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House price momentum slows right down in the UK, says RICS index
House price momentum in the UK has slowed to the same level it was a year ago and new buyer enquiries fell for the second consecutive month, according to the latest index from the Royal Institution of Chartered Surveyors. The number of agreed house sales also dipped for the first time since September 2012, but the overall picture shows a return to a less volatile market, with more stable price expectations over the next three months. The August index report shows that a net balance of 9% of surveyors are now expecting prices to rise rather than fall, down considerably from 51% at the start of the year. Significantly, the concern over a potential rise in interest rates could be a contributing factor to the fall in buyer interest and the number of agreed house sales, says RICS. Members also indicated that Mortgage Market Review from April and an increasingly acute shortage of conveyancers is adding between two to four weeks onto the time it takes to complete a transaction. At a national level, the sales and demand picture was mixed. In London, the South West and the West Midlands, there was a significant dip in new buyer interest, but Scotland and Northern Ireland were noticeable exceptions, where buyer enquiries remain firm, with a net balance of 43% and 52% respectively. While a lack of supply remains a challenge for the market across the whole of the country, there are at last some signs in the capital, where this problem has been most chronic, that instructions are now picking up. Prices over the next 12 months are still projected by surveyors to rise over the next year by 2.3% across the whole country, which is down from 3.7% at the start of 2014. Surveyors in Northern Ireland now appear most optimistic, anticipating a price gain of 3.9%. ‘Buyer activity in the London market has been particularly pronounced but that is in a sense consistent with the move to a more sustainable market in the capital,’ said Simon Rubinsohn, RICS chief economist. ‘Elsewhere around the country, the market in general is showing a greater degree of resilience, but that largely reflects the fact that in some areas the recovery has only recently taken hold and affordability is rather less stretched. Significantly, members now expect price gains over the next year to be faster outside of the Capital, than in it,’ he explained. ‘Some of the momentum has come out of the housing market of late reflecting in part concerns over a likely rise in the cost of borrowing at some point in the not too distant future. However, we are also being told that the implementation of the recommendations of the MMR is taking its toll on activity; slowing the transaction process by on average up to a month,’ he pointed out. ‘Meanwhile, there are increasing signs that the London market is gradually moving onto a more sustainable footing with a modest increase in the number of instructions coming through slowly helping… Continue reading
US foreclosure figures tailing off, latest data suggests
The foreclosure crisis is over in the United States but the distress caused by the housing bust is still lingering, according to the latest report from housing data firm RealtyTrac. Foreclosure filings were reported on 116,913 properties in August, an increase of 7% from the previous month but still down 9% from a year ago, the smallest decrease in the last 47 consecutive months of year on year declines in US foreclosure activity. A total of 51,192 properties were scheduled for foreclosure auction during the month, down 1% from the previous month but up 1% from a year ago, the first annual increase in scheduled foreclosure auctions following 44 consecutive months of annual decreases. Scheduled foreclosure auctions in judicial foreclosure states where foreclosures are processed through the court system increased 5% from a year ago. ‘The August foreclosure numbers demonstrate that although the foreclosure crisis is well behind us, the messy business of cleaning up the distress lingering from the housing bust continues in many markets,’ said Daren Blomquist, vice president at RealtyTrac. ‘The annual increase in foreclosure auctions, the first since the robo-signing controversy rocked the foreclosure industry back in late 2010, indicates mortgage servicers are finally adjusting to the new paradigms for proper foreclosure that have been implemented in many states, whether by legislation or litigation or both,’ he added. Scheduled foreclosure auctions increased from a year ago in 24 states, including Colorado with a rise of 160%, Oregon up 117%, Connecticut up 81%, New York also up 81%, Oklahoma up 72%, New Jersey up 71%, Illinois up 25%, South Carolina up 21% and Maryland up 17%. The report also shows that more than 55,000 properties started the foreclosure process in August, up 12% from previous month and flat from year ago. It was the second consecutive month where foreclosure starts have increased on a month on month basis. Foreclosure starts, which in some states are the scheduled foreclosure auctions, increased from a year ago in 19 states, including Oklahoma up 147%, Indiana up 136%, New Jersey up 115%, Massachusetts up 55%, Florida up 24% and Maryland up 20%. Lenders repossessed 26,343 properties via foreclosure (REO) in August, up 2% from the previous month but down 33% from a year ago. It was the 21st consecutive month where REO activity declined on a year on year basis nationally. REOs increased from a year ago in seven states, included Georgia up 146%, Hawaii up 42%, Oregon up 20%, Pennsylvania up 12% and Connecticut up 10%. Six of the nation’s 20 largest metro areas posted year on year increases in foreclosure activity. In Washington, D.C. there was a rise of 18%, New York up 18%, Baltimore up 12%, Atlanta up 11%, Philadelphia also up 11% and San Francisco up 2%. Among the nation’s 20 largest metros those with the five highest foreclosure rates were Miami with one in every 359 housing units with a foreclosure filing, Tampa one in every 407 housing units, Baltimore one in every 17 housing units,… Continue reading
London and South East skewing average house price figures, latest index shows
The average property price in England and Wales has reached £274,302 but this drops to £185,496 if London and the South East are removed, the latest monthly index shows. This means that these two regions are skewing average house prices by a record £89,000, the biggest disparity since 1995, according to data from the LSL Property Services index. It is due to cooling house prices in some regions and the figures shows that the slowdown outside of London and the South East on an annual basis has dropped to 4.3%. This contrasts with average house price growth of 10.7% in the past year across all of England. On a monthly basis prices have increased by 0.9%, according to the data from the August index report. According to Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, a game of two halves is being played out in the UK property market. ‘In terms of average house price growth, a gap has developed between the South East corner and the rest of the country. If we exclude the key players of London and the South East from the game, a whole different playing field is revealed,’ he said. ‘House prices across the remaining parts of England and Wales have only increased 4.3% in the past year, or less than half of the overall measure of 10.7% when we include London and the South East. In absolute terms the difference would seem to add £88,806 to the average price tag for a home across England and Wales, the highest absolute difference since 1995,’ he explained. ‘This obscures cooler prices in much of the country. Further afield, it is critical that support mechanisms like Help to Buy aren’t dismantled. In July, house price growth slowed across all regions except for London, the South East and East Anglia. While these three regions continue to set new house price highs, the rest of the country is nowhere near these levels of growth,’ he added. Sexton also pointed out that compared to the nadir of 2008/2012, activity in the housing market has improved, but is not completely out of the woods yet, and still needs to recapture some of the vitality of its pre-recession health. ‘There is also much more to be said beyond the headlines for London. The annual rate of growth in London house prices is the fastest witnessed since 2000. Most recently we’re seeing asking prices in the capital start to be reined in, which will apply the brakes on annual house price inflation as the market steadies,’ said Sexton. ‘What’s happening in London may be eye-catching, but it is akin to looking through a kaleidoscope and skews any view of the current total housing landscape. Peeling back the regional layers gives a much more informed view of the core reality of the current housing market,’ he added. ‘With evidence of London starting to cool off after strong growth earlier in the year, it is critical that the underlying momentum… Continue reading
