Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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Home buying barriers frustrate 1.7m tenants
One in three private tenants has put their plans to buy on hold and remained in rented accommodation longer than planned, according to Experian research. Home ownership has been considered an integral part of ‘The British Dream’ for generations, yet Experian’s survey of nearly 1,500 private tenants in the UK suggests 1,655,680 tenants are frustrated first-time buyers. 18 per cent private tenants don’t believe they would be accepted for a mortgage so feel renting is their only option, while 10 per cent have struggled to raise a deposit, delaying their plans to buy. A further five per cent have had to prolong their time renting as they’ve been held up in securing a mortgage. Despite making regular payments for their housing, private tenants don’t see this reflected on their credit report in the same way mortgage payers do. To help them get a mortgage, access finance or prove their identity online, Experian has developed the Rental Exchange. Experian’s Jonathan Westley (left) said, “Many would-be first-time buyers face the challenge of saving for a deposit on a home while paying rent each month. While our research also shows that a significant amount of people are happy to rent in the long-term,…
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Sink estates will rise again
The British Property Federation (BPF) has welcomed proposals from the Government to regenerate some of the country’s most run-down housing estates, praising the Government for ensuring that “binding guarantees” will be put in place for tenants and homeowners, to ensure that their right to a home is protected. The government has launched a package of measures to transform 100 housing estates across the country, including a £140m fund and the launch of an Estate Regeneration Advisory Panel, chaired by former Deputy Prime Minister Lord Heseltine (left). Ian Fletcher, director of policy (real estate) at the British Property Federation, said, “There are some very old council estates that are in need of regeneration, but that process must treat existing residents fairly. The Government is therefore right to put some sorts of guarantees at the forefront of its policy and encourage a partnership approach. “Communities need not only homes, but jobs, schools and green spaces and other leisure opportunities to create places people want to live in. If the Government gets this right it could be some of the best use of £140m it has ever spent.” The Prime Minister’s announcement comes ahead of a report from property advisor Savills which will…
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Global cities of desire
Many of us think that we suffer the highest property prices and ridiculous rises, but we are not alone. Knight Frank’s Prime Global Cities Index shows that three cities recorded double-digit annual price increases; Vancouver, Sydney and Shanghai and around 73% of cities recorded positive annual price growth in the year to September. Kate Everett-Allen (left), Partner, International Residential Research, Knight Frank, says, “As we enter a new era of rising interest rates, greater regulation and potentially lower returns, it will be interesting to see which cities’ prime residential markets will outperform. Events in the world’s two largest economies look set to dominate the proceedings in 2016. The scale of the slowdown in China and the recent US interest rate rise will determine the performance of property markets across developed and emerging markets alike over the next 12 – 18 months. “If we are to pick one prime market which we predict will outperform the world’s top tier of global cities, it is Sydney. Nonetheless, even here the pace of luxury price growth is expected to slow from 15% year-on-year in 2015 to 10% in 2016. Australia’s economic slowdown, weaker stock market performance in recent months and the introduction of…
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Britain’s housing stock worth £7.76 trillion
Britain’s 28.6 million homes grew in value by nearly £1.4 billion per day during 2015, says Zoopla research. Brentford and West Drayton are areas with largest increases in 2015 (24% and 17% respectively) Wales is the region with the lowest price gains over the past 12 months, at 2.2% Edinburgh, Bristol and Glasgow amongst top online property searches in 2015 Zoopla says that the country’s 28.6 million homes are now worth a combined £7.76 trillion (£7,764,650,690,201) — with the total residential stock value rising £519 billion (7.2%) over the past year. The average British property is now worth £290,827 and has risen in value by more than £20,000 (7.4%) on average in 2015 – marking a bigger increase year-on-year than 2014 (6.9%). Homeowners in London have seen the highest price growth in 2015 of any region, with an 11.8% annual uplift. The East of England follows closely with an 11.6% rise – up from 9.6% during 2014. However, property owners in Wales and Scotland saw the lowest growth in house prices in the last 12 months, with values rising just 2.2% and 2.7% respectively. Bodacious Brentford Brentford in Middlesex, Greater London finished the year with the greatest increase in property…
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New homes: Government is “pulling out all the stops”
On the first day back at work after the festive break, Prime Minister David Cameron announced another new scheme to get Britain building. Smaller developers will be able to buy sites in England with planning permission in place – with 40 per cent of the new-builds to be “starter homes” aimed at first-time buyers. Direct commissioning has not been used on this scale since Margaret Thatcher started the regeneration of Docklands, the benefit is that it allows the government to assume responsibility for developing land, instead of large building firms. Prime Minister David Cameron said it was a “huge shift in government policy. Nothing like this has been done on this scale in three decades, government rolling its sleeves up and getting homes built.” The Labour party said he was using “rhetoric to hide his failure on new homes.” Shadow Housing Minister John Healey said the announcement did not promise new investment or affordable homes beyond those already announced. ‘Radical’ shift Adding to Mr Cameron’s energy rush, Communities Secretary Greg Clark (left) said that the government was not only rolling up its sleeves but was “pulling out all the stops to get the country building.” “We know that consistently 90%…
