Posts with tag: property

Confidence of property investors is high

Published On: April 5, 2017 at 9:03 am

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A new report has indicated that confidence regarding investing in property is continuing to grow, with many buy-to-let landlords predicting a good year ahead for the UK housing market.

The survey from Shawbrook Bank discovered that 81% of landlords feel confident about the performance of their property portfolios in the coming year. Much of this optimism stems from improvements in the lending environment.

Demand

Tenant demand remains strong, with 30% of landlords questioned seeing an increase in the number of renters during the second half of 2016. In addition, half of all buy-to-let landlords have seen increases in income during the last twelve months.

It is also good news for the buy-to-let sector, with 66% of respondents saying that they plan on purchasing an extra buy-to-let property during the opening six months of 2017. This comes despite the numerous tax alterations and continuing uncertainty surrounding Brexit.

Confidence of property investors is high

Confidence of property investors is high

Optimism

Karen Bennett, Managing Director of commercial mortgages at Shawbrook Bank, said: ‘Despite uncertainty surrounding Brexit, landlords are still optimistic about the performance of their portfolios. With Brexit negotiations officially underway, as well as recent changes to housing policy, it is encouraging that the market doesn’t seem to be slowing.’[1]

‘Following last year’s tax changes it’s clear that investors are still getting a feel for how the changes will affect them. It is also evident that landlords have made an effort to understand how these new policies affect they way they do business, although the fact that 19% of those asked have little or no understanding of these changes means there is still work to be done,’ she added.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/4/property-investor-confidence-runs-high

 

UK house price growth falls in March

Published On: March 31, 2017 at 9:04 am

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Categories: Property News

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The latest report from Nationwide shows that house price growth in the UK fell in March by 0.3%, with annual growth also falling by 3.5%. This took the average price to £207,308.

In addition, the investigation shows that the gap between regional price growth is closing, with this now at its narrowest since 1978.

Rise and Falls

During the first three months of 2017, six regions saw property prices rise, six saw falls and there was no alteration in the East Midlands.

Robert Gardner, Nationwide’s Chief Economist, noted: ‘The spread in the annual rate of change between the weakest and strongest performing regions was at its narrowest since 1978 at 6.8%, the second smallest gap on record.’[1]

‘The South of England continued to see slightly stronger price growth than the North of England, but there was a further narrowing in the differential. Northern Ireland saw a slight pickup in annual house price growth, while conditions remained relatively subdued in Scotland and Wales,’ he continued.[1]

Quarterly Figures

Quarterly, overall year-on-year prices rose by 4.1%. By country, rises were:

  • England 4.7%
  • Northern Ireland 3.8%
  • Scotland 2.9%
  • Wales 1.2%
UK house price growth falls in March

UK house price growth falls in March

By region, prices in the South West, Outer South East, Outer Metropolitan, London and East Anglia all rose by 5% year-on-year.

Despite regional growth rates beginning to converge, there is still disparity in price levels. This becomes more profound when looking at prices relative to their 2007 peak. Prices in London for example are almost 60% above their 2007 levels, while those in the North, Yorkshire and Humberside and the North West are lower than their 2007 peaks.

Experts feel that the March dip in prices is not a trend, with monthly figures tending to be volatile. In addition, the fall is not thought to be connected with the trigger of Article 50 this week.

Muddle

Jonathan Hopper, managing director of Garrington Property Finders, observed: ‘The market has become a muddled mix of extremes, with double digit reductions going on at one end of the spectrum and gazumping at the other. So it would be overly melodramatic to view the Nationwide’s latest data as a turning point. In reality, average house prices have been meandering for several months against the volatile and uncertain economic backdrop.’[1]

‘Buyer intent remains strong in many parts of the UK, but buyers have become acutely price sensitive. No one wants to buy a home only to realise they could have got it cheaper if they had waited so on the front line, prospective buyers are scrutinising prices harder than ever,’ he added.[1]

