Tag Archives: crisis
UK housing market sales at their highest since 2007
Residential sales in the UK in the first 10 months of 2014 were 21% higher than in the same period in 2013 with over three quarters of a million property sales recorded, new research shows. This was the highest for this period since 2007 with the numbers of sales in England and Wales during January through to October 2014 totalling 760,000, according to the research by Lloyds Bank. It also shows that there has been a considerable improvement in sales since the market reached the depth of its recession in 2009. Sales in the first 10 months of 2014 were 60% higher than in the same period in 2009. However, sales remained 27% below the levels achieved at the height of the boom in 2007. Daventry in Northamptonshire experienced the biggest rise in home sales, up by 56%, but all regions saw a rise in sales in 2014. The biggest increases compared with 2013 was 26% in the East Midlands, 25% in the West Midlands and 25% in the North West. The smallest rise was 11% in Greater London. However, London recorded the biggest pick-up in sales over the past five years as a whole with a 74% gain between 2009 and 2014. All regions have seen rises of at least 50% over this period with the smallest rises in East Anglia at 51%, the North at 52% and the South West also at 52%. Sales in all regions, however, remain lower than 2007 levels with transactions in the northern regions furthest below. The North is down 41%, the North West down 37%, and Yorkshire and Humber down 35%. The strongest recoveries have been in southern England with the South West down 19%, East Anglia down 20% and the South East down 22%. The overwhelming majority of towns in this survey, some 97%, saw an increase in sales between 2013 and 2014. The majority of regions recorded an increase in all towns. London, however, experienced a decline in sales in a fifth of its boroughs. In contrast, all towns in the country saw a decline in sales in 2008. ‘The recovery in the housing market continued in 2014 with sales rising further in almost all areas of the country. Low interest rates, improvements in the UK economy and government schemes, such as Help to Buy, all appear to have contributed to the rise in home sales. Despite these improvements, sales both nationally and regionally are still significantly below their pre-recession levels,’ said Andy Hulme, mortgages director at Lloyds Bank. ‘There is a clear north versus south pattern to the housing market recovery with sales closer to their 2007 levels in the south. Indeed, a small number of towns recorded higher sales last year than seven years earlier, but sales remained much lower than 2007 levels in most areas,’ he added. A breakdown of the figures shows that four towns recorded a 50% or more increase in sales between 2013 and… Continue reading
Rents in England and Wales up almost 3% in last 12 months
Residential rents in England and Wales increased by 2.8% in the last year to an average of £763 and are now 16% higher than in 2010, according to the latest rental index to be published. The data also shows that over last five years rents have grown by an average 3% per year but after inflation is taken into account this amounts to just 0.6% annually, the buy to let index from Your Move and Reeds Rains shows. In absolute terms, the average residential rent across England and Wales has grown by £107 since January 2010, to reach £763 as of January 2015. This amounts to an average annual rent rise of 3.0% over the last half decade. However, this represents a real terms increase of 0.6% per annum when adjusted for inflation over the same period. Most recently, rents have fallen on a monthly basis, down 0.6% between December 2014 and January 2015. On an annual basis, rents are 2.8% higher than was seen last January. ‘The nature and affordability of UK housing is transforming before our eyes. In the last five years the private rented sector has successfully absorbed an unprecedented influx of tenants, while rental prices have broadly tracked inflation,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘As ever, the devil is in the detail but as this growth accelerates, even more investment will be necessary for the industry to keep up. So we need more buy to let landlords to help solve the crisis in demand for homes to rent,’ he explained. He pointed out that it is also important to recognise that these figures don’t float in a hermetically sealed chamber. ‘Many other aspects of finance and the housing market feed into this sector. Rents represent a landlord’s attempt to recoup investment at a reasonable market rate dictated by consumer prices, inflation, and basic principles of supply and demand. Over the long term, rents also tend to reflect higher house prices,’ he said. ‘In real terms, rents have risen only incrementally. But any real and sustained growth in rents should offer a clear lesson. As with the purchase market, the only clear way to make rented housing dramatically more affordable is to build far more homes, far more quickly than is currently the case. And until this happens, landlords are likely to continue to earn double digit returns on their investments,’ he added. Eight out of 10 regions saw lower rents in January 2015 than in December 2014. Only the East of England and the North East defied this downward trend, with 1.3% and 0.7% monthly increases in market rents, respectively. The dominant movement towards lower rents in January was led by a 2% month on month drop in the South West, closely followed by the North West with a 1.7% drop, and the East… Continue reading
Home sales in Canada fall to 2% below levels from a year ago
Residential property sales in Canada fell by 3.1% in January compared with the previous month and are 2% below levels recorded a year ago, according to the latest data from the Canadian Real Estate Association. The monthly CREA home index also shows that prices are 3.1% above a year ago. Price gains varied among housing markets tracked by the index with growth of 7.76% in Calgary, 7.47% in Greater Toronto and 5.53% in Greater Vancouver being the largest year on year increases. In other markets prices were up on a year on year in the Fraser Valley, Victoria, and Vancouver Island, while remaining stable in Saskatoon, Ottawa, and Greater Montreal. By contrast, prices declined year on year in Regina and Greater Moncton January sales were down from the previous month in about 60% of all local housing markets and on a provincial basis, the monthly decline largely reflected fewer sales in Alberta and Saskatchewan. ‘As expected, consumer confidence in the Prairies has declined and moved a number of potential home buyers to the side lines as a result. By contrast, housing market trends in the Maritimes are continuing to improve,’ said CREA president Beth Crosbie. Actual, not seasonally adjusted, activity in January stood 2% below levels reported in the same month last year, marking the first year on year decline since April 2014. ‘Comparing sales activity for January this year to sales one year earlier, there was a fairly even split between the number of markets where sales were up versus the number of markets where sales were down,’ said Gregory Klump, CREA’s chief economist. ‘The decline in national sales largely reflects weakened activity in Calgary and Edmonton. If these two markets are removed from national totals, combined sales activity remained 1.9% above year ago levels,’ he explained. The index data also shows that the number of newly listed homes rose 0.7% in January compared to December. New supply climbed higher in just over half of all local markets, led by Edmonton and Greater Toronto. By contrast, Greater Vancouver, Calgary, and Regina posted the largest monthly declines in new listings. The national sales to new listings ratio was 49.7% in January, marking the first time this measure of market balance has dipped below 50% since December 2012. A sales to new listings ratio between 40% and 60%n is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets, respectively. The ratio was within this range in more than half of all local markets in January. The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. There were 6.5 months of inventory nationally at the end of January 2015, its highest reading since April 2013. As with the sales to new listings ratio, the reading for the number… Continue reading
