Posts with tag: house prices

Fall in construction ‘will raise property prices’

Published On: January 27, 2016 at 11:33 am

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A fall in construction activity will serve to increase house prices still further, according to Nationwide.

The building society noted that prices continue to increase during January, but that any rises will be modest.

Gradual

Prices are up 0.3% during this month, in comparison to a sharper increase of 0.8% recorded in December. Annual growth is more stable, standing at 4.4%, in comparison to 4.5% in the previous month.

In fact, the average property value is currently £196,829, slightly down on that recorded in December.

However, Nationwide warns that the demand for property is likely to increase over the coming months. The firm believes that a strong labour market, in conjunction with wages rising at a steady pace and interest rates remaining static, will drive the upturn.

Fall in construction 'will raise property prices'

Fall in construction ‘will raise property prices’

Concerns

‘As we look ahead, the risks are skewed towards a modest acceleration in house price growth, at least at the national level,’ said Robert Gardner, chief economist at Nationwide. ‘The labour market appears to have significant forward momentum. Employment has continued to rise at a robust rate in recent months and, while the pace of earnings growth has slowed somewhat, in inflation-adjusted terms regular wages continue to rise at a healthy pace.’[1]

‘The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability,’ he continued. ‘Indeed, the market is already characterised by a shortage of stock, with the Royal Institute of Chartered Surveyors reporting that the number of properties on estate agents’ books remains close to all-time lows.’[1]

Adrian Whittaker, Sales Director at New Street Mortgages, also noted, ‘these figures show an unseasonal increase in house prices resulting from a market that is characterised by rising demand and limited supply. The mortgage industry has been slow to keep up with a new technology and if we are to satisfy the demand for faster mortgage applications and adapt to the rising competitiveness of the market, it is crucial that as an industry, we look to keep systems and processes up to date.’[1]

[1] http://www.propertyreporter.co.uk/property/nationwide-predicts-modest-acceleration-in-house-price-growth.html

 

Average Asking Price to Surpass £300k by End of Year

Published On: January 26, 2016 at 9:28 am

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Average Asking Price to Surpass £300k by End of Year

Average Asking Price to Surpass £300k by End of Year

The average asking price of new properties for sale will be £307,000 by the end of this year, according to predictions from Rightmove.

The property portal expects asking prices to increase by an average of £17,000 over the next 12 months.

It forecasts that the average new asking price in London will rise by 3% over 2016, to £635,000.

Rightmove’s January House Price Index found that the average price of property coming onto the market is up by 0.5% (£1,509) on December – the second highest Christmas/New Year period increase since 2007.

The average asking price of a new home coming onto the market is currently £290,963 across the UK and £610,741 in London.

The portal also predicts a surge in traffic to its website in the spring, as rental demand will continue to grow as house prices rise further. In the first week of 2016, visits to Rightmove rose by 21% compared to the same period in 2015.

The expectations arrive after the Association of Residential Letting Agents (ARLA) reported a lull in rental supply and demand for December. This seasonal slowdown is normal. However, letting agents fear that the forthcoming changes to Stamp Duty for buy-to-let investors could cause private landlords to leave the sector and thus, lower supply further.

Find out more about the changes and what they could mean for the private rental sector here: /17794-2/

Housing Demand Exceeds Supply by 12 to 1

Published On: January 21, 2016 at 12:35 pm

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House prices hit a record high of £233,947 at the start of this year, according to research by haart estate agent.

Housing Demand Exceeds Supply by 12 to 1

Housing Demand Exceeds Supply by 12 to 1

The firm has used its own data on average prices of properties sold subject to contract.

The new price record is 14.6% higher than at the same point last year.

haart reports that the average price of a first time buyer home sold subject to contract was £170,812 and the average London property price was £555,952 – a huge annual increase of 23.5%.

The agent estimates, based on its own figures, that there were 58,623 exchanges of contract in the UK over December, a decrease of 5.8% on December 2014. It also puts the ratio of new buyer demand to homes on the market at almost 12 to one.

CEO of haart, Paul Smith, comments on the data: “While December is generally a slow month for the property market, as people turn their focus to the festive season rather than buying or selling their home, there were a staggering 12 buyers chasing every property to come onto the market.

