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Valuations activity up 9% in UK despite price growth slowing
Valuations activity in the UK housing market grew 9% year on year in 2014 despite a cooling in property price growth, according to the latest research from Connells Survey and Valuation. On a monthly basis, total valuations dropped 17%, however, this is slightly lower than the average decrease of 18% typically recorded from November to December for every year since 2010. ‘This latest increase in valuations activity does contrast with more rapid expansion recorded earlier in 2014. But a more balanced and sustainable pick up bodes well for 2015,’ said John Bagshaw, corporate services director of Connells Survey and Valuation. The firm’s data also shows that remortgaging is the strongest performing sector of the market. On a monthly basis, remortgaging valuations had one of the smallest falls of 7% and saw a robust 25% surge year on year to December 2014. According to Bagshaw thousands of households are taking advantage of the record low rates and this looks set to continue for the foreseeable future. He pointed out that just this week Barclays launched a new 10 year fixed rate at less than 3%. ‘At the same time, the relative strength in remortgaging activity in December can be partly explained by the fact it isn’t as heavily influenced by seasonal factors. While home movers and first time buyers may typically avoid a busy upheaval during the festive period, for remortgagers this period is not as disruptive,’ he said. ‘However, remortgaging has wind in its sales as we enter 2015. With the Bank rate set to remain at its historic low for some time, lenders will probably be able to offer even more competitive rates very soon,’ he added. First time buyer activity also saw significant annual growth. On an annual basis the number of valuations for first time buyers increased by 9%. This is despite the fact that valuations dropped by 16% compared to the previous month. By contrast, the buy to let sector of the market saw one of the biggest falls in activity both on a monthly and annual basis. Compared to November 2014, activity fell 33% while on an annual basis it was down 9%. ‘With an improving jobs market, greater mortgage affordability and consistent above-inflation wage growth it is clear that confidence is returning to first time buyers. Looking ahead, the recent changes to stamp duty and the ongoing Help to Buy Scheme should help this sector continue to perform well in 2015,’ said Bagshaw. He explained that after a slightly disappointing performance in October and November, first time buyer activity seems to have regained strength. ‘This sector of the property market was particularly affected by the spate of regulatory policies such as the loan to income caps. Coupled with rising house prices these lending restrictions have proven a hurdle for first time buyers,’ he added. But… Continue reading
Latest RICS market survey shows construction work up in the UK
Construction workloads in the UK rose in the final quarter of 2014, but the shortage of bricklayers reached a record high, according to the latest market survey from the Royal Institution of Chartered Surveyors. Some 52% of respondents reported that workloads in the commercial sector had grown in the fourth quarter of 2014, which is the fourth consecutive quarter where the reading for workloads has been above 50%. Private housing followed at a net balance of 45% and industrial at 40%, while overall UK construction workloads reached a 39% net balance. Looking at growth restraints, around 60% of respondents reported that either material shortages, skill shortages or financial constraints were impeding further sector growth, while the proportion of respondents reporting labour shortages across all of the main trades climbed to an all-time high of 48%. Despite these factors and anecdotal evidence that the upcoming election in May is creating industry uncertainty, confidence remains firm with 75% more respondents expecting workloads to increase and 55% more expecting employment to increase. Members’ anticipate growth in workloads of 3.4% in 2015 with jobs in the sector expected to rise by a further 3%. Elsewhere, the infrastructure sector continued to see what has been a much steadier pace of growth over the last 12 months and in the final quarter of 2014 some 23% more respondents reported a rise in workload activity. In Northern Ireland, the picture remains a little more downbeat compared to the rest of the UK. The survey report says that labour shortages have become increasingly onerous in every area of the sector since the industry began to recover in the middle of 2013, with bricklayers and quantity surveyors in particularly short supply. Now that workloads are rising and optimism is growing, the practical challenges are in providing the skilled labour the industry needs and in alleviating the financial constraints, which saw nine months of decreased lending in 2014. ‘The political challenges in the run-up to the election are around shoring up industry confidence to ensure the framework for effective planning and delivery of projects are in place to create long term growth that is spread across the UK. This will also enable the investment that the industry needs to raise productivity and encourage new training initiatives,’ said Alan Muse, director of built environment professional groups at RICS. Continue reading
New home approvals in Australia reach highest level on record
New home building approvals reached their highest ever monthly level during November, the latest official data from the Australian Bureau of Statistics show. Approvals for new homes totalled 18,245 in seasonally adjusted terms during November 2014, almost 3% higher than the previous record which was set in August 1994. Overall approvals in November rose by 7.6% on the previous month and were 10.1% higher than 12 months earlier. A breakdown of the figures show that seasonally adjusted new dwelling approvals increased most strongly in Victoria at 19.7%, followed by Tasmania at 8.2. They were up 5.7% in Queensland and 1.2% in Western Australia. A fall of 1.4% in new home approvals was recorded in New South Wales, while approvals were down 16.3% in South Australia. In trend terms, new dwelling approvals increased in the ACT by 3.3% and in the Northern Territory by 2.9%. The Housing Industry Association, the voice of Australia’s residential building industry, pointed out that growth has been concentrated in the multi-unit segment of new home building, which rose by 18% in November year on year. Detached house approvals saw growth of 3.6% over the same period. ‘Residential construction was the economy’s good news story during 2014, and today’s figures indicate that we can look forward to another positive year for the industry,’ said HIA senior economist, Shane Garrett. ‘The fact that approvals hit an all-time high during November augers very well for the pipeline of residential construction work in 2015. With weaknesses in several areas of the Australian economy, new home building has come to life at an opportune time,’ he explained. ‘Residential construction is now a central pillar of support for domestic demand in Australia. It is important that policy reform continues in the areas of planning, land supply and removing the taxation burden on new home building. This will form an important part of achieving the necessary rebalancing of the economy,’ he added. Continue reading
