Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
-
Are buyers finally returning after the Brexit vote?
Purchasers are returning to the market following the Brexit vote according to figures from both the Royal Institute of Chartered Surveyors (RICS) and the Council of Mortgage Lenders (CML). RICS says this morning that buyer demand has grown for the first time in seven months and that “market confidence continues to improve following post-referendum jitters”. Its survey of RICS members reveals that last month eight percent more of them reported an increase in buyer enquiries compared to June, when 34% of respondents reported a drop. “The market does now appear to be settling down following the significant headwinds encountered through the spring and summer,” says Simon Rubinstein, RICS Chief Economics. “Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock on the market.” The CML also published an uptick in activity within the market this week. It revealed that the number of people borrowing money to buy homes increased by 14% month-on-month to £12.2 billion and up 11% year-on-year. First time buyers played a significant role in this activity increase, borrowing £5.5 billion during August, up 24% on the same month last year. “House…
Read More » -
Fracking sites will put off 64% of buyers, research claims
The government’s recent decision to give fracking the green light in Lancashire has been attacked by various groups including local communities, farmers and environmentalists. But now perhaps agents should be worried about shale gas extraction as well. Research out this afternoon reveals that over two thirds of British home buyers would be reluctant to buy a property near a fracking site. This may be bad news for agents trying to sell homes near the fracking sites in Lancashire as well as others around the UK including in Sussex. The first sanctioned site operated by fracking firm Cuadrilla is to be near Preston New Road close to Blackpool. A second site in nearby Treales, seven miles from Preston, has yet to be approved. The research by house-extension.co.uk found that 21% of the 1,000 respondents to its survey were “unlikely” to buy a home near a fracking site while 43% said they were “very unlikely” although 32% of those who took part said they’d support fracking if it meant lower energy bills in the UK. One enthusiastic supporter of fracking is Sajid Javid, Minister for Communities and Local Government, who said the green light was given to fracking for its “potential to power economic growth,…
Read More » -
Grainger continues breakneck expansion into rental sector
Leading build-to-rent player Grainger plc has received planning permission for its latest development in London, a 163-home site called Apex House in Seven Sisters, North London, it has announced today. This will bring its total units under management to some 3,600 homes once Apex House is completed. The development is due to start construction next year, cost £60m to build and be ready to rent out in 2020. It will have an initial yield of 6.5% and rental revenues of £3m per annum. Last year the company launched its first purely commercial build-to-rent development in Barking called Abbeville Gardens and also recently bought a 600-unit development in Salford Quays, Manchester. Grainger has also built and managed residential developments for several councils including Kensington & Chelsea in London. It now has operations in Newcastle, London, Manchester and Birmingham and has said it aims to be the largest residential landlord in the UK by 2020. It already owns developments worth £2.7 billion and has also launched a new strategy that will see exit operations in overseas markets and participation in the UK equity release sector. As part of its trading statement for September, chief executive Helen Gordon (pictured) said: “We have seen a…
Read More » -
Home moves to shrink by 200,000 following Brexit vote, says L&G chief
The Brexit vote may lead to some 200,000 transactions being knocked off the number of homes sold this year according to Legal and General Building Services’ managing director Steve Goodall. Speaking at a recent conference organised by Mortgage Finance Gazette, Goodall (pictured, below) said the UK long-term average was 1.5 million transactions a year, topping out at 1.6 million during the “heady heights” of 2006/7 before the financial crisis, then dipping down to 900,000 and now running at 1.2 million. “Because of what happened over the summer – i.e. the referendum vote for the UK to leave Europe – this year we night see a flatlining of transactions,” he said. “The equivalent number of transactions over the last three months may have actually dropped to around one million per annum.” Goodall also said transactions should be much higher overall, pointing out that current levels of transaction should be measured against the growing number of households in the UK. Therefore, he calculates, the market should be running at 1.7 or 1.8 million transactions a year not 1.2 million. “There are more people yet there are fewer housing transactions,” he said. The conference was attended by a mixed bag of industry leaders including Karl…
Read More » -
Knight Frank says extra buy-to-let Stamp Duty must go
Knight Frank chairman Alistair Elliott has today added his voice to the growing industry backlash against last year’s introduction of an extra three percent buy-to-let Stamp Duty levy. Elliott (pictured, left) this morning told City AM that “increasing tax doesn’t increase housing supply” and called for the recent second homes levy to be reversed during the next budget. Knight Frank also claims that the Stamp Duty change has had a bigger effect on the property market than the Brexit vote, particularly in central London. In Chelsea, it says, the number of house sales has dropped by 10% year-on-year. Government figures show that after the Stamp Duty was introduced in April the number of buy-to-let properties purchased dropped off by a fifth, and buy-to-let lending dropped by 65% over the same period, according to the Council of Mortgage Lenders. Elliott is not the only high-profile person to be tackling the government on this issue. Last week Cherie Blair led a failed attempt in the high court by a landlord action alliance called Axe the Tenant Tax Group to reverse the government’s planned reduction in tax allowances for landlords, due to come into force next year. And the property industry is not…
Read More » -
Landlords: the only way is Essex!
