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Average residential rents in Scotland reach new peak
Average rents in Scotland reached a new peak of £544 per month in May after a record monthly increase of 1% and annual growth of 2.7%, the latest buy to let index shows. The rise was led by a 1.9% monthly increase in the south of Scotland, the biggest regional change and annual growth is now the fastest since the summer of 2014, according to the latest index from Your Move, one of Scotland’s largest lettings agent networks. The average Scottish rent has reached an all-time high of £544, following a 1.0% boost in May 2015. In contrast, over the past six months, rents have risen by an average of just 0.1% per month. May’s rise represents the strongest monthly uplift on record, as rent growth begins to pick up. This also represents a significant increase from 1.6% annual growth in April 2015 and 1.3% in March, after a recent lull in annual rent rises. According to Brian Moran, lettings director at Your Move Scotland, the rental market has seen growth more than doubled since March, when annual rent rises were only 1.3%. ‘After a downtrend in rent growth over the winter months, we’re now back on par with the rate of rises a year ago. In fact, at the same time last year, rents were rising at a moderately faster pace, with 2.8% annual growth in May 2014,’ he pointed out. He also explained that affordability is one of the main handicaps reining back private sector rents from rising even faster, but with recent boosts to wage growth, most household incomes are weighing in higher, and tenants can finally afford to pay more. ‘However, this needs to go hand in hand with supply. With a strong economy and sturdy jobs market, demand for homes to let is standing tall. The stock of available housing needs to rise to match this level to maintain the delicate balance with rent rises, and tenant incomes,’ he added. Rents are higher than a year ago in all but one of the five regions of Scotland. Compared to last year, rents in Glasgow and Clyde have seen the biggest movement, rising 5.7% in the past 12 months, equal to £30 in absolute terms. This brings the typical rent in the region to £566 as of May 2015. The second most significant increases were found in the South and the East of Scotland, with average rents in these both regions up 2.7% since May 2014. Rents in the Highlands and Islands experienced more moderate annual rent growth of 1.9%. Edinburgh and the Lothians is the only region where typical rental prices have fallen year on year. The average monthly rent in the region is now 0.6% lower than it was a year ago. At £593 per month, the average rent is now considerably below its November 2014 peak, when prices reached £617. On a monthly basis, rental prices have risen across all regions of Scotland. Rents in the South… Continue reading
US existing home sales jump to highest pace for almost six years
Existing home sales in the United States increased by 5.1% in May year on year to their highest pace in nearly six years, partly fuelled by an increase in first time buyers. The latest data from the National Association of Realtors shows that all regions, led by the North East, saw sales increase. They have risen year on year for eight consecutive months and are 9.2% above a year ago. The median existing home price for all housing types in May was $228,700, which is 7.9% above May 2014, the 39th consecutive month of year on year price gains. According to NAR chief economist Lawrence Yun May home sales rebounded strongly following April's decline and are now at their highest pace since November 2009. ‘Solid sales gains were seen throughout the country in May as more home owners listed their home for sale and therefore provided greater choices for buyers,’ he said but added that overall supply still remains tight. ‘Homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated even with higher mortgage rates above 4%,’ he explained. The data also shows that total housing inventory at the end of May increased 3.2% to 2.29 million existing homes available for sale, and is 1.8% higher than a year ago. Unsold inventory is at a 5.1 month supply at the current sales pace, down from 5.2 months in April. The percent share of first time buyers rose to 32% in May, up from 30% in April and matching the highest share since September 2012. A year ago, first time buyers represented 27% of all buyers. ‘The return of first time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low down payment programmes,’ said Yun. ‘More first time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise,’ Yun added. With demand continuing to far exceed supply, properties typically stayed on the market for 40 days in May, up from 39 days in April but the third shortest time since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 131 days in May, while foreclosures sold in 56 days and non-distressed homes took 38 days. Some 45% of homes sold in May were on the market for less than a month. All cash sales were 24% of transactions in May for the third straight month and are down considerably from a year ago when they were 32%. Individual investors, who account for many cash sales, purchased 14% of homes in May, unchanged from last month and down from 16% in May 2014. Some 67% of investors paid cash in May. Distressed sales, that… Continue reading
UK asking price discounts falling
The average property for sale in the UK is discounted by 6.05% but by almost 10% in some areas, the lowest figures since 2010. Rotherham has the most properties that sell for less than the asking price at 43.6% while the largest discounts are in Blackpool, according to new research from online property portal Zoopla But despite the lower discounts on offer, some 31% of properties currently on the market for sale have had their price reduced at least once since originally being listed. And that equates to over £2 billion of reductions in total have been made from houses and flats currently on the market across Britain. The top 10 areas with the highest percentage of properties with reduced asking prices are all in the north of England, with more than two fifths of all properties listed. After Rotherham the next location with the highest number of discounts is Preston at 43.2% and then Barnsley at 42.3%. After Blackpool the next location with the largest asking price reductions is Manchester at 8.3%) and Bradford at 7.9% while in London it is 7.4% with typical discounts in the capital city can exceed £75,000. Looking at London in more detail, the neighbouring boroughs of Merton at 28.7%, Richmond-upon-Thames and Croydon, both at 27.3%, have the highest proportion of reduced properties for sale, but those looking for the largest reductions will find them in Havering, a borough soon to benefit from Crossrail, where the typical property price discount is 10.45%. At the top end of the national market, more than a fifth of properties valued over £1 million have been reduced since originally coming on to the market, at an average discount of more than £185,000. ‘Buyers may be disheartened by the decrease in the typical discounts on offer but can take cheer from the fact that almost a third of houses are listed today below their original asking price,’ said Lawrence Hall of Zoopla. ‘This means that despite ever increasing house prices, there is still room for some good, old-fashioned negotiating. On the flip side, vendors can be pretty confident of achieving close to their initial asking price. Zoopla has a unique feature on its website that allows potential buyers to track original asking prices and subsequent reductions,’ he added. Continue reading
