Posts with tag: house prices

London House Prices Drop by £40,000 Following Brexit

Published On: June 27, 2016 at 9:37 am

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London house prices have dropped by around £40,000 following Friday’s EU referendum result, according to the latest analysis from estate agent Stirling Ackroyd.

Eurozone buyers can now snap up London homes for up to €50,900 cheaper, reports the agent.

London House Prices Drop by £40,000 Following Brexit

London House Prices Drop by £40,000 Following Brexit

Friday’s depreciation in sterling means that the average property in the capital now costs just €579,200, compared to a record high of €630,100 in November 2015. This change means that homes in London have become €50,900 cheaper for euro buyers, equivalent to £40,900.

The €50,900 reduction in prices amounts to an average 8% discount in the London property market.

The Managing Director of Stirling Ackroyd, Andrew Bridges, comments: “European buyers can now snap up real bargains across London. Overnight, London has become a more affordable global property hotspot – particularly for those paying in euros.”

In sterling terms, London house prices are still historically high, but this masks some underlying cooling in the high end of the market.

The agent found that the top 25% of the London property market experienced an annual decline in prices of 2.4% in the last quarter of 2015 – contrasting to the 8.2% rate of growth recorded in the majority of neighbourhoods.

The most luxurious areas of central London are expected to be hit particularly hard by the referendum result, with Kensington High Street and Notting Hill experiencing sharp falls in house prices during the last quarter of 2015, of 11.8% and 10% respectively.

However, investment firm London Central Portfolio claims that the market will prove resilient to the Brexit.

Bridges concludes: “After the shock of the referendum, calm will return to the market and people will see the bright lights of London are undimmed.

“London’s reputation as a valuable property investment hotspot remains undiminished and the capital will continue to attract an abundance of potential buyers. London will retain its global capital city status.”

eMoov Reacts to EU Referendum Result

Published On: June 24, 2016 at 8:32 am

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Categories: Property News

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With around 52% of the vote, the UK has decided to leave the European Union. Online estate agent eMoov.co.uk has reacted to the EU referendum result.

The outcome was revealed this morning, with 51.9% of the British public believing that the UK is stronger alone.

eMoov Reacts to EU Referendum Result

eMoov Reacts to EU Referendum Result

The CEO of eMoov and former Brentwood First Party councillor, Russell Quirk, explains what the property market can expect from the Brexit.

He says: “Many will be running to their nuclear bunkers now that the apparent end of the world is nigh. But before they do, they might want to take a breath and sit tight. We’ve voted to leave the EU and, regardless of personal views, we must respect the democratic position of the populous.

“We don’t anticipate any tangible difference where the UK property market is concerned, and the supply and demand balance that is currently dangerously out of kilter will see little sign of stabilising itself.”

Quirk looks ahead: “Going forward, the UK market will go from strength-to-strength, perhaps with wobbly knees as it emerges from the clutches of the EU, but it will soon find its feet again.

“There may be many buy-to-let landlords and second homeowners rushing to list their property for sale in order to maximise their profit, before the Armageddon on the horizon destabilises the pound.”

He continues: “Ironically, it will be these people flooding the market with additional stock that may see prices cool ever so slightly. However, property values increased by 6% over the course of 2015 and we predict the same rate of growth by the end of 2016.

“Homeownership will remain far out of reach for the average UK citizen and the overwhelming swell of demand for property will remain despite our choice to leave the EU.

“This could, however, be the final nail in the coffin for the prime central London market, as the capital’s high-end properties have never been less desirable in the eyes of foreign investors. With demand having slumped to record lows over the last year, it’s not looking good for the capital’s property elite.”

How Do House Prices Compare Across the EU Member States?

Published On: June 23, 2016 at 11:20 am

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Categories: Property News

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Ahead of today’s EU referendum, online estate agent eMoov.co.uk has analysed how house prices compare across each of the 28 EU member states.

The agent’s map shows the average price of property per square foot in each state, when they joined the EU and the property price per square foot for each capital city.

