Posts with tag: house prices

Property sales down 0.9% in month after Brexit

Published On: August 24, 2016 at 9:11 am

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Property sales in Britain dropped marginally between June and July of this year, (post-Brexit vote), according to the latest data released by HMRC.

A fall of just 0.9% was recorded month-on-month, with fears of a more substantial drop following the Brexit vote proving unfounded.

Year-on-year however, there was an 8.3% decline in transactions.

Estimations

The seasonally adjusted estimates of non-residential property transactions fell by 7.5% between June and July, 1.7% down on the same month last year.

In addition, the report shows that there was a large rise in transactions in March, in comparison to a sharp reduction in April. This can be attributed to the introduction of higher stamp duty rates on additional property that came in on April 1st.

Andy Sommerville, director of Search Acumen, suggests that the statistics show the market is stabilising. He notes that, ‘many would have expected a sharp fall in transaction activity in what was the first full month in our post-referendum economy, yet an underwhelming change suggests the darkness in our market shows little sign of worsening.’[1]

‘Despite the encouraging resilience the market has shown in the short term, the bigger picture reveals an 8.3% decrease in transactions since July last year, demonstrating the true hit we’ve taken from Brexit, combined with the underlying issue of affordability. As our economy absorbs the shock of the past three months, it is positive that home buyers are being given a leg-up into the property market to reignite demand and boost our industry,’ he added.[1]

Property sales down 0.9% in month after Brexit

Property sales down 0.9% in month after Brexit

Stable

Doug Crawford, chief executive officer of My Home Move, said that the data shows that the property market has shook off the uncertainty of the Brexit vote.

He observed, ‘following the referendum there was talk that the market would be quickly affected by the outcome, but these fears have been allayed with residential transactions falling by just 0.9% month-on-month. While transactions levels remain lower than a year ago, this is in the context of a market that is still feeling the effects of changes to stamp duty, which led to a frontloaded first quarter.’[1]

‘The figures reflect our own experiences of the market. Following the referendum the vast majority of purchases went ahead without any issue, and chains were largely unaffected. In the medium term the market will remain stable, and our view is that it is strong enough to weather mild economic uncertainty.’[1]

Concluding, Crawford said, ‘In the long term, strong fundamentals will continue to support a prosperous housing market. High levels of demand for both rental and owner occupied accommodation will drive transaction figures upwards, and our recently published forecast predicts the number of property transactions will rise by 20% by 2020.’[1]

[1] http://www.propertywire.com/news/europe/uk-sales-post-brexit-2016082312298.html

First Time Buyers are Back in the Prime London Market

Published On: August 22, 2016 at 11:18 am

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First time buyers accounted for more than a third of property purchases in prime London in the second quarter (Q2) of the year, as buy-to-let activity dropped from high levels seen in Q1, according to the latest London Property Monitor from estate agent Marsh & Parsons.

Having accounted for 22% of prime London property sales in Q1 2016, the proportion of first time buyers grew to 34% in Q2, making them the most common type of property buyer.

This expanding market share was aided by decreased competition from buy-to-let landlords. Following the rush to beat the 1st April Stamp Duty deadline, landlord interest cooled in Q2 to just 13% of all sales, down from an uncharacteristically high 36% in Q1.

First Time Buyers are Back in the Prime London Market

First Time Buyers are Back in the Prime London Market

As well as bringing good news to aspiring first time buyers, the rise in activity from this type of buyer has also had a positive knock-on effect on second steppers. New homeowners on the first rung of the property ladder have pushed up the level of second stepper activity, accounting for 22% of transactions in prime London in Q2, compared to 9% in Q1.

However, the picture is not so great for first time buyers in prime central London, where investors are the most prominent type of buyer, accounting for 31% of sales in Q2.

The CEO of Marsh & Parsons, David Brown, says: “We’re often surrounded by stories of what a raw deal first time buyers get – particularly in the capital – so it was encouraging to see them dominate the market in the second quarter of the year. For all the hurdles that stand in the way of prospective purchasers, there are plenty of other positive factors, such as historically low interest rates, to help soften the blow.

