Tag Archives: crisis
UK rental price growth slows but still over 10% higher than a year ago
Rent price rises slowed in every region of the UK over the three months to August 2015 compared to the previous three months, the latest lettings index shows. But they are still rising at double figures rates on an annual basis and are now 10.5% higher than a year ago, according to the finding from the HomeLet rental index. The data shows that across the country the average tenancy signed during the three month period was £992 per month but in Greater London it was £1,558 per month. The index report also points out that the trend is particularly marked in areas where rents have been rising exceptionally quickly this year, notably the South East of England and East Anglia. Nevertheless, on an annual basis, rent prices remain significantly higher than a year ago, with the average UK rent 10.5% higher than in the three months to August 2014. Overall, the average UK rent on new tenancies has increased 1.6% in the three months to August 2015, compared to an increase of 2.2% for the three months to July and June 2015. In the three months to August 2015, with the exception of Wales, where rents rose by 2.5%, no region saw rents increase by more than 2%. Three regions, the South East, North West and North East of England, saw rents fall during this period. The biggest fall was in the North East, where rents paid for new tenancies in the three months to August 2015 were, on average, 2.1% lower than in the three months to July. 'Rents continue to run slightly ahead of house prices, with the majority of the UK still experiencing rising rents, albeit at a much slower pace than we saw in the early part of 2015,' said Martin Totty, chief executive officer of the Barbon Insurance Group, HomeLet’s parent company. 'On an annualised basis, however, rents in most regions are still significantly higher than the same period a year ago, with only the North West reporting lower rents for new tenancies in the three months to August 2015 than for the same period last year,' he added. He explained that there is a robust rental market which is consistent right across the UK with only one or two exceptions, such as East Anglia, where prices rose sharply in 2014 and early 2015 but have now slowed notably, and the South West, which continues to see annual price rises in double figures. Continue reading
Not enough new homes are being built in many metro areas in the US
Despite positive improvements in the labour market in recent years, new home construction is currently insufficient in a majority of metro areas in the United States, new research has found. The situation is contributing to persistent housing shortages and unhealthy price growth in many markets, according to the report from the National Association of Realtors. NAR measured the volume of new home construction relative to the number of newly employed workers in 146 metropolitan statistical areas (MSAs) throughout the US to determine whether home building has kept up with the steadily improving pace of job growth in the past three years. The findings reveal that home building activity for all housing types is underperforming in roughly two thirds of measured metro areas and NAR chief economist Lawrence Yun said that low inventory has been a prevailing headwind to the housing market in recent years. 'In addition to slow housing turnover and the diminishing supply of distressed properties, lagging new home construction, especially single family, has kept available inventory far below balanced levels,' Yun explained. 'Our research shows that even as the labour market began to strengthen, home building failed to keep up and is now contributing to the stronger price appreciation and eroding affordability currently seen throughout the US,' he added. The study examined job creation in 146 metro areas from 2012 to 2014 relative to single family and multi-family housing starts over the same period. Historically, the average ratio for the annual change in total workers to total permits is 1.2 for all housing types and 1.6 for single family homes. The research found that through 2014 some 63% of measured markets had a ratio above 1.2 and 72 percent had a ratio above 1.6, which indicates inadequate new construction. According to Yun, with jobs now being added at a more robust pace in several metro areas, the disparity between housing starts and employment is widening. In 2014 alone, the average ratio of single family permits to employment jumped to 3.7, while the ratio for total permits increased 50 percent to 2.4. 'Affordability issues for buying and renting because of low supply are already well known in many of the country’s largest metro areas, including San Francisco, San Diego and New York. Additionally, our study found that limited construction is a widespread issue in metro areas of all sizes,' Yun pointed out. The markets with the largest disparity of jobs versus home construction, single family, and currently facing supply shortages are San Jose, California, at 22.6, San Francisco at 22.4, San Diego and New York, both at 13.9 and Miami at 11.1. Yun explained that while construction is limited in some markets such as Trenton–Ewing in New Jersey and Rockford, Illinois, they aren’t facing inventory shortages despite having high ratios because their job gains are more moderate. Single family housing starts are seen as nearly adequate to local job growth at a ratio of 1.6 in Jackson, Mississippi, Colorado Springs, Chattanooga in Tennessee, Amarillo, Texas, and St. Louis. Looking ahead, Yun said that there’s… Continue reading
Demand for property under £1 million in London likely to remain strong
Demand for London property priced below £2 million is set to remain strong, with the city’s population forecast to grow by more than 100,000 every year for the next decade. As house prices grow across London, it will create new markets where properties cross the £1 million threshold, according to the latest analysis report from real estate firm Knight Frank. Data from the report shows that annual growth in London's prime market fell to 1.7% in August as changes to stamp duty dampened demand and the number of £1 million plus sales were down by 21% in the year to April 2015. It also shows that annual price growth in prime outer London fell to 3% in August and annual rental value growth decreased to 2.5% in prime central London and 1.2% in prime outer London due to jitters over China and high stock levels. However, there are new areas coming into the prime market. The report explains that new £1 million London neighbourhoods include Hammersmith, Maida Vale, Queen’s Park, Muswell Hill and Vauxhall. The analysis, based on postcode districts where at least 20% of sales have been above £1 million in at least one quarter since the start of 2014, shows that these areas have seen a transformation. Hammersmith (W6) had five such quarters since 2014, making it the area that has undergone the biggest transformation in terms of £1 million plus sales. Other areas include Maida Vale (W9), Queen’s Park (NW6), East Finchley (N2) and Muswell Hill (N10). Further south, Battersea (SW11) and Vauxhall (SW8) which have consolidated their positions as £1 million markets. 'Though it has been an unsettled 12 months, the sub£2 million market has been more immune to recent political and economic events, particularly as this price bracket sat beneath the threshold for the proposed mansion tax,' said Tom Bill, head of London residential research at Knight Frank. 'This market is more closely linked to domestic UK demand and the health of the country’s economy and it is easy to forget the fact the recovery has been stronger than many predicted, underlined by strong GDP data in July,' he pointed out. 'In a further recent sign of the improving outlook, cash bonuses in the 2014/2015 financial year were up 2.7% on the previous year and just 0.1% below their record level in 2007/2008. The result is that price growth below £1 million and between £1 million and £2 million has been stronger than the average in prime central London and prime outer London,' he added. The analysis shows that properties below £1 million grew 17.5% in prime central London and 21.3% in prime outer London in the two years to August 2015, compared to the respective averages of 9.5% and 15.1%. Between £1 million and £2 million, prices grew 15.7% in prime central London and 18.5% in prime outer London over the same period. Demand has also held up better for sub £2 million properties since December’s increase in stamp duty. There were 3.6% more viewings in the… Continue reading