The average house price across all EU member states is currently £2,867 per square foot. Where capital cities are concerned, London storms ahead with the most expensive house prices. At £12,468 per square foot, London’s reputation as the most expensive city in the world to buy a house is apparently confirmed, for the EU at least.

Paris is the second most expensive capital city in the EU for property, however, with an average price that is less than half of that in London, it remains significantly cheaper. Stockholm and Rome also rank highly, both home to an average house price of more than £5,000 per square foot.

Dublin is the ninth most expensive capital city, at £3,489 per square foot. Although Belfast, at £2,205, Cardiff, at £1,583, and Glasgow, at £1,580, all lie within the member state of the UK, they rank as the 15th, 20th and 21st most expensive capital cities for property in the EU.

At just £734 per square foot, Sofia, the capital of Bulgaria, has the cheapest house prices of any capital city in the EU member states.

Although London is the driving force of the UK property market and the most expensive capital city in the EU for house prices, the same cannot be said for the UK as a whole.

At £3,279 per square foot, the UK is only the fourth most expensive EU member state. The top three spots go to Luxembourg, at £4,540, Sweden, at £3,991, and France, at £3,423.

House prices across each EU member state

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In line with its capital, Bulgaria is also the cheapest EU member state for property overall, at just £634 per square foot. This is also the case for Romania and its capital Bucharest, and Hungary and Budapest as the second and third cheapest member states for house prices.

How Do House Prices Compare Across the EU Member States?

How Do House Prices Compare Across the EU Member States?

Although there seems to be no strong correlation between the time a country has been an EU member state and the price of property, there are 15 member states that joined prior to the year 2000. Of these, 13 account for the highest property prices in the EU, with just Portugal and Greece home to an average house price of less than £1,600 per square foot.

The founder and CEO of eMoov, Russell Quirk, comments on the findings: “The UK property market and the influence a Brexit could potentially have has been a big talking point and arguably so, as for the average UK homeowner, their property is the most expensive asset they are likely to own.

“This research isn’t an attempt to sway people either way, simply to show the strength of the UK market against the rest of the EU, but also to highlight that despite the London bubble, there are other areas across Europe where prices outperform that of the UK.”

He continues: “Will property prices drop if we vote to leave? No one really knows for sure, and any potential impact will take a while to come to fruition. Should we vote to leave, any real impact wouldn’t become clear until 2017, and prices could potentially flatten and even go into reverse, which would be a mammoth event given the years of steady upward growth.

“It all comes down to confidence in the market, and whilst the media and campaigners from both sides continue to scaremonger, the seesaw remains finely balanced. A few gloomy headlines and people will understandably sit tight and play it out. However, this lack of investment and activity in the residential market will prompt a fall in buyer demand and this is what will result in a drop in property prices.”

However, he adds: “This said, with the precarious mix of easily obtained credit and inflated property prices continuing to inflate the UK property bubble, something will eventually give, Brexit or no Brexit. I for one think that a cool in demand caused by uncertainty in the market, be it as a result of a leave or remain outcome, could be a healthy thing and help return the UK market back to some level of stability.”

60% of Property Professionals Believe We Should Stay In the EU

Published On: June 22, 2016 at 3:20 pm

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Categories: Landlord News

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The majority of property professionals believe that Britain should remain in the EU, just one day ahead of the crucial vote on Thursday (23rd June).

Landlords, letting agents, mortgage brokers, property experts and landlord insurance specialists all took part in the Landlord News poll at this week’s Landlord Investment Show in London.

60% of Property Professionals Believe We Should Stay In the EU

60% of Property Professionals Believe We Should Stay In the EU

A clear winner emerged by the end of the event; over 61% of property professionals claimed that a vote to stay in the EU would be better for the country and the private rental sector, while almost 39% believe that leaving the EU will be the best option for their businesses.

This week, the country will come out to vote in the UK’s first vote on Europe since 1975. Voters will be asked whether we should remain in the EU or leave.

