Tag Archives: crisis
UK residential sales down 2.8% month on month but up almost 10% year on year
Residential property sales in the UK fell by 2.8% between December 2015 and January 2016, according to the latest data published by HMRC, the UK’s taxman. However, the seasonally adjusted sales figure is 9.7% higher compared with the same month last year, with transactions reaching 105,940. Doug Crawford, chief executive officer of My Home Move, believes that it is significant than January sales are up considerably year on year. ‘This could be accredited to a spike in purchases by additional home buyers looking to escape the rise in stamp duty, set to be introduced in April. This may continue to provide a short term boost for a matter of weeks,’ he said. ‘However, we are now explaining to new clients that it is too late to guarantee completion before 01 April. Looking ahead, the question is whether the market will sustain this level of activity. Supply is likely to be the biggest constraint, so new house building will remain critical,’ he added. However, the figures are published as property experts are being asked what effect the newly announced referendum on the UK’s position in the European Union might have on housing markets. According to Peter Rollings, CEO of Marsh & Parsons, sales activity often cools in times of political uncertainty and the London housing market usually bears the brunt of it. ‘First and foremost, foreign investors may be more tentative given this latest turn in events, especially as it follows hot on the heels of higher Stamp Duty for million pound properties,’ he said. ‘But history shows us that the market recovered quickly from this short term ambiguity in 2015 and in fact, home sales have really been building momentum over the past year. The property market is chock a block with eager buyers, who are being propelled on by cheap mortgage finance and government support schemes,’ he explained. ‘Given the extent of buyer demand, it’s a great time for existing home owners to be thinking about their next step up the ladder, which should drive further purchase activity. For investors, the change in Stamp Duty for second homeowners in April will be an incentive to make purchases quickly over the next month,’ he added. ‘It remains to be seen how much of an impact the EU referendum will have on these current levels of confidence but go or stay, London remains an attractive safe haven in times of uncertainty,’ he concluded. According to real estate services firm Savills the fact that the referendum has been announced now means that the relatively long lead in should minimise the potential impact on property market. ‘We’ve already seen a number of short-term factors impact investors’ sentiment this year, however appetite for UK property remains healthy. Chinese investors remain active in the market and negative interest rates in Japan will also benefit global real estate,’ said Mark Ridley, Savills chief executive officer UK and Europe. ‘As we saw in the run up to the 2015 General Election, one of… Continue reading
Rental prices in Spain fall for 34th month in a row
Rental values in Spain are continuing to fall with the latest figures showing that average rents fell by 0.4% in January compared to the same month of 2015, the 34th month in a row of declines. The data from the National Statistics Institute (INE) shows that rents fell in all regions except in Galicia where they increased by 0.3%, the Balearic Islands and Catalonia both up 0.1%, ad were static in Murcia and Navarra. The most significant fall in rental prices were in La Rioja where they were down by 2% while in Castilla y Leónand Castilla-La Mancha rents fell by 0.9%, were down 0.8% in Madrid and Extremadura and down 0.7% in Asturias and Valencia. The regions of Andalucía and Aragón registered the same rate of decline as the national average at 0.4%, while in Cantabria rents fell by 0.3% and the Canary Islands, the Basque Country and Ceuta all recorded declines of 0.2%. But in the buying and selling market the news is more positive with the INE data showing that the Spanish housing market grew by 11% last year after bottoming out in 2014. There were 318,055 home sales last year, the first time sales have risen above 300,000 a year, and following 260,000 in 2012 and 2013. But sales are still considerably below the 700,000 recorded before the global economic downturn in 2007. In terms of percentage growth, the housing market expanded by 11% last year, after rising 4% in 2014, and according to Mark Stucklin of Spanish Property Insight this suggests that the market has finally turned around. The crash in sales started back in 2008, and declined in five of the six years between 2008 and 2013, with dramatic double digit falls in most of those years. However, looking just at December, sales were up 8% year on year, meaning the market expanded every month in 2015, the first year that has happened since the crisis began. There were 77,865 new home sales registered last year, and 276,267 resales, meaning that resales were 78% of the market, down from parity as recently as 2013. ‘The new homes market has failed to recover as quickly as resales in part due to a lack of new developments on offer, though sales may start to recovery this year as more new projects come on stream,’ Stucklin explained. Of the selected regions most of interest to foreign buyers, Barcelona’s property market increased the most last year, up by 20%, but new home sales fell 20% while resales were up 32%. This was followed by Cadiz province, Las Palmas in the Canaries and the Balearics all up 15%. Indeed, all regions were positive with the exception of Huelva, home to the North Western end of the Costa de la Luz, also known as the Spanish Algarve, where they fell by 2%. ‘The Spanish property market now looks to be on a growth path after years in crisis. Sales growth was particularly… Continue reading
UK landlords cautious over investment due to buy to let changes
Government policies aimed at cooling the UK’s buy to let market are making landlords cautious about their future investment plans for 2016, increasing pressure on the private rental sector, research shows. Although 68% of landlords surveyed by lettings agency Belvoir had not raised their rent in the last 12 months, some 86% believe that increased purchasing costs for investment properties will inevitably lead to increased rents. The majority of landlords who responded to the survey were investment landlords with one to 10 properties and 93% of these rental properties were located in England. They were asked how changes to stamp duty and taxation were likely to influence their investment plans for the next 12 months and 44% said they will be adopting a cautious approach to further investment. Some 68% of landlords had not increased their rents at all in the last 12 months, and almost half of those surveyed have no plans to increase rents in the next 12 months. However 88% believe that increased purchasing costs for investment properties, due to a rise in stamp duty and lack of buy to let mortgage tax relief, will ultimately lead to increased rents. Landlords are almost equally divided in their views as to whether they think buy to let remains a good investment for new people coming into the market. A total of 46% thought it would still be a good investment and 40% thought it would not, with 14% undecided. When asked what effect on the rental sector the Government’s drive on home ownership will have, the results were varied, with some landlords predicting a slowdown and others predicting minimal effect, as so many people are not in a position to buy their own homes or prefer the freedom of renting. There were also concerns that many landlords would get rid of potentially uneconomic property portfolios, resulting in a shortage of rental property and large rent rises. ‘The majority of landlords named George Osborne’s anti-landlord policies as the single largest challenge that landlords will face in 2016. This is entirely in line with our prediction that increased Government interference in the buy to let market will put a real squeeze on the supply of property in the rental market in 2016 and beyond,’ said Belvoir managing director Dorian Gonsalves. Meanwhile, the firm’s rental index shows that in the fourth quarter of 2015 many of their lettings agents across the country are not reporting a mass exodus of rental properties from the market. Of those that are leaving, many are accidental landlords who are anticipating being hit by the impending loss of mortgage interest relief. Indeed, in many areas, including Wales, there has been increased activity with landlords looking for advice to buy further properties before the stamp duty increase kicks in. In cities such as Cambridge, where the population is increasing, there are… Continue reading
