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UK property prices continue upward as sales fall, latest index shows
Property prices increased by 0.4% overall in England and Wales in August and 0.3% in Scotland but sales fell to a new record low for the month, according to the latest real estate index. Property prices increased by 0.4% overall in England and Wales in August and 0.3% in Scotland but sales fell to a new record low for the month, according to the latest real estate index. The data from Home.co.uk show that the South East remains the UK’s fastest moving regional market and prices outdo Greater London with a six month rise of 6.1%. Overall year on year prices were up 6.5% but this rise to 12.8% of £60,000 in Greater London. Asking prices rose in all English regions, Scotland and Wales month on month with the biggest rises in the East of England and the South East at 0.9% and 1% respectively. The index report says that buyer demand and short supply in London and the southern regions continues to drive the national average higher, but at a lesser rate than last year. The supply crisis is worsening and August recorded the lowest number of properties entering the market for that month since the onset of the financial crisis. It suggests that the key driver for demand is the availability of mortgage finance, which remains abundant. Talk of interest rate rises at the Bank of England has not dented buyers’ appetite. Competition between investors remains fierce in London and surrounding regions where the lack of supply is felt most keenly. Indeed, the data shows that in London and the East of England, the volumes of properties entering the market are down 15% and 18% respectively year on year and down 75% and 73% compared with August 2008. ‘These and other southern regions are clearly sellers’ markets and prices remain firmly on an upward trajectory. Marketing times in the South East region have been the lowest in the country since February. Across much of the nation, marketing times are currently around the lowest we have witnessed since 2008,’ said Doug Shephard, the firm’s director. But he pointed out that in the North marketing times are considerably higher than in the South and prices are not rising appreciably and he predicts further upward pressure on prices over the coming months although the North-South divide remains one of the most daunting imbalances in the UK economy. ‘Whilst the stimulus enabled property boom rages in London and the southern regions, the northern markets continue to stagnate. Price appreciation over the last 12 months in the northern regions lay in the range -0.2% to 1.4%,’ said Shephard. ‘Wales too shows little or no sign of market recovery, with a rise of just 1.4% since September 2014. Looking back across the last five years, we can see clearly the dramatic polarisation that has taken place in the UK property market. Only three regions surpassed the average growth for England and Wales, namely London, the South… Continue reading
Charity calls for new UK garden cities to remain affordable
Homes in existing and proposed garden cities in the UK should be exempt from the proposed extension of the Right to Buy scheme, it is claimed. According to the Town and Country Planning Association (TCPA), a housing and planning charity, this would ensure that garden cities remain socially mixed and affordable places to live. ‘Garden cities built today must have a primary focus on providing homes for everyone in society and in particular those most in need in the current housing crisis,’ Kate Henderson, TCPA chief executive told the charity’s Planning Research Convention. ‘That means that garden cities must include genuinely affordable housing for essential low paid workers whose employment underpins an economy on which we all depend. Garden Cities must also deliver intermediate forms of tenure for people on average incomes trying to get onto the housing ladder,’ she added. The extension of the Right to Buy to housing association tenants, a measure proposed in the forthcoming Housing Bill, has potentially significant implications for the housing offer in both existing and new garden cities according to the TCPA. ‘While the implication of the proposed extension to the Right to Buy in garden cities is not yet known, if there is a genuine commitment to new garden cities by Government then they will have to include a mix of housing types and tenures, as well as providing social and affordable housing in perpetuity,’ Henderson explained. ‘That is why we are calling on Government to provide clarity about whether existing and proposed new garden cities can be exempt from the extension of the Right to Buy,’ she added. She pointed out that in Letchworth Garden City today around 30% of homes are socially rented which is part of the town's success. ‘We believe there is a strong case for existing and new garden cities to be exempt from the proposed extension of the Right to Buy to ensure they are, and in the case of Letchworth remain , vibrant, socially mixed and affordable places to live,’ Henderson concluded. This autumn the TCPA will produce a series of guides designed to provide more detailed information and best practice examples to support those engaged in delivering visionary new garden cities. The guides are intended to be an important resource for a wide range of public and private sector practitioners engaged in the creation of new communities. Continue reading
UK lenders and brokers concerned about new European mortgage directive
Almost three quarters of mortgage brokers in the UK, some 74%, are worried about the impact of the incoming European Mortgage Credit Directive (MCD) on overall lending activity over the next year. A similar number of lenders, 71%, take the same view as MCD implementation approaches, with a six month window from 21st September to 21st March to adopt the new rules, according to new research from the Intermediary Mortgage Lenders Association (IMLA). Unlike last year’s Mortgage Market Review (MMR), many of the MCD changes are of a technical nature involving new approaches to disclosure and documentation rather than major changes to advice, affordability criteria or lending decisions for residential mortgage borrowers. Nevertheless, 40% of brokers believe a smooth implementation of the MCD will be more challenging for the industry as a whole than MMR, including 11% who believe it will be significantly more challenging. The majority of lenders, 71%, believe it will be at least as challenging for industry to implement MCD and this includes 21% who believe it is more of a challenge, although 28% feel it will be less challenging. The UK government has openly questioned the benefits of MCD to UK consumers beyond the high level of protection offered by the existing FCA regime, and its approach to the negotiation and implementation of the MCD has been to minimise the impact on the UK market as far as possible. And the IMLA research also shows industry remains sceptical about a number of incoming changes in the lead up to implementing the MCD. Just 5% of brokers felt the introduction of a second APR will benefit the UK mortgage market, while 70% disagreed, as did 86% of lenders. Similarly, just 9% of brokers feel that replacing the Key Facts Illustration document (KFI) with the European Standard Information Sheet (ESIS) is a beneficial move while 68% disagree. Lenders were again stronger in their opposition with 86% disagreeing that the switch from KFI to ESIS will benefit the market. The research also shows that broker sentiment about market conditions at the midway point of 2015 was broadly consistent with the start of the year, with 50% feeling conditions are improving, compared with 51% in January. This is slightly improved from July 2014 when 46% felt the same. The report notes that 67% of lenders feel conditions are currently improving, up from 53% at the turn of the year and just 44% last summer. IMLA’s research suggests ‘standard’ borrowers and first time buyers have both benefitted from improving access to mortgage finance as the market has adjusted to the MMR requirements. During the first half of 2014 some 34% of brokers had been unable to find a suitable product for at least one standard borrower, but just 25% have reported the same in the first half of 2015. Similarly, 28% had been unable to help at least one first time buyer enquiry in the first six months of last year, but just 20% had this… Continue reading