Russell Quirk, chief executive officer of eMoov, noted it is unusual to see a dip in the spring market. He went on to say: ‘Although an air of uncertainty on the run up to Wednesday’s formal process may have left a few buyers on the fence, it is unlikely to have had any direct impact itself. Although the market remains healthy which is great news for existing homeowners, those facing the sizable task of climbing the UK ladder are opting to concede and rent. Not just those at the first rung, but seemingly the third and fourth as well.’[1]

[1] http://www.propertywire.com/news/uk/march-dip-uk-house-prices-seen-blip-not-trend/

Property price sentiment continues to be strong

Published On: March 27, 2017 at 9:15 am

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Categories: Property News

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The most recent report from Knight Frank and IHS Markit has revealed that during March, the majority of UK households believed the value of their property increased.

According to the investigation, this was the eighth straight month that the Index was positive.

Values

Respondents in nine out of eleven regions covered by the Index feel that the value of their home has increased over the last month. Those in the South East were most positive.

Overall, households in all regions believe that the value of their home will increase during the next year.

Oliver Knight, an associate in the residential research team at Knight Frank, said: ‘The latest survey data suggests that house price sentiment across the UK is becoming steadier. Households still report that values are increasing, but at a more modest pace than before the EU Referendum, which is consistent with wider housing market trends.’[1]

‘Future price expectations remain in positive territory, especially in the South and Midlands, but there are a number of headwinds which could weigh on the market, including rising inflation and second-round effects from Brexit. Yet at the same time, a lack of supply of housing for sale is underpinning pricing across much of the UK,’ he continued.[1]

Property price sentiment continues to be strong

Property price sentiment continues to be strong

Upbeat

Tim Moore, senior economist at IHS Markit, noted: ‘UK house price sentiment was relatively upbeat in March, which provides another signal that confidence has gradually picked up during the first quarter of 2017. This suggests that ultra-low mortgage rates and the resilient UK labour market are helping to offset the drag on house price sentiment from squeezed consumer finances.’[1]

‘While sentiment has rebounded strongly since last summer, house price expectations are still much more subdued than those reported in the three years leading up to the EU referendum. Looking at house price expectations for the next 12 months, regional divergences widened across the UK during March. In particular, household sentiment in Scotland fell to the weakest for over four years, and the gap relative to UK-wide price expectations was the greatest since the survey began in 2009,’ he added.[1]

Concluding, Mr Moore said: ‘Meanwhile, the latest survey saw London drop into the bottom half of the UK regional table for the first time since April 2010. By contrast, people living in the West Midlands were more confident about the outlook for their property values than at any time in the past two-and-a-half years.’[1]

[1] http://www.propertyreporter.co.uk/property/house-price-sentiment-strengthens.html

Is Manchester the new property hotspot?

Published On: March 24, 2017 at 10:56 am

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Categories: Property News

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Manchester is seemingly the latest property hotspot, after new research revealed that values here rose fastest over the last year than any other part of the country.

Property price values rose by 8.8% in Manchester during February, in comparison to the same period in 2016. Portsmouth saw a rise of 8.1% as buyers were lured back to the market due to an improving employment outlook and record low mortgage rates.

Price Rises

According to the latest Hometrack UK cites house price index, Bristol also saw high growth, with rises of 8% last month. The Index looks at property price movements across the UK’s 20 biggest cities.

However, the capital is seeing growth cool, with annual property price growth slowing to 5.6%-the lowest level since 2013. London is now tenth on the list of fastest growing cities, with weaker demand partly a cause.

Is Manchester the new property hotspot?

Is Manchester the new property hotspot?

Overall, the headline rate of growth for Hometrack’s UK Cities Index is running at 6.4%, down from 6.9% one month ago and 7.8% one year ago.

