Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
-
Number of managed rental properties drops by 8% during January
The government’s tax-take on landlords is having the effect many predicted it would as the Association of Residential Letting Agents (ARLA) reports an 8% reduction in the number of rental properties managed by agents during January. ARLA says its member agents reported 184 rental properties managed per branch compared to 200 during December, the lowest figures for four months. Such an alarming contraction in the market during a traditionally busy period is also taking its toll on tenants’ finances, ARLA says. As the housing market forces more people into rented accommodation rather than ownership, ARLA says the number of tenants registered with agents increased from 59 to 70 per branch. Rough ride ARLA’s Chief Executive David Cox (pictured, below) says renters are in for a “rough ride” this year as the imbalance between supply and demand begins to push up rents. It’s already begun, ARLA claims, revealing that nearly a fifth of tenants experienced rent increases during January, up from 16% during December. The ARLA figures are backed up the latest rental index, which found that rents in the UK are rising across every region for the first time in two years. Buy-to-let lender Landbay, which produced the index, also…
Read More » -
Property sales remain flat during January, says HMRC
Property sales in the UK during January increased by 1.3% month-on-month, hitting 102,610 transactions says HMRC, but down 0.1% year on year. These figures, which are seasonally adjusted to take account of the Christmas shutdown, are for all residential sales over £40,000. “Property transactions have remained stagnant for quite some time now,” says Richard Sexton, Director of e.surv (pictured, left). “Although our latest research showed one-fifth of mortgage approvals went to first-time buyers last month, if we are to see a real boost in numbers and overall market activity, we need to address our country’s limited housing supply which is acting as a roadblock.” Jeremy Duncombe, Director, Legal & General Mortgage Club, (pictured, right) says: “It is clear that a lack of housing supply across the UK continues to take its toll on the market. “Not only is it having an impact on potential borrowers who want to make their first move onto the property ladder, but it’s also limiting the options available to those who are looking to downsize in later life.” But HMRC’s detailed figures also reveal that, despite much commentary from agents about a difficult market in London and the South, overall UK transactions have been increasing each…
Read More » -
House hunters are returning to the property market, claims Rightmove
The latest house price index from Rightmove reveal rising home hunter activity, an increase in properties coming to market, and asking prices going up in all but one region of the UK. Also, the portal says the contraction in the number of homes being sold in recent months is now losing steam. Its figures, which are for January, reveal that the average asking price has increased by 0.8% across the UK; that the number of properties coming to market rose by 2%; and that agent stock held steady (see graph, right). Also, the number of homes sold contracted by only -1.6% during January, compared to -5.5% in the final quarter of 2017. As well as reporting record traffic to its website at 141 million visits last month, Rightmove says the hottest property market is in the Midlands, where asking prices are rising three times faster than the national average. “The average price of newly-marketed property in the Midlands is up by over 5% compared to a year ago, a marked contrast to parts of London and its commuter belt,” says Rightmove’s Miles Shipside (pictured, left). “Many buyers in the Midlands are willing and able to pay more to secure their…
Read More » -
Revealed: why house sales are going down every year
Agents who wonder why the number of house sales continues to decline every year, and why it’s harder to find stock and buyers need ponder no more. The answer is that young middle-class buyers has been all but wiped out from the property market by fast-rising house prices over the past twenty years. Or at least that what is being claimed by the Institute for Fiscal Studies (IFS). The venerable organisation has crunched the figures and says that in 1995 65% of those between 25 and 34 years old in the middle 20% income bracket owned their own home, a figure that today is just 27%. The key reason for this, the IFW says, is that house prices have risen too fast. The mean price for a property in the UK has soared by 152% since 1995 when adjusted for inflation while the average family income has barely caught up, rising by just 22% over the same period. This has helped the average income to house price ratio to double from four to eight times, while for 38% of first time buyers the homes they want to buy are ten times their income, up from 9% of FTBs in 1995.…
Read More » -
Don’t blame flat property market on recent interest rate rise, says Bank of England
The impact of last November’s half-a-percent interest rate rise on home buyer confidence has been offset by the UK’s cheap and readily-available mortgages, the Bank of England (BoE) has revealed in its latest update on the economy. The report, which is compiled by its 12 agents across the country by talking to 700 businesses including estate agents, looked at the economy from late November last year until mid-January 2018 and compared business activity with the previous quarter and year. As well as increasing its base rate from 0.25% to 0.5% in early November last year, the BoE’s Monetary Policy Committee last week said another interest rate rise could take place as early as May. It also said that more interest rates are in the pipeline as the economy grows, signalling an end to UK homeowners’ reliance on cheap mortgages and credit. The BoE Agents’ Report also says that housing market activity remains subdued but steady, held down by both weak supply and demand, but that the new-build and rental sectors remain buoyant, pushing up new-build prices and rents. “Housing demand was particularly weak in London and the South East, especially for the most expensive properties,” it says. The BoE report…
