Posts with tag: house prices

Average House Price Growth of 5.8% Recorded in February, Reports Land Registry

Published On: April 11, 2017 at 10:00 am

Tags: average house price,house price growth,house prices,property market

The latest Land Registry/Office for National Statistics (ONS) House Price Index shows that average house price growth stood at 5.8% in February, taking the average property value in the UK to £217,502.

Average House Price Growth of 5.8% Recorded in February, Reports Land Registry

On a monthly basis, UK house prices rose by an average of 0.6% when compared to January 2017.

In England, annual house price growth stood at 6.3% in February, taking the average value to £234,466. Month-on-month, house prices were up by an average of 0.8%.

Wales recorded an average annual price rise of 1.8%, which takes the average value to £145,293. Monthly data shows that prices have fallen by an average of 0.9% since January 2017.

Data for London shows that prices increased by an average of 3.7% on an annual basis, to reach £474,704. On a monthly basis, they dropped by 0.9%.

Regionally, the East of England experienced the greatest growth in property values over the past 12 months, with an increase of 10.3%.

Yorkshire and the Humber recorded the largest monthly rise, at 2.5%.

The North East experienced the lowest annual price growth, of just 2.2%, while the South East saw the most significant monthly price decrease, of 1.0%.

The latest UK property transaction statistics showed that, in February, the total number of seasonally adjusted property sales completed in the UK with a value of £40,000 or more dropped by 1.9% compared to February 2016.

The Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, comments on the figures: “Although many have been quick to attribute a slowdown in the market to fears of Article 50 and buyer uncertainty, the latest data from the Land Registry would suggest a more natural adjustment is currently happening to the market.

“Prices across the board have generally continued an upward trend, despite a slower start to the year than usual, but it is no coincidence that both London and the South East have seen some of the only falls in monthly property price growth. Both have considerably higher average house prices than the rest of the UK, and what we are currently seeing is the property market in these areas realigning itself with the rest of the country, having seen an abnormal level of inflation over the last year.”

He continues: “As these markets pause to catch their breath, it is inevitable that the result will be a downward movement in price growth. But as we approach the peak time of year for both homebuyers and sellers, it is likely that this brief respite will soon subside, and price growth across the whole of the UK will remain buoyant.”

Annual House Price Growth is Down to 3.8%, Reports Halifax

Published On: April 10, 2017 at 9:50 am

Author: Em Morley

Categories: Property News

Tags: average house price,house price growth,house prices,property market,property sales

The annual rate of house price growth has dropped to 3.8% from February’s 5.1%, according to the House Price Index for March from Halifax. This is the lowest annual rate since May 2013 (2.6%) and less than half the 10.0% peak reached in March 2016.

Annual House Price Growth is Down to 3.8%, Reports Halifax

On a quarterly basis, house prices rose by just 0.1% between January and March when compared with the previous three months. This is the lowest quarter-on-quarter increase recorded since October 2016.

Between February and March, house prices were unchanged for the second consecutive month, leaving the average property value at £219,755.

Separate research by Halifax shows that average house prices have increased by more than total average employees’ net earnings in a third (31%) of local authority districts in the UK over the past two years.

The biggest gap between rising house prices and earnings was in Haringey, London. Property values in the borough rose by an average of £139,803 over the past two years, exceeding average take-home earnings in the area of £48,353 over the same period – a difference of £91,450, equivalent to £3,810 per month.

In February, for which the latest data is available, total UK home sales slipped by 1% on January’s figure, marking the first decrease for five months. At 103,910, sales were 2% lower than in February last year. Despite this slight monthly decline, sales in the three months to February were 6% higher than in the preceding three months.

The volume of mortgage approvals for house purchases – a leading indicator of completed sales – dropped by 1% between January and February, to 68,300. Approvals have been in a narrow range between 67,000 and 70,000 per month over the past five months, suggesting that home sales are unlikely to change significantly over the next few months.

Supply also remains very low, with the number of properties coming onto the market dropping again in February. This was the 12^th successive monthly decrease, keeping average stock levels on estate agents’ books close to historic lows.

The Housing Economist at Halifax, Martin Ellis, comments on the report: “The annual rate of house price growth has more than halved over the past 12 months. A lengthy period of rapid house price growth has made it increasingly difficult for many to purchase a home as income growth has failed to keep up, which appears to have curbed housing demand.

