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House prices rise in Portugal for first time in five years
House prices in Portugal increased in January as the country’s economy expands and the unemployment rate falls, according to the latest monthly market survey from the Royal Institution of Chartered Surveyors. It is the first time that prices have increased since the RICS/Ci survey was launched in 2010 and comes at a time when buyers demand is increasing. RICS says that improving employment is being reflected in rising new buyer demand and for over 12 months now, new buyer enquiries have been in positive territory and national confidence has reached a series high of +32. It also says that the outlook for sales volumes is strengthening and sales expectations are more elevated than at any other point in the survey’s four year history. The Portuguese economy expanded for the first time since 2010, albeit modestly, with average annual GDP growth of 0.9%. After a three year period in which GDP contracted by nearly 6%, a recovery does now appear to be emerging. The rate of unemployment has fallen by nearly 2% over the past 12 months and now stands at 13.4% having reached a peak of 17.7% in early 2013. The report describes the emergence of a recovery in house prices, supported by a consistent rise in confidence but also points out that in the lettings market, rents are still falling for now, although survey respondents’ expectations point to a more stable trend on the horizon. In the sales market, buyer demand continued to increase, with the pace of improvement accelerating slightly over the month. Meanwhile, sales continued to rise, extending an uninterrupted positive run dating back to February 2014. Moreover, respondents’ sales expectations are more elevated than at any other point over the past four years. Looking ahead, prices are expected to continue to rise over the next three months but RICS explains that a sustained run of positive data will be needed before it is in a position to talk about a genuine recovery. At the regional level, prices are now rising in both Lisbon and the Algarve, but remain more or less stable in the Porto market. In the lettings sector, tenant demand continues to rise gradually and the number of new landlord instructions is diminishing. However, rents are still falling for the time being, although respondents do expect a flatter trend to emerge in the coming months. ‘Even though the volume of new credit is still low, it has been reported by several real estate agents that banks are now more positive about the market,’ said Ci spokesman, Ricardo Guimaraes. ‘Some already have commercial campaigns, announcing lower spreads. This might be the element that was missing to broaden out the recovery that was primarily located in Lisbon,’ he added. According to RICS senior economist, Josh Miller, the Portuguese housing market reached an important milestone in January with prices rising for the first time since the country’s bailout programme. ‘Whether this trend can be sustained depends on the broader economic recovery…. Continue reading
UK rental market returns to growth, latest rental index shows
Residential rents for new tenancies in the UK increased by 2.5% during first month of the year, according to the latest figures to be published. It means that the rental market has returned to growth with nine out of 12 regions covered by the HomeLet rental index reporting rising rents, taking the average rent in the UK to £889 or £707 excluding Greater London. The figures show the highest growth occurring in the East Midlands, Scotland and East Anglia with rents rising 6.2%, 5.7% and 5% respectively. Only the North East of England, Northern Ireland and the West Midlands have seen a decline in rental prices,’ the index data also shows. Overall the index report says that after a period of seasonal adjustment towards the end of 2014, which saw rental prices falling in many parts of the country, the rental market has started 2015 with a return to growth. The average rent in the UK is now £889, compared to £867 at the end of 2014, and £799 in January 2014. A breakdown of the figures show that the average rent in the East Midlands is now £617, a monthly rise of 6.2% and an annual increase of 7.2%. In Scotland it is £651, a month on month rise of 5.7% and year on year up 9.4%. East Anglia has seen a monthly rise of 5% but year on year average rents are up only 1.6%, taking the average to £762 while in the South West the average is £830, up 3.5% month on month and up 10.2 compared with January 2014. Yorkshire and Humber has seen rents rise by 3.2% month on month and 10.1% year on year to £613. Greater London has seen the steepest rise with average rents reaching £1,425 in January, up 2.3% month on month and an annual rise of 13.4% while other regions have seen more muted rise with Wales seeing a month on month rise of 2.3% and an annual rise of just 1% to an average of £586. The North West saw a month on month rise of just 0.8% and an annual rise of 5% taking average rents to £650 while the South East was up 0.7% month on month but over 12 months average rents were up 4.2% to £873. Everywhere else saw rents fall month on month, down 1.1% in the West Midlands to £635 but the region has seen rents rise by 4.8% year on year. In North East they were down 2.6% month on month to £518 but up 2.6% year on year. Northern Ireland has had the poorest performing rental sector. Average rents were down 0.5% to £556 and down 2.3% year on year, the only annual decline in the whole of the UK. Continue reading
UK housing market optimism at lowest level for 18 months
House price optimism in the UK fell to its lowest level for 18 months in January as lending got off to sluggish start. While the Halifax House Price Index found prices increased 2% to £193,130 in January, some 60% of those surveyed for the lender’s latest housing market confidence tracker report expect the average property price to be higher in one year’s time. This means that house price optimism has fallen from 62 to +52, the lowest this figure has been since June 2013, when 52% expected a rise in property prices. In June 2013 inflation was at 2.9% compared to 0.3% currently, employment was just over 30 million compared to 30.9 million, and lending levels were at £15 billion compared to 17 billion. Despite the fact that GDP for 2014 grew at 2.6% and all nine members of the Bank of England’s Monetary Policy Committee voted to hold interest rates at 0.5% the dip in confidence levels over house prices mirrors that over the economy in general. ‘More than half of consumers still believe house prices will be higher than they are now in a year’s time; however optimism has continued to weaken. Despite this the fundamentals remain in place and we’re now seeing a return to the seasonal trend for house price activity,’ said Craig McKinlay, mortgages director at the Halifax. ‘Traditionally, a slow start builds to the summer before another lull and then a further period of increase followed by a gradual easing at the end of the year,’ he added. But he pointed out that of more concern are the figures from the Department of Communities and Local Government showing a slowdown in the number of new homes being built. ‘It’s widely acknowledged that the UK needs an increase in the amount of new housing being built,’ said McKinlay. ‘The Lloyds Banking Group Commission on Housing targeted 2 to 2.5 million new homes built by 2025 new homes to be built before 2025. If we are to address demand the increase in new homes coming onto the market needs to be sustainable,’ he explained. Continue reading
