Tag Archives: crisis
UK property prices record surprise 1.3% rise in June
Property prices in the UK increased by 1.3% in June but the underlying pace of growth is slowing with year on year prices down to 8.4% from 9.2% in May, the lowest since July 2015. This takes the average price to £216,823 and the data from the Halifax house price index also shows that quarterly growth was 1.2%, also down, compared to 1.5% the previous month and the lowest since December 2014. ‘House prices continue to increase, albeit at a slower rate, but this precedes the European Union referendum result, therefore it is far too early to determine any impact since,’ said Martin Ellis, Halifax housing economist. He pointed out that the month on month changes can be erratic and the quarter on quarter change is a more reliable indicator of the underlying trend. The figures show that despite Brexit the UK housing market is fundamentally strong, according to Russell Quirk, chief executive of eMoov. ‘With a continuing, acute shortage of new housing being built and a growing population even if immigration numbers are now curtailed, the demand and supply imbalance and the prospect of even low interest rates will underpin the market,’ he said. David Cheetham, market analyst and FX broker at XTB, pointed out that the month on month rise could be regarded as unexpected following an increase of just 0.6% the previous month. ‘The rise is somewhat surprising considering the impact on house building shares and property funds that has been seen following Britain's decision to leave the EU last month,’ he explained. ‘The worst hit shares in the FTSE100, in both the immediate aftermath and days that followed the Brexit were in the building sector with the majority of observers forecasting the decision to be negative for UK house prices. So far this week numerous asset managers have taken the steps of suspending trading in their property funds as withdrawals have surged amongst jittery investors,’ he pointed out. Sales should start to pick up in the coming months, according to Rob Weaver, director of investments at property crowdfunding platform Property Partner. ‘The fundamentals in the housing market remain unchanged. People still need a roof over their heads. There’s been a stand-off between sellers and buyers with transactions dropping off since the stampede in March to beat the stamp duty deadline. But sales should start to pick up in coming months with the weight of uncertainty now partially lifted,’ he said. ‘While people clearly delayed house purchases in the lead-up to the referendum, that backlog in transactions should unwind through the second half of the year. Life decisions like moving house can’t be put on hold forever. During periods of volatility in the stock and currency markets, investors tend to prefer assets which can provide a reliable income, combined with lower risk to preserve their wealth. For investors, residential property offers both of these attributes,’ he pointed out. ‘Historically, residential property has been the best performing… Continue reading
House sales failures in UK up 9% quarter on quarter
The number of house sales failing to successfully complete in the UK increased in the second quarter of 2016, with more than one in four sales falling through. A house sale fall through rate of 29% was recorded by the latest research from independent home buyer Quick Move, up 9% from the first quarter of the year. The annual year to date fall through rate ended the second quarter of the year at 25.18%, up 3.56% since the end of the first quarter, the data also shows. According to Danny Luke, business manager at Quick Move, the first half of 2016 has been an interesting time for the UK property market. ‘Strong demand and low supply in many areas has led to a strong financial performance, but the market also faced a great deal of uncertainty with stamp duty changes, more challenging conditions for investors, and most recently the European Union referendum. This uncertainty is reflected in the reasons why sales fell through before completion,’ he said. The top reason was a buyer changing their mind, accounting for 47.37% of failed sales, followed by 15.79% due to the seller renegotiating a better offer with a new buyer, the same amount was due to difficulty securing a mortgage and the buyer or seller pulling out of the sale because they felt it wasn't progressing quickly enough while 5.26% was due to legal issues. ‘It seems the uncertainty that has dominated the property market in the last quarter has led to prospective buyers putting in panic offers. It used to be usual to do at least a second viewing, potentially even a third, before making a formal offer on a property, but shortage of supply in some areas, alongside widespread market uncertainty as we drew closer to the referendum, led to many prospective buyers feeling pressure to make offers on a first viewing, fearing that they may miss out if they delay,’ Like explained. ‘Once the dust has settled and the sales start progressing, the cold feet can start to set in, possibly due to nerves about the size of the financial investment and whether they've selected the right property or when surveys highlight potential issues,’ he pointed out. ‘As we move forward in post-Brexit Britain, I would expect to see the market slow, and potentially see the fall through rate continue to rise, as market uncertainty and instability continue,’ he concluded. Continue reading
Prime London property market prices down 0.2% in second quarter of 2016
Pre referendum uncertainty triggered further small price falls in the prime housing markets of London in the second quarter of 2016, according to the latest research. It also slowed growth in regional markets dependent on London buyers, according to the research report from international real estate adviser, Savills. A marginal 0.2% fall in the three month period prior to the referendum left average prime London values down 0.7% year on year and 1.4% below their pre December 2014 level, when stamp duty rates on high value homes were increased. Falls were most pronounced in prime central London where prices fell 1.4% in the quarter. This left values in London’s most exclusive markets on average 3.9% down year on year and 8% below their peak in the third quarter of 2014. Weakened sentiment and a slowing of the London market also impacted the prime regional markets, resulting in small quarterly price falls of 0.4% in the suburbs. Property in the inner and outer commuter zones around London saw marginally positive price growth in the quarter limited to just 0.2% and 0.9% respectively, as the market slowed in response to a lack of urgency amongst buyers. ‘There have been conflicting signals in the market in the period post referendum, which suggests the impact of a vote to leave the European Union will only become clear over coming months as the market finds its level,’ said Lucian Cook, head of UK residential research at Savills. ‘Falls in sterling have prompted some international buyers to re-enter the market, while there has also been a fair share of speculative bids from those hoping to secure a bargain. Against this context, sellers have generally taken a pragmatic approach around pricing without having to slash their expectations,’ he explained. ‘Prime regional markets are at a different stage in their cycle, having been slower to recover peak 2007 values, and therefore appear to have been less affected by pre referendum uncertainty,’ he added. Continue reading