“The EU referendum result at the very end of the quarter came too late to impact the overall trends seen, but after the initial panic in the days immediately following, it’s been very much a case of business as usual ever since. Property investor activity is unlikely to remain so low in Q3 – especially with the currency exchange situation making London property extremely attractive for landlords from overseas.”

The estate agent also found that the rate of quarterly house price growth in prime London cooled in Q2, down by 0.3% on Q1. Outer prime London prevented this fall being more pronounced, with a 0.4% quarter-on-quarter rise in prices.

The annual picture is also more positive, with a 1.3% increase in average house prices across prime London recorded over the past year, rising to 2.7% in outer prime London. This was driven by particularly strong growth in certain parts of south London, with Clapham (9.2%) and Balham (6.5%) – consistently popular with young professionals – leading the increase. North Kensington (5.1%) also experienced strong price growth over the year.

In terms of property type, larger homes are seeing the greatest increases in price, as buyers with families or those seeking extra space dominate the market. Four-bedroom homes experienced average price growth of 1% over the quarter in prime London, with such properties excelling in outer prime London, where they enjoyed an average 2.8% increase.

However, on an annual basis, one-bedroom properties were the best performers, rising in value by an average of 2.7% since Q2 2015 in prime London, and by as much as 5.4% in outer areas.

Marsh & Parsons also found that 61% of prime London properties are bought with a mortgage and 39% are purchased with cash. This split is reversed in the heart of the capital, where 61% of properties are acquired with cash, proof that cash is still king in the most prestigious postcodes.

Brown comments: “With property investors frontloading their transactions into the first quarter of the year, activity was always likely to take a slight step back in the second quarter and so it transpired. Q3 is unlikely to see a marked uptick in values or transactions, as we enter a traditionally slower season that sees individuals more preoccupied with holidays than houses, but is reassuring that the UK’s decision to leave the EU isn’t having the immediately negative impact that some doom-mongers predicted. Indeed, with the Bank of England reducing interest rates to a new historic low, mortgage finance will continue to be accessible, with pricing as attractive as it ever has been.”

House Prices Will Fall by 1% in 2017, Predicts Countrywide

Published On: August 22, 2016 at 8:50 am

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House prices are expected to fall by 1% in 2017, according to the latest predictions from property firm Countrywide.

Today’s report also forecasts that house price growth will slow to 2.5% across the UK this year, but will recover to 2% in 2018, following next year’s decline.

Countrywide believes that house price growth will slow across all regions of the UK in 2016 and 2017, with recovery expected to begin at the end of next year and into 2018.

London is expected to see price growth slow to 3.5% this year, ahead of a 1.25% decrease in 2017 and a recovery to 2% in 2018. The firm predicts that prime central London will be the hardest hit, with price growth forecast to fall by 6% in 2016, rising to 0% in 2017 and 4% in 2018.

Across the south and East of England, price growth is also expected to slow in 2016, followed by small declines in 2017, before returning to positive growth in 2018.

Price growth in the South East will ease to 3.5% in 2016, down from 9.6% in 2015 and fall to -1% in 2017, according to Countrywide. The firm forecasts a similar path for house prices in the East and South West, as prices adjust to weaker economic conditions and previous strong growth.

House Prices Will Fall by 1% in 2017, Predicts Countrywide

House Prices Will Fall by 1% in 2017, Predicts Countrywide

Weaker economic conditions are also expected to hit prices in the north, Midlands and Wales.

Countrywide predicts that price growth will drop to 0.5% in 2016 and -0.25% in 2017 in the North East. Price growth in the North West, Yorkshire and the Humber, Wales and the Midlands is also expected to slow over 2016. Next year is also likely to see small declines too, as uncertainty surrounding the EU referendum impacts investment and labour markets, despite the support of a weaker currency.

The vote to leave the EU has unsettled the UK economy, Countrywide reports, as uncertainty surrounding the arrangements for Brexit affect trade and future economic growth.

