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UK house hunters holding off until general election result, agents believe
House hunters in the UK seem to be holding off making a decision with the country’s general election just a week away, according to the latest monthly report from estate agents. Some 63% of members of the National Association of Estate Agents (NAEA) believe that demand for homes is at its lowest since last year with just 343 house hunters registered per branch compared with 406 last September when demand was at its highest. The report also shows that just 22% of total house sales in March were made to first time buyers, the lowest since July 2014 and down 30% from February. NAEA member agents are concerned about supply and demand for first time buyers as housing policy remains one of the big election issues. The report also shows that almost half, 48%, of agents favoured the Conservatives’ pledge to build 200,000 new starter homes, arguing that this initiative will be the most beneficial for the first time buyer housing market. However, only 6% back Labour’s promises to boost house building rates to 200,000 a year by 2020 and 31% do not believe that any of the proposed policies will be enough to straighten the market out. ‘We would always expect to see an event as monumental as a general election having an impact on the property market. But what makes this election so interesting is that no one knows what the result will be,’ said Mark Hayward, NAEA managing director. ‘And with housing featuring so prominently in all three main parties’ manifestos, buyers in particular are holding off to see what will happen. The outcome of the election will impact first, second, third and last time buyers,’ he added. The NAEA report also shows that while demand is down to 343 house hunters registered per branch in March, supply is up 12% from 43 to 48 houses available per NAEA member branch, as houses stay on the market for longer with nervous buyers. Demand still hugely outstrips supply, so a fall in demand does not affect the number of sales. March saw an increase in the amount of sales agreed per branch, with 10 sales going through, compared to eight in February. ‘We may have seen a slight increase in supply this month, but it is not an ongoing trend or a big enough jump to fill the gap for demand. It’s encouraging to see all parties actively proposing plans to regulate supply and demand,’ said Hayward. ‘However, the policies in place are unlikely to be enough to rectify the crippling situation we’re in. It’s all very well proposing to build 200,000 houses, but planning law, lack of infrastructure and available labour can make this process so lengthy that it may be ten or twenty years until we see this, by which time demand will be greater,’ he explained. ‘Although our agents have seen the market cooling off ahead of the General Election, it will inevitably bounce back again at a rapid… Continue reading
British prime farm land values continue to rise, but at a much slower pace
Prime farm land values in Great Britain increased by 0.5% to £9,900 per acre, much slower than previous quarters in recent years, the latest available data shows. According to the Farmland Value Survey from Savills it suggests that the ‘bull run’, driven by the top end of the market, in average capital value growth is slowing. In the first quarter of 2014 and 2013 the corresponding figures were 1.4% and 1.8% respectively. Quarter one growth was principally concentrated in the southern regions of England and in the East Midlands, where quality farms and estates dominated the market. Average prime arable farmland growth in these regions was 0.4% in the South East, 3.5% in the South West and 0.6% in the East Midlands. All other regions recorded zero growth and the data also shows that values continue to be highest in the East of the country. It points out that average values continue to mask the diversity in the market with sales at values in excess of £15,000 per acre being achieved for the right farms. ‘This end of the market continues to be driven by quality and location with large commercial arable farms and high quality estates attracting the strongest demand,’ the report says. ‘The trend of limited supply continues and, whilst remaining historically low, shows a slight increase on the first quarter of 2014. Supply remains at close to the lowest levels ever recorded, similar to 2001 during the foot-and-mouth outbreak and 2004 during the run-up to the introduction of the Single Farm Payment Scheme,’ the Savills report explains. It also points out that the lack of clarity surrounding the potential outcome of the general election coupled with pressure on farm incomes is creating some uncertainty. Overall just over 15,250 acres of farmland were publicly marketed across Great Britain during the first quarter of 2015, a 9% rise, amounting to 1,320 acres, on the same period of 2014. In the first quarter of this year the increased activity was concentrated in England with 26% whilst the levels of supply continued to fall in Scotland by 10% and Wales by 53%. Across England there were some significant regional differences during the quarter. Large increases in supply were recorded in the East Midlands at 280% and the South East of England at 362%. In the South East of England activity was boosted by two large properties in Hampshire at 1,600 and 1,000 acres. In contrast, decreases in the supply of farmland were recorded in the East of England with a fall of 30%, the North of England down 37% and also in the South West of England with a fall of 11%. Although activity in the South East of England was dominated by two large farms the market in the first quarter predominantly consisted of a larger number of smaller farms suggesting that pressure on incomes and cash flows may be having some effect Savills does not expect a significant change in the overall levels in the… Continue reading
UK house prices up 1% in April, according to latest index
Annual house price growth in the UK edged up to 5.2% in April from 5.1% in March, according to the latest index from the Nationwide building society. The data from the leading lender also shows that house prices rose by 1% in April, taking the average price of a home to £193,048. This is the largest monthly increase since June 2014 and as a result the annual pace of house price growth increased for the first time in seven months, Nationwide chief economist Robert Gardner pointed out. He explained that the pick-up in price growth has occurred even though the pace of activity in the housing market has remained fairly subdued in recent months. ‘Indeed, the number of mortgage approvals is still well below its long run average and 20% below the levels recorded in early 2014. The strength of the economy and relatively subdued pace of activity in the housing market remains something of an anomaly,’ said Gardner. ‘It is possible that heightened uncertainty ahead of the election is weighing on activity, though there is no compelling evidence from previous UK elections to suggest a strong impact. Healthy labour market conditions and continued low mortgage rates should help underpin housing demand in the quarters ahead,’ he added. The Nationwide has also been looking at how the UK housing market compares to the rest of the European Union. ‘The UK is often characterised as a nation of home owners, though compared with our European neighbours, the proportion of the population owning their own home is not particularly high. In fact, it is actually towards the lower end of the range,’ Gardner said. He pointed out that although some other European nations have seen declines in their home ownership rates in recent years, the movement in the UK has been more pronounced. ‘That said, even at its all-time high of 73% in 2007, the UK home ownership rate was not particularly high by EU standards,’ he explained. ‘Since then, there has been significant growth in the private rental sector. Interestingly, while the UK home ownership rate may not be particularly high, the propensity for young adults aged 18 to 34) to live with their parents is relatively low, a trend which has become more pronounced over the past five years,’ he added. Continue reading
