Posts with tag: housing market

Average house prices rise in England at start of 2017

Published On: February 15, 2017 at 12:34 pm

Tags: average property prices,Buy-to-Let,housing market,price of property,rents,yields

The average price of a property in England increased slightly month-on-month to January, but fell in Scotland and Wales, according to new data released by Home.co.uk.

Average values in England rose by 0.3% from December, but fell by 0.2% in Wales and 0.3% in Scotland.

Price Rises

Property price growth in England was driven by a 1.9% month-on-month rise in the East, taking the average house price value here to a record £348,651 per month.

The East and West Midlands saw some of the highest annual rent increases, of 11.4% and 12% respectively.

However, greater London saw the slowest growth in England, with a monthly rise of 0.1%. Prices in the capital are now 1.2% less than one year ago.

Annual house price growth for England and Wales slipped to 3%, while in Scotland, growth was 2.3%. As such, the average price in England and Wales stands at £298,445 and in Scotland, £177,037.

Buy-to-Let Strength

Doug Shephard, director of Home.co.uk, feels that prices could increase in regions where rents are rising and suggests this is a sign that buy-to-let investment is strong.

Average house prices rise in England at start of 2017

Shephard said: ‘It is an established fact that some of the best BTL yields in the country are to be found in the North, and Yorkshire will not be alone in attracting the attention of investors going forward.’[1]

‘On the basis of buy to let investment yield, Wales, the North East and Scotland also look promising. However, the various new tax rules recently imposed will mean astute investors will be incentivised to focus on locations that offer the best yields and rising rents,’ he continued.[1]

Rents

Moving on, Shephard observed: ‘Home prices have been, are, and always will be underpinned by rents. Yields, be they dividends, interest on capital or rents, are always tied to the underlying investment. In today’s near zero interest rate environment and volatile stock markets, unprecedented sums have been ploughed in to the property market in search of a decent return on capital.’[1]

‘In today’s property market it is investment, or lack of, in the private rented sector that ultimately will dictate the direction of the regional markets. Moreover, should the sector be further disincentivised, for example by more regulation or taxation, then we may see the whole market turn to the downside,’ he concluded.[1]

[1] http://www.propertywire.com/news/uk/home-prices-marginally-england-fall-scotland-wales-start-2017/

White Paper reforms will fail unless support is offered-RLA

Published On: February 7, 2017 at 9:47 am

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let landlords,housing market,renters,tenancy agreements,White Paper

Today promises to bring a boost for renters as the long-awaited housing White Paper is finally revealed.

Ministers are expected to unveil plans for minimum tenancies and a number of new homes, built specifically for the rental market.

White Paper

In addition, the Paper is set to include measures to prevent developers from hoarding vital building land and encouragement for new homes to buy, as well as rent.

Greater institutional investment in the sector is also set to receive a new push.

However, the Residential Landlords Association warn that these efforts to boost the supply of privately rented homes will fail unless UK landlords are offered more support. This, the Association says, includes encouraging smaller investors and helping them to add to their portfolios.

While ministers wish to extend the length of tenancy agreements, the RLA state that official Government figures indicate that most tenants stay put for a considerable period. Indeed, data shows that the average length of time tenants spend in their property is four years.

What’s more, research reveals that around one-quarter of small landlords are often prohibited from offering tenancies longer than one year by their lender or insurer. Now, the RLA has called on the Government to take action to encourage mortgage lenders to offer longer tenancies.

Failures

Chairman of the RLA, Alan Ward, noted: ‘Whilst we welcome efforts to boost the supply of homes to rent, this will not be achieved through a single minded focus on corporate investment. The very fact that a renewed push is being made for such investment is a sign that previous efforts have failed.’[1]

‘Any plan for the rental sector that does not provide equal support and encouragement for the vast majority of individuals making up the country’s landlord population is doomed to failure. Instead, the Government should look again at the tax rises imposed by the previous chancellor on landlords which will only act as a disincentive for the hundreds of thousands of smaller landlords to get more properties on the rental market,’ he added.[1]

White Paper reforms will fail unless support is offered-RLA

Aspirations

John Goodall, CEO and co-founder of Landbay, the buy-to-let lender, also offered his response, stating: ‘Despite the aspirations of millions, home ownership levels continue to dwindle regardless of resolute ambitions made by Governments past and present, meaning more people now than ever lean heavily on the private rented sector. A sensible policy discussion is long overdue, so it’s encouraging news that we may finally see some support for what is an increasingly important part of the housing mix,’[1]

