Tag Archives: european
Residential property sales up in UK after election slowdown
Residential property sales in the UK increased by 4.7% between May and June 2015 and the seasonally adjusted transaction figure was 3.2% higher compared with the same month last year. he official data from HMRC also shows a total of 104,590 residential and 10,460 non-residential transactions in June. The number of non-adjusted residential transactions was 15.7% higher compared with May 2015 and the number of non-adjusted residential transactions was 5.8% higher than in May 2014. It means that the UK property market is back on track after disruption caused by a wait and see attitude in the run up to May’s general elections, according to Peter Rollings, chief executive officer of Marsh & Parsons. He said that the jump in sales in June has started to make up for any shortfall in the months preceding the general election and the market is seeing growth on an annual basis once again. ‘In London, supply of properties for sale and buyer demand are head to head, squaring up for steady price growth over the rest of the summer. Confidence is returning to the capital once again, particularly in the sector £1 million,’ he explained. ‘Buyer registrations are building as aspiring home owners seize hold of low mortgage rates and other incentive schemes currently available to them,’ he added. Continue reading
Catchment areas of good schools in UK attracting higher property rent premium
Competition for school places in some of the UK’s best educational establishments is affecting the private rental market with more homes near them being rented to families, new research suggests. Some 28% of properties rented around schools with outstanding ratings from school inspectors OFSTED went to families with children, up from 26% in 2014 and 9% in 2008 In London competition for school places means that for the first time over half of properties rented around the best schools go to families with children, according to the latest quarterly lettings index from Countrywide plc. The firm suggests that while this is a product of the significant increase in competition for school places, the growing number of families living in the private rented sector means more of them move both for work and their children’s education. While the figures in London are most marked for schools rated outstanding, the pressure on school places in the capital means there has been uplift in families with children renting in the area surrounding most schools. Given it is the address from which the school application is made in January that the application is assessed against, the summer months are when most families think about moving. Over half of families with children in the private rented sector move during June, July, August or September in time for the forthcoming academic year. Households with children moving into the area close to an outstanding school don’t move far, an average of just half a mile. This confirms the fine margins involved getting into school catchment areas. This distance is considerably shorter than the three miles the average households in the private rented sector moves, the report explains. As with house prices, tenants pay a premium to live close to a high performing school. Given tenants move more often than home owners, this premium tends to be smaller. In 2015 the average tenant living within a kilometre of a school rated outstanding paid 14% more than someone living more than a kilometre away. While the premium attached to one and two bedroom flats is almost negligible, tenants living in three or four bedroom houses pay an average of 16% more. Where catchment areas are particularly tightly defined, a house on one side of the road can be let for 15% to 20% more than an identical house on the other side. ‘There are 1.6 million families with children living in the private rented sector, 20% more than last year, which means school catchment areas are becoming increasingly relevant to the rental market,’ said David Fell, research analyst at Countrywide. ‘Many of these families are choosing to rent close to the school gates and in some cases parents are taking advantage of the flexibility of renting to move from the fringes of their preferred school’s catchment area to ensure their child’s entry,’ he pointed out. ‘The flexibility of renting can… Continue reading
CML expected improved mortgage market activity ahead in UK
A benign economic backdrop should underpin a gentle improvement in housing and mortgage market activity in the coming months, according to the latest forecast from the Council of Mortgage Lenders. The CML market review report points out that this follows a softer patch over the past year, which has dragged down our expectations for gross mortgage lending to £209 billion this year, from the £220 billion the CML had expected previously. ‘Several of the government’s fresh housing initiatives will take time to take effect and so do not fundamentally reshape market prospects this year or next, as far as we can judge at this stage,’ said Bob Pannell, CML chief economist. The report explains that with house price levels already elevated and continuing to outpace earnings across much of the country, the upside potential for regulated lending is likely to be constrained by affordability pressures, reinforced by the recent MMR mortgage rules and macro-prudential rules. It also points out that perceptions of the buy to let sector can be distorted by the fact that remortgage activity accounts for a much larger share of overall buy to let lending, more than half, than is the case for home owner loans. ‘Although buy to let business volumes continue to expand, the underlying pace of growth in buy to let activity, both for house purchase and refinancing, has been slowing, following its strong recovery over the past few years. Policy interventions in the buy to let space may reinforce this downward trend,’ said Pannell. ‘We expect a further improvement in arrears and possessions this year and anticipate that the overwhelming majority of borrowers will cope with the modest interest rate increases that start in 2016,’ he added. Overall the CML is slightly more optimistic about housing market developments than it was at the turn of the year and Pannell explained that this is largely because of the continuing resilience of cash transactions, amounting to nearly 37% of all transactions over the past year. He added that regulated house purchase activity has continued to edge down relative to the market as a whole over the past year, and this has acted to drag down our overall mortgage lending total for 2015. ‘We now expect gross lending of £209 billion, compared with our earlier estimate of £222 billion,’ he concluded. Continue reading
