Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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Belvoir dismisses “sensationalist” media reports of “out of control” rent rises
Belvoir’s new CEO Dorian Gonsalves (pictured below) says recent media reports that rent rises are out of control across the UK are at odds with the experience within his 300+ branch network. Recent commentary by mainstream media on research from the GMB union and the recent Homelet rental index suggested that rents were rising fast and that many renters – particularly in London – are paying more than half of their salary in rent. Gonsalves say prices are instead rising by an average of 2.75%, increases which he says are mirrored by other indexes and the government’s Office of National Statistics (ONS). “Sensationalist media reports that rents are spiralling out of control across the country are at odds with what our offices are reporting, and that other letting agents across the country are currently experiencing,” he says. “However, feedback from our franchisees confirmed that less properties were seeing static rents than in the previous quarter, and more offices experienced rent rises of £25 and £50 per month.” Gonsalves says the Belvoir Rental Index for the second quarter of the year shows that families and professionals are the most likely to experience rent rises, although he says demand from tenants is…
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First time buyers are back in the market
First time buyers are back with a vengeance borrowing £5.9 billion in June, up 26% on June and 9% on the same month in 2016, the Council of Mortgage Lenders latest figures show. The increase is on the back of first time buyers taking out 36,000 loans in June, 22% more than the month before. The increase is more than a blip. Figures from the CML, which is soon to be renamed UK Finance, show that during the second quarter of this year first time buyer borrowing increased by 18% taking out 91,400 loans. “June’s figures show a busy month in the mortgage market, with home movers having their highest monthly activity levels for over a year and an especially high number of loans for first time buyers,” says Paul Smee, Head of Mortgages at UK Finance (pictured, left). “But there are also signs of a softening market and we are not anticipating that this performance will be sustained in the second half of 2017.” Home buyer borrowing also jumped during July, increasing by 26% month-on-month and 15% year-on-year although buy-to-let borrowing remains subdued, but still rising, by 3% both by month and year comparisons. The CML data also reveals that…
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People hate downsizing out of their huge houses, research shows
Large family homes are very hard to leave – 43 per cent of UK homeowners experienced a sense of ‘sadness, grief or loss’ after moving house; while 83 per cent feel emotionally attached to their homes.
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Are the Tories (finally) turning against Stamp Duty?
The campaign to reform the current Stamp Duty system and have recent increases for landlords and owners of high-value homes reversed is gaining momentum as a raft of the Tory MPs, think tanks and media line up. Yesterday the free-market supporting Adam Smith Institute said current Stamp Duty system is costing the economy over £9 billion a year because it prevents people moving to the homes they want near to their place of work, and that they must commute long distances instead. The Telegraph newspaper has also been running a campaign to reform the duty, which it says taxes too unfairly those who through no fault of their own have to pay high prices to move up their local property ladder. This week the right-wing MP Jacob Rees-Mogg (pictured, left) said the UK should move to a ‘low taxation’ home ownership model and that, in the same way a cut to business taxes helped stimulate economic activity, so a cut to Stamp Duty would achieve the same thing. And former Tory party leader Ian Duncan-Smith (pictured, right) said in July that that the government should be using Stamp Duty to encourage landlords, not put them off investing. “It is time…
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House sales in ‘structural decline’ says Barclays
A city analyst working for Barclays believes house sales are in ‘structural decline’ in the UK. The comments by Jon Bell (pictured, below) come in a note sent to City investors yesterday in which he says the number of homes sold in the UK peaked in 1989 and have been declining ever since. Reason for the decline, the equity analyst says, include the increased number of homes owned by buy-to-let landlords, who tend to buy and sell properties less often than home owners. Bell points out that government’s own figures highlight how private home ownership has barely changed since the early 1990s while the extra housing stock made available since then has been swallowed up by private landlords. Bell also says the higher cost of Stamp Duty, a lack of new public and private housing and the UK’s ageing population, who tend to move less often than younger families, is also depressing sales. Bell, who works at the high street bank’s investment banking arm in the City, also proffers some more surprising reasons for the UK’s declining number of house sales. He says the government Help to Buy scheme for new homes is helping younger buyers purchase larger homes, and…
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Are govt’s landlord tax chickens coming home to roost?
