Tag Archives: crisis
Pending homes sales in the US up marginally after two months of declines
Pending home sales were mostly unchanged in the United States in October, but shifted marginally higher after two straight months of declines, according to the latest index data. The figures from the National Association of Realtors (NAR), show that gains in the Northeast and West were offset by declines in the Midwest and South. The Pending Home Sales Index, a forward looking indicator based on contract signings, inched 0.2% to 107.7 in October from an upwardly revised 107.5 in September and is now 3.9% above October 2014. The index has increased year on year for 14 months in a row. Lawrence Yun, NAR chief economist, explained that pending sales have plateaued as buyers struggle to overcome a scant number of available homes for sale and prices that are rising too fast in some markets. ‘Contract signings in October made the most strides in the Northeast, which hasn't seen much of the drastic price appreciation and supply constraints that are occurring in other parts of the country. In the most competitive metro areas, particularly those in the South and West, affordability concerns remain heightened as low inventory continues to drive up prices,’ he said. According to Yun, although contract activity has slightly trended downward since the spring, the ongoing strengthening of several local job markets continues to fuel the improved demand for buying that has now pushed existing sales above a five million sales pace for eight consecutive months. ‘Areas that are heavily reliant on oil related jobs are the exception and have already started to see some softness in sales because of declining energy prices,’ Yun added. With demand expected to remain stable through the final two months of the year, Yun forecasts existing home sales are set to finish 2015 at a pace of 5.30 million, the highest since 2006. He pointed out that although further expansion in existing sales is expected next year, ongoing inventory shortages and affordability pressures from rising prices and mortgage rates will likely temper sales growth to around 3% in 2016. Home prices are expected to slightly moderate from a 6% increase in 2015 to 5% next year. ‘Unless sizeable supply gains occur for new and existing homes, prices and rents will continue to exceed wages into next year and hamstring a large pool of potential buyers trying to buy a home,’ said Yun. A breakdown of the figures show that the index in the Northeast rose 4.5% in October, and is now 6.8% above a year ago. In the Midwest the index fell by 1% but remains 3.3% above October 2014. Pending home sales in the South decreased 1.7% in October and are now 0.3% below last October. The index in the West climbed 1.7% in October and is 10.4% above a year ago. Continue reading
Number of new affordable homes built in UK up 55% year on year
The latest figures show 66,640 new affordable homes were delivered in the UK in the last year, 55% more than the previous year and the fastest rate of growth since 1993. Communities Secretary Greg Clark said this was further proof of the government’s commitment to get more homes built. He announced that the number of social and affordable rented homes has increased by nearly two thirds, and the number of affordable homes to buy rose by 41% over the same time period. ‘We are far from complacent and the doubling of government investment in house building announced at the recent Spending Review reaffirms our commitment to deliver a million new homes by 2020,’ said Clark. He pointed out that affordable homes to rent and buy are a key part of that, helping to give young people and families across the country the best possible start in life. Housing Minister Brandon Lewis said it showed that house building efforts are paying off. ‘This is real progress but there is more to do. That’s why we are going further and increasing our investment in these homes to ensure many more people can benefit,’ he added. The figures mean that over 270,000 new affordable homes have been delivered since 2010. At the Spending Review last week, the government announced plans to double investment in house building to £8 billion, to help towards delivering one million homes by 2020 and to deliver the largest affordable housebuilding programme since the 1970s. This includes 135,000 new homes to buy through a new Help to Buy: Shared Ownership scheme, a new London Help to Buy, to help aspiring home owners in the capital to buy with a fraction of the deposit they would normally require and 200,000 new Starter Homes, which will be available at a 20% discount to young first time buyers. This is on top of measures included in the Housing and Planning Bill currently going through Parliament, including ensuring new Starter Homes are included on all reasonably sized development sites. The Bill will also mean giving communities the power to grant permission in principle on sites identified in local plans and on brownfield registers, to speed up the planning system while at the same time protecting the green belt and planning reforms to support small builders, with a requirement for councils to offer shovel ready sites for custom build homes. Continue reading
Continued uncertainty over tax still affecting prime central London property
Annual price growth in prime central London fell to 0.9% in November, against the background of prolonged uncertainty surrounding the impact of property tax, according to the latest analysis report. Annual growth was at its lowest level since October 2009, with a monthly decline of 0.3% contributing to the slowdown, says the report from international real estate firm Knight Frank. In the six months to October, when asking prices fell by 10% to 20%, exchanges took an average of 24 weeks but viewing levels in October were the third highest since the start of 2014, it also shows. It points out that the Autumn Statement from Chancellor George Osborne which announce that buy to let investors and those purchasing second homes face paying an extra 3% in stamp duty tax from next April came as tentative signs began to emerge that buyers and sellers are adjusting to previous stamp duty changes introduced in December 2014. ‘After a year under the new system, which raised rates for properties worth more than £1.1 million, a growing number of vendors have begun to set asking prices that reflect the more subdued level of demand and heightened sensitivity to pricing among buyers,’ said Tom Bill, head of London residential research at Knight Frank. He explained that Knight Frank sales data for the six months to October shows properties sold at an incrementally slower pace as the achieved price fell below the asking price. In instances where the achieved price was 80% to 90% of the asking price, where the asking price came down by between 10% and 20%, exchanges took an average of 24 weeks. This compared to nine weeks where the asking price and the achieved price are the same, that is to say where no reduction was necessary. ‘It demonstrates the strength of underlying demand, which is reflected in the fact viewing levels have increased in recent months. Viewings in October were at the third highest level since the start of 2014,’ Bill added. November also saw the release of Knight Frank’s global tax report, which showed London was in the middle of the pack compared to other major global cities in relation to prime property tax and holding costs. ‘The latest stamp duty changes appear unlikely to alter this position materially,’ said Bill. Continue reading
