Tag Archives: europe
Continued UK house price growth underpinning positive sentiment
Households across the UK believed that the value of their home rose in March with the imbalance between demand and supply underpinning house prices growth. Some 25.1% of the 1,500 households surveyed for the latest House Price Sentiment Index (HPSI) from Knight Frank and Markit Economics, across the UK said that the value of their home had risen over the last month, while 4% said that prices had fallen. This resulted in a HPSI reading of 60.5. This is the thirty-sixth consecutive month that the reading has been above 50. Households in every region perceived that the value of their home rose in March, however there were significant regional variations, reflecting wider trends in pricing across the UK market. Londoners perceived the biggest increase at 71.7, followed by those in the South East at 67.4 and East of England at 66.3. In Scotland and the North West the perceived rate of growth was slower at 53.3 and 54 respectively. The future HPSI, which measures what households think will happen to the value of their property over the next year, rose in March to 71.6, from 69.8 in February. March’s reading was the highest recorded by the index since August 2014. The rise in future sentiment was driven by households in southern England, with those in the South East at 81, the East of England at 80.3 and London at 78.9 were notably more confident than those in the North East at 61.4 and Scotland also at 61.4. ‘The fundamentals for the UK housing market remain steady, especially around mortgage costs which remain at record lows. The imbalance between demand and supply of housing is also underpinning house prices. The delivery of new homes remains some 30 to 40% below the levels needed to start to address the annual shortfall of housing in the UK,’ said Gráinne Gilmore, head of UK residential research at Knight Frank. ‘There have already been several large targeted government policies to try and boost development and ease the path of first time buyers and it is notable the future sentiment reading for 25 to 34 year olds is the highest it has been for 15 months,’ she pointed out. ‘As reflected in the index, the sound fundamentals of the market will combine to support overall prices in the coming year, but as the index also reveals, the market will continue to be multispeed across regions and price bands,’ she added. Tim Moore, senior economist at Markit, explained that the latest survey is a clear signal that UK house prices have stayed on an upward trajectory throughout the first quarter of 2016. ‘One of the factors supporting price sentiment seems to be the expectation that interest rates will remain ultra-low for longer, and this belief has become more widespread so far this year. Households’ current price sentiment is stronger now than at any time over the past 17 months, but the economic landscape is not lacking in potential headwinds for buyer confidence,’… Continue reading
New planning guidance for central London published by the Mayor
Protecting London's vibrant commercial heartland and ensuring it can remain a key driver of the UK economy for decades to come is the focus of major new planning guidance published by the Mayor of London, Boris Johnson MP today. The Mayor of London has published major new planning guidance aimed at protecting the city’s vibrant commercial heart which is a key driver of the UK economy. The Central Activities Zone, running from Kensington Gardens and Paddington in the west, to Aldgate in the east, and from Kings Cross and Euston in the north to Elephant and Castle and the Battersea Power Station in the south, is regarded as the economic and administrative epicentre of London. The area, which is approximately 13 square miles in size, employs more than 1.7 million people and boasts outstanding heritage, shopping and culture and attracts millions of visitors every year. It generates almost 10% of the UK's economic output and is also home to more than 230,000 people. However, in recent years, some valuable office space in the area has been lost to new housing in a move that if continued could threaten the capital's economic pre-eminence. But the Mayor believes that the demand to create new homes in London does not need to be at the expense of the business, culture and other key functions of the zone. ‘The heart of the capital is the foundation of London's reputation as best city in the world in which to do business. While we continue to do all we can to increase housing supply city-wide, it is also vital that we protect our office space so central London continues to be a key generator of economic prosperity for the entire country,’ said Mayor Boris Johnson. Highlights of the new Central Activities Zone Supplementary Planning Guidance, which is aimed at planners, developers and local authorities include working to address the recent tension in central London between residential and office space. The Government recently announced that from May 2019 it will allow office space in central London to be converted into homes without developers applying for change of use planning permission. This will replace an exemption that the Mayor negotiated in 2014 that has protected London's core office space. The Mayor is working closely with London's local authorities to bring forward special planning regulations known as Article 4 directions so that they can continue determining planning applications for the change of use. This will ensure that London's commercial heartlands will be protected from planning changes. For the first time ever, detailed guidance states that new residential development is not appropriate in the commercial core of the City of London and northern Isle of Dogs. The guidance also includes more stringent criteria to guide applications across all of central London which would lead to the loss of offices. It pinpoints geographical parts of central London where commercial use should be given priority over new residential developments. This includes substantial areas such… Continue reading
Mortgage lending in UK fell in February month on month, no big change expected
Gross mortgage lending reached £17.6 billion in February, some 5% lower than January but 30% higher than February last year, according to the latest estimates from the Council of Mortgage Lenders. It is, however, the highest lending total for a February since 2008 when gross lending reached £24.1 billion. ‘Lending continues the year on a positive note, with our monthly estimate showing an increase of 30% in February compared to a year ago. This growth rate is in line with what we saw in the closing months of 2015,’ said CML economist Mohammad Jamei. He explained that the recovery is being underpinned by market fundamentals in the UK, as wages grow and unemployment falls, helped by government schemes and competitive mortgage deals but the CML thinks it is unlikely that there will be any significant acceleration in lending. ‘While there may be a slight current boost to lending as some transactions seek to complete before the 01 April tax changes in the buy to let sector, this is likely to be followed by a slight fall in activity. Affordability pressures continue to weigh on activity, as does the low number of properties coming on the market, though this has been improving very recently,’ he added. Andy Knee, chief executive of LMS, believes that apart from a slight dip in activity expected following the April tax changes, all factors are working in the mortgage market’s favour. ‘Despite a delay in the base rate rise, the remortgage market in particular is likely to continue unabated, with home owners sitting on record housing equity and capitalising on the hugely competitive rates currently available,’ he pointed out. According to Peter Rollings, chief executive officer of Marsh & Parsons, once the April deadline passes it will quickly revert to business as usual, and a subsidence in buy to let borrowing will likely water down the growth in the mortgage market. ‘The Chancellor is certainly laying the long-term foundations for future mortgage lending levels, with the Lifetime ISA announcement just the latest guise to help first time buyers save up for a deposit and get onto the property ladder,’ he said. ‘But these savers are a long way down the pipeline, and in the immediate term, borrowing is more likely to feel the brunt of measures affecting the buy to let market. Property investors were completely overlooked in the Budget, and the Chancellor’s move to exclude landlords from the tax break on capital gains seems at odds with the need for greater supply of property on the market. Any measure that discourages and disincentives selling homes is not helpful in the current climate, and for buyers trying to keep track of house prices,’ he added. Continue reading
