Tag Archives: crisis
UK residential housing market sees highest activity for six months
UK housing market activity has climbed to its highest level in six months and the second highest monthly level on record, new data shows. September saw just 0.5% fewer valuations carried out than in March 2015 which was the highest on record, according to the latest research from Connells Survey & Valuation. On an annual basis, total valuation activity is up 29% compared to September 2014, after a 23% month on month rebound since August 2015. ‘Britain’s housing market is going from strength to strength. Against a brightening economic background, players in all parts of the market are feeling more confident about their prospects. Valuation activity is growing beyond the seasonal pick-up at the end of August, with year-on-year growth gathering momentum,’ said John Bagshaw, the firm’s corporate services director. The data also shows that the number of valuations carried out specifically for first time buyers rose by 25% in September compared to the previous month and an 18% increase compared to September 2014. Valuation activity among established home movers performed even better. The number of valuations carried out for those moving house rose 26% when compared to last month and 23% since September 2014. ‘First time buyers aren’t just feeling more confident, they are now following this up with real action and contributing a good portion of growth in the UK housing market. There are no signs yet that schemes such as Help to Buy are going to be phased out, helping to suppress the barriers to setting a first foot on the ladder,’ Bagshaw explained. 'Meanwhile, wages are growing faster than inflation and purchase prices have cooled a little in recent months, all contributing to an acceleration in numbers of first time buyers. Moreover, the latest focus from the government on starter homes is a promising sign there is at least a strong intention to maintain support at the bottom of the ladder,’ he pointed out. ‘Home movers have also been buoyed by the same trends. Rising real term wages combined with steadily increasing property values mean that many of those who are already fortunate enough to have a place of their own feel it’s a great time to buy,’ he added. The data also shows that remortgaging experienced another stand out month. The number of valuations for those thinking of taking a fresh mortgage out against the value of their current home rose 16% on August of this year and 49% since September 2014. Meanwhile the buy to let sector has seen steadier growth, with the number of valuations growing 13% since September last year. On a monthly basis, valuations activity carried out on behalf of buy to let investors grew by 21% compared to August. ‘The remortgaging sector is continuing to power ahead with plenty of people still opting to improve rather than move. High demand in this sector is still being driven by the large number of good mortgage deals out there, as homeowners rush to capitalise on the value of… Continue reading
Farmland prices in England reach new record, but prices are stabilising
The average price of English farmland hit a new record price of £8,306 an acre in the third quarter of the year, but values rose by just 0.5%, the latest index shows. Year on year growth the sector has seen price growth of 8% but this has slowed after a period of exceptional growth, according to the data from real estate firm Knight Frank. The report shows that over five years growth has averaged 43% and 198% over the last decade so a slowdown was to be expected, particularly as availability has started to increase and agricultural commodity markets remain weak. The big question now is whether prices will actually start to fall. ‘Our view is that in terms of supply and demand the farmland market has now reached a state of equilibrium,’ said Andrew Shirley, head of rural research at Knight Frank. ‘This means that while prices may rise or fall slightly on a quarter by quarter basis over the next year or two, we are unlikely to see the price growth of the past 10 years significantly eroded, unless supply increases substantially or demand drops off drastically,’ he added. The report forecasts a period of potential price stability and points out that over the past five years farmland has outperformed many other asset classes, including gold which is down 10%, and it has even kept pace with London’s luxury residential market which has seen growth of 43% over the same period. ‘This strong performance brought new buyers into the market, including a wide range of investors from both the UK and abroad. However, potential purchasers, particularly farmers, have gradually become more considered in their approach to acquisitions since the beginning of 2015,’ the report says. ‘This is partly due to a prolonged period of low commodity prices, but also reflects the perception that the market was reaching a peak,’ it adds. The report explains that the availability of farmland has also increased. So far this year around 20% more land has been advertised publicly compared with 2014. ‘As a result, what we are experiencing now is a market that is much more in equilibrium in terms of the balance between supply and demand. Prices are unlikely to fall or rise to any great extent over the next few years because buyer demand remains strong, albeit cautious,’ said Shirley. ‘Supply, while up on the year, is also low in historic terms and the market is unlikely to be saturated,’ he commented, adding that a sudden upwards shift in interest rates could put some pressure on more farmers to sell up, but the indications from the Bank of England seem to point to a gradual rising of rates starting in the second half of 2016. Price variability on a local, as well as a regional level, is also likely to grow as a dominant theme of the market, he suggests. ‘Extremely high prices will continue to be paid for large blocks of top quality… Continue reading
New property tax regime hits prime property sales and prices in Edinburgh
Demand for prime properties for sale at £1 million and above is on the rise again in Edinburgh after a sharp decline in activity immediately after the introduction of the new property tax. The Land and Buildings Transaction Tax (LBTT), introduced on 01 April this year, is credited with leading to surge in demand beforehand and a dampening of demand afterwards. But now, according to Scottish property consultants CKD Galbraith, there are signs that prime property buyers are coming back to the market, although the available data shows how strong the effect has been. The first three months of 2015 saw 56 properties sold at £1 million plus in Edinburgh alone and there was a surge in the week before the introduction of LBTT when 30 of the 56 sales were completed under the old Stamp Duty system. Under LBTT, the buyer pays different rates of tax on the portion of the purchase price that falls within various bands, rising to 12% for the portion of the purchase price over £750,000. Registers of Scotland recorded a dramatic decline in subsequent sales at the £1 million mark from April until September with only three sales successfully completed in Edinburgh. ‘Our recent research shows that buyer and seller confidence is returning following the introduction of LBTT in April and the UK general election in May, with an increase in the number of properties coming to the market in Edinburgh,’ said Jamie McNeill, head of residential at CKD Galbraith’s Edinburgh office. ‘We are currently handling a number of private sales in the £1 million plus market in Edinburgh and are experiencing a rise in the number of local, national and international buyers registering with our Edinburgh office looking for prime property in the city centre,’ he explained. ‘With the tax changes for properties over £1m, the number of sales at this level is considerably lower than at its peak in March this year, however we expect the number of transactions at this level to continue to increase throughout the remainder of the year,’ he added. The new tax has affected the price of prime property in Edinburgh, according to the latest research from Knight Frank, with values up by just 0.4% between July and September and the rate of annual price growth in the city slowed to 2.5%, its lowest level since September 2013. The Knight Frank report points out that a £900,000 property now attracts a LBTT bill of £66,350. Previously, buyers would have paid £35,000 in stamp duty. Against this backdrop, a two speed market has emerged in the city. Price growth has been driven primarily by the sub-£500,000 market, which has proven to be more resilient to the recent tax change. As a result, price growth at this level has been stronger than the average for prime Edinburgh properties, the report explains. The average value of homes below £500,000 has risen by 1.1%… Continue reading