Read More » -
City’s biggest Purplebricks backer faces tougher times
Traditional agents who are unhappy about the rise of the UK’s largest hybrid agency Purplebricks may find succour in the declining fortunes of its biggest backer, investment fund manager Neil Woodford (pictured, right). His company Woodford Investment Management has been investing millions of pounds into Purplebricks from 2014 onwards and publicly backed the agent’s ‘innovative approach’. Many of his firm’s key funds now include exposure to its stock, in one case of up to 7%. But the highly-successful City figure, whose own website describes him as one of the most influential UK investment managers of his generation, has been facing a stickier wicket than normal in recent months. Woodford specialises in property and has invested heavily in many leading UK property firms including, as well as Purplebricks, Taylor Wimpey, Barratt, Countryside, Crest Nicholson and several commercial property REITS. Only two months ago one of Woodford’s most successful funds, the LF Woodford Equity Income Fund, reported that its “strongest performance came from hybrid estate agent Purplebricks, which reported interim results that showcased the very positive progress it is making across the board”. But, as commentators at both The Times and The Financial Times have noted recently, the City thinks otherwise and…
Read More » -
Stamp Duty changes to blame for 14% dip in property sales volumes says Your Move
The changes to Stamp Duty ushered in by George Osborne in 2014 have reduced property sales in London and the South by up to 30%, analysis of Land Registry data has revealed. The number of homes sold each year has plummeted by nearly a third in London and by 20% in the South over the past two years, according to the monthly Your Move/Acadata house price index, although the sales volume reduction has been less acute nationally, at 14%. These figures are also very different across the UK. For example, in the northern regions the volume reduction is just 11% while in Wales the number of homes sold increased by 2%. “The slowdown in London can now also be seen in the South East. Time will tell if the rest of England and Wales remains resilient,” says Oliver Blake (pictured, left), Managing Director of Your Move. His company’s index reveals one silver lining and potentially brighter times ahead for agents. The Christmas/NY shutdown for 2017/18 did not depress sales volumes as much as it usually does during the festive season. “We estimate that the number of housing transactions [during] January 2018 in England and Wales at 64,000, down by 15%…
Read More » -
20% more landlords struggling with mortgage payments than a year ago
The number of landlords struggling financially has soared by 20%, figures from UK Finance, the organisation replacing the Council of Mortgage Lenders, reveal. Its latest market report shows that the number of landlords with more serious mortgage arrears is on the increase. Those with arrears of between 7.5% and 10% of their balance increased by a fifth year-on-year, although the buy-to-let ‘crackdown’ being led by the government has yet to drive increased possessions in this market – which have held steady. Buried deep in the UK Finance figures is one less publicised fact – that ten times fewer landlords are in mortgage difficulties than homeowners. This may baffle the many landlords who are facing increased lending criteria following the Prudential Regulation Authority’s recently-introduced stricter buy-to-let lending rules. But although the buy-to-let market is struggling, the lending market for homeowners is looking much brighter, UK Finance says. The number of homeowners with arrears of up to 5% of their mortgage balance has been dropping dramatically over the few years, down from 55,000 mortgage in 2014 to 34,500 mortgage during the final quarter of last year. And year-on-year, this type of mortgage arrears decreased by 10%. Also, those in serious arrears has…
Read More » -
Theresa May chairs first meeting of new housing taskforce, but was Dominic Raab there?
Meeting of ministerial minds urged by PM to "think creatively" about how to build more homes, but where was her Minister for Housing?
Read More » -
Letting agents “unfairly” taking deposits from millions of tenants, it is claimed
Letting agents and landlords have unfairly deducted money from the deposits of 2.34 million tenants or 16% of the UK’s renters, it has been claimed. Student lettings website SPCE, which started up last year and claims to have a 50,000 strong property inventory and deals with six universities in the UK, says its research among 2,000 tenants revealed that the problem was even worse among younger renters, who are less likely to know their rights. A quarter of younger tenants and 30% of students had seen their deposits returned with “unfair” deductions, it is claimed, while only 18% of all tenants have successfully challenged attempted deductions from their deposits by a letting agents or landlord. The research also reveals that many tenants lose a part of their deposits because of damage done by fellow housemates, or because of a problem created before they moved in but, presumably, not spotted when the move-in inventory was completed. The research follows figures published last year that revealed that landlords and agents took £1 billion from deposits, according to rental property interiors firm Hillarys. Leon Ifayemi, CEO and co-founder of SPCE (pictured, left), commented on the findings: “With rent prices at record highs, the financial…
Read More »
