Tag Archives: crisis
Prime property rents in London set to see recovery in 2016, report predicts
January will be the start of the prime property lettings season in London, kick starting a recovery in top end rents in 2016, according to a new outlook report. Throughout 2015, the pace of rent rises in London slowed, and weaker activity at the top tiers of the lettings market in particular have created a difficult climate for rent growth, says the report from estate agents Marsh & Parsons. However, the firm is predicting a rental resurgence in 2016, forecasting prime London rents to rise 5% in the next 12 months, a significant uplift from a the 1.9% rise in the past year. While rents at the highest tiers of the market, namely over £750 per week, are unlikely to experience major pick up, rental prices below this benchmark have significant room to grow. And much of this growth will come at the very start of the year, with January typically the strongest month outside of the summer for lettings activity. Over the past three years, there has been on average a 34% monthly boost in lettings exchanges from December to January, as people use the New Year for fresh starts. ‘Come January, households will be picking up where they left off on big life decisions – be this downsizing, starting a new job, relocating overseas or even separating. All of these combine to give new impetus to the rental market at the very start of the year, and it’s a time when we experience some of our most zealous lettings activity,’ said Patrick Littlemore, director of lettings at Marsh & Parsons. ‘This initial activity will feed into stronger and more sustained rent growth throughout 2016 as a whole. It is the lower price brackets of the private rented sector that have the biggest room to grow next year, especially in popular hot spots such as Queens Park, lauded for retaining the style and atmosphere of Kensington with more affordable prices,’ he added. The report also points out that the average length of a tenancy on a rental property in prime London has grown 18% in the past year, from an average of 19 months in the third quarter of 2014 to 23 months during the third quarter of 2015. Marsh & Parsons expects the popularity of two year leases to continue growing in 2016 as tenants are increasingly entering into these longer tenancies in search of greater stability in the face of reduced rental properties available on the market, but it is the guarantee of housing they are securing, not rental prices over this period. The report explains that the stock of homes to let in London has decreased significantly in 2015. The total supply of available rental properties across 2015 was 9% lower than in 2014, while the levels of demand experienced throughout the last year has been 7% higher than during 2014. As… Continue reading
Surge in mortgages available in UK for small deposit buyers
A surge of product launches over recent months means the number of 95% loan to value (LTV) mortgage products available in the UK rose by 84% year on year, new research shows. In November some 260 different products in this range were available, the highest amount since the recession according to the latest Genworth/Moneyfacts Mortgage LTV Tracker. Analysis by Genworth, a mortgage insurer, reveals the number of mortgage products available to buyers with a 5% deposit has risen by 119 over the last year, from 141 in November 2014 to 260 last month. There are now more than six times as many 95% LTV loans available compared to September 2013 at 260 compared to 43, before the Government’s Help to Buy mortgage guarantee scheme launched. It means there are more deals available for home buyers with a 5% deposit than at any other time since the recession as the number of available products has surged in recent months, rising by 68 in the last three months alone. In comparison, competition in other areas of the market has stayed relatively stable or, in some cases, even declined. The number of 75% LTV products fell by 38 between August and November this year. The number of 90% LTV loans fell by one, while 80% LTV products rose by just nine in the same period. 85% LTV loans remained constant, with 669 products available. The tracker report also shows the average rate of a 95% LTV mortgage fell 1.15% from 5.27% in November 2014 to 4.12% last month, also the lowest amount since the recession. Average 75% LTV mortgages also fell by 0.27% annually to 1.90% in November from 2.17% at the same point last year. However, this was 0.07% higher than the record low of 1.83% seen in June 2015. Nevertheless, this means the price gap between 95% and 75% LTV decreased year on year by 0.88% to 2.22%, the smallest since the recession. Off the back of low rates, the number of first time buyers has also increased. Indeed, the third quarter of 2015 saw the highest number of loans to first time buyers so far this year at 86,800, up by 13% from the second quarter of 2015 and 6% more than the 82,100 loans made in the third quarter of 2014. The average first time buyer LTV in the third quarter rose from 82% in the first quarter of the year and the second quarter to 84%, giving the average first time buyer a deposit of 16%, down from 18%, unchanged from the third quarter of 2014. However, Genworth’s analysis raises concerns that lending at 90 to 95% LTV is actually in decline. There was £1.61 billion lent through 90% to 95% LTV loans in the third quarter of 2015, down by 27% from the £2.20 billion lent in the third quarter of 2014. This means… Continue reading
London borough of Newham sees biggest urban house price rise in UK in 2015
Newham in London recorded the biggest percentage rise in house prices among major UK towns and cities over the past year, according to new research. The average house price in the London borough was 22% higher than in the previous year, increasing from £261,399 to £319,522 in 2015, nearly double the 12% increase in London as a whole. The research from home lender the Halifax, based on its own figures, also shows that Royston in Hertfordshire experienced the second biggest rise in average house prices with an increase of 19%. And all 10 top performers were in London and the South East. Stroud in Gloucestershire, Wellingborough in Northamptonshire, and Solihull in the West Midlands were the top performers outside London and the South East, recording price rises of 14% to 15% over the past year. A small number of towns recorded modest declines in house prices 2015. Prices in Merthyr Tydfil in South Wales fell 3.8%, in Colwyn Bay in North Wales they fell by 2.3%, while in Durham prices were down 2.1% and in Coalville in Leicestershire down 0.5%. The 10 worst performing towns are outside London and the South East with the exception of the country’s most expensive area, Kensington and Chelsea, where prices have risen by just 1% in the last year. ‘Those areas that have seen the biggest house price increases over the past year are either in outer London or within close commuting distance of the capital. Demand in these areas has risen as rapid house price rises in central London in the past few years have caused increasing numbers of people to look for property in more affordable areas,’ said Martin Ellis, housing economist at the Halifax. ‘A few towns have experienced modest price falls. These areas are typically still suffering from relatively weak employment and economic conditions, which has dampened local housing demand,’ he added. Continue reading