The east London borough of Havering offers London’s highest rental yield...
Read More » -
Homelessness rises
October 10th is World Homelessness Day and the statistics for homelessness in the UK are on the rise.
Read More » -
‘Proptech and eviction laws are emboldening tenants’
The rise of proptech-led apps coupled to the introduction of regulation to prevent the worst kind of predatory evictions has emboldened tenants and is one reason why more are asking for rent reductions, says David Cox, ARLA’s Managing Director. Last week ARLA revealed that the percentage of tenants asking for rent reductions has increased from 2.1% to 3%, the highest proportion since ARLA began keeping records. Cox says the relationship between landlord and tenant is now more balanced. This, he says, is because the plethora of private rented sector data now available online via both the portals as well as new apps such as recently-launched Movebubble mean many tenants are now more aware of local rental prices and whether their rent is fair or not. “Tenants are looking around and if they see that similar properties nearby are available to rent for much less, they now feel secure enough in their tenancies to start the rental re-negotiation process with their landlord,” says Cox. He says that many tenants who had complained to their landlord in the past about the condition of their property and subsequently asked for a reduction in rent would have been open to a retaliatory eviction, but that now this has…
Read More » -
Buy-to-let mortgage stress test shock
As mortgage approvals continue to fall – down to 60,058 in August from 60,925 in July – buy-to-let lending is also likely to decrease with the latest news from the BoE’s Prudential Regulation Authority (PRA) which has confirmed that a series of investors’ affordability checks and interest rate “stress tests” will be introduced from January 2017. Buy-to-let lenders will be required to verify that landlords can afford to pay the mortgage under potential future interest rates of 5.5 per cent, as the PRA recommended that the interest coverage ratio, a commonly used measure of the ratio of rental income to mortgage payments, does not fall below 125 per cent. Affordability assessments will need to take into account borrower’s costs, personal income and possible future interest rate increases, with lending to portfolio landlords to be assessed using a specialist underwriting process. “The PRA’s actions are intended to bring all lenders up to prevailing market standards and guard against any slipping of underwriting standards during a period in which firms’ growth plans could be challenged by the changing economic landscape and the impact of forthcoming tax changes,” it said. Peter Williams, Executive Director of Intermediary Mortgage Lenders Association (IMLA) said, “IMLA welcomes…
Read More » -
Weak pound makes prime London 29% cheaper
The Brexit vote may have contributed to the current prime London woes but the ensuing pound bloodbath since June is set to save it, says London housing data firm Lonres. The company has crunched the numbers to work out how much cheaper London’s fashionable central postcodes are now that sterling has crashed against the dollar and euro, with surprising results. For those buying with dollars, Lonres says, average values paid including both currency changes and recent average price reductions of up to 10% make prime London up to 29% cheaper than 2014 when sterling and the overall market was at its strongest. “This makes prime central London, for those buying with dollars, the most affordable it has been since 2012,” says Marcus Dixon, Head of Research and Data Analysis at Lonres (pictured, below). And for euro buyers, it’s a similar picture. “Price falls and a weaker sterling have meant the amount paid per square foot in euros in prime central London has dropped by 26% from €2,684 per square foot at the peak in July 2015 to €1,997 in August this year,” says Marcus. “A combination of price falls and a weaker sterling could mean the next few months represent…
Read More »