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UK regional cities house price growth outperforms central London, says latest index
House prices in larger regional cities in the UK have outperformed central London for the first time since 2005, the latest property index shows. Although central London recorded year on year house price growth of 3% in the first quarter of 2015 the capital’s most expensive boroughs are being eclipsed by growth in large regional cities, according to the UK Cities House Price Index from residential analysts Hometrack. Some 12 of the UK’s largest regional cities have registered higher price rises year on year than Central London including Glasgow with growth of 7.6%, Manchester 6.8% and Leeds 6.6%. Indeed, Kensington and Chelsea and Hammersmith and Fulham have seen price declines of 3.4% and 5.1% respectively amidst uncertainty due to the threat of mansion tax and affordability pressures in the run up to the general election. Newcastle, Sheffield, Manchester, Leeds and Glasgow registered the strongest pick up in house price growth in the first quarter of 2015 as households gain in confidence over the economic outlook and attracted by record low mortgage rates. Together these cities account for 30% of housing stock covered by the Hometrack index and this pick-up in growth is supporting the headline rate of house price growth which was 0.8% in the first three months of the year. Average house prices across the 20 cities included in the index registered growth of 3.8% in the first quarter compared to 3% over the same period in 2014. While the UK picture is polarised by a North/South reversal in house price growth, the London market is divided by its East/West compass points. The balance of house price growth across the index for London has shifted from high value markets driven by international capital to the lower value markets favoured by owner occupiers. Newham, Barking and Dagenham, Greenwich, and Croydon registered 14.2%, 12.5%, 12.4%, and 12.1% growth respectively in the last quarter compared to the same period 12 months ago. The index report says that these boroughs are sustaining the capital’s growth, despite house prices in the affluent central London areas falling. The report also suggests that areas of London that are still undergoing regeneration or are benefiting from new investment have proved popular with owner occupiers priced out of the boroughs favoured by international buyers and investors. The highest year on year growth rate was recorded in Newham and Barking and Dagenham, where average house prices are £275,000 and £215,000 respectively, and track 33% and 50% below the London average of £417,000. ‘House price growth is holding up better than expected as a result of a lack of new supply of homes for sale and record low mortgage rates attracting buyers into the market,’ said Richard Donnell, director of research at Hometrack. ‘Growth in London is still running in double digits and high capital growth rates in recent years have pushed down average loan to values in London, creating further capacity for additional borrowing for households that can pass tighter affordability… Continue reading
Cornwall is top spot for holiday homes in England and Wales
Some 165,000 people in England and Wales have holiday homes with Cornwall the most popular location for this type of second property, new research shows. Indeed, the county in the south west of England has over 10,000 holiday properties, according to a new analysis from Direct Line’s SELECT Premier Insurance. That means Cornwall has 6% of the nation’s holiday homes and according to estate agents its 300 mile coastline makes it the top holiday home hotspot. In second place is Gwynedd in Wales with 7,784 or 4.7% of holiday homes with its proximity to Snowdonia National Park adding to its attraction, followed by North Norfolk with its sandy beaches and salt marshes, which has 4,842 or 2.9% of holiday homes. South Lakeland with 4,684 holiday homes, East Lindsey with 4,472, Pembrokeshire with 4,310, the East Rising of Yorkshire with 4,059, South Hams with 3,738, Scarborough with 3,687 and Kings’ Lynn and West Norfolk with 3,539 complete the top 10. Across England and Wales there are almost 1.6 million people who have a second property in a different area to where they live permanently and 11% of these are used as holiday homes with the remainder being used for purposes such as work, or accommodation for student children. According to Nick Brabham, head of SELECT Premier Insurance, holiday homes are very valuable to owners as they are often a place to relax and spend quality time with loved ones. ‘This time is often limited, which means it is essential to keep the property and its contents in top condition all year round,’ he added. Peter Olivey a partner at Cornish based estate agents Cole, Rayment & White in Padstow, explained that Cornwall ticks a number of important boxes for second home owners with its coastal location and abundance of activities. ‘It’s a true holiday haven without the hassle or cost of going abroad. The local property market here is competitive but with a number of new developments springing up and mortgage rates much lower than they have been, there’s still plenty of opportunity for prospective buyers,’ he said. Continue reading
Consumer confidence in UK housing market outlook rebounds
While house price growth continued to slow in March in the UK, consumer confidence in the outlook for the housing market has rebounded to its highest level since July last year, new research shows. Consumer confidence in the outlook for the housing market has bounced back to a net balance of +64 in March from +60 in February, according to the latest quarterly Halifax Housing Market Confidence Tracker as measured by Ipsos MORI. Conversely, house prices increases have slowed over the same period and in the three months to March this year house prices were 8.1% higher than in the same three months a year earlier, compared to 8.5% in January 2015, and 10.2% in July 2014. As to just how confident consumers are in the outlook for the housing market over the next 12 months some 33% are expecting the average property price to be higher by up to 5%, while 25% anticipate increases of between 5% and 10%. ‘We’ve seen a strong start to the year in terms of the net sentiment regarding the outlook for the housing market, and this has translated into an increase in transaction volumes. This increase in optimism is likely to be the result of a combination of factors, including the improving economic figures, greater numbers of higher loan to value mortgages, and extremely competitive mortgage rates,’ said Craig McKinlay, Halifax mortgages director. There has been an increase in the net proportion of consumers who believe mortgage interest rates will be higher in 12 months’ time at +41 compared to +35 in February. Nevertheless, only 12% spontaneously cited concerns about interest rate rises as one of the main barriers to being able to buy a property, down from 15% in the first quarter of 2014. The main perceived barriers to homeownership are the ability to raise enough deposit for 61% while 44% have concerns about job security). A year ago, 60% and 51% respectively identified these as among the main barriers. ‘The results highlight that an increasing number of consumers believe interest rates will begin to rise in the next 12 months, but at the same time it is falling as a perceived barrier to homeownership,’ McKinlay explained. ‘This is perhaps a result of rising incomes and the current low mortgages rates. The fact that consumers’ ability to raise a deposit remains the greatest perceived barrier to home ownership shows there is more work to be done in terms of letting people know what support is now available,’ he added. Overall a net +33 of consumers think the next 12 months will be a good time to sell, compared to +24 at end of December 2014. This is the highest score on this measure since the survey’s inception in April 2011. At the same time the proportion who believes it is now a good time to buy has slumped from +26 at end of December 2014 to +21 as at end of March 2015. Regionally, house price optimism… Continue reading
