Posts with tag: house prices

Landlords Pushing Up the Price of First Time Buyer Homes

Published On: May 16, 2016 at 9:56 am

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Have buy-to-let landlords pushed up the price of first time buyer homes? Rightmove’s latest data seems to suggest so.

Aspiring first time buyers have been left with a property “famine” after landlords rushed to beat the 3% Stamp Duty surcharge at the beginning of the year.

Landlords Pushing Up the Price of First Time Buyer Homes

Landlords Pushing Up the Price of First Time Buyer Homes

Although Chancellor George Osborne claimed that his crackdown on the buy-to-let sector would open up the market to first time buyers, it appears that the opposite has occurred.

Rightmove’s House Price Index for May found that the flood of landlords rushing to beat the 1st April Stamp Duty deadline has left fewer properties on the market, particularly in the lower end sector.

The average price of a first time buyer home – properties with two bedrooms or less – has surged by 6.2% over the past month, to £194,224. This is the greatest monthly increase recorded for this sector since February 2012.

Overall, the average asking price across all sectors has risen by 0.4% since April, and 7.8% annually, to £308,151.

For first time buyers, the greatest annual increase in house prices was seen in Croydon, Greater London, where prices rose by 18.6% to £297,770.

Outside the capital, Dartford experienced an 18.5% jump to £244,310, while Luton’s average price was up to £186,900.

There have, however, been some price drops. The largest, 7.5%, was in Llandudno, where the average price is now £145,703.

The Director of Rightmove, Miles Shipside, comments: “Buy-to-let investors have had a bricks and mortar feast between the Chancellor’s announcement in November and the tax deadline at the end of March, and the result is a famine of suitable property and higher prices. First time buyers are still eager to secure some of the very limited suitable supply in many parts of the country.

“Estate agents have perhaps been focused on getting investor sales through to completion before the tax hike, and some may have been surprised by the continuing momentum and scarcity of stock to meet ongoing demand.”

He adds: “The net effect is eye-watering increases in asking prices in some towns, and is further stretching first time buyers’ affordability, even though they are competing against fewer buy-to-let investors in the market.”

House Prices in London Almost Double to a Whopping £600,000

Published On: May 12, 2016 at 10:39 am

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The average property in London has broken through the £600,000 mark, as house prices have almost doubled in the capital since 2009, according to data from LSL Property Services.

The firm, which owns Your Move and Reeds Rains estate agents, reports that house prices in England and Wales have risen by 8.9% since April last year, to reach an average of £298,030.

The figures, based on Land Registry data, show that property values have hit new peaks in nine out of ten regions. The North East is the only part of England where prices are lower than before the downturn of March 2009.

House Prices in London Almost Double to a Whopping £600,000

House Prices in London Almost Double to a Whopping £600,000

In London, prices have continued to surge, with the average property value increasing by 11% over the past year, to £600,625.

In eight London boroughs, average prices are double what they were during the credit crisis in 2009. The area with the greatest increase is Waltham Forest, where prices are up by a huge 113% over the last seven years. The average property in the area now costs £430,704.

The Director of Your Move and Reeds Rains, Adrian Gill, claims that some of the more affordable parts of the capital have experienced the steepest increases in prices, as residents search for cheaper homes.

“These kinds of huge hikes in home values in London mean that Sadiq Khan will now face a serious challenge to deliver his promise of increased affordable housing in the city,” says Gill.

The new Mayor of London has promised to deliver a series of measures that will aim to resolve the housing crisis.

The LSL report states that the average price of a home in England and Wales is edging closer to £300,000, after rising by 1% over the month and by 50% over the last seven years.

“This acceleration in home values comes when many had expected house prices to dip due to a natural decline in demand from buy-to-let and second homebuyers,” explains Gill. “However, after an exceptional March, there is a severe shortage of properties on the market, with fierce competition between buyers for each available property.”

LSL reports that there were 20,000 fewer sales in April, as demand fell in the weeks following the introduction of the 3% Stamp Duty surcharge on buy-to-let properties and second homes.

This is reflected in the latest report from the Royal Institution of Chartered Surveyors (RICS), which shows that demand has fallen for the first time in more than a year.

Figures from HM Revenue & Customs (HMRC) also reveal a large spike in home sales during March, as landlords rushed to purchase buy-to-let properties ahead of the higher tax rate.

The RICS believes that reduced demand from buy-to-let landlords appears to be the main cause of a decline in new buyer enquiries.

Housing Demand and Supply are Both in Decline, Reports RICS

Published On: May 12, 2016 at 8:35 am

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Housing demand has fallen for the first time since March 2015, according to the latest Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS).

Housing Demand and Supply are Both in Decline, Reports RICS

Housing Demand and Supply are Both in Decline, Reports RICS

The organisation believes that the market has cooled after landlords rushed to beat the 1st April Stamp Duty deadline and the EU referendum approaches.

The survey found that interest from buyers dropped in April, with 22% more chartered surveyors reporting a decrease in demand.

The RICS claims that there is little prospect of the market improving, with 8% more surveyors reporting a fall in new instructions in April and the lack of housing stock looking unlikely to ease in the short term.

Of the 303 surveyors polled, 22% more respondents in London expect property sales to drop over the next three months.

Despite a fall in demand, prices are still rising outside of central London and parts of the North of England. Over the next 12 months, prices are forecast to increase across the whole of the UK, with 61% more surveyors expecting prices to go up in England and Wales.

Regionally, London has lower price growth expectations over the next few years than the rest of the UK, with prices likely to remain steady. However, surveyors expect prices to go up in each part of the UK by between 3-5.5% per year in the next five years.