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Rents cool off as tenant demand softens
Rents across England and Wales fell by an average of 0.9 per cent in November taking the average to £799 a month, according to latest buy-to-let index from Your Move and Reeds Rains. Average rents are now £17 per month below September’s all-time record high of £816pcm, reflecting a slight drop in demand from tenants seeking rental accommodation. A breakdown of the data reveals that six out of 10 regions monitored saw rents decline on a monthly basis, led by southern regions. The South East saw rents drop by 3 per cent month-on-month and they were down 2 per cent in the South West and 1.2 per cent in London. By contrast, Wales witnessed a 2.9 per cent rise in rents. They also rose by 1 per cent in the East Midlands, the West Midlands saw a 0.4 per cent increase and Yorkshire and the Humber a 0.2 per cent hike. But despite the recent fall, on average, rents have increased significantly over the past 12 months, up 4 per cent compared to November 2014, led by gains in London where rents are up 8.9 per cent year-on-year. Rents in East of England rose by 8.4 per cent. They are…
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House prices set to soar
Residential property prices and rents look set to rise sharply over the next decade, according to a new report. The ARLA and NAEA Housing 2025 report forecasts that the average UK home price, currently stood at around £280,000, will appreciate by half their existing value by 2025 – reaching an average price of £419,000. House price growth is expected to be led by London, where it is estimated property prices will almost double in the 10 years, increasing from £515,000 to £931,000, fuelled primarily by a widening supply-demand imbalance in the market. The ARLA and NAEA Housing 2025 report also projects that there will be a drop in the proportion of UK households that own their own property over the next decade, down from its existing rate of 62 per cent to 55 per cent, owed mainly to high home prices and the ageing of the baby-boom generation. “House prices are only going to go one way, and unfortunately that is up. For so many already priced out of the market, this is news aspiring house buyers will not want to hear,” said Mark Hayward, Managing Director, NAEA. He added, “Ongoing house price inflation, combined with low wage inflation, tighter…
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Stamp duty hikes will push up rents, says IFS
Fewer new homes will be built and rents will rise as a consequence of the hike in stamp duty on buy-to-let unveiled in last week’s Spending Review, the Institute for Fiscal Studies (IFS) has predicted. The Chancellor George Osborne announced that a 3 per cent rise in stamp duty for buyers of second homes and buy-to-let landlords will come into play from April 2016, almost trebling the purchase tax on a typical £275,000 buy-to-let home from £3,750 to £10,800. Osborne believes that the new surcharge on stamp duty for landlords and those acquiring second homes will raise £1billion for Treasury by 2021. The tax change will almost certainly result in an inevitable rush of people trying to secure buy-to-let properties before April’s deadline, which could push up home prices in the short-term. But should the buy-to-let market slow thereafter, as many analysts anticipate, it may enable more first-time buyers, squeezed out by investor-driven purchasers, to buy property, but not if there is a major reduction in the construction of new homes. Stuart Adams, a Senior Research Economist at the IFS, projects that the tax increase could deter property developers, with less reason to invest, slowing down the building of new…
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Residential transactions rise again
Residential property sales in the UK have exceeded 100,000 per month for a fifth month in succession with purchasers taking advantage of low mortgage borrowing rates. The latest official transaction data from HMRC reveals that the provisional seasonally adjusted UK property transaction count for October 2015 was 105,490 residential and 10,160 non-residential transactions. However, sales still remain significantly below the monthly tally of almost 150,000 recorded at the height of the property boom in 2006. This means residential purchases in October fell month-on-month by 0.2 per cent but on a 12 month basis rose by 6.3 per cent comparedwith the 99,290 recorded in October 2014. “In October 2014, the residential market cooled slightly following a busy summer – but this year the market shows little sign of slowing down,” said Brian Murphy (left), Head of Lending at Mortgage Advice Bureau. “Demand from potential buyers remains high, with many taking advantage of the excellently priced mortgage rates available on the market,” he added. Despite a slight correction in property transactions on a monthly basis, the UK housing market remains “head and shoulders above a year ago”, as buyers take advantage of a wave of “low interest rates and attractive mortgage products”,…
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Rents fall in October
Rents across England and Wales dropped by 1.2 per cent fell in October taking the average to £806 per month, according to the latest buy to let index from Your Move and Reeds Rains. Rental price falls were led by the South East where they dropped by 2.5 per cent month-on-month, followed by the South West, down 2.1 per cent, and London where they fell by 1.1 per cent. But despite the fall in rents between September and October, they remain significantly higher than a year ago, with average rents having increased by 4.7 per cent in the 12 months since October 2014. On an annual basis, London leads the way with rents 10.7 per cent higher year-on-year, while rents increased by 8.9 per cent in the East of England and 5.7 per cent in the East Midlands. By contrast, rents in Wales are 6.7 per cent lower than a year ago. With the festive season rapidly approaching, better deals will almost certainly be made available for tenants seeking to rent later in the autumn, but there has been no huge change in the supply-demand fundamentals pushing rents higher than in previous years, according to Adrian Gill (left), Director of…
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