Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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London rents are falling down says Rightmove
There’s a change in tempo across the private rented sector, says Rightmove, as rents rise in almost every area outside London. Rightmove’s quarterly index shows a new pattern, as London rents have peaked because the tenants simply cannot afford it. The Negotiator received a ‘phone call today from one frustrated home-seeker asking for advice on where she could get a ‘room’ in a shared flat in London for less than £1000 per month. Now, Rightmove’s index shows the facts behind the commentary saying that “Inner London rents fell by 5.2% while there was a smaller drop of 2.5% in Outer London.” All regions except London recorded a rise in asking rents in 2016, with prices up annually by 3.0%, just slightly lower than 2015’s rise of 3.7%. Northern regions led the way as the year ended, with Yorkshire and the Humber up 4.5% and the North West up 4.4%, overtaking the East of England that had been the best performing region until Q4. In London, more available rental stock throughout the year led to a 4.4% annual drop in prices across the capital. Buy-to-let concerns Rightmove’s Head of Lettings Sam Mitchell said, “This year will be one of caution for buy-to-let investors…
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Property market goes into Xmas deep freeze
Latest property market figures from the National Association of Estate Agents (NAEA) reveal how much the government’s recent increased Stamp Duty and other measures to put off landlords plus the post-EU referendum slowdown have taken their toll during the run-up to Christmas. Almost all indicators for house sales in the UK are down, its research shows, including asking prices and the supply of and demand for property. And although this can be blamed on the traditional Xmas slowdown, it’s the most severe since records began. Agents sold fewer properties per branch during November than in previous months, down from nine in September and October to eight properties last month. Also, four out of five properties or 84% sold for less than the asking price during November, the highest proportion since the NAEA began gathering data in 2013. Last year the proportion was 76%. Also, during November the number of house hunters fell by a fifth or 22% from 440 to 344 registered per branch. Supply also fell – the number of properties on agents’ books dropped from 43 to 39. As a proportion of sales, first time buyers have eased off slightly from 32% to 29%. “Following the EU referendum earlier…
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80% of agents say rents will rise after fees ban
Eight out of ten letting agents expect the tenant fees ban to be passed on as increased rents while reduced supply and increased demand will also contribute to upward pressure on rents, says the Association of Residential Letting Agents (ARLA). It canvassed 917 of its members over the past two weeks and found that 53% also expected to see increased competition for rental property during 2017 and 63% said there would be a drop in the number of privately rented properties available within the market. “I manage around a dozen properties for one of my clients and I spoke to her recently about the tenant fees ban,” says Brighton letting agent David Burt. “She made it clear to me that she wasn’t going to pay extra for the referencing or any of the other costs associated with acquiring tenants for her properties that tenants normally pay, so I’m going to have to consider putting up the rent so that my percentage management fee rises instead. Otherwise I’ll be working harder for less money.” ARLA says the recent increase in Stamp Duty for landlords and the reductions in personal tax and capital gains tax allowances are pushing up costs for landlords before…
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Rental market inflation slows
Rents agreed in September were 3 per cent higher than a year ago, New data from the September HomeLet Rental Index reveals, but the pace at which rents are rising is continuing to slow, as landlords strive to ensure that tenancies remain affordable.
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Average size of a deposit rises by £5,000
The average deposit on a property in England and Wales rose by c. £5,000 year-on-year...