‘There are currently 4.3million tenants in the rented sector and the fact remains that those hoping to one day purchase a home of their own are relying on a well-served buy-to-let market to ensure that excessive rental growth doesn’t dampen their purchasing power,’ he continued.[1]

Concluding, Mr Goodall said: ‘However, recent tax and stamp duty changes for landlords mean that rents continue to feel upward pressure. Simply building more homes is not enough, but building more homes specifically designed to rent rather than buy should go some way to increasing the number of people able to get a foot on the housing ladder down the line.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/rented-housing-reforms-doomed-to-failure-without-support-for-private-landlords

Property price growth set to be subdued in 2017

Published On: January 31, 2017 at 9:48 am

Author: Em Morley

Categories: Property News

Tags: Brexit,housing market,property price growth

A new report has revealed that property price growth for 2017 is likely to be most prominent in regions outside of London.

Data from an investigation by real estate advisors JLL suggests there will be overall residential price growth of 0.5% in the UK during the year. This is set to increase to 1% in the capital, but the prime market here is set to be flat.

Uncertainty

The forecast for house price is so low due to economic and political uncertainty. Apprehension over Brexit could have knock-on effects to other area, the report suggests.

However, it states that cities such as Manchester, Edinburgh and Birmingham could well perform best. Manchester city centre has seen poor levels of supply during the last few years, which in turn has pushed up prices by nearly 15% and rents by 11% in 2016. There is due to be little change in these growth percentages during 2017.

In Edinburgh, there is strong demand for suburban family homes. In addition, Build to Rent is taking shape in the city centre.

Property price growth set to be subdued in 2017

Weaker Investment

Andrew Frost, leader director of UK residential at JLL, noted: ‘Legislative changes, such as stamp duty and the uncertainty around Brexit have led to weaker investment demand from overseas as well as domestic buyers. Alongside an overstretched owner occupier market, this will keep a lid on price pressure.’[1]

‘At the same time, build costs will see significant inflation as the devalued pound sterling hits imports while the Mayor of London has continued to push for bigger affordable housing contributions. As a result, in contrast with the nearly 24,000 homes built in London during 2015, 2017 levels are expected to fall back closer to 16,000,’ he continued.

Moving on, Mr Frost said: ‘The challenges for the Mayor to use public land, planning and investment to stimulate supply are steep. There is much to be encouraged by so early on in his tenure, but his oft-used phrase of it’s a marathon, not a sprint is only too true. A strong, stable political backdrop for housing policy aligned with the creation of the new London Plan and Government White Paper will be an important handrail for an industry in need of guidance.’[1]

[1] http://www.propertywire.com/news/uk/manchester-edinburgh-birmingham-set-property-hot-spots-2017/

Date for publication of White Paper could have been decided

Published On: January 26, 2017 at 2:36 pm

Author: Em Morley

Categories: Property News

Tags: government,housing market,Housing White Paper,landlords,White Paper

The long wait for the Government’s long-awaited White Paper on Housing is seemingly coming to an end. It is now thought that this paper is likely to be aired on Monday February 6^th 2017.

Tipped to include major reforms that will impact on the lettings and construction sectors particularly, the White Paper is eagerly anticipated by all property market peers.

Delays

At the Conservative Party conference last September, Communities Secretary Savid Javid and Housing Minister Gavin Barwell indicated the document would be released before the end of 2016.

Several more false hopes have followed, with varied speculation on release dates. It was thought that the Paper may appear on the 16^th January. Now, Government sources have indicated to journalists that the document is now likely to be released on the 6^th February.

The issues set to be addressed in the White Paper are expected to include incentives and planning for Build To Rent. What’s more, there could be incentives for older owners to leave their properties and new attempts to highlight Government-owned sites considered good enough for new housing.

In addition, many property peers expect a wholesale re-shaping of policy for starter properties.

Date for publication of White Paper could have been decided

Brexit

There is more pressure to get the White Paper published after the Supreme Court decided that Parliament must vote on whether to trigger article 50.

