Tag Archives: european
UK govt revises its medium term house price growth forecast downward
The UK government thinks house prices will grow sat a slower rate than previously expected in the medium term, mainly due to changes in lending. The latest forecasts from the Office for Budget Responsibility (OBR) reveal that overall, house prices are expected to rise by 34.1% by the first quarter of 2021 with the outlook revised from the last guidance which was issued in March. The OBR cites changes to the regulatory environment as well as changes to lenders’ behaviour brought about by the Mortgage Market Review (MMR) which came into play in April 2014 as reasons for the revision. As a result, the estimated cumulative level of house price growth by the first quarter of 2020 is 5% lower than it was in the March forecast so the growth prediction is now 34.1% by the first quarter of 2021. The OBR has also revised its forecasts for Stamp Duty revenue which is now forecast to raise £11.5 billion in 2015/2016, rising to £17.3 billion in 2019/2020 compared with the March forecast of £10.4 billion £18 billion respectively. So, compared with its March forecast, SDLT receipts are expected to be £1.1 billion higher in 2015/2016 but £0.7 billion lower by 2019/2020. The OBR said it has changed its short term forecast for stamp duty receipts because residential property transactions were higher than expected at the end of the 2014/2015 financial year, a trend it expects will continue. In the long term, lower house prices relative to the March forecast reduce receipts by around £1.2 billion in 2019/2020. Meanwhile, the selling market is expected to be busier this summer. Traditionally the prime months for selling houses were March through to the end of June with a second period of activity in September and October. These two seasons reflected the end of spring and school summer holidays. However, according to real estate firm Knight Frank there has been a change in recent years, with the market continuing through the usually quieter summer months. The number of properties sold by Knight Frank between June and August 2014 was in fact 25% higher than in 2013. ‘The increase in summer activity is a reflection on a number of factors including the popularity of holidays being taken in the UK and thus being able to see a house more quickly and the rise of the internet allowing holiday makers to browse their tablets and phones whilst relaxing,’ said Rupert Sweeting, head of Knight Frank Country. ‘We are seeing this happen again this year principally as the election made many buyers put their decisions on hold until after the result was known. As a result the market is six to eight weeks late. We already have a high level of house bookings going forward this month and in August,’ he added. Continue reading
Home approvals strengthen in Australia but new home sales fall
New home approvals in Australia strengthened during May and remain at high levels, up 2.4% compared to the previous month, the latest data shows. Multi-unit approvals soared 15.1% but detached house approvals fell by 8.5% with a total of 218,442 approvals recorded in the year to May, a new record for approvals over any 12 month period since records began in 1983. ‘While it is positive to see improved levels of approvals, the distribution of growth was uneven with multi units increasing significantly during the month and detached house approvals falling back,’ said Shane Garrett, the Housing Industry Association’s senior economist. He pointed out that during 2014, new home building reached an all-time high and the latest figures suggest a solid pipeline of new home building during the second half of 2015. ‘However, the recent strengthening of price pressures in several markets indicates that the supply of new homes will need to stay at elevated levels in order to fully address demand,’ he warned. ‘This onus is very much on policymakers here. They must rectify the bottlenecks in the planning system, redress the excessive fees and charges on new residential developments and ensure that the pipeline of residential land will meet the ongoing community demand for new homes,’ he added. A breakdown of the figures shows that approvals saw the strongest increase in Victoria with growth of 11%, followed by New South Wales at 8.8%, Queensland at 3.6%, and Western Australia at 0.2%. Approvals fell significantly in Tasmania with a fall of 32.6% and were down 9.9% in South Australia. In trend terms approvals increased in the Northern Territory by 9.7% and in the ACT by 6% during May. Meanwhile, the HIA New Home Sales Report, a survey of Australia’s largest volume builders, recorded the first decline for 2015 in May with total seasonally adjusted new home sales falling by 2.3%. The decline was driven by a 5.1% dip in detached house sales, and this reflected weaker monthly demand in four out of the five states surveyed, according to HIA chief economist Harley Dale. ‘This is a softer result at face value, but delving beneath the surface reveals an aggregate profile of healthy new home building conditions in 2015. The mature stage of the new home building cycle primarily reflects further momentum in the multi-unit sector, together with persistence of healthy conditions in New South Wales and Victoria,’ he pointed out. The data shows that new sales of multi-units increased by 7.6% to yet a new record level, with sales volumes up by 26.7% over the three months to May. Meanwhile strength in detached houses sales is evident in New South Wales and Victoria, with growth in the May 2015 quarter of 5.2% and 6.2% respectively. ‘Leading indicators such as new home sales and ABS building approvals will provide vital clues in coming months of the sustainability and composition of the upcycle in new home building in 2015/2016,’ said Dale. A breakdown of the… Continue reading
More than half a million British properties now worth over £1 million
The number of home owners in Britain whose property is worth £1 million or more has exceeded half a million for the first time, according to new research. The number of so called property millionaires now stands at 524,306, an increase of 8.3% on last year’s figure and almost 11,000 streets now have an average property value above £1 million, the data from Zoopla shows. Of the 10,958 streets with average property prices over £1 million some 43% are located in London. Areas outside the capital with the highest proportion of £1 million plus streets are all in Surrey, with Guildford, Leatherhead and Richmond housing 158, 154 and 144 respectively. At the very top end of the market, the data shows there are now 13 streets in Britain where the average house price is over £10 million, all of which are in London. Kensington Palace Gardens in W8 ranked as the country’s most expensive street overall, with homes there worth £42,591,972 on average, over 150 times the average national property value. The Boltons in SW10, where a nine bedroom detached house sold for £51 million in April, takes second place, with average property values standing at £30,288,586. Grosvenor Crescent in the exclusive suburb of SW1 rounds out the top three, with an average property price of £22,752,425. While exclusive London boroughs boast most of Britain’s priciest properties, certain areas of Surrey and Buckinghamshire have also acquired a reputation for very high property values. Virginia Water and Cobham, both in Surrey, top the towns table, with average property prices of £1,208,638 and £1,037,825 respectively. Beaconsfield in Buckinghamshire, where the average property value amounts to £982,660, comes in third. In terms of postcodes, W8 in Kensington, remains top of the heap, boasting average property prices of £2.77 million. Neighbouring SW7 in Knightsbridge is the next most expensive area in the capital with average values of £2.43 million, while property values in third placed SW3 in Chelsea stand at £2.24 million. ‘London continues to be the epicentre of the million pound property market in Britain but there are a number of high value property areas outside the capital, particularly in Surrey and Buckinghamshire, that are very attractive to professionals seeking to live outside yet within easy reach of the city and enjoy low crime rates coupled with good schools,’ said Lawrence Hall of Zoopla. Continue reading
