Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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Investors deterred by buy-to-let clampdown
For many people buy-to-let has been an attractive income investment at a time of low saving rates and stock market volatility. But with the Chancellor George Osborne making it his goal to create what he described as a “level playing field” between landlords and those buying homes to live in, many would-be landlords are now put off the idea of investing in property, new research shows. Around one in four would-be landlords have been deterred from the idea of investing in the buy-to-let sector by the Government’s proposed 3 per cent stamp duty surcharge, according to the study by online investment platform rplan.co.uk. The study has also shown that 9 per cent of UK adults have given up on aspirations to own a buy-to-let property while 30 per cent are still considering whether to do so. Some 14 per cent existing landlords say they will now sell one or more of their properties because of the new rules. In his Autumn Statement last year, the Chancellor 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, almost trebling the purchase tax on a typical £275,000 buy-to-let…
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Housing market activity buoyant in January
The New Year has proved to be a catalyst for house-hunters looking to buy or rent property, new data suggests. Moneypenny reports that there was a significant rise in the volume of calls to estate and letting agents to request property viewings in January. The telephone answering specialist reported that there was a 70.8 per cent increase in the volume of calls handled last month compared with December, while there was also a marked increase on the corresponding period last year when the average calls concerning viewing requests saw a 32.5 per cent spike. In particular, viewing requests for residential sales rose by 77.6 per cent and by 57.2 per cent for lettings. Samantha Jones, Moneypenny’s Commercial Manager – Corporate and Property, commented, “We typically see a rise in viewing requests in January, but this year we anticipated that figure would increase. With major advertising campaigns run by portals like Rightmove and Zoopla over the Christmas period, as well as the April 1st Stamp Duty deadline looming, there have been a number of factors that could have potentially acted as a catalyst for those looking to buy.” The sharp increase in activity witnessed by Moneypenny reflects recent figures from Rightmove…
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U-turn on BTL attack will not happen
The Government’s sudden attack on landlords is unlikely to end anytime soon despite widespread criticisms. The Government has come under attack for its plans to introduce a 3 per cent stamp duty surcharge on buy-to-let and second home purchases and slash the tax relief that landlords can claim on buy-to-let income. The CML is the latest in a long line of commentators calling for a Government U-turn on the buy-to-let onslaught. The trade body is urging the Government to reform its implementation plans for a stamp duty surcharge, to mitigate potentially negative impacts on the housing market as a whole. Paul Smee (left), CML Director General, said, “Our longstanding view is that stamp duty is a blunt policy lever. Given the complexity of the proposals, we also suspect that in practical terms the surcharge could cause more problems than it solves. We urge the government at least to move away from a position where people will have to pay and then potentially claim back to one where payment is deferred, and only triggered if the buyer genuinely falls into the intended target category.” But David Cox (right), Managing Director of ARLA, does not expect a change in Government policy any…
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UK steps up housebuilding
The number of new homes registered to be built in the UK increased by 7 per cent year-on-year in 2015, hitting an eight year high of over 156,000, the latest figures from the National House Building Council (NHBC) show. Private sector registrations rose by seven per cent to 118,611 in 2015 compared to 110,674 in 2014 while public sector registration increased by five per cent to 37,529 from 35,685 in 2014. While the 2015 annual total is still well below the 199,177 new build homes registered in 2007, it is 75 per cent higher than the 88,993 new homes registered during in 2009. “2015 was a year for continued housing growth in the UK. Both the public and private sectors have performed well and we have seen encouraging levels of house building across most regions of the country,” said NHBC chief executive Mike Quinton (left). The volume of detached homes registered reached 42,173, the highest for more than a decade. Additionally, the number of semi-detached homes registered in 2015 at 35,423 was the highest in over 20 years. NHBC’s latest figured also revealed that most parts of the UK experienced significant growth year-on-year, led by Northern Ireland, up 30 per…
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Rents rising at quickest pace since 2011
Rents across England and Wales increased by 3.4 per cent in December taking the average to £794 a month, according to latest buy-to-let index from Your Move and Reeds Rains. On an annual basis, rents increased in eight out of 10 regions led by the East of England with a rise of 7.8 per cent, London was up 6.3 per cent, and the East Midlands up 4.7 per cent. Rents dropped by 1 per cent in Wales and by 2.6 per cent in the South East. The figures also reveal that Yorkshire & Humber and West Midlands both saw rents reach a record high in December. The rent increases recorded in 2015 came about despite a month-on-month fall in the latest market rents, dropping 0.6 per cent between November and December. Average rents are now £22 per month below September’s all-time record high of £816pcm, reflecting a softening in tenant demand in the run-up to Christmas. A breakdown of the data reveals that six out of 10 regions monitored saw rents decline on a monthly basis, led by London, with rents down 1.6 per cent. By contrast, Wales saw a 1.8 per cent increase in rents. They also rose by…
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UK house prices set to rise in 2016
With record-low interest rates for at least another few months and housing supply set to remain low, the general consensus among households across the UK is that property prices will increase in 2016, albeit at a slower rate than in 2015. The latest data from the House Price Sentiment Index (HSPI) from Knight Frank and Markit Economics found that house price growth this year is expected to be led by the East of England and London, with more modest levels of price increases set to be recorded in many other parts of the UK. The future HPSI, which measures what households think will happen to the value of their home over the next year, increased marginally this month to 70.5 from 70.3 in December. This is the highest reading since June 2015, but remains below the peak of 75.1 reached in May 2014. Expectations for residential property price growth among households in the East of England hit an all-time high of 81.1, suggesting that they expect to see the highest rise in property values over the next year. Home prices in London, where an average HPSI reading of 79.1 was recorded, is also expected to outstrip the national average. In…
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RIBA calls for more new homes…
The Royal Institute of British Architects (RIBA) has welcomed the Government’s recent commitments to increasing the numbers of new build houses, including the announcement on funding for Housing Zones across England. But the RIBA has also warned that the whole exercise could prove futile if the Government fails to put quality at the heart of this investment. RIBA went on to call on MPs from all political parties to vote for the amendment to the Housing and Planning Bill calling for the adoption of a minimum space standard into national building regulations. This will ensure new build homes are large enough for families and built to last. RIBA President Jane Duncan (left) said, “Whilst this new focus on quantity is to be applauded, the Government can no longer ignore the poor quality of some of our new housing stock, especially as it ploughs public money into housebuilding. Our latest report, ‘HomeWise: Space Standards for Homes’ concluded that some new homes being built in England are still too small and that a minimum space standards for new dwellings must be adopted into building regulations. “These aren’t outlandish demands; they simply ensure that all new build homes are of an adequate size.”…
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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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