Posts with tag: housing market

Housing market beginning to settle after Brexit vote

Published On: September 12, 2016 at 10:09 am

Tags: Brexit,Buy-to-Let,housing market,landlords

The UK housing market has begun to level out, following the surprise of the Brexit vote, according to a new survey.

Surveyors are now expecting sales and prices to rise in the upcoming months, data from the Royal Institution of Chartered Surveyors (RICS) suggests.

Stable

Sales of property in the follow-up to the decision to the leave the EU fell sharply but has stabilised. RICS’s members predict that house prices in the UK will rise by an average of 3.3% over the next five years.

RICS thinks that a shortage of homes on the market was holding up property prices. Simon Rubinsohn, chief economist at RICS, believes, ‘there are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum.’[1]

‘Buyer enquiries did dip again in August but only modestly and more significantly, sales expectations are beginning to edge upwards once again. It is likely the swift response from the Bank of England has played a role in helping to support confidence,’ he continued.[1]

Housing market beginning to settle after Brexit vote

Rise and falls

Data from the report reveals that sales stabilised in August, but fell in some parts of the country, most prominently in London and the West Midlands.

The report from RICS measures housing sentiment and is one of the few that estimates future movements in the market. Results reveal that a higher proportion of surveyors expect sales to increase during the next three months. More believe sales will increase than those who expect them to fall.

An estimated rise of 3.3% annually is different from RICS’ prediction at the start of the year, when the firm estimated prices would rise by an average of 4% per year for the next five years.

Brian Murphy of the Mortgage Advice Bureau noted, ‘whilst the survey is based on sentiment rather than hard data, this provides us with a good temperature check in terms of what surveyors up and down the country are observing.’[1]

‘This is in line with other data released from lenders such as the Halifax which supports the same point of view that after a deep intake of breath in June and allowing for the traditionally quieter summer hiatus, the overall market picture for most of the UK is stable, with the continued lack of supply being the underlying factor which is likely to underpin the market in the months to come,’ he concluded.[1]

[1] http://www.bbc.co.uk/news/business-37297910

Slowdown in the Property Market Normal for This Time of Year

Published On: August 4, 2016 at 10:50 am

Author: Em Morley

Categories: Property News

Tags: Brexit,homebuyers,housing market,properties for sale,property market

The slowdown in the property market recorded over July is normal for this time of year, according to the latest Property Activity Index from Agency Express.

The recent property market report from the firm found that both new listings and the number of properties sold dropped in July.

Nationally, the number of new property listings fell by 15.3%, while the amount of properties sold was down by 8.8%.

Slowdown in the Property Market Normal for This Time of Year

However, over the past three months, the decline has been less severe, with new listings down by 3.2% and properties sold down by 3.8%.

Looking back over the Property Activity Index’s historical data, a slowdown in the property market in July is not uncommon. As the summer holiday months commence, a seasonal cooling in the market is expected, and this year’s figures appear consistent with those recorded between 2013-15.

Across the country, just four of the 12 regions included in the Property Activity Index bucked the seasonal trend.

The best performing region in July was the West Midlands, which saw a record best rise in new property listings for July, of 5.6%.

The strongest regions for new listings in July included:

West Midlands: +5.6%
East Midlands: +3.1%
North West: -0.5%
Wales: -1.9%

In terms of the number of properties sold, the best performing regions were:

Wales: +3.2%
North West: +0.2%
South East: -3.7%
South West: -3.8%

The greatest declines seen in July’s Property Activity Index were in London. New listings in the capital fell by a huge 49.9%, while the amount of properties sold was down by 19.9%.

With buyers and sellers in London remaining cautious over the effects of Brexit, the rental sector in prime central spots has experienced a boost: /rent-prices-prime-central-london-following-brexit/

The Managing Director of Agency Express, Stephen Watson, says: “Throughout July and August, we traditionally see a decline in the UK property market. This month, the vote to leave the EU did bring an air of uncertainty, but as it stands, figures have remained true to trend.

“However, with the Brexit effect yet to emerge, it will be interesting to see if September’s figures return with the same vigour.”