Many recent reports have made suggestions on the potential outcome of the vote. The latest, from property portal Zoopla, claims that house prices will drop by 20% if we vote to leave.

Despite political uncertainty previously having an adverse effect on the property market, house prices appear unaffected by the forthcoming Brexit vote.

However, mortgage lending has fallen to a 12-month low ahead of the referendum, as buyers await the outcome.

Tenant eviction specialist Paul Shamplina, of Landlord Action, has witnessed a slowdown in the number of buy-to-let landlords purchasing properties.

“The property market doesn’t like uncertainty,” he explains. “If a landlord is looking to purchase, then watching and waiting makes sense.”

However, he understands that many landlords may not be in a position to buy after the referendum is decided, as a large number rushed to invest in the sector ahead of the introduction of the 3% Stamp Duty surcharge on 1st April.

Shamplina adds that the influx of landlords investing further into the private rental sector could bring “a lot more property onto the market, which may bring rents down”.

Whether house prices or rents will come down if we leave, “only time will tell”, concludes Paul. But one thing’s for sure, property professionals believe we should stay in!

London Property Now £26,000 Cheaper for Euro Buyers

Published On: June 22, 2016 at 1:57 pm

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Eurozone buyers are flooding the London property market, as prices drop by £26,000 ahead of the EU referendum, according to the latest analysis from estate agent Stirling Ackroyd.

The depreciation in sterling seen in June means that the average house price in London is now just €596,900 for euro buyers, compared to a record high of €630,100 in November 2015. Therefore, property in the capital is now €33,100, or £26,000, cheaper for these buyers.

London Property Now £26,000 Cheaper for Euro Buyers

London Property Now £26,000 Cheaper for Euro Buyers

The €33,200 saving equates to a 5.3% drop in London property prices.

The Managing Director of Stirling Ackroyd, Andrew Bridges, comments on the findings: “European buyers are snapping up bargains across London. A declining exchange rate has meant London is becoming a more affordable global property hotspot, particularly for those paying euros.

“If Britain votes to leave the EU, sterling is set to fall further, so, ironically, London would become even more affordable – and therefore more attractive – to overseas buyers paying in euros. While Eurozone buyers are propping up the temporarily soft market as prices stutter, Brexit might make Europeans much more significant players in London’s property scene.”

Although London house prices are still historically high, the luxury end of the market is experiencing a slowdown.

Stirling Ackroyd found that the top 25% of London’s property market experienced an annual fall in prices of 2.4% during the last quarter of 2015, compared with 8.2% annual growth in the majority of the capital’s neighbourhoods.

The capital’s most exclusive districts, such as the West End, are being hit particularly hard by the forthcoming EU referendum.

Kensington High Street (W8) saw the greatest annual decline in house prices over the last quarter of 2015, at 11.8%. This was followed by a 10% fall in Notting Hill (W11).

Bridges continues: “After the referendum chatter has calmed down, the bright lights of London will be undimmed – whatever the result. London’s resilience is second to none.

“House prices may be cooling slightly in the face of geographical uncertainty, but this is offering bullish buyers opportunities. The luxury areas of London’s property market are feeling the acutest drops in house prices, but these areas typically have a higher proportion of European buyers – meaning exchange rate discounts on property purchases are compensating for any further slowdown.”

He concludes: “Speculation about the aftermath of the result is rife, but London’s reputation as a valuable property investment hotspot remains undiminished. The capital is fully equipped to combat the consequences of either a remain or a Brexit vote, and London will continue to attract an abundance of potential buyers and retain its global capital city status. A ballot paper may prove an unequal opponent to London’s property power.”

UK House Prices Rise to Record High

Published On: June 21, 2016 at 10:11 am

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The average price of a house in the UK soared by over £20,000 during the last financial year, reaching an all-time high. UK residential property price inflation is now back at double-digit figures after two years of slower growth, reports The House Shop.

