Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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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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Number of rentals to outstrip sales for first time in 80 years, says Countrywide Lettings Index
The number of homes rented next year will outstrip the number sold if current trends continue, says Johnny Morris, research director at Countrywide (pictured, below). His prediction is made within the Countrywide Lettings Index, published today, which also highlights increasing rents in the north but slowing growth in the south. “A different type of two speed rental market is emerging, with falling stock and growing demand driving rental growth in many Northern cities at a higher rate than those in the South,” he says. The Countrywide Lettings Index also reveals that rents in Manchester are rising the fastest at 7.1%, three times faster than the average. York, Leeds, Liverpool and Glasgow are the other cities in the high growth ‘top five’ while the slowest growth cities – where many landlords are cutting back rents – include Cambridge and Oxford. Overall Countrywide says rental growth has slowed across the UK over the past 12 months from 2.8% to 2.2% as rent rises have slowed in eight of the UK’s eleven regions (see list, below). Agents will be cheered by Countryside’s activity figures, nevertheless. Morris says September saw “record activity with increasing numbers of lets agreed and tenants choosing to renew their contracts,”…
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Is Airbnb going too far?
The increasingly important role Airbnb plays in the UK property has been exposed following a recent Sunday Times investigation, and now questions are now being asked within the property sector about the true aims of the business, which started out as a way for home owners to make money from short term lets. “Short-term lets are undoubtedly playing an increasingly important role in the UK’s housing mix, and websites such as Airbnb make perfect sense for landlords who need to fill their property fast for a short period between tenancies,” says Richard Price, Executive Director of UKALA. “However, the emergence of Airbnb has rightly raised questions about the role they should play in the wider lettings market; after all, with demand for houses at an all-time high the last thing anyone needs is right now are rented homes taken out of circulation.” The Sunday Times also revealed that a significant number of short-let management companies have sprung up specialising in the management of Airbnb properties on behalf of landlords. Several suggested to the paper’s reporters that UK planning laws, which usually restrict rental periods to 90 days, are easy to break and poorly policed by local authorities. “The most important thing is…
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Are buyers finally returning after the Brexit vote?
Purchasers are returning to the market following the Brexit vote according to figures from both the Royal Institute of Chartered Surveyors (RICS) and the Council of Mortgage Lenders (CML). RICS says this morning that buyer demand has grown for the first time in seven months and that “market confidence continues to improve following post-referendum jitters”. Its survey of RICS members reveals that last month eight percent more of them reported an increase in buyer enquiries compared to June, when 34% of respondents reported a drop. “The market does now appear to be settling down following the significant headwinds encountered through the spring and summer,” says Simon Rubinstein, RICS Chief Economics. “Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock on the market.” The CML also published an uptick in activity within the market this week. It revealed that the number of people borrowing money to buy homes increased by 14% month-on-month to £12.2 billion and up 11% year-on-year. First time buyers played a significant role in this activity increase, borrowing £5.5 billion during August, up 24% on the same month last year. “House…
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Fracking sites will put off 64% of buyers, research claims
The government’s recent decision to give fracking the green light in Lancashire has been attacked by various groups including local communities, farmers and environmentalists. But now perhaps agents should be worried about shale gas extraction as well. Research out this afternoon reveals that over two thirds of British home buyers would be reluctant to buy a property near a fracking site. This may be bad news for agents trying to sell homes near the fracking sites in Lancashire as well as others around the UK including in Sussex. The first sanctioned site operated by fracking firm Cuadrilla is to be near Preston New Road close to Blackpool. A second site in nearby Treales, seven miles from Preston, has yet to be approved. The research by house-extension.co.uk found that 21% of the 1,000 respondents to its survey were “unlikely” to buy a home near a fracking site while 43% said they were “very unlikely” although 32% of those who took part said they’d support fracking if it meant lower energy bills in the UK. One enthusiastic supporter of fracking is Sajid Javid, Minister for Communities and Local Government, who said the green light was given to fracking for its “potential to power economic growth,…
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Grainger continues breakneck expansion into rental sector
Leading build-to-rent player Grainger plc has received planning permission for its latest development in London, a 163-home site called Apex House in Seven Sisters, North London, it has announced today. This will bring its total units under management to some 3,600 homes once Apex House is completed. The development is due to start construction next year, cost £60m to build and be ready to rent out in 2020. It will have an initial yield of 6.5% and rental revenues of £3m per annum. Last year the company launched its first purely commercial build-to-rent development in Barking called Abbeville Gardens and also recently bought a 600-unit development in Salford Quays, Manchester. Grainger has also built and managed residential developments for several councils including Kensington & Chelsea in London. It now has operations in Newcastle, London, Manchester and Birmingham and has said it aims to be the largest residential landlord in the UK by 2020. It already owns developments worth £2.7 billion and has also launched a new strategy that will see exit operations in overseas markets and participation in the UK equity release sector. As part of its trading statement for September, chief executive Helen Gordon (pictured) said: “We have seen a…
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Home moves to shrink by 200,000 following Brexit vote, says L&G chief
The Brexit vote may lead to some 200,000 transactions being knocked off the number of homes sold this year according to Legal and General Building Services’ managing director Steve Goodall. Speaking at a recent conference organised by Mortgage Finance Gazette, Goodall (pictured, below) said the UK long-term average was 1.5 million transactions a year, topping out at 1.6 million during the “heady heights” of 2006/7 before the financial crisis, then dipping down to 900,000 and now running at 1.2 million. “Because of what happened over the summer – i.e. the referendum vote for the UK to leave Europe – this year we night see a flatlining of transactions,” he said. “The equivalent number of transactions over the last three months may have actually dropped to around one million per annum.” Goodall also said transactions should be much higher overall, pointing out that current levels of transaction should be measured against the growing number of households in the UK. Therefore, he calculates, the market should be running at 1.7 or 1.8 million transactions a year not 1.2 million. “There are more people yet there are fewer housing transactions,” he said. The conference was attended by a mixed bag of industry leaders including Karl…
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Knight Frank says extra buy-to-let Stamp Duty must go
Knight Frank chairman Alistair Elliott has today added his voice to the growing industry backlash against last year’s introduction of an extra three percent buy-to-let Stamp Duty levy. Elliott (pictured, left) this morning told City AM that “increasing tax doesn’t increase housing supply” and called for the recent second homes levy to be reversed during the next budget. Knight Frank also claims that the Stamp Duty change has had a bigger effect on the property market than the Brexit vote, particularly in central London. In Chelsea, it says, the number of house sales has dropped by 10% year-on-year. Government figures show that after the Stamp Duty was introduced in April the number of buy-to-let properties purchased dropped off by a fifth, and buy-to-let lending dropped by 65% over the same period, according to the Council of Mortgage Lenders. Elliott is not the only high-profile person to be tackling the government on this issue. Last week Cherie Blair led a failed attempt in the high court by a landlord action alliance called Axe the Tenant Tax Group to reverse the government’s planned reduction in tax allowances for landlords, due to come into force next year. And the property industry is not…
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Landlords: the only way is Essex!
The east London borough of Havering offers London’s highest rental yield...
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