“Nonetheless, the supply of both new homes and existing properties available for sale remains low. This, together with historically very low mortgage rates, is likely to support house price levels over the coming months.”

Russell Quirk, the Founder and CEO of online estate agent eMoov.co.uk, also responds: “The market had shown positive signs out of the blocks for 2017, but it would seem these green shoots of upward property price growth have stalled in the early springtime frost of Article 50. It is also important to note that some natural adjustment in price levels is no surprise given the rapid level of growth seen over the last year, driven for the large part by a lack of housing stock to meet buyer demand.

“The triggering of Article 50 may lead to some further uncertainty in the market as, once again, UK buyers let the dust settle before committing to a property sale. But this should soon subside and it is likely that the initial upward trend in property price growth seen at the start of the year will continue to blossom over the coming months.”

House Prices to Continue Rising in 2017 Despite Brexit, Predicts Cebr

Published On: April 10, 2017 at 8:22 am

Author: Em Morley

Categories: Property News

Tags: Brexit,EU referendum,house price growth,house prices,property market

Average house prices in the UK are expected to rise to £220,000 in 2017, despite the Brexit process, according to the latest forecasts from the Centre for Economics and Business Research (Cebr).

Cebr predicts that house prices will rise at a rate of 4.4% over the rest of the year, which is much below the 7.4% rate of growth recorded in 2016 and the slowest increase since 2013.

This forecast, part of the consultancy’s Housing Prospects report, claims that growth will fall below 5% for the next two years, until activity in the housing market is expected to pick up again.

House Prices to Continue Rising in 2017 Despite Brexit, Predicts Cebr

After a turbulent 2016, the data for the first quarter (Q1) of 2017 suggests that the property market is moving along at a steady, if unspectacular, pace.

Mortgage approval numbers – a leading indicator for property transactions – have recovered from their mid-2016 low and remain at a stable level of close to, but just under, 70,000 per month.

While this is a low figure compared to the historical average, it is near the post-crisis high of 74,000 seen in early 2014. Though the number of mortgage approvals dipped slightly in February, secured borrowing continues to benefit from low mortgage costs, after the Bank of England cut interest rates in response to the EU referendum result last summer.

Looking at the market fundamentals, the shortage of suitable housing continues to exert pressure on house prices. According to the Government’s Housing White Paper, more than 40% of local planning authorities do not know how to meet local housing demand over the next ten years. Looking at the higher end of the market, those looking to sell can hope to benefit from a pick-up in foreign demand, due to the low value of sterling.

While these factors will provide a bottom floor to price growth, substantial risks on the downside remain. Rising inflation, in combination with stagnating wage growth, has led to a halt in real income growth. This will affect consumers’ disposable incomes and put a dampener on the housing market in 2017 and 2018.

Furthermore, the property market is still reeling from additional taxes, which the previous government implemented not expecting the UK to leave the EU. The increase in Stamp Duty for additional homes, which was introduced in April last year, led to plummeting transaction levels in the subsequent months, which have still only partly recovered.

Additionally, the Government’s changes to mortgage interest tax relief for buy-to-let landlords will further hit the property investment sector. Starting on Thursday 6^th April 2017, the Government mandates that only 75% of taxes on mortgage interest payments can be deducted at the full rate of 40%, while the remaining 25% will be deducted at the basic rate of Income Tax – 20%.

Over the next few years, until 6^th April 2020, the tax system further reduces the share of pre-tax profits that can be deducted at the higher rate. In 2020, all pre-tax profits can only be deducted at a rate of 20%, essentially shifting the tax base from profits to rental income.

This means that higher rate taxpayers will see their applicable tax deduction shrink by 50%, resulting in substantially lower net profits. Cebr expects this shift to significantly reduce the number of private buy-to-let landlords in the market.

David Brown, the CEO of Marsh and Parsons estate agent, comments on the report: “A lot of the fears many had around Brexit haven’t materialised; both in terms of the wider economy and the housing market, which has proven resilient. The London property market remains an attractive global hub, luring people from around the world to invest and live here. In many ways, the vote has actually brought vigour to some parts of the market, as we are seeing renewed interest from overseas property purchasers as a result of the weaker pound to complement the strong demand from domestic buyers.

“The strength we have seen in the market is reflected in mortgage approval data. At just below 70,000 a month, this is close to the post-crisis high of 74,000 in 2014, and we only expect that to increase in the coming months.”