Check back to Landlord News for the latest property market updates and insight.

What Will Theresa May’s Government Mean for the Housing Market?

Published On: July 19, 2016 at 9:45 am

Author: Em Morley

Categories: Property News

Tags: EU referendum,homeownership,housebuilding,housing market,property market,Theresa May

Last week, Theresa May became the UK’s 76^th Prime Minister, becoming the first female PM since Margaret Thatcher. But what will her Government mean for the housing market?

Her appointment as PM is welcome news for the property market and landlords, who have suffered a period of political uncertainty since the country voted to leave the EU on 23^rd June.

Now that Theresa May is in office, how will the new Government improve the property market, and the country?

Making Brexit a success

In a statement following her appointment, May promised to build a “better Britain” and “to make a success” of Brexit. She spoke of the need for strong leadership to lead us through these uncertain economic and political times, and the need to negotiate the best deal for Britain outside of the EU.

Although many had called for a second referendum, May – who was part of the Remain campaign – has insisted that “Brexit means Brexit” and there will be no second vote.

Dealing with the housing crisis

What Will Theresa May’s Government Mean for the Housing Market?

May has made it clear that she will tackle the housing crisis as Prime Minister.

In a speech delivered in Birmingham, she said: “Unless we deal with the housing deficit, we will see house prices keep on rising. Young people will find it even harder to afford their own home. The divide between those who inherit wealth and those who don’t will become more pronounced. And more and more of the country’s money will go into expensive housing instead of more productive investments that generate more economic growth.”

What will happen to house prices?

If the Government finds a way to control net immigration and May delivers on getting “more houses built”, she could have a chance of swinging the supply and demand imbalance seen across the UK, particularly in London, where house prices have spiralled in recent years.

However, London estate agent Portico believes that this is quite unlikely, as the country does not currently have the housebuilding capacity, in terms of manpower, to see supply outstrip demand.

The firm argues that unless this changes and the supply of housing increases significantly, certainly in the short-term, it doesn’t expect to see an immediate drop in prices across the capital. Outside of prime central London, the market is driven by homeowners rather than landlords, who Portico points out will always need somewhere to live, regardless of the Brexit. They will also continue to need to upsize as their circumstances change.

Additionally, the prime central London market was showing signs of a slowdown prior to the referendum, and in areas of central London, prices began to cool following a decline in property sales. Portico believes that this decrease is likely to continue over the rest of the year.

What must happen?

Housebuilder shares have dropped post-Brexit, and most firms are now reassessing land approvals.

The Regional Director of Portico, Mark Lawrinson, explains: “May and her Government need to not just build more houses, but make the building of houses easier, be that by reducing planning restrictions on brownfield sites, encouraging more young people to take up the trade through funding and education, speeding up the planning process time it takes for developers to get sites off the ground, or incentivising smaller developers – as well as the larger groups – to build with potential tax breaks for hitting a certain quota year-on-year.

“We then need to make the process of buying property easier and cheaper; as much as Stamp Duty Land Tax has been reviewed, it is still a significant cost to any potential purchaser, on top of a large deposit required to obtain a mortgage. If we are successful in building more houses and reducing the costs associated with buying a property, it will help generate more transactions, which will keep momentum in the market and keep house prices at a steady level.”

Should you buy now?

Lots of buyers, both homeowners and landlords, have been holding off property purchases due to political uncertainty and a possible interest rate cut.

However, now that we have regained some political certainty and the Bank of England looks set to leave interest rates as they are, those holding off property purchases should now be ready to act.

The future of the housing market

Although it is yet unclear what Theresa May’s Government will mean for the housing market and for Britain, it is clear that her pro-EU approach and years of experience in UK Government has created a level of certainty for the future. Ultimately, this is what the property market needs to regain momentum at this time.

Study into Decline of Homeownership Expected for Release in Autumn

Published On: July 7, 2016 at 10:46 am

Author: Em Morley

Categories: Property News

Tags: Brexit,homeownership,housing crisis,housing market,Redfern Review

The Redfern Review, an independent study into the decline of homeownership, is expected for release in autumn 2016.

