Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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Property industry welcomes new Tory Government
The Conservative victory in the General Election has been welcomed by the housing industry. It should provide welcome stability to the residential property market. Glynis Frew (left), Managing Director of Hunters Property Group, said, “We welcome a Conservative victory as this will bring some much needed stability to the property market, and from stability comes growth. We look forward to seeing the extension of Right to Buy to 1.3 million housing association homes in England, and more importantly, the introduction of 200,000 starter homes by 2020. We anticipate this will have a massive impact on the market. What’s more, the Government’s Stamp Duty reforms announced in December last year have already had a positive effect on the housing market, so we are pleased this will stay in place.” Lucy Morton, Director and Head of agency at Prime Central London estate agency, W.A.Ellis, said that her firm noticed an immediate change in sentiment from both vendors and purchasers after the election result, following months of uncertainty and the threat of Labour housing policies, including the planned introduction of a mansion tax. “A Conservative victory is a good result for the housing market, particularly in London,” she said. “As we opened for…
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Transactions fall across England and Wales
The number of residential property transactions in the three months to January fell by 18 per cent at an average of 71,090 a month compared to the corresponding period a year earlier, the latest figures from the Land Registry show. The data also reveals that the average price of a home in England and Wales dropped by 0.8 per cent in March, following several months of slowing activity. The figures, which are based on sold prices, put the average price of a property at £178,007, 5.3 per cent higher than in March last year. The month-on-month decline in property prices reflects the fact that inquiries from prospective homebuyers has fallen in recent months, while mortgage lending has dropped. Despite the overall decline in prices, two regions, London and the south east of England, did record month-on-month price increases of 0.8 and 0.2 per cent respectively. In contrast, the north east of England witnessed a 4 per cent fall. On an annual basis, double digit price increases continued to be recorded in London and the south east, but growth was far more modest in other regions, while in the north east prices fell by 2.9 per cent year-on-year. The highest property…
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Political parties set to fail on house building promises
All the major political parties are proposing to develop at least 200,000 new build homes a year if elected to power this week to help tackle the housing shortage, but new research shows that level of house building may be unachievable under existing market conditions. Knight Frank’s latest Housebuilding Report reveals that more than two thirds of residential property developers in the UK believe that it would be impossible to deliver more than 180,000 new homes a year as things stand. More than 160 respondents from house-builders and developers across the country took part in Knight Frank’s annual survey, with 67 per cent of respondents stating that the maximum sustainable annual delivery of new homes was 180,000 or less. Just 9 per cent said it was possible to build more than 200,000 residential units a year. Over half of all developers and house-builders said a rise in the delivery of affordable homes over the next year was unlikely. However, around 60 per cent expect a continued rise in the number of total housing starts and completions over the next 12 months. With a general shortage of new homes coming onto the market, 78 per cent of respondents expect new-build prices…
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Labour plans for PRS would be disastrous – NLA
Labour’s plans to cap rents, ban letting agent fees, and restrict tax reliefs for landlords who do not keep properties to basic standards could have an adverse impact on the private rented sector (PRS), according to Richard Lambert, Chief Executive Officer at the National Landlords Association (NLA). While acknowledging that Labour has tenants’ “concerns at heart”, Lambert points out that the policy will almost certainly backfire because “they don’t understand the economics of supplying private housing to rent”. The NLA’s CEO (left) insists that these changes “will have far-reaching consequences for the PRS”, and could deter many people from investing in the buy-to-let market which in turn would reduce the supply of housing stock in the PRS. He commented, “If these proposals are going to be rushed into the first Queen’s Speech, less than a month away, without time to think through the consequences, Labour’s good intentions could make the housing crisis worse, not better.” NLA research has found that around two-thirds of landlords do not increase rents during a tenancy. Lambert continued, “Capping annual price rises to inflation sounds like a great consumer protection initiative, but wherever these formulas have been introduced, it’s proved to be counterproductive because it…
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Significant rise in residential property transactions
There has been a sharp increase in the volume of residential property transactions in the UK in the last five years, according to Ludlow Thompson. The company report that transactions have risen by 37 per cent in the last five years, from 878,720 in 2010-11 to over 1.2 million in 2014-15, helping to boost the wider economy. HM Revenue and Customs data reveals that over £10 billion has been raised in revenue from stamp duty on property and land over the past 12 months, which is more than capital gains tax and inheritance tax collectively. Stephen Ludlow, the company’s Chairman, commented, “Not only does the increased activity show that the residential property market is booming, the increased revenue from stamp duty is hugely beneficial in putting the UK on a firmer financial footing.” Last week, HMRC data revealed that the number of residential property transactions reached 100,790 in March, down 2.4 per cent compared to the corresponding month in 2014. “House sale completions are limping along as we approach the final furlongs before the election,” said Adrian Gill (left), Director of Your Move and Reeds Rains estate agents.” But while many prospective buyers are currently dragging their heels, Gill expects…
