Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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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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Central London sales market turning a corner, claims LonRes
LonRes, the London property market fee sharing and data firm, says the capital’s central prime sales market is turning a corner after over three years of dipping transactions and prices. The company’s latest market report shows that the number of sales in Prime central London increased by 3% during the first six months of the year compared to the same period last year. “Withdrawal rates are falling in central London and tentative signs are that prospective buyers and movers are beginning to get itchy feet again,” says Marcus Dixon, Head of Research at Lonres (pictured, left) He also says supply is increasing; the number of properties on the market across all areas of Prime London has risen compared with 2016. But LonRes Managing Director Anthony Payne (pictured, right) says London’s stucco-fronted prime property market still has a long way to go before it returns to the pre-Stamp Duty increases and pre-Brexit ‘normal’, and that many wealthy people looking to live in London are renting at the moment rather than buying. Anthony says a house that rents for £25,000 a week or £1.3 million a year in central London would cost £5,150,000 in Stamp Duty, twice that amount payable before the…
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Tax changes herald arrival of uber renter says London agent
The UK’s looming exit from the EU and the ending of permanent non-dom tax status by the Cameron government in 2015 has created a new phenomenon in the property called the uber tenant, it has been claimed. Not a tenant who uses the mobile app to get around but, says a leading north London agent, the growing number of overseas residents who rent luxury property instead of buying them. Agent Trevor Abrahamsohn of Glentree Estates (pictured, left) says fewer wealthy families are purchasing the sort of £20-£25 million mansions his company deals in and that, instead, they are renting them, often for over £100,000 a month. “With Sterling being greatly devalued and the draconian banking regulations which apply to bringing wealth in to this country, some of our international friends find it easier to rent than to buy, which is markedly pushing up prices,” says Trevor. Amit Soni (pictured, right), who runs Glentree’s rentals business, says this month his average rent for a property on his patch has been £40,000 a week, which he says is “unprecedented both for us and the locality”. “By renting these mansions, they are able to live in the same luxury as if they had…
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Property market is over EU referendum shock, claims Rightmove
Rightmove says the property market has recovered from the shock of the EU Referendum with more sellers coming to market and more people buying than a year ago. Its latest house price index reveals that there were 4.6% more sales agreed last month compared to June 2016, and 7.6% more properties coming to the market. “The half way point of 2017 is a useful time to make a comparison with the previous year and the number of sales being agreed by agents is uncannily within fractions of a percent of the number at the same half-way point of last year,” says Miles Shipside of Rightmove (pictured, left). “This year and last year have had their own shocks and distortions, but these statistics show that the distractions have been short-lived and have now evened themselves out. “While the number of existing owners coming to market this month is up in eight out of ten regions compared to a year ago, giving more fresh choice, it has to be kept in mind that the comparison is against a subdued new listing period in 2016 around the time of the referendum.” Despite the upbeat market data, prices are at a “virtual standstill” across…
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