The report, commissioned by the former Shadow Secretary of State for Housing and Planning, John Healey MP, is undergoing an extended consultation period to take into account the consequences of the recent UK vote to leave the EU.

Study into Decline of Homeownership Expected for Release in Autumn

The Redfern Review’s main objective is to analyse the recent decline in homeownership and ways in which opportunities to boost homeownership can be improved. It is an independent review that aims to widen public debate and policy thinking.

Despite his recent resignation from the shadow cabinet, John Healey continues to work on housing and is determined to continue to encourage the delivery of the review. Alongside Peter Redfern, he remains passionate about the long-term health, sustainability and fairness of the property market. Redfern is committed to completing the work of the review, and expects it to be published in autumn.

The recent uncertainty caused by the EU referendum has put the housing market into sharp focus as a key factor in national social and economic stability, and in the security and life choices of individuals.

The panel and team have already focused on the long-term issues surrounding the market, how short-term initiatives impact in the long-term, and the balance of opportunity for all in accessing homeownership and other forms of housing tenure.

In the early autumn, the panel expects to set out a comprehensive analysis of the decline in homeownership and an overall framework within which high quality and long-term housing related decisions can be made.

However, the referendum vote of 23^rd June has caused a series of potential challenges and opportunities, and the team intends to update its report to take this change into account.

The initial submission and consultation process is now complete, but the Redfern Review will now extend its consultation deadline to 31^st July, to consider the impact of Britain’s exit from the EU. Submissions can be sent to: info@redfernreview.org.

Peter Redfern comments: “The long-term decline in homeownership in the UK towards 60% disadvantages both individuals and the health and stability of our economic and social structures. Our initial findings indicate that only long-term measures will work in addressing this critical issue in a sustainable way.

“The review will report in the autumn taking into account views on the impact that Brexit will have on homeownership. We need to continue to strive to give current and future generations a realistic opportunity to own their own home.”

John Healey MP adds: “Following the recent referendum vote, fresh thinking and new ideas in areas like housing are more needed than ever. I’ll be carrying on my work on housing, and look forward to the important contribution the Redfern Review will make to our national debate.”

Brexit boost for North East properties

Published On: July 1, 2016 at 2:08 pm

Author: Em Morley

Categories: Property News

Tags: Brexit,EU referendum,housing market,North East property prices

Property prices in the North East have enjoyed a resurgence both in the lead up to and in the aftermath of the EU referendum.

Statistics released from North East sales and lettings firm KIS shows that house price values in the area increased by 4.8% in the last four weeks. This has added £8604 to the value of an average home in the region.

Regional rises

This rise comes on the heels of a 0.4% increase recorded in May and means that house prices in the area are now positive in 2016. Previously, they had fallen by 3.1% and 4% in April.

The average North East property is now valued at £165,039. Prices are 6.5% greater than those seen in June 2015.

In fact, house values rose in all of the twenty regions surveyed, with rises recorded ranging from 0.7% in Gateshead to 9% in Durham City. The strongest regions in terms of growth include Tynemouth (7.6%), North Shields (7.5%) and Killingworth (7.2%).

Moreover, the average rent in the North East rose by £10 per calendar month to hit £580. Rents in the region are now £28 greater than in March and have grown by 4% year-on-year.

Rising property prices now mean that the North East average rental yields have fallen by 0.1% to hit 4.3%.

Brexit boost

Leading property expert Ajay Jagota, founder and MD of North-East based lettings firm KIS, said, ‘if you listened to the way some people have been banging on in the media you’d be forgiven for expecting the Brexit vote to have had an apocalyptic impact on the North End and national housing market. But these figures prove just how wrong they were and to me that’s no surprise at all.[1]

‘I don’t believe there is a financial crisis around the corner and never have. Of course we saw some pretty unprecedented market volatility in the aftermath of the Brexit vote itself, but thankfully the markets have now calmed down and my prediction is from herein we can expect to see not just continuing growth but the region’s largest gains for some time,’ he continued.[1]

Brexit boost for North East properties

Uncertainty

Jagota notes that, ‘buyers and sellers traditionally put off big decisions when there is electoral uncertainty and that’s bound to have happened in recent months. But we still saw prices rising by more than seven percent in places like Tynemouth, North Shields and Killngworth. Imagine what’s possible now that uncertainty is over.’[1]

‘Of course we need to be aware of the impact a financial crisis could have on the regional housing market, unlikely as it looks to me. North East house prices only returned to their pre-financial crisis levels in 2014. But rising rents and stable returns are likely to have been a driving force behind this month’s growth, with anecdotal evidence continuing to suggest that the region is continuing to emerge as a destination of choice for national property investors.’