“The high level of competition sustained throughout 2015 has pushed house prices up by 14.6%, or £29,814 in monetary terms, over the year. This is more than the UK average salary, according to official Government data, throwing the price rise into sharp relief – certainly good news for those looking to release the equity in their home.”

He also offers his predictions for the year: “Off the back of this, I expect 2016 to be a particularly active year for the property market, especially for the first few months as buy-to-let investors clamour to complete purchases by April and the introduction of the 3% Stamp Duty surcharge.

“With interest rates likely to stay stable, generous mortgage packages will continue to be available, including those that require just a 5% deposit. This will be particularly helpful for first time buyers, and will also push up demand among homeowners and investors. As a result, I expect to see house prices increase by 9% throughout 2016.”1

It was recently reported that landlords are rushing to buy ahead of tax changes in the buy-to-let sector. How is this changing the market? Find out: /valuations-firm-confirms-that-landlords-are-rushing-to-buy/

1 http://www.propertyindustryeye.com/house-prices-set-yet-another-new-record-as-demand-outpaces-supply-by-factor-of-12-to-1/

House prices up 7.7% in November-ONS

Published On: January 19, 2016 at 12:13 pm

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Figures released today from the Office for National Statistics (ONS) reveal that average property prices in the UK rose by 7.7% in the year to November 2015. This figure was up from the 7.0% recorded in the year to October.

Rises

Property price annual inflation was found to be 8.3% in England, 1.3% in Wales, 0.4% in Scotland and 4.6% in Northern Ireland. Annual house price increases in England were propelled by a yearly increase of 10.2% in the East, 9.8% in the South East and 9.8% in London.

With the exception of the capital and the South East, UK property prices rose by 5.8% in the twelve months to November of last year.

In November 2015, property prices paid by first-time buyers were 7.4% greater on average than those recorded one year previously. For existing owner-occupiers, values increased by 7.8% over the same period.

‘House prices in November saw the biggest annual increase in eight months, despite traditionally being a quieter time in the housing market,’ observed Brian Murphy, head of lending at the Mortgage Advice Bureau. ‘Those lucky enough to already be on the property ladder are the clear winners of this boom, as homeowners trading up to the next rung take advantage of improving property values. Increased equity means even those not looking to sell can benefit by switching to a more affordable mortgage deal.’[1]

House prices up 7.7% in November-ONS

House prices up 7.7% in November-ONS

Rush

Murphy feels that, ‘the heat is set to rise in the buy-to-let and second home market in the short-term, as buyers rush to complete before the changes to Stamp Duty kick in in April.’ Continuing, he said, ‘in the long-term, the dearth of properties available combined with rampant demand means house price growth isn’t likely to slow any time soon. This creates clear affordability concerns for first-time buyers.’[1]

‘Government schemes to increase affordable housing will put a bandage over the wound: but without a significant and sustained increase in the construction of new homes, the current housing crisis isn’t likely to be cured any time soon,’ he concluded.[1]

Adrian Whittaker, Sales Director at New Street Mortgages, noted, ‘these figures from the ONS are typical of the strong growth that the housing market experienced last year, as house prices rose well above the level of inflation. A supply deficit and rising demand as more people looked to purchase property is squeezing the market and this puts vendors in a position where the can select the most appropriate buyer.’[1]

‘Increasing gulf ‘

Stephen Smith, Director of Legal and General Housing Partnerships, also said, ‘house prices are continuing to rise well above inflation which is pricing many prospective buyers out of the market. Prices have also risen significantly on an annual basis, exposing the increasing gulf between supply and demand.’[1]

‘Suitably sized housing needs to become more readily available at both ends of the market, to enable first time buyers to take their first steps onto the housing ladder and help last time buyers to ‘rightsize’, making life better for all. The Government needs to build  around 250,000 extra houses this year to give potential buyers any hope of finding their dream home. There are currently a number of constraints which elongate the house building process and the country should consider exploring alternative avenues to help speed up construction, such as modular housing,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/november-house-prices-gained-77.html

 

Average House Price Could Soon Hit £300,000

Published On: January 14, 2016 at 12:04 pm

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The average house price in England and Wales was £292,077 at the end of last year, according to the latest report from Your Move and Reeds Rains.