The firm forecasts a weaker economy, which will hit house prices and property sales through consumer confidence, household incomes and the labour market.

Although this is not the only factor affecting the path of house prices, it says. Higher Stamp Duty rates are continuing to take their toll on the top end of the market, and after years of double-digit house price growth, expectations of future capital gains have weakened in many areas, leading to reduced demand.

However, the report adds that the continuing lack of housing supply and very low mortgage rates will remain a supportive factor for house prices. Putting its predictions into context, Countrywide expects prices to return to levels seen in the first quarter of this year.

Nevertheless, it points out that there are higher than usual risks at this time, given the nature of the challenges facing the country. The firm says that future house price growth will be dominated by the UK’s negotiations with the EU. It believes an orderly exit is in the interest of the remaining EU members and global economies – this gives some room for an upturn to the forecasts.

The Chief Economist at Countrywide, Fionnuala Earley, comments: “Forecasts in the current environment are trickier than ever, as the vote to leave the EU has thrown up many risks. Our central view is that the economy will avoid a hard landing, which is good news for housing markets. However, the weaker prospects for confidence, household incomes and the labour market mean that we do expect some modest falls in house prices, before they return to positive growth towards the end of 2017 and into 2018.

“Not all of the corrections are due to the vote to leave the EU. Stamp Duty and weaker house price growth expectations, particularly in London’s prime markets, have a part to play. There are supports to prices on the supply side from the continuing mismatch of supply. On the demand side, ultra low interest rates and the significant discounts available to overseas buyers, resulting from the fall in sterling, will help to support prices too.”

 

The Average Property Price Across the Night Tube Lines

Published On: August 19, 2016 at 9:33 am

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The Night Tube has finally arrived in London! With services set to commence on the Central and Victoria lines tonight, eMoov.co.uk has revealed the average property price across the network.

The Tube will run past midnight tonight (Friday 19th August) for the first time on the Central and Victoria lines, with the Northern, Jubilee and Piccadilly lines set to follow in the autumn.

Online estate agent eMoov has taken a look at the average property price across the two lines due to open tonight, as well as the increase in value over the last year and the hottest locations for housing demand.

Night Tube Property Prices

The average house price across both the Central and Victoria Night Tube lines is £883,690 – around £300,000 more than the London average.

However, the average house price along the Central Night Tube line comes in just shy of this, at £858,034, while the Victoria line is the more expensive of the two, at an average of £939,812.

The Highest

Unsurprisingly, the Zone 1 stations across the lines dominate the top ten most expensive stops. At a whopping £2.5m, Marble Arch is the most expensive Tube stop across the new service, with Bond Street (£2.3m), Holland Park (£2.3m) and Notting Hill Gate (£2.3m) also exceeding the £2m mark.

Oxford Circus is the fifth most expensive stop on the Victoria line, at £1.9m, joined by Tottenham Court Road, at £1.9m. The Victoria line’s other entries in the top ten most expensive stations are Pimlico, Victoria and Green Park, all with an average property price just below £1.7m. At £1.4m, Holborn completes the top ten across both lines.

The Lowest 

Although the general price of London property is high, there are still a number of affordable options for those hoping to take advantage of the new Night Tube service.

Despite boasting the highest average price, the Central line is also home to the majority of the top ten cheapest stops.

However, the Victoria line hosts the cheapest station, with an average house price of just £347,389 at Tottenham Hale. Blackhorse Road and Walthamstow Central (both at £435,906) are the only other Victoria line entries in the most affordable stations, in ninth and tenth place.

The Central line fills out the rest of the top ten, from second to seventh, with Gants Hill (£362,303), Newbury Park (£362,303), Stratford (£362,886), Barkingside (£368,933), Fairlop (£368,933), Hainault (£368,933) and Leyton (£400,885).

The Average Property Price Across the Night Tube Lines

The Average Property Price Across the Night Tube Lines

Property price changes

Property prices along the Central and Victoria Night Tube lines have increased by an average of 3% in the past year.

The Highest

Warren Street and Euston, both on the Victoria line, have enjoyed the greatest price rises in the last year, of 8%.

