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Home prices rising faster in East of England than anywhere else in UK
Asking prices in the East of England are rising faster than anywhere else in the UK, raising concerns about the sustainability of the region’s property market. Indeed, the region's average asking price has risen twice as fast as the rest of the country over the last 12 months, according to the June index from property search engine Home.co.uk. Year on year prices in the East of England increased by 13.9%, compared to an England and Wales average rise of 6.8% and a rise of 6.7% in Scotland over the same period. The data also shows that the East of England's rises far outstrip Greater London's 7% year on year rise and the South East's increase of 7.8%. Asking price figures for May and June 2016 provide further evidence of how the East of England has become the UK's hottest market. Over this period, the region's average asking price rose by 1.6%, while London's fell by 0.4% and prices in the South East only rose by 0.2%. Across England and Wales the latest monthly rise was 0.4%. Properties are also selling faster in the East of England than in any other region. The typical time on the market for homes in the East of England in June is 54 days, compared to 80 days across England and Wales and 62 days in London. Lack of supply is a key factor in these regional variations in asking price. There was an 8% fall in supply of property in the East of England between May 2015 and May 2016. Over the same period, the UK wide fall in supply was 7%. In contrast, between May 2015 and May 2016, the supply of property rose in Greater London by 2% and in the South East by 1%, a key indicator as to why asking prices in those two regions are now flagging compared to the East of England. Home.co.uk is predicting that the East and West Midlands are set to follow the East of England's rapid rate of asking price inflation, as the supply of property in each area has dropped by 13% and 14% respectively over the last year. These are the largest regional declines in property supply since May 2015. ‘A cooling London market has changed the dynamic of the UK property market and is now less of a focus for property investors,’ said Home.co.uk director Doug Shephard. ‘The new regional champion is by far the East of England where terrific price rises look set to rival even London in its heyday. But investors should be aware as if prices rise too far and too fast, a severe correction becomes a significant risk in the region,’ he added. Continue reading
Rents up month on month across Scotland, recording fastest May rise on record
Rents in Scotland are at a record high, up 1.3% in May, the fastest month on month growth on record, according to the latest buy to let index. Across Scotland the average rent now stands at £549, led by growth in Edinburgh and the Lothians with a year on year rise of 12%, the data from the Your Move index also shows. The report suggests that the cost of the Land and Buildings Transaction Tax (LBTT) surcharge of 3% for additional homes introduced in April has pushed up prices in the market. ‘Rents are rising rapidly as a result of the new Land and Building Transaction Tax surcharge for buy to let properties. This tax hike has dissuaded landlords from investing in the sector leading to a shortage of homes to rent, compared to the demand for housing,’ said Brian Moran, lettings director at Your Move Scotland. ‘With the limited supply of rental properties, potential tenants have been forced to compete to secure homes, pushing up rents. The introduction of this anti-landlord legislation from Holyrood has ensured the cost of the policy has hit tenants hardest,’ he pointed out. He also said that the rent control policy in the Scottish Government’s private tenancies bill will affect the market and not necessarily in a positive way. ‘By limiting the rent that can be charged on a property, becoming a landlord will become less appealing, limiting investment and forcing many to consider leaving the sector. This will lead to an even greater shortage of homes to rent,’ he explained. ‘In addition, without the potential incentive of higher rents, landlords will lack the motivation and finance to improve the quality of their properties. The Government needs to look at incentivising landlords to increase the supply of rental properties in Scotland. With more homes available to rent, tenants wouldn’t need to compete for properties and rents would be more affordable,’ he added. A breakdown of the figures show that on a monthly basis, rents rose across all of Scotland’s regions in May. Glasgow and Clyde has seen the steepest uplift month on month, with rents in the region increasing 1.9% from April. This amounts to a £11 jump in cash terms, with typical rents increasing from £538 in April, up to £549 in May. The smallest monthly upswing in rents occurred in the Highlands and Islands. Rents in the region increased by just £1. With a smaller population and fewer high paying jobs than other parts of Scotland, competition for rental properties in the region has not been as fierce. In the South of Scotland, the increase in rents was also marginal, with only a 0.2% uptick leaving typical rents to standing at £514, the lowest average of any region. Meanwhile, in Edinburgh and the Lothians, rents continued their upward trajectory, rising 1.7% or £11 from April, pushing the typical rent in the region to a… Continue reading
UK property sales up slightly but still well below a year ago
Residential property sales in the UK increased by 1.5% between April and May 2016 but the month’s seasonally adjusted figure is 11.9% lower compared with a year ago. The latest report from HMRC says that the large increase in transactions for March 2016 followed by the substantial reduction in April is likely to be associated with the introduction of higher stamp duty rates on additional properties in April 2016. But it points out that whilst April and May 2016 are lower than the corresponding months in 2015, it should be noted that the total for March to May 2016 is still substantially higher than the corresponding period last year. The additional property rates were announced in the Autumn Statement 2015 for England, Wales and Northern Ireland, and in the Scottish Government's draft 2016/2017 budget for Scotland. The report also says that additional non-tax factors may have played a role as well, for example the Bank of England's plans to curb buy to let mortgages resulting in a rush to purchase. The residential count includes properties paying the main and additional rates. Greg Bryce, managing director at SearchFlow, also believes that uncertainty surrounding the referendum on the future of the UK in the European Union has also been affecting the market and looking ahead activity levels in June look set to be dampened as buyers and investors are holding off any decision to purchase until after the vote. However, once the dust settles post referendum, it is expected that activity levels in the housing market will remain buoyant with a strong economy, employment level high, interest rates and mortgage rates low and the economic and housing policies unlikely to change very much. The market is expected to bounce back if the vote is for the UK to remain in the EU, according to Doug Crawford, chief executive officer of My Home Move. ‘Ultimately, high levels of demand for both rental and owner-occupied accommodation will drive transaction figures upwards,’ he said. The firms most recent forecast predicts that sales will rise by 7% this year and by 20% by 2020. The figures show there has been a continued ripple effect from the stamp duty change, according to Rob Weaver, director of investments at property crowdfunding platform Property Partner. ‘The desperation to complete before the April 1st deadline pulled forward thousands of housing transactions that would normally have happened in April or May. March recorded the highest number of transactions in a decade,’ he said. He also pointed out that overall, 2016 is beating 2015 with transactions for the first five months of the year up 13% on the same period last year. ‘If we vote Remain on Thursday, we can expect a rising trend in activity as buyers and sellers re-engage after the referendum,’ he explained. ‘Transactions should slowly rebuild as the summer months are historically strong. But the dire shortage of supply is the main reason why we see house prices on… Continue reading