The Rural Areas with the Highest Quality of Life in the UK

Published On: April 5, 2017 at 9:21 am

Author: Em Morley

Categories: Property News

Tags: countryside,homebuyers,house prices,London,quality of life

Many people are moving out of cities, predominantly London, to improve their mental health, breathe cleaner air and enjoy a higher quality of life in general. But which rural areas are the best to move to in the UK?

The Rural Areas with the Highest Quality of Life in the UK

The 2017 Rural Areas Quality of Life Survey from Halifax reveals that the Orkney Islands are the best locations to settle down for a life out of the city.

The islands off the northeast coast of Scotland came out on top thanks to low crime rates, excellent, well-funded schools and the lowest anxiety levels.

Second place went to Wychavon in Worcestershire, which scored well on health, low pollution levels and well-paid employment, with the Derbyshire Dales, Hambleton in North Yorkshire and Purbeck in Dorset completing the top five.

An Economist at Halifax, Martin Ellis, comments: “With one of the lowest population densities and traffic levels in Scotland, some of the most stunning scenery in the British Isles, and the lowest levels of anxiety and highest life satisfaction ratings, the Orkneys offer a quality of life unmatched elsewhere in rural Britain.

“While the employment rate is significantly higher than the national average, there is more and more emphasis being placed on achieving a good work-life balance.”

Scottish island groups fared well overall, with the Shetlands and Western Isles also ranking in the top 50 rural areas to live.

While areas in the south of England appeared most frequently in the top 50, rural areas in the north of England scored better on education, lower house prices to earnings ratios, lower traffic flows and population densities.

In contrast, typically richer southern areas tended to do better for weekly earnings, the weather, health and life expectancy.

The benefits of living in southern rural areas come at a price, however, with the highest house price to earnings ratios in Tandridge, Surrey (11.3), Purbeck (10.8) and East Dorset (10.7).

The study’s findings also suggested that Londoners needn’t cut all ties with the capital to achieve a better quality of life, as 11 of the top 50 best rural areas to live are in the South East.

Commuter favourite Chiltern in Buckinghamshire – number seven in the rankings – scored highest for educational attainment, with 55% of the adults educated to a high level, compared with a national average of 36.5%. It also boasts some of the country’s largest homes.

Landlords, if you’ve decided against a London property investment due to high house prices and low rental yields, head to these rural areas to cater to those looking for a higher quality of life.

Prime Central London Prices hit an All-Time High

Published On: April 5, 2017 at 8:11 am

Author: Em Morley

Categories: Property News

Tags: house prices,London,London property market,prime central london,property sales

Prime central London prices hit an all-time high at the end of last year, as buyer sentiment improved, reports London Central Portfolio (LCP).

Prime Central London Prices hit an All-Time High

Despite turbulence in 2016 as Brexit uncertainty and Stamp Duty changes affected the market, prime central London prices showed signs of growth in the fourth quarter (Q4) of 2016.

The year ended with prime central London prices at a record high. According to data from HM Revenue & Customs (HMRC), the average house price in prime parts of the capital exceeded £1.8m at the end of 2016 – the highest level on record and 2.7% higher than the previous peak in Q3 2014.

This was spearheaded by a rally in Q4. Despite declines in annual price growth in the first three quarters of the year, Q4 recorded a 14% rise in quarterly prices, bringing 2016 price growth to 3.75%.

Transactions, however, dropped to an all-time low. Compared with the previous year, sales were down by 29%, with just 3,330 taking place – equivalent to just 64 per week. This is the lowest number on record – lower even than the depths of the financial crisis.

However, there is a reason for optimism, says LCP. As with prime central London prices, sales numbers saw a marginal recovery in the final quarter of 2016. Q4 experienced a 19% increase in sales compared with Q3. This is notable, as it bucks the seasonal trend of volumes typically tailing off in the pre-Christmas period.

It is LCP’s expectation that transactions will continue to rise gradually as the initial shock of Brexit and tax changes wash through.

The renewed activity in the London market appears to have continued into 2017, as investors’ confidence returns and they take advantage of the softer market.

As an international buying market, the weakness in sterling has also drawn investors back to prime central London. Despite the fact that prices are 2.7% higher than in Q3 2014, they are still 20% cheaper for investors buying in US dollars.

