Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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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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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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