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UK house prices up in all regions in April, latest RICS index shows
General election uncertainty saw new instructions fall and house prices rise in all parts of the UK in April, according to the latest report from the Royal Institution of Chartered Surveyors. House prices were driven up again in April as the data showed the third consecutive monthly decline in supply with new instructions falling at their fastest rate since May 2009, the RICS residential market survey shows. While 33% more surveyors saw prices rise in April, the highest reading since last summer, new instructions slipped to a net balance of -21%, the eighth consecutive drop in the last nine months. Moreover, the flow of second hand stock onto the market dropped in most parts of the country. Alongside this, for the first time since August 2014, respondents reported an increase in prices in every area of the UK due to the shift in tone in the London market, where 28% more respondents saw prices rise compared with 6% more surveyors in March who saw house prices fall. Near term member expectations for prices and sales continue to point to relatively modest gains, but 72% of members expect prices to rise over the course of the next 12 months. Meanwhile, in the lettings sector, there is no slowing in the growth of tenant demand, which is helping to underpin higher expectations for rents. Although anecdotal evidence suggests that these trends may have in part been a result of uncertainty ahead of the election, they are also reflective of deeper underlying problems, the report points out, adding that the downward trend in owner occupation rates across the country is a visible sign that affordability constraints bite ever deeper, as does the squeeze on household budgets from higher rents. ‘It is conceivable that the decisive outcome to the election could encourage a pick-up in instructions to agents and ease some of the recent upward pressure on house prices, but it is doubtful that this will be substantive enough to provide anything more than temporary relief. Alongside an increased flow of second hand stock, it is absolutely critical that the new government focuses on measures to boost the flow of new build,’ said Jeremy Blackburn, RICS head of UK Policy. ‘The affordability and availability of homes in the UK is now a national emergency and addressing this crisis must be the priority for the new government. The last time we were building 300,000 homes was in 1963 under Harold Macmillan’s Conservative government, which utilised both public and private building,’ he pointed out. ‘We need a coherent and coordinated house building strategy across all tenures. This should include measures that will kick start a supply side revolution, such as mapping brownfield, addressing planning restrictions and creating a housing observatory to assess the underlying economic and social drivers of housing and provide the impetus for solutions,’ he added. He concluded that introducing demand side measures such as extending Right to Buy will not see the Conservatives deliver on their promise… Continue reading
More accessible lending for first time buyers in UK confirmed by latest data
There has been an increase in the UK to borrowers with smaller home deposits due to increased accessibility in lending and highly attractive mortgage rates, the latest mortgage market report suggests. Loans to borrowers with small deposits, typically first time buyers, saw a year on year increase in April of 7.3% and were up 6.4% month on month, according to the data from e.surv chartered surveyors. However, the number of house purchase approvals fell year on year, suggesting that higher LTV lending is helping to support total mortgage approval figures. In the total market, there were 1.9% fewer approvals for house purchase loans in April than there were last year: 62,035 loans, down from 63,236 in April 2014. As a proportion of total approvals, higher LTV lending now stands at 16.3%, compared to 15.5% in March and 14.9% in April last year. These gains come despite a poor start to the year, the report points out. ‘This revival of the bottom of the market is becoming ever more crucial and this showed in the recent election struggle, with all the main parties placing helping first time-buyers as one of the crucial components of their campaigns,’ said Richard Sexton, director of e.surv. ‘However, before concerns are raised regarding the increase in higher LTV lending, it’s worth putting these numbers in context. The number of higher LTV house purchase approvals is still only a quarter of what it was in 2007. This is a healthy upturn in higher LTV lending, not a symptom of any malady in the mortgage market,’ he explained. ‘Prime Minister David Cameron has outlined a plan to provide 200,000 cut price starter homes, alongside a commitment to unlocking brownfield land for building new homes. This is the kind of clear planning the property market needs and it is to be hoped that the proposals crystallise into real policies,’ he added. The data also shows that on a monthly basis, house purchase approvals increased 1.1% from March, when there were 61,341 house purchase loan approvals. Despite a small month on month drop in March, this is the latest piece of a clear trend of growth stretching back to December last year. Sexton pointed out that in the wake of mortgage reforms a year ago there were five consecutive months of dips. ‘We turned a corner at the start of this year, and lending is starting to find its feet again in the new regulatory landscape. This should be even more of a spur to the government to push forward their plans for home building, as a continual demand for home ownership places ever more pressure on Britain’s insufficient stock of homes,’ he said. The proportion of higher LTV lending has either increased or remained stable in most UK regions in April but Scotland saw just 12% of house purchase approvals for borrowers with smaller deposits in April, compared to 16% in March. At the other end of the spectrum, house… Continue reading
Average rents rising across the UK as regions catch up with London growth
The average rent on a tenancy signed in the UK during the three months to April 2015 was £916, some 10% higher than a year ago, according to the latest index to be published. The data from the HomeLet rental index also shows that excluding London the rise is 7.4% taking average rents to £730 and rents are rising across the country apart from Wales. In Scotland average rents increased annually by 6.2% to £635, in Northern Ireland they were up 5.2% to £594, but in Wales they fell by 0.7% to £573. It also reveals that after a year of rents in London rising at over twice the rate of the UK average, growth rates have now converged with the annual increase in Greater London at 7.5%. On a regional basis the South West has seen the highest annual growth at 15.5% followed by East Anglia at 8.4%, taking the average in these regions to £877 and £778 respectively. Rents are up annually by 7.9% in the West Midlands, by 7.4% in the South East and by 4.3% in Yorkshire and Humber, taking average rents to £645, £916 and £598 respectively. In the North East they are up 3.9% to £526, in the North West 3.8% to £668 and in the East Midlands 3.4% to £588. The monthly figures show more variation with Yorkshire and Humber seeing a fall of 2.1%, a decline of 1.1% in the East Midlands and a fall of 0.5% in the North West. ‘For the first time we are seeing rent price growth rates in Greater London converge with those across the rest of the UK. During 2014, London rent price growth far outpaced other regions but in 2015 we are seeing the emergence of a different pattern,’ said Martin Totty, chief executive officer of Barbon Insurance Group, parent company of HomeLet. ‘What this tells us is that the private rental market is experiencing demand nationwide and that it is not simply a London phenomenon that increasing numbers of people are requiring privately rented property,’ he explained. ‘While there have been periods in recent years where London’s rent price growth has moved more in line with other parts of the UK, most notably during the period following the financial crisis, the capital has always remained significantly ahead,’ he pointed out. ‘The convergence suggests that after a lengthy period of substantial outperformance in terms of rental increases, the pace of growth in London has slowed while the rest of the UK is catching up,’ he added. Continue reading