A Labour spokesman said: ‘We now want to see the timing and it is clear the white paper needs to come to parliament in time for the debate … MPs have a right to be able to see what the government’s plan of action is. The speech is not adequate. It set out a wish-list of options.’[1]

‘As we’ve said many times, Labour respects the decision of the British people to leave the EU and therefore will not frustrate the will of the British people. But respecting the will of the British people is very different from respecting the will of the British government. We need to see the plan and make sure the process is held to account in parliament at every stage,’ they added.[1]

[1] https://www.theguardian.com/politics/2017/jan/25/government-to-publish-brexit-white-paper-theresa-may-tells-mps

Activity in housing market slows for first time since July

Published On: January 20, 2017 at 3:34 pm

Author: Em Morley

Categories: Property News

Tags: housing market,landlords,property price growth,RICS

The housing market in the UK almost stopped during December, as price growth slowed and fewer transactions were made, according to the latest RICS survey.

As residential property price growth slowed, the headline balance of surveyors reporting an increase slipped to 24% from 29% in November.

Setback?

A RICS statement said: ‘Although this suggests prices are still rising firmly, the latest figure does end a run of four successive months of higher house price balances.’[1]

Further findings from the report found that the majority of RICS’ members predict a further slowdown in property price rises and new sales in the opening quarter of 2016.

The statement continued by saying: ‘While it remains to be seen if this is a temporary setback, 1% more chartered surveyors saw a fall rather than a rise in sales last month, and figures for predicted sales over the next three months across the UK also saw a noticeable slow down with only 4% more respondents anticipating an increase in sales during the coming three months down from 18% previously.’[1]

Price falls

London was the only region to see a fall in property values, while the North West of England saw the largest growth.

With price expectations for the next three months softening, RICS believe respondents were more positive on their outlook for the year. 49% of those questioned feel prices will increase during the next 12 months, in comparison to 40% in the last survey.

Simon Rubinsohn, chief economist at RICS, said that the latest survey, ‘provides further evidence that both price and rent pressures are continuing to spread from the more highly valued to more modestly valued parts of the market for good or ill.’[1]

Activity in housing market slows for first time since July

Sluggish

Despite activity falling in the last month, Richard Sexton, director of e.surv, noted that a seasonal slowdown is typical. In addition, he feels that the major problem is supply.

‘New instructions remain sluggish and with annual house prices rising at an unsustainable rate, too many prospective new buyers are being priced out of the market. A new year means new opportunities for change. As we await the government’s Housing White Paper, hopefully further initiative and funding will be applied to help secure home ownership for many hard-working earners,’ Sexton noted.[4]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/1/uk-housing-market-activity-slows-for-first-time-since-july–rics

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Is inflation a bigger threat than Brexit?

Published On: January 18, 2017 at 2:19 pm

Author: Em Morley

Categories: Finance News

Tags: Brexit,housing market,inflation,landlords,property

A leading estate agent has moved to express his view that inflation is a bigger threat to the confidence of the housing market than Brexit.

In a statement, former RICS residential chairman and London estate agent Jeremy Leaf, said: ‘If the cost of everything is going up, people feel poorer and less inclined to take on further debt. With the housing market it always comes down to confidence and if people see bad news, they tend to overreact, sit on their hands and do nothing.’[1

Announcement

The statement from Mr Leaf comes on the heels of an announcement that inflation has risen to 1.6%, the highest for 18 months. This increase was larger than expected and was attributed to the effects of the fall of Sterling since Britain decided to leave the EU.

Leaf’s comments also came after the ONS released its figures for house price rises over the year to November.

Is inflation a bigger threat than Brexit?

According to this report, prices increased by an average of 6.7%, up from 6.4% in October.

The average price of a property in the UK was £218,000, £14,000 greater than November 2015 and £2,000 more than in October. The average price of a property in England is now £234,000.

Wales saw prices increase by 4.1% in the same period to £147,000 and in Scotland, by 3.3% to hit £143,000.

‘The house price index findings are not too surprising because … they are a little bit historic. We expect to see some moderation in price growth in future as we have already seen on the ground in the past month or so. Shortage of stock and increased nervousness is showing itself in only slightly higher prices and lower activity,’ Leaf concluded.[2]

[1] https://www.estateagenttoday.co.uk/breaking-news/2017/1/inflation-bigger-problem-for-housing-market-than-brexit-claims-top-agent