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Scottish house prices rise twice as fast as in England and Wales
House prices in Scotland have increased by 11.2% in the last 12 months, twice as fast as the 5.6% seen in England and Wales, the latest index shows. In March alone average property prices in Scotland increased by 5.4% or £9,200 ahead of the new Land and Buildings Transaction Tax (LBTT) being introduced in April, taking the average price of a home to £178,930. At the same time completes sales increased 29%, mainly at the top end of the market where the new tax is higher. Indeed, some 36 homes worth £1 million or more were sold, the highest number ever in a single month. Edinburgh and the surrounding area saw an especially strong surged, with East Lothian prices up 11.8% in one month, the Your Move/Acadata index also shows. ‘In what would have been an unimaginable trend just a year ago, house prices are now rising faster in Scotland than in London,’ said Christine Campbell, regional managing director of Your Move. She pointed out that part of the surge was due to a short term scramble to avoid the new LBTT which was introduced on 01 April. ‘For the top of the market especially, a pre-deadline rush has boosted the average price paid in March, so the latest surge in prices is unlikely to be sustained to quite the same extent in April under the new regime,’ she explained. But she also pointed out that even before the one-off effect of looming tax changes, Scottish house prices were rising on an annual basis by 6% in February, already on a par with 6.8% south of the border. As prices cool across the rest of Britain, Scotland has seen the opposite trend, with prices accelerating upwards. ‘Once the new tax regime has become an established feature of the property market, the effects could be different again. On the face of things, there are clear benefits for those buying a home for less than £254,000 as they will have to pay less tax than under the old system,’ said Campbell. ‘But it remains to be seen if this will be quickly countered by higher prices for these properties, as buyers with a little more buying capacity just bid up the average price for these homes. On the other hand, by far the clearest effect is already for the top of the market. There were a record number of million pound transactions in March as wealthy buyers rush to save thousands before the onset of the new law,’ she explained. Continue reading
Number of UK tenants in arrears rises but still a small proportion overall
Progress for UK residential tenants significantly behind on rent halted in the first quarter of the year with those in arrears up 4% since a year ago. In the first three months of 2015 there were now 70,900 tenants facing more than two months of unpaid rent, some 1,500 more households than in the previous quarter, when 69,400 tenants were over two months behind on rent, or a quarterly increase of 2.2%. Since the same point last year the number of tenancies in such a position has grown by 4%, with 2,700 additional households falling into this most serious category of late rent, according to the latest tenant arrears tracker by estate agency chains Your Move and Reeds Rains, part of LSL Property Services. This setback represents a levelling off in the number of tenants in the most dire financial situation. Compared to the worst peak of serious rent arrears in third quarter of 2012, when 116,600 households faced more than two months in late rent, this has moderated significantly, to the tune of 45,700 fewer such cases in the first quarter of 2015. However, the report points out that progress has now been incremental or even backwards for over 18 months with the fourth quarter of 2013 still the best calendar quarter on record, when just 63,500 struggled with serious rent arrears. Despite a lack of progress since the end of 2013, the chance of a given tenant falling so far behind on rent is extremely low. As a proportion of all tenants, just 1.4% owed more than two months’ rent in the first quarter of 2015, the same as in the fourth quarter of 2014. This compares to 2.9% in the first quarter of 2008 even before the worst of the financial crisis and recession. A setback for the most severe cases of rent arrears comes despite a more encouraging trend among those who fall more incrementally behind on payments. As of March 2015, 7.4% of rent is now in arrears of any length, down from 7.6% in February 2015 and down from 7.8% of all rent late a year before in March 2014. As with severe arrears, rent arrears of all lengths remain considerably lower than in previous years, since peaking at 14.6% in February 2010. ‘Tenants are now far less likely to be out of work than at this point last year but many tenants are still struggling to keep up with household expenses in the face of extremely modest wages. There are some signs on the horizon this will improve, but in the meantime a small but significant minority of households are facing a real challenge to find the rent every month,’ said Adrian Gill, director of estate agents Your Move and Reeds Rains. ‘Other factors are at play too. There are also more cases of severe arrears, in absolute terms, because there are more people renting their home overall. The chance of a… Continue reading
Annual UK house price growth puts on a spurt, especially in Scotland
UK house price growth is increasing again with the latest figures from the Office of National Statistics showing an annual rise of 9.6% in the year to March 2015. This is up from annual growth of 7.4% in the year to February 2015 and some parts of the country have seen record increases. House price annual inflation was 9.4% in England, 5.7% in Wales, 14.6% in Scotland and 7.5% in Northern Ireland. This is the highest annual increase in Scotland since July 2007. Annual house price increases in England were driven by an annual increase in the East of 11.4%, London 11.2% and the South East 11.2%. Excluding London and the South East, UK house prices increased by 8.1% in the 12 months to March 2015. On a seasonally adjusted basis, average house prices increased by 1.1% between February and March 2015 and prices paid by first time buyers were 7.8% higher on average than in March 2014. For existing owners prices increased by 10.3% for the same period. But there are concerns that house price growth is so strong. ‘House prices are going up four times faster than people’s wages. No wonder mortgage approvals are falling and first time buyers are struggling to save a large enough deposit. And we all know that housing bubbles burst and cause economic chaos,’ said Frances O’Grady, general secretary of the Trades Union Council. ‘There is no sign the government yet understands the challenge of ending the housing crisis. Their headline policy is an incredibly unpopular plan to sell off social housing to the private market. This would reduce the supply of affordable homes when we should be adding to them as quickly as possible,’ added O’Grady. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that it is worth bearing in mind that these figures concentrate on March. ‘The country was still convinced that we had a close-run election on our hands and vendors and buyers in London were holding their breath about what impact mansion tax and other possible policies might have,’ he said. ‘Now the reality is far different, a frisson of excitement has returned to the high-end market,’ he added. Continue reading
