Posts with tag: annual price growth

Slow growth in London dragging national levels down

Published On: June 14, 2017 at 10:06 am

Tags: annual price growth,Brexit,London,property,property price growth

The most recent analysis released by Home.co.uk has shown that property price growth in London is in decline. On the other hand, prices in the North and South West and the Midlands are thriving and in turn upping the national average figure.

Substantial price growth, that above the rate of monetary inflation, is apparent in only four English regions.

Northern Rising

Trends towards improved market conditions in the North are continuing, with property marketing times improving significantly. In the region, higher demand and limited supply has pushed prices higher during the last month.

The North West is leading the way, with annual growth of 3.7%, followed by Yorkshire, which recorded 2.9%. The North East has seen marketing times return to levels seen in 2008.

The East of England is still heading the regional league table for price growth, closely followed by the East Midlands, the South West and West Midlands. All of these regions are showing growth on or above the rate of inflation. What’s more, in all regions apart from the East, marketing times are either the same or lower in comparison to June 2016 levels.

Slow growth in London dragging national levels down

Dragging

Overall, the national figures for growth will represent a static market. Despite recent price rises in these regions indicate that confidence is high, the dragging of prices seen in Greater London suggests that the trend towards zero year-on-year price growth is almost inevitable.

In addition, rising inflation due to a weaker post-Brexit means that overall capital values will show no rise in real terms.

Looking ahead towards the back end of the year it is expected that prices in London and the South East will fall – causing a negative impact on national figures. In June 2016, the yearly rate of increased home prices was 6.8%. Today, that figure stands at just 2.8%.

Prime central London rental values slip

Published On: August 4, 2015 at 4:50 pm

Author: Em Morley

Categories: Finance News

Tags: annual price growth,central London property market,property market

Latest research indicates that rental values in prime central London locations slipped during July. Additionally, financial service sector demand also dropped off, due to an uneven global economic climate.

Falls

The monthly slide of just 0.1% was the first dip since February 2014 and saw annual growth slow down to 2.9%. At its peak in May, growth was 4.2%, while prime gross yields were at 2.95%, according to a study by Knight Frank.[1]

According to the prime central London Index, stock levels have received a boost by the restrained sales market, with an increase in stamp duty for properties worth in excess of £1.1m slowing activity.

Tom Bill, head of London residential research at Knight Frank, suggests that with annual price growth slowing, more property owners have chosen to become landlords and wait until the market to settle, following the introduction of a number of recent tax changes.

Supply/demand

Mr Bill said that the short-term imbalance between supply and demand meant that tenants are having to shop around more, meaning that deals are becoming more difficult to close for landlords. As a result, Bill believes that landlords have made it more beneficial and attractive for existing tenants to remain in place, which has led to increased renewal rates.

‘While seasonal demand from students has remained strong, corporate demand has become more muted, despite some pockets of stronger performance,’ Bill noted.[1]

Prime central London rental values slip

In addition, the report shows that demand in the prime central London lettings market has typically been strong, but this year, optimism from bankers fell away during the second quarter of the year.

Mr Bill said, ‘continued regulatory uncertainty means banks are scaling back spending plans and nervousness surrounds a possible UK exit from the European Union, the recent Greek crisis and Chinese stock market volatility. However, there are longer term grounds for economic confidence, and the UK’s recovery was underlined by strong GDP figures in July. Furthermore, in an attempt to increase the appeal of London, Chancellor George Osborne plans to reduce the bank levy.’

‘Meanwhile, Brevan Howard, one of the world’s largest hedge funds, is reportedly moving senior traders back from Geneva to London, underlining the city’s dominance as a global financial centre,’ Bill concluded. [1]

[1] http://www.propertywire.com/news/europe/central-london-prime-rents-2015080410824.html

House Prices increased again in April

Published On: April 29, 2015 at 4:36 pm

Author: Em Morley

Categories: Landlord News

Tags: annual price growth,general election,Nationwide House Price Index

Latest Landbay Rental Index Reveals Best and Worst Areas for Growth in England

The latest Nationwide House Price Index has showed that UK house prices rose yet again in April.

An increase of 1% was recorded, which was significant due to it being the largest monthly rise since June 2014.[1]

Growth

Statistics from the report showed that annual price growth was up marginally from 5.1% in March to 5.2% in April. Average house prices are now £193,048. Robert Gardner, Chief Economist at Nationwide, commented that, ‘the pick-up in price growth has occurred even though the pace of activity in the housing market has remained fairly subdued in recent months.’ Gardner also noted that, ‘the number of mortgage approvals is still well below its long run average and 20% below the levels recorded in early 2014.’[2]

Mr Gardner then went on to describe the strength of the economy but seemingly slow pace of housing market activity as, ‘something of an anomaly.’ As a possible reason, Gardner suggests that, ‘it is possible heightened uncertainty ahead of the election is weighing on activity.’[3]

However, he concedes that, ‘there is no compelling evidence from previous UK elections to suggest a strong impact.’ Gardner believes that,’ healthy labour market conditions and continued low mortgage rates should help underpin housing demand in the quarters ahead.’[4]

‘Law unto itself’

Chief Executive of Dragonfly Property Finance, Jonathan Samuels, stated that the recorded 1% increase in April, ‘underlines the inherent volatility of the property market. It is truly a law unto itself.’[5]

Samuels believes that, ‘while mortgages are cheap, employment high and the cost of living low, people are far more cautious than they were in the past.’ He thinks that, ‘there is an element of caution and conservatism, in the market that perhaps wasn’t there before 2008.’[6]

House Prices increased again in April

‘People are more aware than ever that the property market is a double-edged sword,’ explains Samuels, who went on to sat that, ‘buying a property is not a decision that can be taken lightly.’ Samuels does expect activity levels to rise further after the General Election, but feels that, ‘2015 as a whole is shaping up to be a middling year for the market.’[7]

Imbalance

‘Although house price rises in recent months may seem subdued when compared to last year, prices are still rising well above the level of inflation,’ remarked Jeremy Duncombe, Director of Legal and General Mortgage Club. He believes that this is due to a, ‘surplus in demand which is outpacing the supply of new houses,’ and it is this imbalance that has,’ pushed up the average asking price in April, making homeownership a more distant dream for many potential buyers.’[8]

Duncombe does however believe that it is, ‘encouraging to see that political parties are talking about building more properties in the run up to the election.’ He went on to say that, ‘we need to ensure that house building remains at the top of the agenda throughout the next parliamentary term so a good supply of new properties is built and the issue is not forgotten about after the electioneering is over.’[9]

[1-9] http://www.financialreporter.co.uk/finance-news/april-sees-pick-up-in-house-price-growth.html?utm_content=bufferac29b&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer