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House price growth continued across the UK in November, latest ONS data shows
House prices in the UK increased by 7.7% in the year to November 2015, up from 7% the previous month, according to figures from the Office of National Statistics. House price annual inflation was 8.3% in England, 1.3% in Wales, 0.4% in Scotland and 4.6% in Northern Ireland. The ONS data also shows that house price growth in England were driven by an annual increase in the East of 10.2%, the South East at 9.8% and London also at 9.8%. Excluding London and the South East, UK house prices increased by 5.8% in the 12 months to November 2015. On a seasonally adjusted basis, average house prices increased by 0.8% between October and November 2015 and prices paid by first time buyers were 7.4% higher on average than in November 2014. The continued upward trend is likely to exacerbate affordability issues for first time buyers, according to Steve Bolton, founder of Platinum Property Partners who added that it is a result of the current dearth in property supply. ‘Recent initiatives aimed at addressing the challenges faced by first time buyers show little signs of reversing this trend. The Chancellor’s decision to levy a 3% surcharge on stamp duty for landlords and second home owners may be with first time buyers’ interests at heart, but in reality this is likely to drive up house prices further in the short term as buyers rush to compete purchases before spring,’ he explained. ‘The stamp duty changes and restriction on buy to let tax relief gives the impression that a strong private rental is a barrier to popular home ownership. However, the reality is that by attacking private landlords and increasing buy to let costs, tenants are likely to face rising rents which is a huge barrier to future home ownership,’ he pointed out. ‘The tax grab is targeted purely at landlords with mortgages, excluding the wealthiest landlords. This is unfair and undemocratic, which is why we’re currently co-heading a legal challenge to fight these changes. Having received considerable industry support, as well as raising funding for the initial stage in a matter of days, its clear many landlords agree the tax changes pose a serious threat to the future of the buy to let market,’ he added. Rishi Passi, chief executive of Oblix Capital believes that the lack of supply is unlikely to change in the short term. ‘Better job prospects, wage improvement and recurring delays in interest rate rises mean that it’s likely this surge in house sales and price inflation will continue, for the meantime at least,’ he said. ‘Further investment is needed to encourage house building, stem the supply imbalance in crowded markets, and ensure that small and medium sized developers have access to the finance they need,’ he added. Jonathan Hopper, managing director of buying agents Garrington Property Partners, pointed out that overall first time buyer prices are rising more… Continue reading
Prime property prices in UK set to vary in 2016 according to location
The rate of overall house price growth in the UK prime property market is expected to continue at much the same pace in 2016 as in 2015, with the regional variations remaining too. Average UK house prices rose 4.5% in 2015, according to the latest residential market update from real estate firm Knight Frank. Average values in prime central London rose by 1% last year on average, but the rate of growth varied across the capital while prime country house prices rose by 3.1% in 2015. The report says that the Bank of England’s decision to keep interest rates on hold in January, coupled with the continued fall in oil prices has prompted some economists to push back the date on which the first UK rate rise is expected to 2017. ‘A longer period of low mortgage rates, alongside firmer wage growth and a continued lack of new and second-hand housing stock, should continue to underpin overall pricing during 2016. Activity has been gradually picking up in recent years, but this trend is likely to be hampered by the continued lack of supply of homes coming to the market across the country,’ said Grainne Gilmore, head of residential research at Knight Frank. She also pointed out that the Government has announced a raft of new policies to boost the supply of housing, a recognition that housing is now one of the key areas of focus for the electorate. A breakdown of the figures in the report show that in prime central London the biggest rise in prices has been in Islington with growth of 6.4%, followed by City and Fringe at 5.7%, Marylebone at 4.7%, Mayfair at 3%, and Kensington at 2.5%. In St John’s Woods prices were unchanged and south of the river Southbank saw prices rise by 1.7% and Riverside growth of 4% but elsewhere prices fell, most notably a decline of 6.1% in Knightsbridge. Prices were down 3.8% in Notting Hill, by 3.7% in South Kensington, by 2.7% in Chelsea, by 1.8% in Hyde Park and by 0.2% Belgravia. Average rents across the country rose by 2.7% in the year to September, with the strongest rental growth across Greater London at 4.1% but rental growth in prime central London eased in the second half of last year, and now stands at 0.7%. This comes after prime central London rents peaked at 4.2% growth in May. ‘This market is quite seasonal, and closely linked to the financial services sector. As a result, rents have been affected by restructuring plans announced by major European banks,’ explained Gilmore. Prime rents increased by 2.7% in the South East and the East of England, by 2.1% in the East Midlands, by 1.9% in the West Midlands, by 1.8% in the South West, by 1.6% in Scotland, by 0.9% in Yorkshire and the Humber, by 0.7% in the North West and by 0.5% in Wales and the North East. The report points out that certain sections… Continue reading
Total value of housing in Britain moves past £6 trillion for first time
The total value of Britain’s housing stock has passed the £6 trillion mark for the first time after gains of £385 billion in 2015, according to new research. Housing wealth stands at £4.84 trillion, net of mortgage debt, or 2.7 times GDP and for owner occupiers with no mortgage total property wealth exceeded £2 trillion for the first time, the analysis from real estate adviser Savills shows. It also reveals that the private rented sector’s total value is now £1.29 trillion, up 55% in five years with number of homes in the sector up 28%. Net wealth passed £1 trillion in 2015, overtaking that held by mortgaged owner occupiers for the first time. The total value of homes in London exceeded £1.5 trillion for the first time at £1.612 trillion, accounting for more than a quarter of the total value of housing stock in the UK and having risen by £589 billion in five years. The South of England saw total value growth of £179 billion, exceeding London growth for the first time in five years while Bristol saw the biggest increase in total housing stock value outside of London, up £4.5 billion to £44 billion. The report points out that residential property has become an increasingly important store of wealth. Total equity now stands at around £4.8 trillion net of borrowing, equivalent to over 2.7 times the GDP of the UK. Over the past 10 years the total value of the UK’s homes has risen by over £1.6 trillion, but the biggest growth, almost £1.2 trillion, was seen in the past three years. This means the UK’s 28.2 million homes of all tenure now have an average value of £218,474, up 18.9% in five years. ‘Value and gains vary sharply according to location and ownership. Gains have been concentrated in equity rich markets, notably London and the south east, particularly benefitting those who own their homes outright. In 2015, for the first time, the total value of owner occupied homes without a mortgage exceeded the total value of those with a mortgage,’ said Lucian Cook, head of residential research at Savills. ‘While the difficulties faced in getting on and trading up the housing ladder and the consequential rise in private renting is well documented, these figures show the scale of the change and challenges faced by Government,’ he added. London and the South East accounted for 57% of total value gains at £218 billion in 2015 and now have a total value of almost £2.8 trillion. This means that 26% of the UK’s homes now account for 45% of the total value, and takes the average value of a home in London to £430,436 and £284,805 in the South East. At the other end of the spectrum, the total value of homes in the North East equates to less than a tenth of London’s value, having risen just 2.2% in 2015. At a total of £135 billion, the region’s… Continue reading