Surprisingly, following the recent surge in demand from buy-to-let landlords, there has not yet been a noticeable increase in new landlord instructions.

The survey suggests that recent policy changes in the buy-to-let sector are causing landlords to reconsider their position in the market. As tenant demand rises – 22% more surveyors have seen a rise rather than a fall – rent prices are more than likely to increase further. Due to a lack of stock for all tenures, rental growth is expected to rise at an average rate of 4.6% per year over the next five years.

The Chief Economist at the RICS, Simon Rubinsohn, comments: “Uncertainty is a word that features heavily in the feedback we are receiving from members responding to the survey and is contributing to the flatter trend in the latest data.

“More ominous is the expectation that both prices and rents will head materially higher over medium term, despite existing affordability concerns with the supply pipeline continuing to fall short of household growth, notwithstanding the various levers the Government is pulling to try and drive development.”

Number of Property Transactions Up by 80% in March

Published On: May 9, 2016 at 11:01 am

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Number of Property Transactions Up by 80% in March

Number of Property Transactions Up by 80% in March

A huge surge in residential property transactions in March caused an 80% increase over the past year, according to data analysed by the latest Homes & Communities Agency report.

In March, 141,310 property sales were recorded, up by 80.6% on the same month last year. The Government agency believes that this sharp rise could be the result of a rush of buy-to-let landlords hoping to beat the 1st April Stamp Duty deadline.

As of 1st April, buy-to-let landlords and second homebuyers are charged an extra 3% in Stamp Duty.

On an annual basis, there were 1,135,830 property transactions in the year to the end of March, up by 9.9% on the previous 12 months.

However, the total stock of property for sale remains at a historically low level. In England and Wales, the number of homes entering the market was down by 6% compared to March last year.

The West Midlands and South West are suffering the most from a shortage of stock, with levels falling by 12% and 11% respectively over the past year.

Greater London is the only region in England where the amount of homes coming onto the market has increased, up by 6% on the same month in 2015.

The Homes & Communities Agency reports that house price growth has returned to all regions across England. However, the house price divide between the southeastern regions and the rest of the country has widened further since the start of the year.

The report compares annual house price growth from several indices for the past year:

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Last week, we released the HomeOwners Alliance’s review of house price data for the year: /homeowners-alliance-reviews-house-price-data-year/

Is This the Cheapest Property in the UK?

Published On: May 7, 2016 at 8:43 am

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At a time when the average house price is almost £190,000, could this flat in a North Lanarkshire village be the cheapest property in the UK?

The three-bedroom flat in Upperton, near Airdrie, is on the market for just £1.

With everyone else in the country struggling to save for the average home, costing £189,901, could the buyer of this property be onto a winner?

Although the rundown apartment needs “significant upgrading”, Auction House Scotland claims it offers “huge potential for development”.

The flat is set to go under the hammer at an auction in Glasgow, with a guide price of just £1, later this month.

The firm expects a buy-to-let landlord to snap it up.

The Director of Operations at Auction House Scotland, Gillian Cochrane, says it is not the first property they have advertised for £1.

“We have done it once before and the flat sold for £14,500 to a London-based property manager,” she remembers. “It’s not a strategy that we’d use for all types of property.”

She adds: “It’s very rundown and the seller is desperate to get a quick sale – it’s a one-off.”1

The top floor flat in Dervaig Gardens has a shared balcony, communal gardens and on-street parking.

A similar property on the same street sold for £25,000 last year.

Although it seems that you’d really have to do your research with this property, could its super low price encourage you to make your first investment in buy-to-let, or expand your portfolio? There’s no doubt that you’ll make healthy returns!

1 http://www.bbc.co.uk/news/uk-scotland-glasgow-west-36202983

HomeOwners Alliance Reviews House Price Data for the Year

Published On: May 5, 2016 at 10:35 am

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Five-year fixed rate mortgages could bring good news for buy-to-let investors
HomeOwners Alliance Reviews House Price Data for the Year

HomeOwners Alliance Reviews House Price Data for the Year

As the major house price indices often report conflicting data, the HomeOwners Alliance has reviewed the figures to determine exactly what is happening in the property market.

Its May 2016 House Price Watch shows that house prices have risen by 0.7% in the past month and are up by 7.2% over the last year. These figures were calculated by finding the averages of house price growth data from other indices.

The average monthly change in house prices varies across the major indices, from a low of -0.5% reported by Land Registry to a high of 2.6% from Halifax.

It is believed that property sales surged between February and March, as buy-to-let landlords and second homebuyers rushed to beat the 1st April Stamp Duty deadline. On a monthly basis, there were 41.5% more property transactions, while there was an increase of 69.7% reported over the year.

The Council of Mortgage Lenders (CML) estimates that gross mortgage lending reached £25.7 billion in March, up by 43% on February and 59% on an annual basis. Again, it is believed that this was driven by a rush of landlords hoping to beat the 3% Stamp Duty surcharge.

Looking forward to the rest of the year, fewer transactions are expected. The HomeOwners Alliance reports that the distortion caused by the Stamp Duty change appears to be much larger than any previous tax revision.

The CML expects to see around 10,000 fewer mortgaged transactions each month in the second quarter of the year than would otherwise have been the case.

It is also forecast that house prices will slow in the near term, as uncertainty surrounds the forthcoming EU referendum and regional elections.

The Research Director of the HomeOwners Alliance, Katherine Binns, comments: “The Stamp Duty on second homes from 1st April 2016 has brought a rush of activity to the market ahead of the change. Looking forward, fewer transactions are expected later in the year to offset the early surge in the market. House prices, too, are likely to settle in the near term with the current climate of uncertainty around the European referendum and local elections.”