Posts with tag: house prices

House Prices Increasing at Fastest Rate for 12 Years

Published On: April 22, 2016 at 8:36 am

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Over the first quarter of the year, house prices increased at the fastest quarterly rate for 12 years, according to the latest data from Hometrack.

The valuation firm believes that buy-to-let landlords have driven prices up as they seek cheap properties in high yielding cities.

House Prices Increasing at Fastest Rate for 12 Years

House Prices Increasing at Fastest Rate for 12 Years

The UK Cities Index for March reveals that average house prices rose by 4.2% in Q1 2016 – the fastest quarterly growth rate in 12 years.

The greatest quarterly increase of any city in the UK was in Liverpool, at 4.1%, taking the average house price to £113,100. Hometrack has found that many landlords have looked to the city for high yields in order to accommodate forthcoming tax changes.

A quarterly boost of 3.5% was also recorded in Cardiff, where the average property now costs £191,300.

The Insight Director at Hometrack, Richard Donnell, explains: “The acceleration in growth in the last quarter has, in part, been down to stronger demand from investors, especially those searching for higher yielding property and seeking to beat the Stamp Duty deadline.”

As of 1st April, buy-to-let landlords and second homebuyers are now charged an extra 3% in Stamp Duty. Ahead of the deadline, there was considerable evidence that landlords were fuelling a rush in the housing market.

The greatest annual increase in average house prices was in Cambridge, where values rose by 15.6% to £403,500. London was close behind, at 14.2%, taking the average property price to £468,100. However, recent research suggests that the London property market is finally running out of steam.

House prices in Bristol have also recorded double-digit growth for the year, at 13.5%, to £248,800.

Donnell adds: “In the recent past, periods of accelerating house price growth have coincided with changes in market sentiment and demand, notably following the introduction of Help to Buy in 2013 and after the 2015 general election.

“We believe house prices will continue to rise, but a moderation in investor demand and greater caution in the run-up to the EU referendum will limit further acceleration in prices.

“Most likely, the rate of growth will slow more rapidly in high value, low yielding cities such as London, where prices will be more responsive to weaker investor demand.”1 

Indeed, the Royal Institution of Chartered Surveyors believes that the Stamp Duty changes and the forthcoming EU referendum will cause a dip in house prices and sales.

1 http://www.propertyindustryeye.com/house-prices-rising-at-their-fastest-rate-for-12-years/

The Cost of an Average Property for Each Mile of the London Marathon

Published On: April 21, 2016 at 9:30 am

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Buying the average property in London would cost you £20,243 for each mile of the London marathon, according to online estate agent eMoov.

On Sunday, around 38,000 people will take to the streets of the capital for the 26.2-mile race. And while the runners may be able to enjoy London’s iconic landmarks along the way, many will have no hope of ever getting onto the property ladder in the capital.

Based on the average London house price of £530,368, a buyer would have to raise £20,243 for every mile of the London marathon to get into the housing market. Failing that, each of the 38,000 participants could contribute £14 each to jointly own one London home.

eMoov has calculated the average property price per mile to work out how much it will cost a buyer for each mile they run. The race starts in Greenwich…

Greenwich 

The Cost of an Average Property for Each Mile of the London Marathon

The Cost of an Average Property for Each Mile of the London Marathon

Around the leafy start line of Greenwich Park, the price per mile has come down slightly from the London average, at £19,969 for the typical property, which costs £523,208.

Woolwich

Through the two to four mile mark, Woolwich will offer runners the cheapest price per mile of the whole route. At £290,915, the average home here will cost £11,103 per mile of the marathon.

Rotherhithe

As the runners push to the ten-mile mark, the property price per mile shoots up again to £19,401, as the average house price in Rotherhithe is £508,321.

Bermondsey

As the racers prepare to cross the Thames, the last area south of the river they pass through is Bermondsey. With an average house price of £546,974, a property here will cost £20,876 per mile.

Canary Wharf and the Isle of Dogs

North of the river, property isn’t any cheaper. In Canary Wharf, a typical property will cost a buyer £19,367 per mile. It does drop slightly in the Isle of Dogs, where buyers will face a price of £18,469 per mile at the 16-mile mark.

Monument

As the runners head into prime central London, the property price per mile picks up to £35,653, as the average house price in Monument is a huge £934,115.

St James’s Park

However, nowhere on the route costs more per mile than near the finish line at St James’s Park. A home here is a whopping £2,478,034, costing a runner almost £100,000 (£94,581) for each mile ran.

The CEO and founder of eMoov, Russell Quirk, comments on the findings: “Although the real obstacle of the day is the gruelling 26.2-mile slog across the capital, these figures paint a really clear picture of just how unobtainable a London property is for the majority of us.

