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UK households positive about property market, latest sentiment index shows
Households in all regions of the UK perceived that the value of their home rose in August, and at a faster pace than in July, according to the latest house sentiment index. It is the first rise in the index from Knight Frank and Markit Economics in the month of August, which is typically a quieter summer period, since 2009. The index, regarded as a bellwether for house price growth across the country, says that it reflects the upward pressure on house prices due to a lack of sock across the residential property market. Households in all UK regions expect house prices to rise over the next 12 months, although the rate of expected increases eased in many regions including London and the South East and some 6.6% of households expect to buy a home over the next 12 months, up from 5.3% in the previous month and the joint highest since July 2014. Some 23.6% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, the second highest reading since October last year. Just over 4% said that prices had fallen, resulting in a HPSI reading of 59.5. This is the twenty ninth consecutive month that the reading has been above 50. Any figure over 50 indicates that prices are rising, and the higher the figure, the steeper the increase. Any figure below 50 indicates that prices are falling. August’s reading marked a rise from the 58.6 recorded in July, and while matching June’s reading, it remains well below the record high of 63.2 achieved in May last year. Households in all 11 regions reported that prices rose in May, with those in the South East at 64.3 reporting the biggest rise. This is only the second time in the last four years that the perceived increase in South East prices has outstripped that in London. In fact, the reading for London eased notably after a spike in July, dipping from 69.6 to 63.4, the second largest monthly drop since late 2010. While Londoners still perceive that prices are rising, they are reporting that the pace of increases has eased. Tim Moore, senior economist at Markit, pointed out that UK house price sentiment has now strengthened considerably from the year and a half low reached in February. ‘While still below the high water mark reached last May, the latest survey indicates that perceptions of rising property values are more widespread than at any time seen during the five years leading up to 2014,’ he said. ‘The uptick confounds the usual seasonal summer lull and comes in spite of heightened expectations of a Bank of England rate rise next year. In particular, August’s spike in current price perceptions across the South of England suggests that an acute shortage of supply remains the major factor driving up property values,’ he explained. ‘Looking ahead, the prospect of a rate hike next year does appear… Continue reading
Record number of Australian suburbs have homes at over a million dollars
The number of suburbs in Australia with homes values at a millions dollars or over has climbed to 437, a new record and an increase of 23.1% year on year. The data from CoreLogic also shows that the number the number of suburbs with a median value of at least $1 million comes off the back of an 11.1% rise in combined capital city home values over the past 12 months. The rise in values has been strongest in Sydney and Melbourne and the jump in the number of suburbs on the list is evidence of these strong value rises. To be eligible for ranking as a million-dollar-suburb, each suburb had to achieve a minimum of 10 sales over the past year. Sydney suburbs clearly dominate the record board and account for 17 of the 20 most expensive suburbs nationally. Only one Melbourne suburb and two Perth suburbs made it to the millionaire suburbs list. In other states the most expensive suburbs are a long way from making it into the top 20. For units, Dawes Point in Sydney at 14th spot is the most expensive suburb and is the only suburb on the top 20 list for units. A breakdown of the figures shows that New South Wales had the greatest number of suburbs at 302, up from 232 the previous year. New South Wales's share of suburbs with a median value of $1 million or higher is also rising quite sharply. In 2010 57.6% of $1 million suburbs nationally were in New South Wales, the proportion has now increased to 69.1%. With 61 suburbs, Victoria is the state with the second highest number of suburbs with a median value in excess of $1 million and far less than New South Wales's number, but 14% overall. The rest of Australia has very few. According to Tim Lawless, CoreLogic RP Data research director, the data reflects the effect of strong capital growth rates which show that Sydney values are growing substantially faster than all other areas and the cost of housing in Sydney is much higher than elsewhere. Additionally, those that have owned a Sydney property for at least several years are likely to have built up a substantial level of equity in their home. Of the 437 suburbs with a median value of at least $1 million over the past year, 427 or 97.7% of suburbs were located in a capital city. There were also significantly more suburbs making the list for houses at 424 than units at 13. In fact, all of the suburbs listed for units were situated in Sydney and were located adjacent to or on the water. While the number of suburbs with a median value of at least $1 million has risen sharply over recent years, CoreLogic RP Data also recorded a sharp rise in suburbs with a median value of at least $2 million. In June 2014, 32 suburbs had a median value in excess… Continue reading
Property sales fell back in UK in July, latest transaction data shows
Property sales in the UK fell back between June and July by 4.4%, according to the latest seasonally adjusted estimate from HMRC. There were a total of 100,720 residential transactions and 10,100 others in July, the data shows, some 0.2% higher compared with the same month last year. Peter Rollings, chief executive officer of agents Marsh & Parsons, pointed out that it is the first rise on an annual basis for this measure for seven successive months. ‘In July, sales may have slipped back slightly month on month, but we need to remember that the market was working overtime in June to regain ground lost before the election,’ he said. He explained that ever since the changes to stamp duty at the end of 2014 property taxation has become more of a sticking point in London, and here buyer demand has slowed somewhat at the top-end. ‘It will take a while for these changes to fully bed in, and in the meantime house price rises and property sales in the capital may be outshone by other UK regions for the months to come,’ he said. ‘But that’s not to say they’ve fallen out of line and with an average 12 buyers chasing every available property on the market, the strength of the demand for homes in London will continue to push growth up a gear,’ he added. Doug Crawford, chief executive officer of conveyancing services provider myhomemove, also believes that the general election has been a factor affecting the property market in recent months. ‘The general election’s outcome assured buyers and sellers that the housing market was likely to remain stable, leading to a spike in the number of property transactions in June. Today’s HMRC figures show that the number of transactions has barely changed over the last year and this begs the question about why a year’s steady improvement in the economy hasn’t led to an increase in home purchases, particularly when mortgage availability and rates have been so favourable,’ he said. ‘The main impediment has been a serious shortage in supply. There is a lot of appetite from buyers but not enough homes for sale to meet demand. This mismatch is stoking price rises. In some areas we have even seen instances of gazumping, as sellers look to make the most of competition between buyers by accepting higher offers,’ he explained. He believes that the big question looming in the background is the timing of an interest rate rise from the Bank of England. Many would be buyers are keen to purchase while mortgage rates are so low. Increased anticipation of rate rises is putting greater pressure on buyers and competition for homes for sale could drive up prices further in the short term,’ he added. Continue reading