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Property sales level out after summer of slump
The number of property sales in the UK increased by one percent between September and October this year, latest figures from the Office of National Statistics show. But compared to October last year, the volume of house sales dropped by 8% across the UK. London is taking the brunt of the slow down. Sales there fell by 39.3% latest figures from August reveal, while in England volumes dropped by 20.3% compared to the year before. This is an improvement on July’s figures, when house sales were down by 28.1% year-on-year. Wales also experienced lower sales volumes, down by 11.6%. The figures reflect other market indicators including lower levels of lending, fewer first time buyers as well as fewer buy-to-let investors around following the April Stamp Duty change. “As a result of Brexit, earlier this year we found one in five [people] were less likely to sell their home. Now, with a lack of willing buyers, there has clearly been a shift from a seller’s market to a buyer’s market,” says Stephen Jury, Spokesperson for Plentific.com. The Royal Institute of Chartered Surveyors says the supply of homes coming on to the market remains tight, which is helping keep house prices buoyant. The October data for…
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Only 4% of new builds are affordable, says conveyancer
It has been revealed that only 4% of all affordable homes sold in England are new builds. Conveyancing services firm MyHomeMove looked at all property transactions under the £125,000 zero percent Stamp Duty threshold between January and September this year and found that just 3,841 new homes were sold out of a total of 100,656. Doug Crawford, CEO of MyHomeMove, says he doubts whether the government can deliver its affordable homes promises of 40,000 units made in the recent Autumn statement, as so few new homes are being built that can be classed as affordable. “From our own research we know that two thirds of people believe affordable housing should cost less than £120,000,” he says. Some of the figures will make for grim reading for Housing Minister Gavin Barwell. In Berkshire, Herefordshire, Surrey and London only 1,544 properties were sold for less than £125,000 of which just 57 were new builds. The research also reveals the three areas where the most affordable homes, and new homes, were sold. These are Manchester, West Yorkshire and the Midlands, reflecting a strong north/south divide in the figure. The further south you go the fewer affordable homes of any kind are found for sale.…
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Report reveals carnage within London sales market
Research into the severity of the London sales market crash has been published by Portico, which has 18 offices in the Capital. The shocking report, which has just been released, reveals that sales volumes in London are now more than half those before the 2008 financial crisis and 48% percent lower than this time last year. Portico says much of the downturn can be pinned on April’s Stamp Duty changes. Before the extra 3% was introduced the number of properties sold in Westminster rose from 200 a month in February to over 500 in March as landlords rushed to buy prior to the deadline, before dropping dramatically to just 84 sales in May. Portico says the market has not recovered significantly since then. But despite the sales slump, house prices in London have not dropped and instead have almost doubled since the financial crisis, increasingly from an average of £250,000 to nearly £500,000. Portico says prices are likely to start dropping soon as the market in central London finally starts to react to low sales volumes. The company predicts likely price drops of up to seven percent, which it believes will then spread out to Greater London. This reflects other recent market reports.…
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London’s affordability nightmare
Living in London has become an affordability nightmare, with property prices rising way beyond average affordability levels. Hometrack’s latest UK Cities House Price Index, covering October 2016, shows that while City level house price growth is holding steady at 8.4 per cent, an 86 per cent uplift in house prices since 2009 has pushed the price to earnings ratio in London over 14x, more than double the UK average of 6.5x. City level house price inflation is running at 8.4% as the upward momentum in house price continues. Bristol remains the fasting growing city (10.6%) but the rate of growth is slowing. Aberdeen continues to register a year on year price falls (-8.1%). The impetus for house price growth is shifting from the affordability constrained cities in southern England to cities in the midlands and the north of England where affordability remains attractive. An update of city level affordability reveals that the price to earnings ratio ranges from 3.7x in Glasgow to 14.1x in London, compared to a UK average of 6.5x. London has the highest price to earnings ratio on record as a lack of supply and strong demand fuelled by low mortgage rates has resulted in an 86%…
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Autumn Statement: Building industry response
The housing industry’s response to the Autumn statement has been mixed – depending on whether your a housebuilder or in lettings, or whether you believe what he says at all! Some like him… “Philip Hammond is something of a political novelty, he is a Chancellor who listens,” says Jeremy Blackburn, RICS Head of Policy as The Chancellor, Philip Hammond finished his Autumn Statement. “Our ‘listening Chancellor’ consulted widely with industry in the build up to today’s statement, as I’m sure he will as Britain moves closer towards Brexit. We haven’t yet seen him pictured in a hard hat, but he clearly understands the housing sector better than his predecessors. “RICS warned Treasury that the UK is facing a critical rental shortfall of 1.8m homes. Our latest figures show that there has been a 15 per cent decline in house sales to first time buyers over recent months. That tells us that for all the rhetoric, David Cameron and George Osborne’s Starter Homes Strategy failed to get off the ground.” We can only hope that Jeremy is right. Other industry comments were varied in their support and/or cynicism. Martin Skinner, CEO Inspired Homes, said: “I am pleased that the Government is recognising the…
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