Tag Archives: europe
Housing demand in UK reaches 11 year high
H ousing demand in the UK has reached an 11 year high with the number of housing hunters registering with estate agents reaching almost 430 per branch at a time when fewer homes go on sale. The number of house hunters registered per branch of members of the National Association of Estate Agents reached 439 in June, the highest since August 2004, and sales to first time buyers fell. This is 15% more than in May when 383 house hunters were registered per branch and it comes at a time when supply of housing stock fell from 46 in May to just 44 houses available per branch, widening the growing gap between supply and demand. ‘What we’re seeing is a market that lulled over the general election period, coming back to life in full force,’ said Mark Hayward, managing director of the NAEA. ‘Buyers are feeling more confident and those who put their plans on hold over the election and political aftermath have kicked off their hunt, causing this massive jump in demand. There’s also an impetus to buy right now in light of the impending interest rate rise as buyers fight to buy and fix mortgage rates. But the fact that demand is at an eleven year high without the housing stock to fuel it, is bad news for the market,’ he added. The monthly NAEA report also shows that as the gap between supply and demand widened in May, activity remained consistent, with nine sales made on average per branch for the second month running. However, the number of sales made to first time buyers declined in June, with the group accounting for just 24% of sales, compared to 29% in May. ‘Although activity is still slow, it’s very promising to see that the surge in demand and dip in supply hasn’t caused activity to halt, and houses are still being sold. However, the growing gap between supply and demand is worrying and clearly demonstrates that more needs to be done to plug this. The election was full of promises to build more houses, but now those promises need to be put into bricks and mortar to respond to demand,’ Hayward explained. Continue reading
New housing developments do not impact on surrounding house prices
A new study has shown that new house building in the UK has little discernible and consistent impact on local house price patterns. The report by LSE London at the London School of Economics and Political Science and jointly commissioned by Barratt Developments, the largest house builder in the UK, and the NHBC Foundation, examined whether a new development will always reduce prices or reduce the rate of increase in prices in the immediately surrounding area. Examining the impacts of eight recent residential Barratt developments on their local areas, the research concluded that prices did not decline as a result of development, although sometimes there may be some limited impact during construction. Once the developments were completed, the local areas generally moved with the market. One of the most common concerns of home owners across the UK is that a new build residential development nearby will reduce property values in the local area. For many people their new home is their largest single investment. The selected sites all involved fewer than 300 units and were substantially completed within the last five years. Spread across the South and Midlands these sites are typical of housing development outside city centres or wholly rural areas. The aim was to exemplify ‘ordinary’ developments mainly on sites where there had been objections, some significant, at planning permission stage prior to development. Five sites were built on land with previously higher amenity value, and three were built on land that previously had lower amenity value including derelict industrial land. Specifically, the research found that house price changes in the surrounding streets and the broader three or four digit postcode districts suggest that new developments may stabilise or even increase prices in the immediate areas once development is complete where the market is generally stable and rising. They also suggest that there is almost no evidence of Longer term negative impacts. For sites where a high level of opposition was experienced throughout the planning and construction processes, this opposition tended to decrease once the development is completed. In one case where there were high levels of opposition, at least half of all eventual purchasers of the new homes previously lived within five miles of the development. ‘Few would argue that the UK needs to build substantially more homes to avoid a housing crisis, but despite this, local opposition remains one of the main obstacles to achieving this,’ said Neil Smith, head of research and innovation at NHBC. ‘It is understandable that home owners will be anxious to protect their investment in their homes, and concerns about the negative effects of new developments have compounded the issue,’ he explained. ‘While there are clearly a number of factors affecting property values in specific areas, this research challenges the assumption that new build developments will adversely affect local house prices,’ he added. Philip Barnes, group land and planning director at Barratt Developments Plc, acknowledged that one of the understandable fears of new development is that… Continue reading
UK house price sentiment dips slightly
The UK’s residential property market is likely to see continued house price momentum in the second half of 2015 but sentiment is down from last year’s highs, the latest index shows. Households still believe the value of their homes is rising and the July House Price Sentiment Index from Knight Frank and Markit Economics has now been in positive territory for 28 months in a row. However, July’s reading of 58.6 was a slight decrease on the 59.5 recorded in June, but it was still the second highest reading so far this year, an indication that households across the UK are still confidence that house prices are rising. Tim Moore, senior economist at Markit Economics, pointed out that UK house price sentiment in July was comfortably above the year and a half lows seen during February. ‘A gradual rebound in households’ property value perceptions has been underpinned by strong demand conditions so far this summer, alongside an underlying lack of supply and the continued low mortgage rate environment,’ he explained. He believes that these factors are likely to support house price momentum through the second half of 2015, but added that tighter mortgage lending rules and stretched affordability have brought down UK households’ expectations of future house price growth from last year’s record highs. Indeed, the future HPSI, which measures what households think will happen to the value of their property over the next year, fell marginally in July to 70.2, from 70.5 in June. On a rolling three monthly basis to July the future HPSI is 70.2, the same as the previous three months, an indication that expectations for future house price growth have flat lined. ‘Overall expectations for future house price growth remain firm, underpinned by a strengthening labour market, improving economy and ultra-low mortgage rates,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘There is now more discussion about possible interest rate rises, but this, as well as the property tax announcements in the Summer Budget, has had little impact on average expectations for the direction of travel for house prices,’ she explained. ‘However, there are regional differences in the data, with the widest spread between the future HPSI reading in the North East and London than at any time since March last year, reflecting the differing dynamics of housing markets across the country, with local economic factors leading to a disparity in the levels of house price growth,’ she added. Continue reading