Average House Price Could Soon Hit £300,000

Average House Price Could Soon Hit £300,000

The firms found that the average property value rose 6.6% annually, an increase of £17,963 over the year.

House prices in central London fell by an average of 8.7% last year, pulled down by higher Stamp Duty on the most expensive homes. Meanwhile, prices elsewhere in the capital soared by 11%.

The estate agents also found that last month was the strongest December for property sales since 2006, as buyers compete for fewer homes on the market. Over the month, there were 85,000 home sales.

The Director of Your Move and Reeds Rains, Adrian Gill, claims that new price records were set in every single month last year.

He says: “If the current speed of house price growth continues into 2016, the value of the average home may soon pass the £300,000 watermark, having reached £250,000 in December 2013.

“Property prices have certainly left the recession in their wake.”

He continues: “Regionally, house prices in the South East have been increasing at a rate of knots, enjoying the fastest growth of any region. The 8.1% year-on-year price rise has been particularly propelled by demand for homes in commuter towns.

“Luton has seen the largest increase of 18.5% year-on-year, with the average cost of a semi-detached home in the town increasing by approximately £40,000 since 2014.

“The East Midlands has also seen a significant surge in house prices, overtaking East Anglia to become the second fastest growing region in England.

“This acceleration has emanated from a boom in Nottingham, which has seen year-on-year house price growth of 10.6%, boosting the region’s overall annual growth rate of 6.7%. Average property prices in the city have risen £14,691 in a year and now stand at £152,978.”1 

How have prices changed where you live?

1 http://www.propertyindustryeye.com/average-house-prices-will-soon-get-close-to-300000-mark-claim/

 

Shortage of Supply Will Continue Pushing Up Prices, Says RICS

Published On: December 22, 2015 at 10:24 am

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A shortage of housing supply will continue to push up property prices next year, according to the latest report from the Royal Institution of Chartered Surveyors (RICS).

The body predicts an average 6% increase in house prices and a modest rise in sales activity.

Shortage of Supply Will Continue Pushing Up Prices, Says RICS

Shortage of Supply Will Continue Pushing Up Prices, Says RICS

It states that next year’s growth in prices will outstrip any rise in household incomes.

The report says: “One theme has dominated the private housing market this year – the dramatic fall in inventory on the books of estate agents.”

It expects the greatest price rises to be in East Anglia in 2016 at 8%, followed by the South East and West Midlands at 7%.

The North West, Wales, and Yorkshire and the Humberside will see prices rise by 6%, believes the RICS, with 5% increases in London, Northern Ireland and the South West, 4% in the East Midlands and Scotland, and 3% in the North East.

Chief Economist at the RICS, Simon Rubinsohn, comments: “Housing has clearly leapt up the Government’s agenda, but despite the raft of initiatives announced over the past year, the lags involved in development mean that prices, and for that matter rents, are likely to rise further over the next 12 months.

“Lack of stock will continue to be the principal driver of this trend, but the likely persistence of cheap money will compound it for the time being.”

He continues: “Critically, our principal concern with the measures announced by the Government is that they are overly focused on promoting homeownership at the expense of other tenures.

“Discouraging buy-to-let could see private rents take even more of the strain if institutional investment doesn’t increase significantly, particularly given the likely reduced flows of social rent property.”1 

Separately, Marsh & Parsons’ Peter Rollings forecasts a 3% increase for house prices in prime central London, but 5% on the fringes of the capital.

The estate agent reports that sales of expensive homes have been greatly affected by last year’s Stamp Duty changes, which saw a top rate of 12% introduced.

Sales of properties worth more than £937,000 – the threshold for higher Stamp Duty charges – have dropped substantially.

The firm warns that next year, vendors of prime property must revise their price expectations.

Rollings adds: “The Stamp Duty changes have certainly dulled the London housing market, and while 2016 will see a return to growth, it will be rather lacklustre.”2

However, he expects high demand to continue outstripping supply and believes that in the broader London market, the only way for house prices is up.

1 http://www.rics.org/uk/news/news-insight/comment/uk-house-prices-to-rise-by-6-percent-in-2016/

2 http://www.propertyindustryeye.com/lack-of-stock-will-continue-to-drive-next-years-market-rics-warns/