When agents warned the government that its anti-landlord tax measures would lead to higher rents, they were dismissed as scaremongers. But Countrywide’s latest rental index shows that the predictions weren’t far off the mark in London, the South and Scotland. Rents in London were higher by 2.1% in July compared the last year driven by an 18% drop in properties available to rent, and the number of properties coming on to the market from landlords in the South has halved since 2015, helping drive the national average rental increase up from 1.1% to 2.2%. And the rate at which new rental properties are coming on to the market is slowing across some parts of the UK; down 18% in London, -6% in the East of England and -5% in the South. North vs South But other parts of the UK are seeing a dramatic increase in the number of rental properties coming on to the market, including in Yorkshire & Humberside (+37%), Wales (+22%) and the North West (+21%) suggesting that landlords are shifting their investment focus away from London and the South. The research may be good news for first time buyers. In London the proportion of homes being bought…
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UK increasingly a two-tier property market say surveyors
The Royal Institution of Chartered Surveyors (RICS) says the UK is becoming a two-tier property market featuring rising prices in Northern Ireland, the West Midlands and the South West but falling prices and sales activity elsewhere, particularly in London. RICS says London’s ongoing reductions in house prices and both weak demand and supply are spreading into the surrounding regions particularly in the South East, which saw the weakest reading for prices from RICS members since 2011. Its July UK Residential Market Survey also highlights softening prices in the prime £1m+ property price bracket; 68% of agents involved in this market said properties were not achieve their asking price. RICS says a third of these agents said properties were coming in at up to 5% less than the asking price, with a further quarter of agents saying agreed prices were between 5% and 10% below their asking price. And for properties between £500,000 and £1m, nearly 60% of agents said properties were failing to achieve their asking price. New instructions More worrying for sales agents is that the number of new instructions during July dipped, the 17th month in a row during which properties coming on to the market decreased. RICS…
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Rental market reform needs to go much further, say tenants
Three quarters of all tenants say banning fees should be just the start in the process of much needed rental market reform. Research by online letting agency LetBritain reveals that 67% of the 2,000 tenants it canvassed don’t believe the current government can do anything to help them get on the property ladder, and that 70% said banning letting fees was “just the tip of the iceberg” and that more should be done. Three fifths of those canvassed also believed the government still isn’t doing anything to help Generation Rent become owners, and a similar number believe the rental market is going to get more difficult over the next five years. The research also revealed that half of all tenants in London rent properties much better than they could ever afford to own. Nearly 40% of tenants outside the capital also rent higher calibre properties than they could afford to buy. Landlord tenants LetBritain also uncovered a new breed of renter who could be a lucrative opportunity for networked agents – a quarter of those who rent said they wanted to purchase buy-to-let property outside the area they live in and get on the property ladder, but stay as tenants…
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Prime price discounts widening, says Home Owners Alliance
The extent of the pain being endured at the top of the sales market has been revealed by research from the Home Owners Alliance (HOA). Properties are being sold for up to 14.5% less than their asking price in the prime market within England and Wales, the research suggests. Using its estateagent4me estate agent comparison tool, which tracks agents’ achieved prices versus asking prices, HOA says homes in the prime £2 million-plus price bracket are being sold for £296,000 or 14.5% less than their asking price. “There are significant reductions at the top end of the market,” says HOA Chief Executive Paula Higgins (pictured, left). Also, homes for sale in the £1.75 million to £2 million bracket are being sold at an average discount of £225,000, she says, while homes for sale between £1.5 million and £1.75 million are being sold at a £142,219 discount on average. Properties with an asking price of £1.25 million and £1.5 million are agreeing final offers for £92, 970 less, the research shows. HOA’s estateagent4me tool, which is available on its website, was built by Oxfordshire-based tech firm United Legal Services (ULS) which also has a stake in HOA. Home Owners Alliance Although used…
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Housing market needs 2 million new homes now to solve crisis
Former housing minister Grant Shapps has suggested that the time for radical solutions has come if the UK stands any chance of solving the current housing market problems. Shapps, who was housing minister from 2010 to 2012, made the comments during a live section of Friday night’s Channel 4 News that examined the housing market. He suggested that between one and two million new homes need to be built over the next five to ten years. That would mean up to five sizeable garden cities to be built within the countryside, Shapps suggested. “We need to build in areas where there aren’t that many people in the first place, thus reducing the difficult of building,” he said. Housing market Referring to comments on the programme by Matt Thomson (pictured, right), Head of Planning at the Campaign to Protect Rural England that brownfield sites could help make room for new homes and that it “was not necessary to build on the green belt”, Shapps said citing brownfield as the solution to the housing crisis was “conning people”. Shapps also said that even building an extra 200,000 homes a year – which is often cited as the minimum number to help alleviate…
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