Combined with the Trump-effect and increasing instability in Europe, it is expected that steady levels of price growth will be witnessed, as investors retrench to safe havens.

However, while LCP expects sales volumes to harden gradually as investors return to the market, the overall trend of falling transactions is likely to continue, it warns.

As more investors choose to hold onto their blue-chip assets, the number of prime central London sales has been shrinking annually. This is likely to continue, explains LCP, which will put further pressure on the imbalance between supply and demand, and underpin future growth for prime central London prices.

Slow High-End House Price Growth Offsets Stamp Duty Hike for Additional Homes

Published On: March 31, 2017 at 10:10 am

Author: Em Morley

Categories: Property News

Tags: high-end property market,house prices,property sales,Stamp Duty

Slow house price growth in the high-end property market has effectively offset the Stamp Duty hike that buy-to-let landlords and second homebuyers are now forced to pay, according to new research from Private Finance.

The independent mortgage broker’s analysis of Land Registry figures shows that the average house price among the top 5% of property sales in England and Wales in 2016 was £1.121m. This was up by just 0.5% from 2015, as a combination of Stamp Duty changes and uncertainty following the EU referendum put the brakes on high-end property sales.

The 3% Stamp Duty surcharge that was introduced in April 2016 means that a property worth £1.121m is now liable to Stamp Duty of £89,521 if purchased as buy-to-let or second home, at an effective rate of 7.98%. This is £33,639 more than the £55,882 fee under the previous system, which still applies if the property is bought as a main residence, at an effective rate of 4.98%.

Slow High-End House Price Growth Offsets Stamp Duty Hike for Additional Homes

Despite the higher fee amounting to a 60% hike in Stamp Duty costs for landlords, investors and second homebuyers in the high-end of the property market, Private Finance’s analysis suggests that this extra £33,639 has been more than offset by the potential savings to be made on property values as a result of slower house price growth.

Annual price growth of 0.5% in 2016 among the top 5% of property transactions was markedly slower than across the rest of the market, where average prices rose by 4.2%.

Had the top 5% of the market risen at the same rate, buyers would have had to part with £1.162m for the average high-end home in 2016, rather than £1.121m – an extra £40,827. This saving more than compensates for the additional £33,639 Stamp Duty bill facing landlords and second homebuyers.

The difference is even larger for potential buyers of second homes or buy-to-let properties in Greater London. The average high-end property sale in 2016 was worth £2.581m in the capital, up by 1.5% on the previous year.

However, the remaining 95% of the London property market saw average prices rise by 8.2% over the same period, from £443,259 to £479,507.

Had the top 5% of the London market grown at the same 8.2% rate, it would have pushed average prices in this bracket up to £2.750m, leaving buyers to find an extra £169,410 for their purchases.

This far exceeds the additional £77,431 in Stamp Duty that would be due on a £2.581m home if it were purchased as a buy-to-let or second home (where Stamp Duty would cost £300,903) rather than a main residence (where £223,472 would be due).

The study comes after the Office for Budget Responsibility forecast rising Stamp Duty receipts from 2016/17 to 2021/22, and revised its previous 2016/17 prediction made in November 2016 on the basis of residential transactions and prices being “stronger than expected”.

The Director of Private Finance, Shaun Church, says: “Conditions have been tougher at the top of the housing market since last April’s Stamp Duty reforms, which created all manner of disruption to normal activity before and after they took effect. A healthy housing market needs movement and fluidity at all levels and across all tenures, but successive changes to Stamp Duty in 2014 and 2016 have had the opposite effect.

“If there is one silver lining for would-be buyers and investors, it’s that slower growth of high-value property prices has had a positive impact on affordability. A buyer today can pay markedly less for a high-value property at the top end of the ladder than if growth had kept pace with the rest of the market, making it easier to absorb any extra Stamp Duty fees.”

He continues: “Despite being something of a damp squib, last month’s Housing White Paper hopefully marks a shift away from an era of policy gimmicks and short-term tinkering with housing. Greater thought is needed to create a Stamp Duty system that supports homebuyers and sellers across the market.

“In the meantime, the long-term trend of rising house prices means Stamp Duty can be just as much of a psychological issue for buyers as one of affordability. There are plenty of funding options at hand to help with covering transaction costs, which mean the associated fees and taxes need not be a permanent barrier to property purchases.”