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Latest index confirms that UK house price growth continues to moderate
UK house prices in the three months to the end of November were 0.7% higher than in the previous three months, according to the latest quarterly figures from the Halifax. This quarterly rate was marginally down from 0.9% in the previous month and the data also shows that prices in the three months to November were 8.2% higher than in the same three months a year earlier. On this measure, annual house prices are now growing at their slowest rate since February and on a month on month basis they are up o.4% which reverses the 0.4% monthly decline recorded in October. However, home sales fell in October to 98,490, the first time they have been below 100,000 in 2014. Nonetheless, current estimates suggest that housing transactions in 2014 will total in excess of a million for the second consecutive year. This is the first time since 2006 and 2007 that home sales have exceeded a million in successive years, according to HMRC, seasonally adjusted figures. The index also points out that mortgage approvals continue to fall. The volume of mortgage approvals for house purchases, a leading indicator of completed house sales, fell in October, to 59,426, data from the Bank of England shows. Approvals have now fallen by 22% from 76,574 in January 2014. Private housing completions in the first three quarters of 2014 were 10% higher compared with the same period in 2013, at 68,930, according to the department of Communities and Local Government. It means that levels of house building remain well below those required to keep up with the pace of household formation, but these latest figures show signs of a revival. A continuation of this upward trend in house building would help to bring demand and supply into better balance, curbing upward pressure on house prices. ‘Receding buyer interest combined with a revival in private housing completions has brought supply and demand into better balance. These factors have in turn contributed to the easing in house price growth since the summer,’ said Martin Ellis, Halifax housing economist. ‘But housing demand continues to be supported by a strengthening economy, rising employment levels, still low mortgage rates and the first gain in real' earnings for several years,’ he explained. ‘We expect a further moderation in house price growth over the next year with prices nationally expected to increase in a range of 3% to 5% in 2015. The prospect of higher interest rates at some point in the year and the deterioration in affordability over the past year are expected to be key factors curbing housing demand,’ he pointed out. ‘Housing demand should be supported by solid economic growth, higher employment, still low mortgage rates and the first gain in real earnings for several years. We expect to see a more even regional pattern in house price growth during 2015,’ he added. Continue reading
Over half of UK landlords plan to expand their portfolios in 2015
Over half of landlords in the UK are looking to buy more property in 2015 and are feeling bullish about the new year, according to a new study. The optimism is fuelled by the growth in demand for rental property, falling rent arrears and rising rent prices during the last 12 months, says the research from online letting agent PropertyLetByUs. The survey also found that 50% of landlords have achieved yields of between 6% and 8%, 10% of landlords have achieved yields of over 8% and 40% of landlords have achieved yields of 4%, over the last 12 months. The firm says that rising property prices has meant that almost a third of landlords are enjoying sizeable equity in their property, with a loan to value ratio of between 30% and 40%. It also says that with booming tenant demand, it is no surprise that only a quarter of landlords are planning to cash in on rising property prices by selling some of the their buy to let properties in 2015. ‘Landlords have enjoyed good rental yields and increased asset values in 2014,’ said Jane Morris, managing director of PropertyLetByUs, adding that they have also experienced high levels of tenant demand, with just 3% reporting that it is declining, according to recent research from Paragon Mortgages. The study shows that overall, 41% of landlords surveyed said tenant demand was growing or booming and 51% said demand was stable. Home ownership has fallen to its lowest level for a quarter of a century and with property prices continuing to increase, tenant demand is set to grow during 2015 and beyond. ‘Over the last year, we have seen a surge in landlords across the UK using our website, particularly in the North, London and the South East. We have also seen a sharp rise in the website’s advertised properties, up by 50% since May 2014,’ explained Morris. Continue reading
Research reveals high number of UK tenants don’t have contents insurance
With both the cost of renting and the number of renters increasing in the UK new research has found that a third of tenants don’t have any form of home insurance to protect their contents. This proportion is almost six times larger than the comparative figure for those who own their own homes which is 6%, according to the research by Co-operative Insurance. The research reveals the most common reason that those renting have no contents cover is a belief that they can’t afford it with this affecting 44%. This is in spite of recent industry data, which reveals that the average home contents policy costs just £2.44 per week. Furthermore, the findings highlight that 29% of those without insurance feel that they don’t need contents cover as they don’t have expensive belongings whilst 26% believe they don’t need insurance as they rent rather than own a property and 16% are happy to take the risk of not insuring their contents. Some 7% said that they don’t have contents insurance as there are too many things excluded from the cover, 6% will just pay for damage from savings, 5% have not got round to it yet, 3% believe this is covered under landlords insurance, 2% think insurance is too complicated and 1% didn’t renew last time their policy finished. The research also revealed that the average value of contents estimated by renters is £16,644, for home owners this doubles to £31,651. Industry findings highlight that the average theft claim for contents now costs £1,700 whilst this rises to £11,000 in the event of a fire. The average claim for accidental damage is now £550. ‘This research uncovers a worrying insurance gap, amongst a growing proportion of the UK population,’ said Anthony Lewis, Head of Insurance for The Co-operative Insurance. ‘Prized possessions and home contents are worth protecting whether people own or rent their property, and our research suggests that many millions of people are taking a risk without any cover in place in the event of theft, or other perils such as flooding and fire,’ he added. The research also shows that 10% of those who rent, have stopped insuring their home over the last five years. This compares to just 6% of those who own their own homes. Overall the figures reveal the main factor behind people stopping insuring their homes, is a desire to save money with 47% saying so, while 20% say they have moved to an area with a lower crime rate, the same number have moved from owning a home into rented accommodation, 19% lost their job and 14% have installed extra security. Continue reading
