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UK asking price reaches all time high but growth is slowing
October has seen a new all time high for the price of property coming onto the market in the UK at £296,549, according to the latest index figures to be published. However the month on month rise of 0.6% was relatively modest for the time of year and it the lowest October increase since 2010, the data from Rightmove shows. Year on year prices are up 5.6% and the new record asking prices is being fuelled by high demand for first-time buyer properties, with prices in this sector up 4.9% on last month and 9.6% over the past 12 months, the firm’s report says. It also points to a ‘vicious circle’ as high tenant demand leads buy to let investors to go head to head with first time buyers and many letting agents report ‘same day’ rentals and little or no property to rent. At the same time the number of first time buyer properties, usually regarded as two bedrooms or fewer, coming to market is down by 8% on same period a year ago, exacerbated by first time sellers struggling with second step price gap. ‘There are signs of a slowing pace of price rises in some sectors of the market, with the overall October rise the lowest we’ve recorded at this time of year for five years. We still have another national average record however, as prices continue their upward trend,’ said Miles Shipside, Rightmove director and housing market analyst. ‘This is mainly being fuelled by the heady price rises of typical first time buyer homes. A near 10% price surge in this category in the last year proves that despite tighter lending criteria in last year’s Mortgage Market Review, some first time buyers can still afford the higher prices being asked for by sellers in this sector,’ he explained. ‘It’s also symptomatic of a shortage of properties coming to market with two bedrooms or fewer, combined with demand from both first-time buyers and landlords investing in reaction to the huge rental demand for smaller properties,’ he added. Letting agents report extraordinary demand from tenants in many parts of the country, with new or existing households looking to the rental sector to fulfil their need for quick and flexible housing arrangements. A growing number of people like the transience of renting, without the complications, commitments and costs of buying and then selling, the report says. With inadequate supply from housing associations and the public sector, private landlords are one of the few active providers of smaller homes for rent. However, when this need is combined with first time buyer demand, boosted by the return of low deposit mortgages and lenders competing to reduce their rates, it creates a vicious circle due to the limited supply of suitable properties for sale in this most active sector. ‘With local authorities, housing associations and developers no longer satisfying the country’s housing needs, those in particular looking to rent or buy smaller homes must hope for… Continue reading
Price growth for central London prime market revised down
Property price growth in the prime market in central London is likely to be less than expected due to a slowdown in the sector, a new analysis suggests. Leading real estate firm Knight Frank has revised its 2016 forecast for annual price growth in prime central London to 2% from 4.5%. The firm pointed out that the prime London property market has faced a number of headwinds in 2015, which reduced annual price growth from 5% at the end of last year to 1.3% in September. ‘These challenges have been led by the increase in stamp duty at the end of 2014, a factor that will continue to weigh on transactions and price growth into 2016 as the market absorbs the new rates,’ the report says. It also explains that global economic uncertainty centred on China has also dampened demand to some degree. ‘However the strength of the UK’s economic recovery, employment growth in London and the likelihood of continued low interest rates mean price growth will remain positive next year,’ it adds. It also points out that activity in September and October has increased following a subdued summer and the appearance of some high quality stock has driven demand. However, buyers have become more circumspect and stringent in their requirements due to the stamp duty increase. ‘It has resulted in a flight to quality, meaning demand is particularly strong for properties in the best condition and on a prime floor, street or square,’ the report adds. ‘While the anticipated gear change materialised as summer moved into autumn, there has been no sense the market is entering full-blown recovery mode after what has been a subdued 2015,’ it concludes. Continue reading
Less than one in five house sales fell through in UK in third quarter
Less than one in five house sales fell through between July and September in the UK, taking the house sale fall through rate to its lowest level since late 2012, new research shows. The figures from home buyer Quick Move Now indicate a house sale fall through rate of 19.62% in the third quarter of the year, down from 36.34% in the second quarter of 2015. The six month average fall through, which offers a greater overview of how the property market is performing generally, shows that at the end of the second quarter it was 28.44% but this fell to 27.99% in the third quarter. ‘As the property market becomes more competitive, buyers are coming to the market better prepared in order to make themselves more attractive to vendors when competing for property,’ said Danny Luke, business manager at Quick Move Now. ‘Often, buyers will already have sought financial advice, have mortgage offers in place, and taken time to really consider affordability so they know what they can afford and they know what they're looking for, so when they find a good property they want to snap it up as quickly as possible and not risk losing out to another buyer,’ he added. He also believes that due to continued market buoyancy and predicted interest rate rises, buyers are keen to secure properties quickly before they're priced out of the market. Meanwhile, separate research shows that demand for London property at below £2 million is set to remain strong, with the city’s population forecast to grow by more than 100,000 every year for the next decade. As house prices grow across London, it will create new markets where properties cross the £1 million threshold, according to the latest London Residential Review from real estate firm Knight Frank. The analysis is based on postcode districts where at least 20% of sales have been above £1 million in at least one quarter since the start of 2014. The minimum threshold was five sales and no postcode district was allowed to have more than one quarter with 20% of sales above £1 million before 2014. The data shows that Hammersmith (W6) had five such quarters since 2014, making it the area that has undergone the biggest transformation in terms of £1 million plus sales. Other areas include Maida Vale (W9), Queen’s Park (NW6), East Finchley (N2) and Muswell Hill (N10). Further south, Battersea (SW11) and Vauxhall (SW8) have consolidated their positions as £1 million markets. Continue reading