Plenty of prospective buyers chasing the decreasing supply of houses for sale has shot prices up by £21,500+ compared to March 2015. That’s a 10.1% price rise. The most recent Halifax home cost index shows the average cost of a house in the UK is now at £214,811. As well as being the largest increase since July of 2014, it’s the second largest over all since the credit crunch that happened late 2007.

Housing prices fell by little (1.5%) in February 2016, before rising around 2.6% again in March.

Halifax derives their data from homebuyers who apply to Halifax for home mortgages. Martin Ellis, a Housing Economist for Halifax, has stated that the property price rise is driven by the current supply vs demand imbalance, which he classified as “acute”. February of this year marks three months in a row of increased numbers of new houses being completed.

Although the amount of new houses for sale hitting the market has increased in the last few months, that number is clearly not keeping up with a concurrent rise in demand.

According to another major mortgage lender, Nationwide, house prices actually dropped for two consecutive months last year in July and August, causing some concern that the market might be turning around. Nonetheless, since the price drop that happened from late 2007-early 2009, the UK market has been steadily rising, and the latest price boost shows that a couple of months of consecutive house price falls are not at all a sign of a real estate market downturn.

Effect of the EU referendum

UK House Prices Rise to Record High

UK House Prices Rise to Record High

Many leading economists and newspapers have shared speculation and warnings that UK property prices could fall if the UK electorate decides to vote UK out of the European Union in Thursday’s referendum. However, economists have published advice that inflation could rise as well as fall, and the property market could go either way. The only thing that it seems safe to say is that some buyers and sellers might be cautious over the next few months, hoping for a sharp price decline or rise, respectively, after June 23rd.

It’s been common lately to hear market managers warning that businesses will pull out of London if the UK withdraws from the EU. But many UK nationals also have property elsewhere in the EU, and might find post-Brexit that their finances will be in much better shape if they return home. For example, UK citizens who are currently living abroad and receiving their pension will no longer be able to. Even for financially independent UK nationals, they may find it much more difficult to come and go between the UK and their destination of choice. There are thousands of investors poised right now ready to buy their place in the sun abroad, and the referendum results will swing their purchases in many cases.

Rush of landlords and second homebuyers

Taking these cautions into consideration, Nationwide’s data shows that second homebuyers were in fact rushing to buy before the Stamp Duty rise in April. New alterations to Stamp Duty mean that property investors buying to let will now have to foot a 3% fee as of April. Nationwide reported an average 5.7% rise in prices over the last year, compared to Halifax’s 10%. Whichever figures you go by, it’s possible that the March jump in prices will be followed by a slight slowdown between April and June. This slowdown should just be on average, and the market will probably stay robust due to demand from people moving house and first time buyers.

The Chief Economist over at IHS Global Insight expects the upward pressure on house prices to ease after April due to this slight “waning” of second home buying interest. The prices that we are seeing right now, according to Halifax’s data alone, have pushed the price-to-profit ratio right back up to record amounts not seen since the last big property boom in the early 2000s.

Another possible influence on the market this year might be the fact that property inflation UK-wide has increased significantly more than wage rises over the last few years. This might be expected to slow buying, but borrowers have been able to keep up with more expensive houses due to low mortgage lending rates and being able to extend the repayment terms. Overall, optimism for property in the UK looks set to continue to outpace widespread economic caution and pessimism, regardless of the results of the Brexit referendum.

In addition to low mortgage rates and appealing interest rates, a continued squeeze on supply is keeping prices high. The high ratio of buyers compared to sellers means that rival buyers are pushing prices up. Although investors are going to be understandably more reluctant after the April rate rise, there should be plenty of new buyers ready to rush in and fill the void.

Flat prices, in particular, have risen rapidly since 2008 (compared to other property markets), and this is especially true in London. HouseSimple.com’s Chief Executive, Alex Gosling, is concerned that the record high that house prices reached up to March might lead some market watchers to speculate that property market must be spiraling out of control. But Gosling believes that the figures reflect investors seeking to avoid the April rate changes and that there will be a soft slide back to a healthy, more sustainable market increase over the coming months.