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UK asking prices up 1.4% this month, latest index shows
The price of property coming to the market in the UK increased by 1.4% in January at a time of year when prices usually fall, according to the latest index from Rightmove. It takes the average national asking price to £273,275 and means prices have increased by 8.2% in the last 12 months. But it points out that even although the number of properties on sale has increased by 2% this if failing to replenish agents’ historically low stock and currently levels are 10% below the same period last year. Sales activity has been boosted by Stamp Duty savings of up to £1,250 for some first time buyers and average property prices in this sector are down by £1,132 this month. However the firm reckons that despite continued low mortgage and inflation rates, sellers will have to work harder in 2015 than in 2014 due to election jitters and mortgage restrictions. It believes that lenders are selecting buyers who are good risks to lend to, and in turn buyers are very selective with the properties they choose. A closer look at the figures show that prices and activity both cooled in the second half of 2014, though there are signs of a New Year bounce back. More people are looking for property than last year, and more sellers are putting their property up for sale. ‘Early 2015 statistics currently point in the right direction for home movers, with the Chancellor’s Stamp Duty reform perhaps being the spur for people to get on with moving. There are more positive signs of early bird activity rather than pre-election jitters or economic worries deterring prospective movers,’ said Miles Shipside, Rightmove director and housing market analyst. ‘The unseasonably high 1.4% jump in new sellers’ asking prices suggests that there are more rises in the pipeline for the next few months. Early-bird buyers, including trader-uppers, can potentially catch a good deal by getting off the mark quickly in 2015, and get a better pick of the housing crop,’ he explained. Rightmove’s updated House Price Index now tracks typical property prices and supply for the main market sectors, including first time buyers, second steppers and the top of the housing ladder. It says that with the average first time buyer property coming to the market at £163,251, the reform to Stamp Duty announced in the Autumn Statement could mean potential savings of up to £1,250. ‘Should prices rise, as they look set to over the next few months, potential Stamp Duty savings will diminish, but they will still be helpful to first time buyers struggling to save enough to cover the Stamp Duty bill as well as the mortgage deposit,’ said Shipside. ‘First time buyers are in a potential win-win savings window this month with the price of property coming to market in this sector being over £1,100 cheaper, coupled with up to £1,250 in Stamp Duty savings. This is a welcome boost given that the price of property coming to market… Continue reading
Multi freehold blocks provide highest gross yields in UK for landlords
Multi-unit freehold blocks have overtaken houses in multiple occupation and now provide UK landlords with the highest gross yield at 9.3%, new figures for the fourth quarter of 2014 show. This compares to 8.6% in the third quarter and is the highest yield on record for this property type, according to the latest complex buy to let index from Mortgages for Business. Houses in multiple occupation (HMOs) saw rental yields rise to 9% in the fourth quarter of 2014, from 8.9% in the previous quarter, slightly lower than the yields recorded earlier in the year where HMO yields stood at 9.6% in the first three months of the year. However, the index report points out that compared to vanilla and semi-commercial property, houses in multiple occupations still provide one third more than standard buy to let investment. The only exception to this trend is semi-commercial property which saw yields fall to 6.4% from a high of 9.7% in the third quarter. Gross yields on vanilla buy to let properties have returned towards the levels seen in early 2014. For a standard buy to let property the equivalent figure is now 6.3%, up from 5.9% in the third quarter. ‘Rental yields for HMOs and MUFBs are typically higher than those for vanilla buy to let. For a multitude of reasons, not least stagnant wage growth for half a decade, many tenants simply can’t afford an enormous flat with a spare bedroom. As such, the attraction for many of renting a room rather than whole property will ensure that there is a steady yield-boosting demand for HMOs over 2015,’ said David Whittaker, managing director of Mortgages for Business. Across all types of buy to let property landlords have seen loan to value ratios (LTV) fall. The average LTV on a vanilla buy to let mortgage in the fourth quarter was 63%, considerably down from 68% in the previous quarter. Loan to value ratios for HMOs have fallen the most, from 71% in the third quarter to 64% in the fourth quarter, while both multi-unit freehold blocks and semi-commercial properties have fallen by four percentage points each to 64% average loan to value in the fourth quarter. ‘While property prices have slowed a little in recent months, landlords have on the whole seen enormous price growth compared to the indecisive direction of property prices a few years ago,’ explained Whittaker. ‘Looking ahead, this might spur some landlords to expand their existing portfolios further and diversify as a result of the high yields on non-standard properties,’ he added. Continue reading
Home sales fell almost 6% in December, latest CREA index shows
Nationally home sales in Canada fell in December compared with the previous month, recording a fall of 5.8%, the latest index shows. However, actual (not seasonally adjusted) activity stood 7.9% above December 2013 levels, according to the data from the Canadian Real Estate Association (CREA). The number of newly listed homes rose 1.1% from November to December and the Home Price Index (HPI) rose 5.4% year on year in December while the national average sale price rose 3.8% on a year on year. The number of home sales processed through Canadian real estate Boards and Associations fell 5.8% in December 2014 compared to November and remained above year ago levels. December sales were down from the previous month in almost two thirds of all local housing markets, led by declines of about 25% in both Calgary and Edmonton. Activity also slipped by about 5% in the Greater Toronto Area. ‘Home sales activity remained above year ago levels in most local housing markets. Sales were also stronger in December than they were the previous month in about one third of all local markets in Canada,’ said CREA president Beth Crosbie. December sales were down from the previous month in a number of Canada’s largest and most active housing markets, indicating a broadly based cooling off for Canadian home sales as 2014 came to an end, according to CREA chief economist Gregory Klump. ‘Even so, sales remain above year-ago levels in many of the same markets. Given the uncertain outlook for oil prices, it’s no surprise consumer confidence in Alberta softened and moved some home buyers to the side lines,’ he explained. ‘With regards to slower activity in Calgary and Edmonton, sales in these two markets had been running strong all year before they returned to levels that are entirely average for the month of December,’ he added. The number of newly listed homes rose 1.1% in December compared to November. Led by Calgary, Regina and Ottawa, new supply was up in just over half of all local markets. The national sales to new listings ratio was 51.8% in December, down from the mid 55% range in the previous four months. A sales to new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in just over two thirds of all local markets in November. More than half of the British Columbia, Alberta and Southern Ontario markets that had been in seller’s market territory in November returned to balanced market territory in December. This list included Greater Vancouver, Calgary, Edmonton, and the Greater Toronto Area. The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. There were 6.2 months of inventory nationally at the end of… Continue reading
