Tag Archives: europe
UK house prices set to keep rising in 2016 due to shortage of supply
House prices in the UK are set to continue rising during 2016 due to a lack of available housing stock in the property market, according to the latest index report. There are 47% fewer properties currently for sale than in December 2007 and 16.1% fewer than in December 2014, the data from Home.co.uk’s asking price index shows. The firm says that this is creating ‘a vicious circle’ of price hikes that are set to continue throughout 2016, and follows a rise of 8% in England and Wales' property prices in 2015. Already, regions with the biggest shortages of available housing for sale are experiencing the quickest price rises, with the East of England in particular set for continued rapid price hikes next year. Overall the firm is predicting price growth of 9% in England and Wales with the highest of 13% in the East of England, followed by 12% in the South East, 9% in Greater London and 7% in both Scotland and the West Midlands. The rest of the country is likely to see more moderate growth with just 1% in the North East, 2% in Wales, the North West and Yorkshire and Humber and 6% in the East Midlands and the South West. A breakdown of the data shows that between November 2010 and November 2015, the supply of property in the East slumped by 27%, while prices in the region increased by 10.6% over 2015. Scotland's housing supply fell by 13% between November 2010 and November 2015. Other areas where the supply of properties for sale dried up over the same period include the East Midlands, which saw a fall of 12%, and the West Midlands, where supply dropped by 11%. The South East is another region to experience a drought in the volume of property for sale, with supply falling 10% over the same period while only two areas saw an increase in housing stock for sale between November 2010 and November 2015 with a rise of supply of 10% in Yorkshire and the Humber and 2% in Wales. For 2016, Home.co.uk is predicting a similar range of regional price rises as seen in 2015. However, due to further contractions in supply, the East of England and the South East are expected to outperform Greater London over the next 12 months. Buyers in Scotland, the West and East Midlands and the South West are advised to brace themselves for a year of rapid price growth as the supply crisis ripples out to these regions. Meanwhile, typical time on the market has also fallen due to this imbalance between high demand and low supply. In England and Wales, the typical time on the market in December this year is 104 days, compared to 110 days a year ago. ‘Next year is set to see the vicious circle of spiralling prices and falling supply deepen even further as buyers take advantage of cheap credit to chase ever fewer properties,’ said the firm’s… Continue reading
CML figures shows dip in UK mortgage lending in November
Gross mortgage lending in the UK reached £19.9 billion in November, some 9% lower than October’s lending total of £21.9 billion, the latest data shows. But the figures from the Council of Mortgage Lenders also show that lending was still 23% higher than the £16.1 billion lent in November last year. CML economist Mohammad Jamei pointed out that lending is set to finish the year stronger than it started, with the pace of lending recovering over the summer months. ‘As we’ve said for the best part of 2015, lending continues to be supported by strong fundamentals, which are low inflation, strong wage growth, an improving labour market and competitive mortgage deals,’ he said. ‘Reflecting this recovery, we estimate lending this year to reach £214 billion, up from our earlier estimate of £209 billion. Looking ahead, upside potential appears limited as a result of affordability pressures and new supply challenges which will continue to weigh on activity,’ he added. Peter Rollings, chief executive of Marsh & Parsons, believes that a seasonal slowdown at the end of the year is to be expected although the strengthening economy and favourable lending conditions means that sales haven’t tailed off like they did last year. ‘The recent measures announced by the Government to build new homes and offer help to those looking to take their first step on the property ladder are welcome gestures, but it will be some time before this intervention is evident in the various monthly indices,’ he explained. ‘The powers that be also need to be careful of artificially stimulating the market at the bottom end while continuing to penalise those in the upper reaches,’ he added. Adrian Gill, director of Reeds Rains and Your Move estate agents, believes that mortgage lending has been good over the past year, with loan values showing a huge annual margin in November. ‘When we consider that many of these loans will have been agreed before the added impact of the Chancellor’s Autumn Statement housing announcements, it bodes well for early performance in 2016,’ he said. He pointed out that demand is high, remortgaging activity continues to pick up and first time buyers are benefitting from competitive mortgage rates while the buy to let market has been the most dynamic recently. ‘With a new stamp duty levy for second homes coming into play next April, there will only be a further rush to secure buy to let investment before the cost of completing a purchase rises,’ he said. But he also pointed out that this will pit landlords against first time buyers even more. ‘As the deadline creeps closer, we may see another trend emerge in the spring as canny buy to let investors seize the opportunity to sell up and profit from the triple whammy of impending tax changes, low supply of homes, and high demand. Demand is accelerating, and there will be jostling for a decreased number of properties available on the market. So it will… Continue reading
Sales and prices in Canada still rising but market is balanced, says CREA
Home sales in Canada increased by 1.8% month on month in November with the number of new listings also rising, up 3.1% compared with October, the latest index figures shows. Prices also increased, up by 10.2% year on year but this figure is affected by prices in Greater Vancouver and Greater Toronto as when they are excluded the annual price growth is 3.4%. The data from the Canadian Real Estate Association (CREA) also shows that year on year sales were up 10.9% and overall the housing market remains balanced. There was a fairly even split between the number of markets where sales posted a monthly increase and those where sales declined. The national increase was again led by monthly sales gains in the lower mainland of British Columbia and in the Greater Toronto Area. Sales activity was down sharply in the Calgary region compared to what were historically high levels posted prior to the collapse in oil prices while the number of newly listed homes rose 3.1% led by the Lower Mainland, Calgary, Edmonton, Kingston and Ottawa. ‘Recently announced changes to mortgage regulations will likely boost sales activity in the short term, as buyers jump off the fence to beat the changes before they take effect next year,’ said CREA president Pauline Aunger. Meanwhile, CREA chief economist Gregory Klump pointed out that changes to mortgage regulations taking effect in the middle of February next year are aimed at cooling the Greater Vancouver and Greater Toronto housing markets. ‘Minimum down payments will be going up for homes that sell for more than half a million dollars, so larger more expensive housing markets will be affected most. Unfortunately, the regulatory changes will also cause unintended collateral damage to housing markets beyond Toronto and Vancouver, including places that are facing economic headwinds from the collapse in oil prices,’ he explained. The national sales to new listings ratio eased to 57.3% in November compared to 58% in October. A sales to new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively. The ratio was within this range in slightly fewer than half of all local housing markets in November. Of the remainder, more markets recorded a ratio above 60% than fell below 40%. Markets where demand is tight relative to supply are located almost exclusively in British Columbia and Ontario. The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. There were 5.4 months of inventory on a national basis at the end of November 2015, down from the 5.5 months recorded in October and the lowest level in nearly six years. The national figure is being pulled lower by increasing market tightness in British Columbia and Ontario, according to the index. A… Continue reading