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Mansion Tax would be bad for property, warns agent
With just over a week until the General Election, London based estate agents Sandfords has joined a chorus of other industry experts and warn of the possible ‘disastrous consequences’ for the residential property market if Labour is elected into power. The estate agency firm is particularly concerned about the party’s plans to introduce a mansion tax on all homes worth more than £2 million, and the potential impact that the levy could have on the housing market in London as well as other parts of the country. _“In the immediate run up to the Election we are seeing a lot of influential individuals, economists and agents shouting about the reality of a Labour Government and the effects their proposed mansion tax will have on the whole property market, and not just in London,” said Tim Fairweather, a Director at Sandfords. “We have voiced our fears of Labour’s taxing policy on numerous occasions ever since its proposal but it’s now increasingly apparent that it will provoke far reaching problems that will have an effect on millions of everyday people,” he added. Although Labour insist that they want to help aspirational homeowners gain a foot on the housing ladder, Fairweather claims that…
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Ed’s last stand: “a load of cobblers”
General Elections bring out the opinions of the electorate and property people have been more than forthcoming in these last days before the big election day on 7th May. Naomi Heaton (left), CEO of London Central Portfolio says that Ed Miliband’s “last stand” is “a load of cobblers”. Among her points are: “The latest Labour pledge is to abolish stamp duty for first-time buyers buying homes worth up to £300,000 for the next three years. They have said that it will benefit nine in 10 such buyers to the tune of £5,000. Rubbish. “Labour is clearly very bad at its sums, which is why, of course, we are so worried about them running the economy. “The average purchase price for a first time buyer outside London is £137,120, (Halifax). Following the Stamp Duty reforms introduced by the Conservative coalition last December, the Stamp Duty charge for buyers at this level is just £242. This is what the Labour policy would save, not £5,000. “If we look at the country as a whole, including London, the average price for a first time buyer, is £171,870. Again, due to the recent reforms, Labour would be knocking off £937 off their purchase costs,…
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Political leaders vow to tackle housing crisis
High residential property prices are the single biggest concern among home-hunters, a new Rightmove survey reveals. The latest data from the property portal shows that asking prices for homes on sale in England and Wales hit an all-time of £288,133, on average, in the month to early April, pushed up by a drop in the number of properties on the market, creating a lack of choice in the market, which incidentally, is the second biggest concern for house-hunters. Miles Shipside (right), Rightmove Director and Housing Market Analyst, commented, “April’s Rightmove House Price Index reported an all-time high in asking prices this week of £286,133, setting an interesting challenge for political leaders. Failure to meet house-building targets since the eighties, nineties and noughties to match forecast housing demand has been a major factor in upwards price pressure both in the property sales and private rented sectors. “ As the cost of housing is a key concern for many home-hunters Rightmove asked David Cameron, Ed Miliband and Nick Clegg for their proposed solutions to make more affordable homes available, and what else they would do to try and solve the UK’s housing problems. Here are extracts from the interviews with the three…
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General Election
We are not even building half the number of homes that we need to keep up with demand. A record number of young people are living at home with their parents. Many young people and families are priced out of homeownership and some of these families are living in overcrowded conditions. We have committed to ban letting agent fees to tenants.” Despite the desperate need for more homes, under this Tory-led Government we have seen the lowest level of house building in peacetime since the 1920s and homeownership is now at its lowest level for 30 years. THE FUTURE Labour is committed to tackling the housing shortage and we have set out a comprehensive plan to get at least 200,000 homes built a year by 2020. Under our plan, we want to see all local communities take responsibility for their own future and plan for the homes local people need. A Labour Government will make it compulsory for every local authority to have a plan which sets out how it intends to meet local housing needs. But with that responsibility will come much greater powers to deliver the homes their communities need. We’ll give local councils the ability to designate…
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Property sales dry up ahead of Election
The upcoming Election is to blame for residential property sales drying up, but a general lack of housing stock coming onto the market could fuel another surge in home values after the election, according to the latest monthly market survey from the Royal Institution of Chartered Surveyors (RICS). The research reveals that political uncertainty surrounding next month’s General Election is deterring many purchasers, with buyer enquiries and house sales falling. But despite the dip in demand from purchasers, a general housing shortage across many parts of the country led to 21 per cent more surveyors reporting an increase in home prices in March, up from 15 per cent in February. Furthermore, 15 per cent more surveyors expect prices to appreciate even further over the next three months compared with 10 per cent in February, fuelled by the existing supply-demand imbalance in the market. Nationally, the market in Northern Ireland continues to outperform the rest of the UK with the strongest home price growth last month and the highest price expectations over the next three months. However, across much of the rest of the UK, particularly in Wales and Scotland, price gains over the next three months are expected to be…
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