidence returns and they take advantage of the softer market.

As an international buying market, the weakness in sterling has also drawn investors back to prime central London. Despite the fact that prices are 2.7% higher than in Q3 2014, they are still 20% cheaper for investors buying in US dollars.

Combined with the Trump-effect and increasing instability in Europe, it is expected that steady levels of price growth will be witnessed, as investors retrench to safe havens.

However, while LCP expects sales volumes to harden gradually as investors return to the market, the overall trend of falling transactions is likely to continue, it warns.

As more investors choose to hold onto their blue-chip assets, the number of prime central London sales has been shrinking annually. This is likely to continue, explains LCP, which will put further pressure on the imbalance between supply and demand, and underpin future growth for prime central London prices.

Slow High-End House Price Growth Offsets Stamp Duty Hike for Additional Homes

Published On: March 31, 2017 at 10:10 am

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Slow house price growth in the high-end property market has effectively offset the Stamp Duty hike that buy-to-let landlords and second homebuyers are now forced to pay, according to new research from Private Finance.

The independent mortgage broker’s analysis of Land Registry figures shows that the average house price among the top 5% of property sales in England and Wales in 2016 was £1.121m. This was up by just 0.5% from 2015, as a combination of Stamp Duty changes and uncertainty following the EU referendum put the brakes on high-end property sales.

The 3% Stamp Duty surcharge that was introduced in April 2016 means that a property worth £1.121m is now liable to Stamp Duty of £89,521 if purchased as buy-to-let or second home, at an effective rate of 7.98%. This is £33,639 more than the £55,882 fee under the previous system, which still applies if the property is bought as a main residence, at an effective rate of 4.98%.

Slow High-End House Price Growth Offsets Stamp Duty Hike for Additional Homes

Slow High-End House Price Growth Offsets Stamp Duty Hike for Additional Homes

Despite the higher fee amounting to a 60% hike in Stamp Duty costs for landlords, investors and second homebuyers in the high-end of the property market, Private Finance’s analysis suggests that this extra £33,639 has been more than offset by the potential savings to be made on property values as a result of slower house price growth.

Annual price growth of 0.5% in 2016 among the top 5% of property transactions was markedly slower than across the rest of the market, where average prices rose by 4.2%.

Had the top 5% of the market risen at the same rate, buyers would have had to part with £1.162m for the average high-end home in 2016, rather than £1.121m – an extra £40,827. This saving more than compensates for the additional £33,639 Stamp Duty bill facing landlords and second homebuyers.

The difference is even larger for potential buyers of second homes or buy-to-let properties in Greater London. The average high-end property sale in 2016 was worth £2.581m in the capital, up by 1.5% on the previous year.

However, the remaining 95% of the London property market saw average prices rise by 8.2% over the same period, from £443,259 to £479,507.

Had the top 5% of the London market grown at the same 8.2% rate, it would have pushed average prices in this bracket up to £2.750m, leaving buyers to find an extra £169,410 for their purchases.

This far exceeds the additional £77,431 in Stamp Duty that would be due on a £2.581m home if it were purchased as a buy-to-let or second home (where Stamp Duty would cost £300,903) rather than a main residence (where £223,472 would be due).

The study comes after the Office for Budget Responsibility forecast rising Stamp Duty receipts from 2016/17 to 2021/22, and revised its previous 2016/17 prediction made in November 2016 on the basis of residential transactions and prices being “stronger than expected”.

The Director of Private Finance, Shaun Church, says: “Conditions have been tougher at the top of the housing market since last April’s Stamp Duty reforms, which created all manner of disruption to normal activity before and after they took effect. A healthy housing market needs movement and fluidity at all levels and across all tenures, but successive changes to Stamp Duty in 2014 and 2016 have had the opposite effect.

“If there is one silver lining for would-be buyers and investors, it’s that slower growth of high-value property prices has had a positive impact on affordability. A buyer today can pay markedly less for a high-value property at the top end of the ladder than if growth had kept pace with the rest of the market, making it easier to absorb any extra Stamp Duty fees.”