The Lowest 

However, Chancery Lane (-6%), Holborn (-5%) and Bank (-5%) have all experienced significant falls in value over the past 12 months. Vauxhall (-0.4%), St Paul’s (-0.1%) and Liverpool Street (-0.1%) have also suffered marginal declines.

Property demand

Property demand across the two Night Tube lines is currently at 25% – just 3% below the rest of the Underground network.

Tottenham Hale is currently the most in demand area across the initial Night Tube service, with property demand at 56%. The Victoria line also accounts for the fourth and fifth hottest Tube stops, with Blackhorse Road (48%) and Seven Sisters (46%).

However, the majority of the most in demand stations on the Night Tube network are located along the Central line.

Woodford (51%) and Leytonstone (49%) are the most in demand stops on the Central line Night Tube service, with Loughton (45%), Barkingside (45%), South Woodford (44%), Snaresbrook (42%) and Leyton (42%) all in the top ten.

The founder and CEO of eMoov, Russell Quirk, says: “In London in particular, property close by to a good transport link, such as an Underground station, will always command more where price is concerned. In fact, transport links have almost become an additional feature of the property itself and a great bargaining chip during the house selling process.

“The introduction of the Night Tube service should only help boost the value of the properties surrounding stations due to benefit from the service. The great thing about the Underground and the night service itself is that you don’t have to live centrally to benefit; you can live out in Zone 4 or beyond and still benefit, not only from the Night Tube, but the cheaper cost of property.”

He explains: “Take the likes of Barkingside for example. It is situated on the Central line, has one of the lowest average house prices on the initial Night Tube network, but is also the seventh highest level of demand, and as a result, has enjoyed one of the largest price increases over the last year.

“The average property in Gants Hill will only set you back just over £360,000, but has also seen the third largest value increase across the Central and Victoria lines. Even Loughton out in Zone 6 is a promising prospect for homebuyers, with demand at 45% and price seeing a 5% increase in the last 12 months.”

Landlords, if you’re looking to take advantage of high tenant demand across the Night Tube network, consider one of the great value locations uncovered by eMoov.

UK Property Market Resilient to Brexit Jitters, Reports ONS

Published On: August 16, 2016 at 10:45 am

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The UK property market proved resilient to Brexit jitters in the month of the vote, according to the latest House Price Index from the Office for National Statistics (ONS).

The average UK house price rose by 8.7% in the year to June 2016, up from 8.5% in the 12 months to May, continuing the strong growth recorded since the end of 2013, found the study.

The report, compiled using Land Registry data, reveals that the average UK house price in June – for which the most recent figures are available – was £214,000, up by £17,000 on June 2015 and £2,100 higher than the previous month.

UK Property Market Resilient to Brexit Jitters, Reports ONS

UK Property Market Resilient to Brexit Jitters, Reports ONS

The main contributor to the increase in UK property prices was England, where values rose by 9.3% in the 12 months to June. The average house price in England is now £229,000, compared to £145,000 in Wales, which saw an annual increase of 4.9%, and £143,000 in Scotland, where prices were up by 4.6% over the year. The average property value in Northern Ireland was just £123,000 in June.

Regionally, London continues to boast the highest average house price in England, at £472,000. Behind are the South East, at £309,000, and the East of England, at £270,000. The lowest average house price in England continues to be found in the North East, at £124,000.

However, the East of England has replaced London as the region with the highest annual house price growth, with values rising by 14.3% in the year to June. Despite this, growth in London remains high, at 12.6%, followed by the South East, at 12.3%. The lowest annual growth was seen in the North East, where prices were up by just 1.5% in the past year.

The most expensive place to live in England as of June was Kensington and Chelsea, where the average home costs a whopping £1.2m. Contrastingly, the cheapest area to buy a property was Burnley, at just £75,000.

The Senior Economist at PwC, Richard Snook, comments on the data: “These figures only capture one week of market activity after the vote to leave the EU on 23rd June, so it is too early to draw any firm conclusions from this set of data.

