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Buy to let surges in UK as first time buyer activity retreats
May has seen an acceleration in property valuations for buy to let landlords, while first time buyer activity has retreated, according to the latest research. There were 33% more buy to let valuations conducted in May than at the same time last year. Conversely, valuations for first time buyers declined by 4% over the same period, the data from Connells Survey and Valuation shows. On a monthly basis, May’s buy to let valuations were up 3% on April, while valuations for first time buyers fell 2% between the two months and the buy to let market is booming, according to John Bagshaw, corporate services director of Connells Survey and Valuation. ‘Would be landlords are eager to enter the sector and current landlords look to expand. However for first time buyers, May was not just less positive than the rest of the housing market, but also disappointing in comparison to the previous month. Previously, valuations for new buyers had proved resilient in April, even with uncertainty about the impact of the election result on home buyers,’ he said. He explained that fewer people are looking to buy their first home means more tenants sticking to the rental sector. ‘As such, new landlords enter the market and those already in the sector grow their business to capitalise on the increased demand. Yet what remains unclear is how long this contrast in fortunes will continue,’ he added. May’s remortgaging figures also outperformed the overall housing market, with these valuations up 9% on April’s figures. This equates to a 31% increase on the number of remortgaging valuations since May 2014. Meanwhile, valuations for those existing home-owners looking not to remortgage but to move to a new property posted a 4% increase since April. This has contributed to an 8% increase in the number of home-owner valuations since May 2014. ‘Remortgaging is going from strength to strength right now. Record low mortgage rates are the main reason for this, and with inflation still near zero and flirting with a negative reading, the Bank of England is likely to play it safe and keep rates at bargain-basement levels for the foreseeable future,’ said Bagshaw. ‘Yet the recent cooling in home mover activity points at another cause for the remortgage rush. Increasingly, home owners are opting to upgrade the property they already have, be it through a loft conversion, conservatory or major face lift, rather than sell up and get a new one. In short, people are improving not moving,’ he pointed out. He believes that people feel financially secure enough to use their home as a guarantee against which to raise big capital, a sentiment that was absent for some time immediately after the economic crash. ‘However, they still don’t feel the property market overall is safe enough to risk trading up what they already have. For a government reliant on movement… Continue reading
Call for new housing to match demand for homes in Wales
The Building Societies Association (BSA) has called on all parts of the Welsh housing market to work together to ensure the supply of new housing in Wales keeps up with rising demand. The trade body, which represents all 44 building societies in the UK including the Principality, Swansea and Monmouthshire, made the call as part of its Housing for All conference in Cardiff. Delegates to the conference included local authority representatives, estate agents, developers, housing associations and building societies to discuss the problems and opportunities facing the Welsh housing market. The opening speech at the conference was given by Paul Broadhead, head of mortgage policy at the BSA, who called on the different parts of the market to identify the barriers and opportunities to ensure sufficient housing was provided for future generations within Wales. ‘In Wales there are encouraging signs but the ultimate goal has to be a significant increase in the number of new homes completed each year,’ he said. ‘As mortgage lenders, building societies play their part in fulfilling borrowers’ housing aspirations and as the Help to Buy Wales scheme shows can have a positive effect. But we need action to be taken now to ensure we have sufficient homes for the population of tomorrow,’ he added. The headline speech of the event was made by Lesley Griffiths, Minister for Communities and Tackling Poverty, who pointed out that the government is committed to increasing the supply of homes of all tenures across Wales. ‘We are on track to meet our target of providing 10,000 additional affordable homes, while good progress is also being made on our ambition of supporting the construction and sale of 5,000 homes through Help to Buy Wales,’ Griffiths explained. ‘The sector plays a key role in helping us fulfil our vision for housing in Wales. Through continued partnership working between private, public and third sectors organisations, I am confident we can meet the challenges we face and deliver the additional,’ added Griffiths. Continue reading
Fewer homes coming onto the market in UK, despite positive election result
Hopes for a post-election supply bounce in the UK residential market fail to materialise and selling instructions fell for the fourth month in a row, according to the latest monthly report. Indeed, the average stock of houses per surveyor has fallen by around 12% since the start of 2015, the data from the May report by the Royal Institution of Chartered Surveyors shows. But prices are not suffering with 38% more surveyors expecting higher house prices over three next three months and new buyer enquiries are rising at the fastest rate in over a year. The RICS report shows that house prices rose again in May, and at a quicker pace than in April, as the stock of homes per UK surveyor fell to a record low since the data series began in January 1978. While 34% more surveyors saw prices rise in May, the same month in which the Nationwide Building Society estimated that the average price of a home in the UK has now climbed to £195,000, supply to the market declined with 19% more surveyors reporting a drop in new instructions. Despite the rise in new buyer enquiries, which increased from a net balance of 4% in April to 18% in May, many respondents to the survey expressed some surprise at the lack of post-election bounce in fresh supply following the unexpectedly decisive outcome to the poll. The North West and London saw the sharpest drop in instructions compared with April. More ominously, UK wide listings have now failed to see any meaningful growth since the middle of 2013. Additionally, although respondents' reported a slight improvement in credit conditions with higher perceived loan to value ratios on mortgages to first time buyers and existing home owners, the average number of newly agreed sales per surveyor rose only very marginally to 19, down from 23 in May 2014 and up from 18.9 in April 2015. At a regional level, unbalanced price growth continues to be particularly marked across the market. Surveyors reported the highest price growth over the last three months in the North West, Northern Ireland, East Anglia and the South West. But London is now seeing a slight turnaround, following seven consecutive months in which the net balance for prices was in negative territory, it has now been positive for two months in succession. In the lettings market, tenant demand continued to increase in May on a non-seasonally adjusted basis extending an uninterrupted run of demand growth into a fifth straight month and respondents' anticipate rents will rise across all parts of the UK over the next three months, with expectations most elevated in the East Midlands and the South West. ‘There had been some hope that the removal of political uncertainty would encourage more properties onto the market but the initial indications are that this is not proving to be the case. As a result, it is hardly surprising that prices across much of the… Continue reading