He continues: “Despite being something of a damp squib, last month’s Housing White Paper hopefully marks a shift away from an era of policy gimmicks and short-term tinkering with housing. Greater thought is needed to create a Stamp Duty system that supports homebuyers and sellers across the market.

“In the meantime, the long-term trend of rising house prices means Stamp Duty can be just as much of a psychological issue for buyers as one of affordability. There are plenty of funding options at hand to help with covering transaction costs, which mean the associated fees and taxes need not be a permanent barrier to property purchases.”

Number of House Sales Agreed Reaches Ten-Year High

Published On: March 31, 2017 at 8:18 am

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The number of house sales agreed in February hit a ten-year high, according to the February Housing Report from NAEA Propertymark.

House sales agreed

The number of house sales agreed increased to a ten-year high in February, to an average of 11 per branch. The last time this figure surpassed ten per branch was in September 2007, suggesting that buyer confidence is growing. In January, estate agents agreed eight house sales per branch, up from six in December.

Number of House Sales Agreed Reaches Ten-Year High

Number of House Sales Agreed Reaches Ten-Year High

Although high house sales were recorded in February, three in every four (74%) of the sales made were below the original asking price, indicating that sellers are taking a pragmatic approach to their property transactions.

Sales to first time buyers

The proportion of house sales that were agreed for first time buyers dropped to 22% in February, down from 30% in the previous month.

Housing supply

The number of properties available to buy on estate agents’ books rose to 44 in February. In January, just 38 were available per branch.

This figure has increased by 26% from last February, when agents had just 35 properties on their books.

Demand for properties

The number of homebuyers registered per estate agent branch remained at 425 in February for the second month in a row.

Housing White Paper

Only 7% of estate agents expect the remedies outlined in the Government’s Housing White Paper to be enough to fix the broken housing market.

Two fifths (43%) don’t think they will make a difference, while 39% believe the proposals could positively impact the market, but can’t yet tell how.

The Chief Executive of NAEA Propertymark, Mark Hayward, comments: “The number of sales agreed reaching a ten-year high indicates the housing market is moving in the right direction.

“However, first time buyers need to be a priority – the number of sales made to the group dipped in February, when it should be growing. As house prices continue to rise, the market’s most vulnerable buyers are being priced out and the only way to address this is to increase housing stock.”

He adds: “The Government has pledged yet again to build more homes, but our members aren’t feeling optimistic about the plans. If promises are kept and we see construction sites set up across the UK, we’ll be in a better position in a few years than the stark reality we will be facing if this doesn’t happen.”

Property sales hit ten-year high during February

Published On: March 30, 2017 at 1:14 pm

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The most recent data from NAEA Propertymark has revealed that during February, agreed house sales increased to a ten year high. 74% of these sales were below the original asking price, which suggests sellers are becoming more realistic when it comes to transactions.

Rises

According to the data, sales rose to 11 per branch. This figure has not been beaten since September 2007. During January, estate agents agreed eight sales on average per branch, up from six in December.

However, the proportion of sales agreed for first-time buyers fell to 22% in February, down from 30% in January.

The number of properties available to purchase on estate agents books rose from 38 in January to 44 in February. This number is up by 26% from the figure seen last February.

Despite good sales figures only 7% of estate agents expect the proposals outlined in the Government’s Housing White Paper to be enough to sort out the issues in the housing market. 43% think the proposals will not make a difference, while 39% feel that they will have a positive impact.

Property sales hit ten-year high during February

Property sales hit ten-year high during February

Moving Forwards

Mark Hayward, Chief Executive at NAEA Propertymark, said: ‘The number of sales agreed reaching a 10 year high indicates the housing market is moving in the right direction. However, first-time buyers need to be a priority-the number of sales made to the group dipped in February when it should be growing.’[1]

‘As house prices continue to rise, the market’s most vulnerable buyers are being priced out and the only way to address this is to increase housing stock. The Government have pledged yet again to build more homes, but our members aren’t feeling optimistic about the plans. If promises are kept and we see construction sites set up across the UK, we’ll be in a better position in a few years than the stark reality we will be facing if this doesn’t happen,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/house-sales-soar-to-10-year-high.html