Taylor Scott International News
Residential property prices in the UK increased by 0.3% in February and there was a slight growth taking the annual increase to 4.8%, the latest house price index shows. This took average prices to £196,930 and overall the annual rate of growth has remained between 3% and 5% since the summer of 2015, according to the data from lender the Nationwide. The index report also says that the number of mortgages approved for house purchase increased sharply in January to almost 75,000, up from around 71,000 approvals in December and the highest number since January 2014. However, Nationwide’s chief economist Robert Gardner pointed out that much of the increase is likely to be related to the impending increase in Stamp Duty on second homes which is due to take effect in April 2016. He pointed out that after declining gradually over the past 12 years, the rate of home ownership in England stabilised in 2014/2015 but at 63.6%, this is well below the peak of 70.9% recorded in 2003. ‘This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring/summer. Looking through this volatility we expect the underlying pace of activity to increase in the quarters ahead as improving labour market conditions and low borrowing costs provide ongoing support,’ he said. Gardner pointed out that after declining gradually over the past 12 years, the rate of home ownership in England stabilised in 2014/2015 but at 63.6%, this is well below the peak of 70.9% recorded in 2003. ‘If we look at the shift in tenure patterns by age over the past decade, we see a particularly marked decline in home ownership rates amongst the younger age groups, especially amongst 25 to 34 year olds, traditionally the segment containing most first time buyers. While there was a marginal uptick in 2015, the proportion of younger adults who own their own home, currently 37%, remains considerably lower than 10 years ago,’ he explained. ‘Over the same period, the proportion of people renting increased from 43% to 63%. For 16 to 24 year olds, the proportion renting increased from 73% to 92% over the same period. The increase has occurred in the private rental sector, which currently houses 19% of total households. Over the past 10 years, the number of privately rented households has increased by 75% to 4.3 million,’ Gardner said. He also pointed out that the latest English Housing Survey showed that the proportion of private renters who expect to buy a home at some point in the future declined from 61% to 57%, the lowest reading since the survey began in 2008/2009. Even amongst those who expect to buy a home, for most this remains a longer term aspiration, with 75% expecting it to take at least two years. March is likely to be similar in terms of house prices and sales, according to Alex… Taylor Scott International
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