“Nevertheless, we expect that the vote to leave the EU will have a significant impact on the housing market. In our main scenario, average UK house price growth will decelerate to around 3% this year and around 1% in 2017. Cumulatively, our estimates suggest average UK house prices in 2018 could be 8% lower than if the UK had voted to stay in the EU.”

The founder and CEO of eMoov.co.uk, Russell Quirk, also looks at how the Brexit will affect the UK property market: “The latest data from the blended ONS and Land Registry indices shows no Brexit impact in June to the UK property market.

“Nationally, house prices are £17,000 higher than in June of last year and up more than £2,000 when compared to pre-Brexit. However, the two-month reporting lag of this particular indices means the drop in prices reported by Halifax at the start of the month is unlikely to come to the surface until July’s indices.

“Regionally, the capital is still king of UK house prices, at £472,204 on average, but it’s interesting to see the East of England has overtaken London with the highest rate of annual growth, of 14.3%, 1.7% higher than London.”

Quirk believes: “This could be an early indicator of foreign investment fleeing the capital pre and post-referendum result, although, that said, we’ve seen property demand in prime central London plummet to record lows over the last year. This is evidently becoming clear now in terms of property values, with both Kensington and Chelsea and Hammersmith & Fulham in the top five for the poorest performance in terms of annual growth, with values down 6.2% and 3.2% respectively.

“Newham still flies the flag for London as the fourth highest local authority district in terms of annual growth, up 21.4% over the year. So the capital and the UK as a whole are still looking rather robust where the state of the property market is concerned.”

The Average Property Price in Each London Borough Following Brexit

Published On: August 11, 2016 at 11:21 am

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The Average Property Price in Each London Borough Following Brexit

The Average Property Price in Each London Borough Following Brexit

Although the Brexit result caused uncertainty in the housing market and we are still awaiting its full impact, property prices in London are expected to remain robust.

For those with properties in London, these volatile market conditions may have caused concern over the value of your assets. But fear not, recent house price data from Rightmove suggests that the London property market is staying strong.

Over the past few years, London has seen constant double-digit growth in house prices, leading to many people being priced out of the market.

In the year to May, Land Registry figures show that this trend continued for two-thirds of London’s boroughs.

However, during this period, the more affluent boroughs of the capital recorded either very modest growth or declines in house prices. Islington and Hammersmith & Fulham recorded rises of 4.7% and 2.7% respectively, while prices were own by 9.2% and 2.5% in the City of London and Kensington and Chelsea.

Ahead of June’s Brexit vote, this slowdown in the prime central London market was widely attributed to an oversupply of luxury homes and the higher 12% Stamp Duty rate for properties priced over £1.5m. With these factors continuing to have an effect on the market, it is no surprise that the prime market remains slow. However, the latest figures from Rightmove show that this trend is rippling out to higher-priced properties over London.

The following data highlights the average house price in each London borough post-Brexit.

The average property price in each London borough

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Following the cooling in the market ahead of the Brexit and further uncertainty about the impact of the vote in the past month, it is easy for property owners to expect the worst.

However, Nina Skero, of the Centre for Economics and Business Research (Cebr), has some good news: “Although Brexit has certainly sent shockwaves, Cebr expects the housing market to slow down but not plummet.”

The consultancy expects house prices to continue growing this year and from 2018 onwards, but has forecast a 5.6% decrease next year.

Simon Rubinsohn, the Chief Economist at the Royal Institution of Chartered Surveyors (RICS) has predicted a similar dip, but has positive long-term expectations: “Prices are expected to rise, albeit a little less than previously anticipated, with a cumulative increase of 14% projected for the next five years.”

Even if the former Chancellor, George Osborne’s predictions of an 18% decrease is realised, this would only mean a return to last year’s house price levels for much of London, which is not a catastrophe.

Additionally, the sky-high house prices in the capital are continuing to keep many prospective homebuyers out of the property market, which is good news for landlords.

However, those hoping for property prices in the capital to plummet could be disappointed – as long as demand outweighs supply, the London housing market will remain as resilient as ever.