Posts with tag: housing supply

Housing Supply Crisis is Worsening, says Rightmove

Published On: July 20, 2015 at 2:12 pm

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Categories: Landlord News

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The shortage of supply on the housing market is worsening, says Rightmove.

The property portal has found that the number of new vendors has dropped 10.6% in the past year.

However, Rightmove reveals that demand is still high, with traffic and enquiries to agents both up 22% in June compared to June 2014.

The site also says that asking prices for properties new onto the market have reached another record high, rising 0.1% month-on-month to an average of £294,542.

Housing Supply Crisis is Worsening, says Rightmove

Housing Supply Crisis is Worsening, says Rightmove

Demand is strongest for small properties with up to two bedrooms.

The amount of inquiries for small homes is 24% higher than for larger houses with three or more bedrooms.

However, the greatest decrease in supply is in the standard first time buyer sector.

Miles Shipside, Director of Rightmove, explains: “The greatest mismatch between demand and supply is at the lower end of the property ladder, as no doubt many buyers in this category would like to afford to buy a larger home, but have had to accept that it is out of their reach and downsize their aspirations to increase their chances of a successful purchase.

“The forthcoming extra tax burdens on buy-to-let investors may help to tip the balance in favour of first time buyers, but the consequent drop in rental property supply could push up rents.

“More supply of affordable starter homes for the growing demand from both renters and buyers is required, which means more new builds for both sectors to meet the country’s current and future housing needs.

“The challenge for Government, planners and developers is how best to ensure the right properties are built in the right locations and at more affordable prices.”1

Two agents have reacted to Rightmove’s revelations, noting high property investor activity in the lower price range.

Trevor Binch, Managing Director of Merrick Binch in Coventry, comments: “We’re finding that any properties on the market with us at under £150,000 – so your typical two-beds or some three-bed terraced – are selling immediately.

“There are a lot of investors snapping up these types of properties and this, coupled with the fact that a lot of sellers aren’t coming to market, is making the supply shortage worse.

“While there are some new developments being built in Coventry, there just isn’t enough to satisfy the demand, especially at the lower end of the market.”1

Donald Collins, Director at Go View London in Ealing, adds: “The natural consequence of a growing London population, young professionals trying to get on the ladder and investors looking for long-term investments, is a big shortage of two-bed properties coming to market.

“For properties we have on between £400,000 to £700,000, half of the interest comes from residential buyers and half from investors.

“The fact that investors have a long-term focus of building their portfolio and in many cases handing it down to their kids, means that these kinds of properties in the right locations won’t come back round on the market for about 15-20 years.”1

1 http://www.propertyindustryeye.com/supply-crisis-worsening-says-rightmove-as-new-instructions-dive/

UK Property Prices to Rise 25% in Next Five Years

Published On: June 11, 2015 at 12:40 pm

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Categories: Finance News

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Property prices in the UK are expected to increase by 25% in the next five years and become even more unaffordable due to a huge shortage of houses for sale, a leading organisation has cautioned.

The Royal Institution of Chartered Surveyors (RICS) revealed that the supply of properties for sale, measured by the average number on a chartered surveyor estate agent’s books, has dropped to the lowest level since records began in January 1978.

Furthermore, the anticipated post-general election supply boom has failed to emerge, with the North West and London experiencing the sharpest fall in instructions compared to April.

The average stock of properties per surveyor is now 52, down by around 12% since the start of the year. Meanwhile, new buyer inquiries rose at their fastest rate in over a year. As a

UK Property Prices to Rise 25% in Next Five Years

UK Property Prices to Rise 25% in Next Five Years

consequence, house prices increased further in May at a quicker pace than in April, found RICS.

Economists have indicated that prices will rise again now that the Conservative Government is in power. Earlier this month, Chief Economist at F&C Investments, Steven Bell, said boom conditions have returned to the market.

Last week, Halifax’s Housing Economist, Martin Ellis, warned that housing supply “remains extremely tight.”

He continued: “The imbalance between supply and demand is likely to continue to push up house prices over the coming months.”1

The Halifax and Nationwide both found the average house price to be £195,000-£196,000.

Chief Economist at RICS, Simon Rubinsohn, says: “There has been some hope that the removal of political uncertainty would encourage more properties onto the market, but the initial indications are that this is not proving to be the case.

“As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher, with property set to become ever more unaffordable.”

He adds that feedback from RICS members “points to prices at a headline level rising by another 25% over the next five years.”1

He says that this suggests there is no real confidence amongst members that the Government will deliver effective measures to boost new supply.

The chartered surveyor, Frost Partnership in Ashford, Surrey, told RICS: “Listings are in very short supply, which is pushing up asking prices to unrealistic levels in some cases.”1 

However, Christopher Green of Curzon Land in central London, which specialises in prime property investments, was pleased with the election result, telling RICS: “The market has gained an immense amount of optimism now that the socialist spectre has been removed for the next five years.”1 

But tenants are also receiving some bad news – RICS members are also forecasting rent rises averaging around 3% in the next 12 months. The group says this reflects the fact that demand for rental accommodation is continuing to grow.

“Contributors [to the study] anticipate that rents will rise across all parts of the UK over the next three months, with expectations most elevated in the East Midlands and the South West,”1 RICS concludes.

1 http://www.martinco.com/news/2015/06/10/uk-house-prices-will-rise-25-in-next-five-years/?utm_campaign=Social%20Media&utm_content=15884523&utm_medium=social&utm_source=twitter#.VXlHQlupr8t