Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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House prices set to rise
Residential property prices look set to increase by an average of £60,000 over the next five years, hitting more than £320,000 in 2020, according to Cebr, the Centre for Economics and Business Research. The economic forecaster expects the average price of a home in the UK to reach £263,000 this year, up 5.6 per cent on last year, but believes that the market offers further room for growth of 3.5 per cent in 2016, with further annual price rises of in the region of 4 per cent in the four years that follow. If accurate, these price hikes will take the average price of a UK home to £321,600 during 2020 – £58,600 more than the average residential property price in 2015, according to Cebr. Nina Skero, CebrEconomist and main author of the report, believes that capital growth will be primarily fuelled by a growing “reduction in the number of properties being put on the market” as a result of low levels of housebuilding, as well as other factors such as an ageing population and the rising cost of moving up the property ladder. He commented, “The price gap between a first-time home and a larger family home has skyrocketed…
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Office-to-resi changes made permanent
Changes to permitted development rights enabling offices to be converted in to residential dwellings are to be made permanent, as part of a wider package of Government measures to address the housing crisis the Housing and Planning Minister Brandon Lewis has announced. In moves unveiled under the Housing and Planning Bill, the temporary change introduced in 2013 and due to expire on 30th May 2016 will become permanent after 4,000 conversions were given the go-ahead between April 2014 and June this year. The Housing Minister made clear that the new permitted development rights will also permit the demolition of office buildings and new buildings for residential use as well as enabling the change of use of light industrial buildings and laundrettes to new homes. Furthermore, those who already have permission will have three years in which to complete the conversion that will end the “potential uncertainty for developers” caused by the current regime. The rights will, however, be subject to limitations and prior approval by the Local Planning Authority, full details of which are yet to be provided. Planning specialists at Daniel Watney LLP have welcomed the move designed to give housebuilding a boost, but added that it wants to…
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Average rents rise 8.5%
Private rents have continued to increase across the UK, albeit at a slower pace, hitting a new high of £995 per month in September, research shows. Following six months of annual rent price increases of 10 per cent plus the latest HomeLet rental index reveals that the average price paid in rent slowed to an average annual increase of 8.5 per cent across the UK in September. Strong demand from tenants and an undersupply of properties have continued to place upward pressure on rents, with nine of the 12 UK regions analyzed seeing rent prices increase on an annual basis in September, led by gains in Scotland at 8.4 per cent, followed by the East Midlands at 7.7 per cent and Greater London at 6.6 per cent. In contrast, rents fell by 4.6 per cent in the North West, were 2.2 per cent lower in East Anglia and dropped by 1.4 per cent in Northern Ireland. Martin Totty (left), Chief Executive Officer of Barbon Insurance Group, parent company of HomeLet, said, “Affordability is an important factor in determining rents. Depending on what happens with inflation and real incomes over the coming months, could have a bearing on future rental price…
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Estate agents target more newbuild housing instructions
Hunters and Douglas & Gordon are hoping to win more new housing instructions from housebuilders after launching dedicated New Homes divisions to cater for an anticipated rise in the volume of new build homes set to come on to the market. Hunters has introduced a Residential Development Investment (RDI) divisionto cater for its growing number of investor and developer clientele in the land and new homes sector of the housing market. With offices in Manchester and London the new RDI division, trading as Hunters Land & New Homes, will focus on delivering high-quality investment stock in the capital, Manchester and other select regional markets to Hunter’s expanding client base. Services for developers include land sourcing and acquisitions; consultancy; and the management of sales and marketing campaigns in the UK and overseas, spanning Africa, the Middle East and Asia. “Our team is equipped to offer developers nationwide a complete and comprehensive service including consultancy, innovate marketing and branding, on-site and overseas sales and of course, access to our national database of clients through Hunters’ 160 branches throughout the UK,” said Mike McManus (left), Director of Hunters Land & New Homes Manchester office. In London, Hunters Land & New Homes will primarily…
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First-time buyer home prices soar
Home prices for first-time buyers are continuing to rise because of high demand from buy-to-let investors for properties typically acquired by those purchasing their first home, says Rightmove. New data supplied from the property portal reveals that the average asking price for residential properties currently coming on to the market has increased by 5.6 per cent over the past year to a new high of £296,549, but sellers of typical first-time-buyer homes are now asking 9.6 per cent more than this time last year. The average asking price of houses and flats with up to two bedrooms has increased by over £8,000 to £184,676, Rightmove said, making it harder for first-time buyers to save up enough money for a deposit. The report states that home prices are being driven higher by growing demand from buyers, particularly buy-to-let investors, and that a lack of properties coming onto the market was creating greater competition for purchasers, particularly first-time buyers. Rightmove added that the volume of first-time homes coming up for sale had dropped by 8 per cent on October 2014. The buy-to-let market has gone from strength to strength in recent years, reflecting the fact that a growing number of people are…
