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UK annual house price growth falls again
Annual house price growth in the UK slowed to 5.1% in March from 5.7% in February and prices were up just 0.1% month on month, according to the latest index figures. It means that annual house price growth has now slowed for seven months in a row, taking the average price of a property to £189,454, the data from the Nationwide Building Society shows. UK house prices are currently around 2% above their pre-crisis levels. However, the pace of housing market activity has remained subdued, with the number of mortgages approved for house purchase in January around 20% below the level prevailing a year ago. ‘Economic conditions have remained supportive, with labour market conditions continuing to improve and mortgage interest rates close to all-time lows,’ said Robert Gardner, Nationwide's chief economist. While house price growth has moderated across the UK, there is still significant regional variation. Prices in London and the South of England continued to see the strongest rates of annual growth, though there was a noticeable softening this quarter, particularly in London Price growth also continued to cool in the North West of England, Scotland and Wales, even though prices in these regions remain some way below their 2007 peak. Indeed, in annual terms, prices in Wales declined by 0.5% in the first quarter of 2015. A breakdown of the figures show that all regions except the North of England saw a further slowing in annual price growth in the first three months of 2015. Across the UK as a whole, prices rose by 0.6% over the quarter, after allowing for seasonal effects. Prices were up 5.9% compared with the first quarter of 2014. London remained the strongest performing region, with average prices up 12.7% year on year, although annual house price growth has slowed noticeably compared with recent quarters, with growth down from 17.8% in the fourth quarter of 2014. Amongst the other English regions, the Outer Metropolitan area continued to outperform, with annual price growth not far behind London at 12%. Yorkshire and Humberside was the weakest performing English region, with prices up 1.3% over the last 12 months. Northern Ireland saw a slowing in annual price growth to 5.7%, while annual price growth in Scotland moderated to 1.3%. Wales remained the weakest performing region and was also the only region to see a fall in average prices, which were down 0.5% compared with the first quarter of 2014. There was a further slowing in annual house price growth in Scotland, from 4.2% last quarter to 1.3% this quarter. Edinburgh was the best performing area, with prices up 11% on the previous year. The Highlands and Islands saw the weakest growth, with prices up 2%. The Land and Buildings Transaction Tax (LBTT) is set to be introduced in Scotland on 01 April. Under LBTT, those purchasing properties above £333,000 will pay more tax compared with marginal stamp duty land tax (SDLT) system now in use in the rest of the… Continue reading
Exchange rates and golden visa encouraging overseas buyers in Spain
Currency exchange rates are encouraging even more foreign buyers back to the Spanish property market and this is reflected in increased sales, especially in popular areas. New legislation to relax the requirements for Spain’s golden visa which allows non-European Union buyers to gain citizenship if they invest in the real estate market is also set to encourage more buyers from overseas. In the Balearics the currency rates are currently by far the biggest influencing factor in the property market, according to Alejandra Vanoli, managing director of Mallorca Sotheby's International Realty. ‘Thanks to negative interest rates, affluent Germans are currently paying to keep their money in the banks and some would rather see it being put to good use in real estate investment. Mallorca is an obvious choice, German tourists have been coming to the Island for more than 50 years and represented 38.6% of all foreign arrivals to Mallorca in 2014, they have their own weekly newspapers, radio station and Air Berlin dominates the Airport. There is a strong bond,’ he said. He explained that with the British pound is at a seven year high against the euro, a two million euro property would have cost £1.67 million a year ago, but just £1.44 million today, some 14% more affordable. Swiss buyers are in a similar situation. The Swiss Franc soared when the National Bank abandoned its euro peg in the middle of January and a property costing 2.54 million Swiss francs a year ago would now cost 2.11 Swiss Francs, a saving of around 17%. The golden visa, which was introduced in September 2013, has seen 530 foreigners granted a visa so far with the majority, some 490 people, doing this through putting at least the minimum of €500,000 into property. Most of the property investors have been Chinese, Russian or Arab with business entrepreneurs coming largely from the United States and it has earned the Spanish economy an estimated €700 million so far. Previously the visa was granted to the applicant, their spouse, children under the age of 18 and disabled children of any age. This has now been extended to unmarried couples, economically dependent relatives and children of any age. Also, while the economic criteria remain the same, the path has been made smoother with applicants able to start the process upon arrival in Spain rather than applying from overseas. The visa will also be given within six months even to those who haven't formalised a property purchase, provided they've signed a contract and paid a deposit. ‘We are expecting more non-European purchasers but at the moment Mallorca is still very much dominated by British buyers who have been coming en masse since the 1960s, the Germans, and the Swedish who also have a long standing love affair with the Island,’ said Vanoli. ‘Mallorca is reported to be the most popular holiday destination for Swedes in 2015. Like the Germans, they have… Continue reading
UK property market cooling in run up to general election in May
Almost a third of house sales in the UK are going to first time buyers but overall the market is cooling in the run up to the general election, according to estate agents. Some 30% of total house sales in February were to people getting on the housing ladder for the first time, the highest number since September 2014, says the latest monthly survey from the National Association of Estate Agents (NAEA). The data also shows that 46% of NAEA members have seen a cooling in the property market as the May general election approaches and 27% think the election will have the biggest impact on the housing market this year. Findings in February also show that demand for property is up, with 366 house hunter’s registered per NAEA member branch, up from 353 in January. With supply marginally down from 44 houses per branch last month, to 43 this month, there’s still a significantly higher demand than supply of housing, a problem that is unlikely to be solved anytime soon. The total number of sales agreed in February remained the same as previous months, with eight house sales going through per NAEA member branch. ‘It’s clear from the findings in the report that things are starting to ease for first time buyers, which could be down to reduced property prices or more accessible funding, especially following December’s stamp duty reforms,’ said Mark Hayward, NAEA managing director. ‘We will all be waiting with bated breath to see if the first time buyer figures increase following the new Help to Buy ISA, and whether we see real momentum in the market. It still remains notoriously hard to get cut through in the property market, especially for first time buyers, so any green shoots are encouraging,’ he added. When it comes to policy proposals in the run up to the election some 45% of agents think that the Conservatives’ pledge to build 200,000 more homes will have the best impact on the housing market. On the downside, 57% of agents think Labour’s proposed Mansion Tax will have a negative impact on the housing market. ‘Demand is still vastly outweighing supply in this country, so it is clear something needs to be done to aid this growing problem. It will be interesting to see the outcome of this year’s General Election, but whoever wins it is vital that building more affordable homes is top of their agenda,’ Hayward concluded. Continue reading