“To think that for every mile of the route, each runner would need to raise close to the average UK salary just to get on the London ladder is a little sickening. I for one am glad the money raised is going to worthy causes and not to further fuelling the London property bubble.”

Which Feature Adds the Most Value to House Prices?

Published On: April 20, 2016 at 10:45 am

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Having a spare bedroom is the number one feature that adds the most value to house prices, according to the latest survey by eMoov.

The estate agent asked over 1,000 UK homeowners what they think adds the most financial value to a property when looking to buy a new home.

A spare bedroom topped the list, with a quarter (25%) of those asked believing that this would justify a higher house price. Not only is a spare room great for guests, but it can also be used as an office or nursery. You may also like to rent the room out, now that the tax-free lodgers allowance has been increased.

And while the British summer is usually brief, outdoor space is the next feature that adds the most value to homes, with 19% of homeowners believing it justifies a higher price.

The garage is the third best feature, according to 16% of respondents, and an ensuite bathroom to the main bedroom came out in fourth, with 13% of homeowners believing this adds the most financial value.

Completing the top five is an extra car parking space, cited by 11% of respondents.

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Which Feature Adds the Most Value to House Prices?

Which Feature Adds the Most Value to House Prices?

5% of homeowners think good local amenities will add the most value, while 4% believe a strong internet connection is the most justified. A strong mobile phone signal was considered the best feature to boost a property’s price by 3% of respondents.

Just 2% believe a good community spirit will add value to a house price.

The CEO and founder of eMoov, Russell Quirk, says: “Often those looking to sell will pour money into additional DIY projects around the house, in an attempt to increase the value of the property and justify pushing up their asking price by a few thousand pounds or more. Unfortunately, a lot of the time they may as well be pouring it down the drain, as potential buyers will care little for aesthetic improvements, due to having their own long time view of how they want the property to be.”

He continues: “This research goes to show that it’s the fundamentals people are concerned about: the number of bedrooms in case they want friends to stay or wish to start a family; outside space to entertain or for the kids to play in; a garage to store that accumulated clutter as the years pass by; an ensuite so you can have a bath in peace; or that extra parking space for when the 17th birthday rolls round.”

Quirk adds: “It is a little disappointing that a good community atmosphere ranks so lowly amongst homeowners. I know it doesn’t necessarily add value, although on the flip side, a bad atmosphere can certainty lower an asking price, however, it goes to show that the community spirit that has been so prevalent in years gone by is rarely thought about now.”

Homebuyers in London Paying 170% More in Deposits than the Rest of the UK

Published On: April 19, 2016 at 8:59 am

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The average deposit for a property in Greater London is almost three times, or 170% more, than in the rest of the UK, according to new research.

Over the past three years, the average deposit in London has risen by almost £30,000, or 30%, reaching a huge £127,000, says the report from My Home Move.

However, the average deposit size as a proportion of purchase price for the UK as a whole has fallen by 1.8% since 2013, but home movers’ deposits remain high, as house prices continue to rise.

Homebuyers in London Paying 170% More in Deposits than the Rest of the UK

Homebuyers in London Paying 170% More in Deposits than the Rest of the UK

My Home Move’s data shows that nationally, the average property price in 2013 was £162,040, requiring a deposit of £44,690. In 2014, the average home cost £173,202 with a deposit of £45,534, rising to £182,293 and £46,976 in 2015.

Contrastingly, the average house price in Greater London was £377,855 in 2013 with a deposit of £99,375, up to £439,399 in 2014 and a deposit of £112,266, and a huge £482,512 in 2015, requiring a deposit of £127,141.

In the UK as a whole, the deposit needed in 2013 was 27.58% of the purchase price, falling to 26.29% in 2014, and dropping again to 25.77% in 2015. However, in the capital, a buyer needed a deposit of 26.3% of the purchase price in 2013, 25.55% in 2014 and up to 26.35% in 2015.

The CEO of My Home Move, Doug Crawford, states: “The London property market has always commanded greater prices than anywhere else in the UK, but our research has shown just how extreme the situation is becoming.”

He notes that London property prices have increased by 27% in the past three years, and while the rest of the UK has experienced a small decline in deposit size, those seeking a home in London are paying 170% more in deposits than other UK buyers.

“This situation is unsustainable and has been driven by rising house prices. For some, their deposit will come from the equity in the property they are selling. However, for many, they will still need to save tens of thousands of pounds to make the move onto and up the property ladder,” he says.

“Ultimately, it still begs the question: Who is going to help those looking to enter the capital’s housing market and those on the lower rungs of the ladder, first time buyers and second steppers?”1

He points out that earlier in the year, My Home Move predicted that 100,000 properties would be purchased in 2016 using gifted deposits from buyers’ parents. Based on these figures, it seems that a very large proportion of these could be based in Greater London.