‘If this is the case, the region’s property prices would be more insulated from any financial shocks than last time around, even in the unlikely event they even existed,’ Jagota concluded.[1]

[1] http://www.propertyreporter.co.uk/property/brexit-vote-gives-boost-to-north-east-homes.html

Brexit to have varied impact on London property markets

Published On: July 1, 2016 at 9:45 am

Author: Em Morley

Categories: Property News

Tags: Brexit,buy-to-let landlords,housing market,London property market

New analysis from independent property buying agency Black Bric has looked at what impact a Brexit will have on London’s property market.

The firm suggests that the vote to leave the European Union is to have a varied impact on properties across the capital.

Investors

Black Bric said that sub £2million pound homes will continue to attract investors, due to domestic demand, high yields and good liquidity.

However, the firm’s MD Camilla Dell feels that the prime property market and new build outer prime markets could be set for difficulty.

Dell said, ‘we expect the section of the market dominated by domestic buyers and those working in the financial services sector, predominantly £2million to £5million but also up to the £12million to £15million range, to potentially face some pressure linked to Brexit concerns.’[1]

‘We do not expect the wholesale flight of financial services firms away from London, but it is likely that they will lose their passporting rights, or their ability to sell financial services across the EU if the UK does leave, triggering the departure of some financial services capacity to Dublin or the continent,’ she continued.[1]

‘However, even relatively low numbers of bankers leaving areas such as South Kensington or Notting Hill where Europeans, in particular, tend to be concentrated could have a significant effect on local markets over the next couple of years.’[1]

Outer-prime uncertainty

In addition, the firm expects the new-build outer prime market to be most at risk, with the sector already having seen a quiet period before the referendum.

Dell notes that, ‘The stock market has already heavily bid down builders linked to this part of the market, which is suffering from significant oversupply and the disappearance of the foreign investors who had supported it in recent years,’ said Dell.[1]

‘Areas such as Nine Elms in Vauxhall and Earls Court in West London are particularly vulnerable due to oversupply of expensive properties aimed at the overseas investor. However, there are a handful of stand out developments, such as Television Centre, that we believe are likely to continue to prove popular, and there will certainly be bargains to be had, particularly on the secondary market,’ she pointed out.[1]

Super prime positives

On the flip side, Black Bric expects the super prime market to be least affected. Dollar buyers are factoring in a 12.5% rise in their purchasing power.

‘For the global elite buying properties at £15 million to £20 million or above, purchases tend to be about lifestyle choices, rather than business decisions, or are to diversify extremely large portfolios. Indeed, we are still seeing transactions continue. Brexit did not feature in conversations with clients in this part of the market before the referendum, and it is unlikely to be much of a factor now it is underway,’ Dell added.[1]

Brexit to have varied impact on London property markets

Development

Moreover, London’s Deputy Mayor for Housing James Murray said there will be discussions with major developers and the G15, which represents the capital’s largest housing associations.

Aims of the meeting will be to secure significant housing settlement to drive new housing, allowing the capital to retain its property taxes and rushing through new planning rules to support build to rent developments.

Mr Murray noted, ‘last week’s European Union referendum result was not the outcome we wanted, but the fallout underscores how vital it is we do everything possible to stimulate and support the housing industry.’

‘There is no doubt that the vote has already caused uncertainty that will make it harder to fix the housing crisis, but our message to developers, housing associations and local authorities is that we will do all we can to give you the support and certainty you need to get through these difficult times,’ he added.[1]

[1] http://www.propertywire.com/news/europe/london-property-markets-brexit-2016070112094.html