Tag Archives: crisis
Prime property country locations set to outperform London, new analysis suggests
Country locations are set to outperform London as the prime property markets enter the next stage of the housing cycle, according to a new analysis report. Stamp duty changes introduced in the 2014 autumn Statement have had a bigger impact than many forecast, the effect initially being masked by the uncertainty in the run up to the General Election, according to the report from property firm Savills. However, it points out that both the prime housing markets of London and the country have reacted relatively rationally to the changes. Indeed, small price falls were recorded in the higher value markets where the stamp duty liability has increased but by contrast, in the lower value prime markets where there is now a tax saving, values have continued to rise, albeit at a slower rate than in 2014. The challenges faced by the prime markets of late are reflected by the fact that the total value of housing stock in Kensington and Chelsea fell in 2015, though the loss of £693 million is dwarfed by the gains of £68 billion over the preceding 10 years, the report explains. Transaction levels, though undoubtedly lower than in 2014, have not collapsed as some would argue. Figures from the Land Registry indicate a 5 to 10% fall above £1 million across England and Wales. ‘While this suggests there is still a market for appropriately priced stock, it also means we are unlikely to see cuts to rates of stamp duty at the top end,’ said Sophie chick of Savills research team. ‘Indeed, in the 2015 autumn Statement, more stamp duty changes were announced for buyers of additional homes (second homes and buy to let) causing further small price falls in markets with high concentrations of such buyers in the last quarter of last year,’ she explained. Chick pointed out that to understand what lies ahead it is helpful to look back and identify what happened between 2002 and 2005 when the market was at a similar stage in the housing cycle. ‘In prime London, over the three and a half year period from June 2002, prices increased by just 5%. Currently, average values have seen no net growth since the first quarter of 2014, so if the market follows a similar trend we would expect prime London values to remain broadly flat through 2016 and most of 2017,’ she said. ‘Over the same period, prices in the prime country markets outperformed London with an average increase of 17%. We expect a similar trend this time round as the ripple effect took hold and more equity flows to the housing markets beyond London,’ she explained. The analysis shows that in terms of how residential value is concentrated, Kensington and Chelsea sits far ahead of any other borough or local authority across the UK, not just by virtue of high property prices but also the relative density of housing in the borough. The combination of the two means that on average in… Continue reading
Property prices in England and Wales up over 7% year on year
Residential property prices in England and Wales increased by 2.5% in January and are not 7.1% higher than a year ago, the latest index shows. This takes the average house price in England and Wales to £191,812 but the average price in London is much higher at £530,409, according to the data from the Land Registry. The house price index also shows that the number of property transactions has decreased over the last year. From August 2014 to November 2014 there was an average of 81,656 sales per month. In the same months a year later the figure was 78,652. The January data for London shows a monthly increase of 2.8% and year on year growth of 13.9% the North East saw the smallest annual price increase of 0.2% while Wales recorded the greatest monthly price rise of 3.7% and the North East also saw the most significant monthly price decrease with a fall of 1.6%. Within London the borough with the highest annual price rise was Hillingdon with a ise of 15.5% and Hillingdon also experienced the highest monthly price increase at 2.4%. Camden saw the smallest annual increase of 3% and Camden and Islington both recorded the only monthly fall, each seeing prices down by 0.4%. The number of properties sold in England and Wales for over £1 million in November 2015 increased by 14% to 1,091 from 953 in November 2014. The number of properties sold in London for over £1 million in November 2015 increased by 9% to 657 from 601 in November 2014. In the months August 2015 to November 2015, repossession volumes averaged 409 per month. This is a fall compared to the same period a year earlier, when volumes averaged 801 per month and the report says that repossession volumes appear to be exhibiting a downward trend. The region with the greatest fall in repossession sales was the South West with a decrease of 78% from November 2014. All regions experienced a decrease in the number of repossession sales in November when compared with the same period a year earlier. Continue reading
Rental prices in UK up by 2.6% in last 12 months
Private rental prices paid by tenants in the UK rose by 2.6% in the 12 months to January 2016, up from 2.5% in the year to December 2015, the latest index shows. The data from the Office of National Statistics (ONS) reveals that rental prices grew by 2.7% in England, 0.3% in Wales and 0.8% in Scotland with rents up the most in London at 3.9%. It means that overall rents are up 0.1% in annual terms compared with the year to December 2015, and up 0.7% compared with the annual price increase in January 2015. The regional breakdown of the figures shows that annual rental price growth varies, rising in Yorkshire and The Humber from 0.8% to 1.2%, and in the North East from 0.6% to 0.9%, whereas it fell in Wales from 0.7% to 0.3%. Rental growth in Scotland has gradually slowed to 0.8% in the year to January 2016, from a high of 2.1% in the year to June 2015. Rental prices in England show three distinct periods, increasing from January 2005 until February 2009, then decreasing from July 2009 to February 2010, and increasing again from May 2010 onwards. When London is excluded, England shows a similar pattern but with slower rental price increases from around the end of 2010. Since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year, with January 2016 rental prices being 2.7% higher than January 2015 rental prices. Excluding London, England showed an increase of 2% for the same period. A shortage of suitable properties combined with strong demand, both from people priced out of the housing market and those who prefer to rent, lies behind these increases, according to Steve Bolton, founder of Platinum Property Partners. He believes that the Government is taking an enormous gamble on the private rental sector through its announced changes to buy to let investment and this could affect prices and growth. ‘Ending tax relief for landlords and levying a higher rate of stamp duty will ultimately increase investor’s costs, forcing many to push tenants’ rents up to remain profitable. Standards may also be reduced, with landlords having fewer funds to invest in the quality of their property. In some instances, landlords will be forced to sell, adding additional strain to private rented sector housing stock,’ he explained. ‘It is hard to see how the proposed changes will benefit prospective first time buyers. The biggest barrier to homeownership is a lack of adequate property supply, and discouraging buy to let investment will do nothing to alleviate this. With prices standing at such high levels, first time buyers need to raise a substantial deposit and as rental prices continue to grow this will become ever more difficult,’ he added. Jonathan Hopper, managing director of the buying agents Garrington Property Finders, believes that the traditional January uptick in activity and a scramble by second home and buy… Continue reading
