Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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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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Government Spending Review
George Osborne has today declared that he plans to “end the crisis of home ownership in our country.” Great news. To do this, The Chancellor is to double the housing budget to £2 billion a year and build 400,000 new homes across the country. “We are the builders!” yelled Mr Osborne above the parliamentary hubbub. He was talking about infrastructure when he said that, but it also applies to his housebuilding plans. A new building bonanza will be funded by public money, with developers channeled into building starter homes for hard working families (Mr Cameron’s favourite sector). The Chancellor is also mindful of the importance of ‘young hardworking families’ as he has now decided to rein back his proposed cuts to tax credits, softening the blow by delaying implementation of those deeply unpopular cuts. He is, however, capping Housing Benefit for new tenancies. The funding for housebuilding will be split into several parts; £2.3 billion directly to developers (ever thought you were in the wrong business?) to ‘encourage’ them to build 200,000 starter homes. That’s £11,500 per house. These homes are designated as being for ‘those aged under 40.’ Tough luck if you are just 41 and not yet been…
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Planning delays stifle new housing
A lack of resources within planning departments is one of the biggest reasons for the chronic housing shortages in this country, according to Linea Homes. The niche housebuilder reports that the vast majority of planning applications are being delayed by six months or more owing to what it claims is a shortage of staff and inefficient processes within local planning departments. It is estimated that around 250,000 new homes need to be built in the UK annually to help address the growing supply-demand imbalance in the market, but housebuilders will continue to fail to meet that target year-on-year owing to severe delays with planning applications that could be avoided, Gavin Sherman, Co-Owner of Linea Homes, has said. He commented, “We are not alone in experiencing severe delays with our planning applications that are complete with professional reports and are policy compliant. Local authorities are so under resourced that they simply can’t acknowledge and administer the number of applications they are receiving. Some officers only work two days a week, which makes it impossible for them to deal with the workload they are given.” A recent report compiled by the British Property Federation and GL Hearn, a property consultancy, supported Sherman’s…
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Britain is building again
The volume of new homes in England increased by 25 per cent in 2014-15, the biggest rise in 28 years, according to latest Government figures. Alterations to planning laws helped boost the number of residential properties developed through a change of use, but the main factor was a hike in the number of new-build homes completed during the year. Data from the Department for Communities and Local Government shows that a total of 170,690 homes were added to the country’s housing stock, which Communities Secretary Greg Clark said was further proof of the Government’s commitment to get more homes developed. More than 700,000 additional homes have now been delivered since 2010, supported in part by a rise in the number of commercial buildings converted into residential properties. Clark (left) said, “As a one nation government we’re determined to make sure everyone has the opportunity and security of owning a home of their own. “Today’s figures show a 25 per cent increase in the number of new homes over the past year – showing our reforms are building new homes across Britain. “We are going further and will do everything we can to help families buy a place of their own.…
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