However, recent research does suggest that the London property market is running out of steam.

1 http://www.propertywire.com/news/europe/uk-buyers-deposit-research-2016041811807.html

 

Is the London Property Market Running Out of Steam?

Published On: April 17, 2016 at 8:23 am

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New research suggests that the London property market is finally running out of steam, after years of continuous house price growth.

According to data from property search engine Propcision, which provides figures for Rightmove, a third of homes in the wealthy borough of Kensington and Chelsea have had their asking prices cut by a third since coming onto the market.

Around 40% of properties listed for sale in Earl’s Court, a district within the borough, have had their prices reduced since coming onto the market.

Similarly, about 35% of homes up for sale in the prime central London hotspots of Chelsea and Knightsbridge have had their prices cut.

Is the London Property Market Running Out of Steam?

Is the London Property Market Running Out of Steam?

The average reduction is around 8% of the original asking price.

The postcode areas of W1, W2 and SW8 are the most likely spots for house price reductions.

However, the co-founder of Propcision, Michelle Ricci, believes this is more of a correction. She explains: “To make an analogy, it’s like throwing a ball into the air: at some point, the ball will stop moving upward and shift downward. In statistics, we call this a point of resistance.

“The upward trend prime central London enjoyed for the past few years has started to show signs of resistance. This is typically associated with the start of correction, although not necessarily a downward trend, as in the ball analogy.”

She continues: “We feel the data suggests asking prices are holding steady with levels seen in the past six months. However, that said, there are particular areas of vulnerability that may start to show demonstrable evidence of a downward trend, most notably new builds.”1

The Director of Chelsea-based estate agent Farrar, Nick Hubner, believes that house prices are being weighed down by Stamp Duty changes, falling foreign investment and the forthcoming EU referendum.

He says: “We have cut prices. The market has slowed since April 2014. It is down 10-15% and could drop further. The thing with Chelsea is that it is like a light switch, and things can go on or off instantly.”1

It is thought that recent changes to Stamp Duty for buy-to-let landlords and second home buyers, alongside the EU referendum, will bring prices and sales down in the coming months.

Separate research from property developer Arcadis shows that 35,000 prime London homes are due for construction over the next ten years. This is a 40% increase on 2014 levels, and will add almost 11,000 new properties to Kensington and Fulham alone.

With the downward trend set to continue in the capital, do you still see the London property market as a lucrative investment opportunity?

1 http://www.propertyindustryeye.com/asking-price-correction-reported-in-central-london/

Prices and Sales May Fall Due to Stamp Duty Changes and EU Referendum

Published On: April 15, 2016 at 10:16 am

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The EU referendum and changes to Stamp Duty for landlords have caused uncertainty in the housing market, which could lead to a fall in house prices and property sales, according to the Royal Institution of Chartered Surveyors (RICS).

For the first time since 2008, more property professionals are expecting sales to drop rather than rise in the near future, says the latest monthly report from the RICS.

Prices and Sales May Fall Due to Stamp Duty Changes and EU Referendum

Prices and Sales May Fall Due to Stamp Duty Changes and EU Referendum

The expected decline in activity comes after a busy start to the year, as buy-to-let landlords rushed to complete sales ahead of the 3% Stamp Duty surcharge on 1st April. The RICS reports that agreed sales have increased for the fourth consecutive month as a result.

The organisation says that most UK regions experienced house price growth in March, while property prices have increased every month for the past three years on a national level.

However, London has not followed the trend, with prices falling in some areas. The RICS believes that uncertainty over the EU referendum and the London mayoral election will continue to contribute to decreasing prices. Of the surveyors working in central London, 38% more predict that house prices will fall rather than rise in the next three months.

The Chief Economist at the RICS, Simon Rubinsohn, says: “Elections inevitably bring with them periods of uncertainty in the market, and our figures would suggest that May’s devolved elections are no exception. Likewise, the EU referendum is likely to be an influence in terms of the damper outlook, for London in particular.”1

John King, of London-based estate agent Andrew Scott Robertson, reports that activity picked up ahead of the Stamp Duty change. He comments: “The outcome is likely that we will see a slowdown in sales occurring while outside events surrounding currency rates and employment levels undermine confidence.”1

The latest Credit Conditions Survey from the Bank of England found that banks and building societies are also expecting buy-to-let mortgage lending to drop significantly in the coming months.

Additionally, the Council of Mortgage Lenders has reported that buy-to-let landlords seeking to complete purchases before being hit with the higher tax rate boosted activity in the first three months of the year.

Property sales in England and Wales were at a nine-year high in March, says LSL Property Services. It is therefore unsurprising that sales levels will come down from this peak in the coming months.

1 http://www.theguardian.com/business/2016/apr/14/house-prices-sales-fall-stamp-duty-brexit-election-rics