The table below shows how property prices for all 20 regions assessed by Hometrack have faired:

HomeTrack infographic

Flat

Richard Donnell, insight director at Hometrack, noted: ‘Levels of housing turnover across UK cities are expected to remain broadly flat over 2017. There is some further upside for sales volume in regional cities but much depends upon how would be buyers respond to external factors, not least the impact of lower real wage growth, the potential for higher mortgage rates and whether demand will be impacted by the triggering of Article 50 at the end of the month.’[1]

‘In cities where affordability remains attractive we expect demand to hold up in the short term albeit with slower growth in sales volumes. Overall we continue to expect the rate of house price growth to moderate over the rest of 2017,’ he added.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/3/manchester-has-fastest-growing-house-prices-in-the-uk

 

More young people giving up on homeownership

Published On: March 23, 2017 at 2:01 pm

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Categories: Property News

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The ever-growing gap between incomes and house prices continues to rocket, leaving a rising number of young people giving up on the idea that they will ever own their own property.

According to research from the Halifax, 48% of 18-34 year olds feel it is harder than ever to get a foot on the housing ladder. In fact, 25% of people in this age bracket feel the only way they will make it onto the ladder is if they inherit the money.

Challenges

One in five questioned said that homeownership is a thing of the past. This adds weight to the theory that many people are giving up on owning property and instead renting for more long-term periods.

80% said that the lack of affordability was their main barrier to homeownership, with 14% saying they will rent forever.

Deposits remain unrealistic for 52% of tenants asked and the average age of those buying their own home has risen to 30.

More young people giving up on homeownership

More young people giving up on homeownership

Deposits

Overall, the average deposit put down for an average first-time buyer is £32,321. This figure rises to £100,445 in London!

By region, average house prices as shown in the Halifax research are:

London-£402,692

South East-£272,777

South West-£200,465

East Anglia-£196,367

West Midlands-£159,732

East Midlands-£153,779

North West-£144,367

Scotland-£137,188

Yorkshire-£135,719

Wales-£133,730

North-£124,117

Northern Ireland-£115,269

Martin Ellis, Housing Economist at the Halifax, said: ‘Even with the highest number of first-time buyers in the last decade in 2016, many young people still feel they are running financial gauntlet-saving for a deposit, finding an affordable property in the right area and managing to fund living in the meantime.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/forever-renters-young-people-increasingly-giving-up-on-home-ownership

 

 

More landlords diversifying to avoid tax increases

Published On: March 21, 2017 at 2:44 pm

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According to Roma Finance, the specialist bridging finance lender, an increasing number of buy-to-let landlords are diversifying their portfolios by investing in semi-commercial property.

This is in order to protect their investments from higher rates of taxation.

Exemptions

Mixed-use property is presently exempt from tax increases coming into force next month. Landlords are looking to diversify their portfolios in order to offset stamp duty tax rises.

For example, a £500,000 residential buy-to-let property would command stamp duty of £30,000. However, stamp duty on a commercial or semi-commercial property of the same value would be only £14,000.

Investing in mixed-use property also gives investors two types of property, with potentially multiple source of rental income.

Recent lets from Roma include on a retail unit with flats above and pubs with houses attached.

More landlords diversifying to avoid tax increases

More landlords diversifying to avoid tax increases

Diversify

Scott Marshall, managing director at Roma Finance, commented: ‘We’re seeing many landlords looking to diversify their portfolios and some are investing in semi-commercial units for the first time. They are keen to take advantage of tax efficient property types and also have another string to their bow when it comes to spending tax risk.’[1]

‘With a residential unit and a residential flat above, they are getting longer tenancies for the shop and good rental prices for the flat. We’ve funded conversions where separate entrances have been created for the different parts of the property and occasionally the exit route for the bridging loan has been to sell one of the units and retain the other,’ he continued.[1]

Concluding, he said: ‘Landlords and property investors are putting in place a variety of strategies to protect their portfolio from increasing taxation and semi-commercial property has a definite role to play in this as they look for new opportunities.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/more-landlords-diversifying-their-portfolios-to-avoid-increasing-taxation