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Average rents continuing to grow
The average rent achieved for a newly let residential property in the UK rose in September by 3.6 per cent year-on-year to £941 per month, the latest figures from Countrywide reveals. The research found that rents continued their growth over the year, with prices supported by falling numbers of homes available to rent and sustained demand from tenants. The study also shows that the gap between the areas where many people can afford to rent and where they can afford to acquire property has continued to widen, owed largely to the fact that house price growth has outstripped rents across most parts of the country in recent years. As a result, more than half of tenants – 51 per cent – who purchase a property do so outside the town or city where they were renting, compared to 38 per cent in 2008. This trend is most evident in London where a third of renters – 36 per cent – who take their first steps on the housing ladder end up living outside the M25, up from a fifth – 21 per cent – in 2008, reflecting a surge in property prices over the past seven years. Johnny Morris (right),…
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More starter homes needed
The Government wants to give thousands of young people the opportunity to own property, David Cameron announced during the closing speech of the Conservative Party conference last week. Not for the first time, the Prime Minister talked about plans for new starter homes – to be built as part of a new residential development, allowing housebuilders to fulfil their obligation to develop affordable homes. Cameron hopes that the starter homes, which would be sold for 20 per cent below the market rate, will lead to a significant increase in housebuilding levels, as part of the Government’s plans to tackle the mounting housing shortage. The starter homes discount will apply to properties worth up to £450,000 in London and £250,000 outside the capital, and the Tories believe this scheme will provide 200,000 new homes by 2020. The Home Builders Federation (HBF) has welcomed the Government’s plans to deliver on its pledge to improve homeownership opportunities for young people. Stewart Baseley (left) of HBF said, “Greater flexibility in the way affordable housing is provided should not only speed up the process of securing an implementable planning permission but also make more sites viable for new housing. This will in turn increase availability…
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UK property sales hit 16-month high
Residential property sales have improved across the UK, reaching a 16-month high in September, the latest index report from RICS has revealed. It was the fifth month in a row that agreed sales rose, with the greatest increases over the month witnessed in the North, East Anglia and Scotland. According to RICS, this was the sixth consecutive month that the number of new buyer enquiries has increased, supported in part by less stringent mortgage lending conditions, with 18 per cent more chartered surveyors reporting a rise in demand. Despite the increase in activity levels, the report also identified a lack of new instructions, which has fallen in 13 of the past 14 months, for continuing to hold back sales growth. “Activity is now picking up which is encouraging, but unless the stock being sold is replenished there is a limit to how sustainable this modest improvement in market turnover will prove to be. And, unfortunately, the indications are that we are locked in a cycle where the lack of available properties on agents’ books is itself deterring some potential vendors from thinking about putting their own property on the market,” said Simon Rubinsohn (left), RICS Chief Economist. RICS forecast that…
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Osborne vows to build more new homes
George Osborne used his party conference speech in Manchester this week to reaffirm the Conservative policy toward housing. The Chancellor George Osborne during his speech to Conservative Party conference in Manchester described the Tories as “the builders” with a plan for a prosperous future for working people. The Chancellor announced plans to sweep away planning rules delaying house building on brownfield sites this autumn in a bid to boost the number of new build homes being delivered by developers across the UK. The Government has also pledged to spend an extra £5 building on housing schemes, as well as other projects, and has set up a new independent national board to review spending priorities across various sectors, including house building. Mr Osborne told the conference in Manchester, “Building doesn’t come easy and especially when it comes to new homes and infrastructure that the country needs. “We are going to get many more homes built for families to buy, we’re sweeping away planning rules on brownfield sites, this autumn we will direct our housing budget towards new homes for sale. “We will give housing association tenants the right to buy. We’ve had enough of people who own their own home lecturing…
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Housing market is at ‘crisis point’
The supply of residential properties for sale has slumped to its lowest level for 11 years, stoking fears that the growing housing shortage will continue to dive up home prices. Fresh data released by the National Association of Estate Agents (NAEA) reveals that the volume of properties available to buy per estate agent branch fell to 38 in August, down 31 per cent on July’s 55. This is the lowest level of supply recorded since January 2004, when 38 properties were also available. August also saw a dip in the number of house-hunters registering with agents, with an average of 408 applicants registered per member branch, compared to 462 in July, owed in part to the fact that many people were away on their summer holidays. Mark Hayward (left), Managing Director of the NAEA, said, “We’ve been banging the drum about the dwindling supply of housing for a while and this month’s report reiterates what we’ve been saying – there simply aren’t enough houses to match demand and we’re reaching crisis point. “There are now eleven house hunters fighting after every available house which isn’t sustainable.” The data also shows that the number of sales completed in August rose by…
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