Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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London’s affordability nightmare
Living in London has become an affordability nightmare, with property prices rising way beyond average affordability levels. Hometrack’s latest UK Cities House Price Index, covering October 2016, shows that while City level house price growth is holding steady at 8.4 per cent, an 86 per cent uplift in house prices since 2009 has pushed the price to earnings ratio in London over 14x, more than double the UK average of 6.5x. City level house price inflation is running at 8.4% as the upward momentum in house price continues. Bristol remains the fasting growing city (10.6%) but the rate of growth is slowing. Aberdeen continues to register a year on year price falls (-8.1%). The impetus for house price growth is shifting from the affordability constrained cities in southern England to cities in the midlands and the north of England where affordability remains attractive. An update of city level affordability reveals that the price to earnings ratio ranges from 3.7x in Glasgow to 14.1x in London, compared to a UK average of 6.5x. London has the highest price to earnings ratio on record as a lack of supply and strong demand fuelled by low mortgage rates has resulted in an 86%…
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Autumn Statement: Building industry response
The housing industry’s response to the Autumn statement has been mixed – depending on whether your a housebuilder or in lettings, or whether you believe what he says at all! Some like him… “Philip Hammond is something of a political novelty, he is a Chancellor who listens,” says Jeremy Blackburn, RICS Head of Policy as The Chancellor, Philip Hammond finished his Autumn Statement. “Our ‘listening Chancellor’ consulted widely with industry in the build up to today’s statement, as I’m sure he will as Britain moves closer towards Brexit. We haven’t yet seen him pictured in a hard hat, but he clearly understands the housing sector better than his predecessors. “RICS warned Treasury that the UK is facing a critical rental shortfall of 1.8m homes. Our latest figures show that there has been a 15 per cent decline in house sales to first time buyers over recent months. That tells us that for all the rhetoric, David Cameron and George Osborne’s Starter Homes Strategy failed to get off the ground.” We can only hope that Jeremy is right. Other industry comments were varied in their support and/or cynicism. Martin Skinner, CEO Inspired Homes, said: “I am pleased that the Government is recognising the…
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Autumn Statement: 40,000 new homes promised
40,000 new homes on their way – that was a good start to The Chancellor’s Autumn Statement. The Government has, again, increased its drive for more affordable housing to help to address what he described as a chronic shortage. The Chancellor echoed the pledge by Theresa May, the Prime Minister, to ensure the economy “works for everyone.” Philip Hammond said that the Government had made great efforts but now must go even further, announcing a further £1.4bn funding injection to help thousands more families to buy a home. The Government says that 40,000 new homes will be built as a result of the funding injection, which, with the Help to Buy Equity Loan Scheme and the Help to Buy ISA, will be used to help first-time buyers, sharing owners who wish to move on. He said that they will abandon the rigid framework set by the current Affordable Homes Programme, with the £4.3bn of current and £1.4bn of additional funding allocated “flexibly” between existing shared ownership and affordable rent schemes. Previous plans indicated that 88pc of funds would be used to build at least 135,000 homes for shared ownership, which are targeted at families with incomes of £80,000 or less,…
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Minister’s controversial ideas to beat housing crisis
Gavin Barwell, the Housing Minister has been airing some interesting views about the UK’s housing crisis and how it can be resolved.
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No spare change for rented spare rooms?
The number of tenants in the UK renting a property with a spare room has nearly halved from 60% in 2010 to just 35% today, the lowest proportion on record according to Countrywide’s latest monthly lettings index. Also, the extra cost of renting a property with a spare room is now £295 a month, an increase of 14% over the past five years. “As affordability pressures have risen, for many tenants, extra space has become a luxury,” says its Head of Research Johnny Morris (pictured). “Sacrificing extra bedrooms and sharing has helped renters to absorb higher prices. But those living in the South are close to a point where there’s not much more room to squeeze, meaning rental growth is likely to be capped by tenants’ incomes for some time.” The squeeze on affordability in most British cities is also revealed by the research, which says that on average only a quarter of tenants in many urban areas of the south have a spare room including Bristol (24%), Oxford (28%) and Cambridge (27%). Those tenants living further north are more able to rent a spare room, the research shows, and for example in Liverpool the figure is nearly double at…
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Hallelujah! Auction House sells 2,000th lot this year
Auction House reported a busy and profitable August, with a success rate of 82 per cent...
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Will Hammond rescue faltering London market?
Haart today revealed that its branches within the M25 recorded an increase in sales activity of just 1.1% month-on-month during September compared to a 75% increase for its branches 100 miles or more outside the capital, painting a worry picture of the struggling London property sales market. “The evidence from our branches is that areas around 100 miles from the capital are where the market is reviving, and this is spreading towards the South East and London – a complete reversal of the traditional ‘London first’ pattern we’ve grown used to,” says Haart CEO Paul Smith (pictured). Land Registry data shows that the number of homes sold in London reduced by two-thirds between March and June this year, before the Brexit vote. The slump has been blamed by agents such as JLL squarely on the recent increases in Stamp Duty and Land Tax (SDLT) at the top end of the market. Homes for sale over the SDLT threshold of £925,000 now make up 34% of all homes for sale in London so the changes have been keenly felt in this price band, plus many agents blame the extra 3% SDLT for hammering the number of landlords buying property there too.…
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500,000 homeowners aged 55+ want to move but don’t
One in five (19per cent) homeowners aged 55 or over considered moving in the past two years but have not done so...
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5-minute briefing: Barwell’s housing plans
Housing and Planning minister Gavin Barwell has confirmed that he is to undertake a significant review of the government’s housing plans within the next four weeks that will swing government policy away from its previous mania for home ownership and take a more realistic approach that includes the private rented sector. Speaking at a RICS reception at the Conservative Party Conference earlier this month he confirmed a White Paper is in the offing and made it clear he wants to ‘stabilise’ the rental market. On the other hand, he also plans to make more land available to build homes on and turn more planning ‘permissions’ turned into ‘builds’, a dig at the big builders for not keeping up with demand. Initiatives within the rented sector are likely to be bad news for letting agents as only two levers of control are available to the government. These are to either make tenancies longer and more secure, something the Residential Landlords Association and Shelter have been pushing for, and to back the spread of Build to Rent. Agents have been resisting longer tenancies and many say their tenant clients like the flexibility of short-term, rolling contracts. But Barwell doesn’t agree and as recently as August he said…
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Latest Land Registry figures show rising prices but subdued volumes
The official House Price Index for August has been published by the Land Registry and it gives a detailed analysis of the UK property market for the second full month of data following the Brexit vote. It’s a mixed picture to put it mildly with strong price growth but transaction volumes that are far behind those recorded during previous years. Prices continue to climb, the Land Registry says, rising by 1.3% since July and by 8.4% across the UK to an average of £218,964, although they fell in Wales by 0.6%. and by 0.2% in the North East. The strongest, double-digit growth in prices during August took place in London, the South East and the East of England, while demand for new build properties pushed up prices by a staggering 13.6% during august and by 26.4% year-on-year. But the HPI reveals a much less rosy picture for property sales. The number of transactions in England is down by 32.2% in England, 27.1% in Wales and 46.7% in London, the report says. “Housing market indicators for August suggested a period of relative stability during the month,” it says. “Although demand and supply was broadly unchanged compared to the previous month, the…
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