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UK property prices up 3% month on month with record highs across the country
UK residential property prices have risen to a new record as buyers act but sellers hold back with six out of 10 regions posting price highs, the latest real estate index shows. Prices were up 3% or £8,460 to an average of £294,351 and the clear cut general election result is regarded as having boosted the market, according to the May index from online portal Rightmove. It also reveals tighter supply in the market with number of properties coming to market down 8.5% on same period a year ago, though £2 million plus properties buck this trend with and 86% month on month leap in new listings. The firm says that such high demand and low supply highlights the urgency for the delivery of more new build homes. ‘Some buyers had been holding back in the weeks before the election, leading to some sellers suffering an unseasonal price standstill in the late spring. In particular, sentiment and prices got hit in the mooted mansion tax price brackets. Now the unexpected election outcome has caused a strong rebound, prompting an upturn in buyer demand and helping new seller asking prices to hit their highest ever levels,’ said Miles Shipside, Rightmove director and housing market analyst. ‘Agents report that the election surprise has given a boost to market sentiment, driven by more certainty about future economic and taxation policies. While would be buyers have been able to respond quickly to these events, many potential sellers have so far failed to come to market. This has pushed up some of the asking prices of those properties that have been marketed, meaning that buyers are faced with paying a new average record price high for the more limited choice available. It could be said that this is the price of political certainty,’ he added. But he pointed out that pre-election jitters contributed to a small fall of 0.1% in Rightmove’s May index, which has made the size of the rebound in June appear somewhat more dramatic. However, while June’s 3% rise is partly catching up on lost ground from last month’s fall, it is also a reflection of strong housing demand not being matched by suitable supply in many parts of the country. He says that evidence of this is that six out of 10 regions have set new record price highs this month as the supply/demand imbalance and consequent upwards price pressure continue to head further north. As well as the four southern regions, both the East Midlands and West Midlands reached all-time price highs this month. London has seen the strongest monthly price performance, up by 5.7%, aided by the higher priced boroughs seeing more top end owners willing to come to market now that the threat of the mansion tax has been removed. Continue reading
Majority of UK home movers have benefited from Stamp Duty change
Home buyers spent an estimated £7.7 billion on Stamp Duty in England and Wales in the year to March 2015, new data shows, with the average home owner spending nearly £10,000. Home owners in London who bought for the first time in 1999 will now, on average, have spent over £38,000 in Stamp Duty over their lifetime and the typical Stamp Duty bill for a third stepper has fallen by £2,500 or 26% over the past year due to December’s reform of the tax. The research from Lloyds Bank shows that overall revenue raised increased by an estimated £1.5 billion, comfortably exceeding the £6.2 billion in the year to March 2008 at the peak of the last housing boom. In contrast, in the 12 months to March 1999, less than £1 billion was raised. A higher number of residential property transactions and increased prices are estimated to have led to a significant rise in Stamp Duty and the research also found that home owners stay in their homes for just under eight years on average, and take three steps up the ladder in their lifetime. The proportion of first time buyers paying Stamp Duty has more than doubled over the past 16 years from 32% in 1999 to 66% in 2015. In London and the South East over nine in 10 first time buyers now face paying Stamp Duty on their purchase. The proportion of home movers paying Stamp Duty has risen from 68% in 1999 to 85% in 2015. In the southern regions of England more than nine out of 10 home movers now pay Stamp Duty on their purchase. The highest overall Stamp Duty costs are faced by buyers in London and the South East. In London home buyers pay four times as much as the average for England and Wales at £38,600 while in the South East the lifetime cost is £22,800. The lowest lifetime Stamp Duty costs are in Wales which, at an average of £3,800, are less than 40% of the England and Wales average. Home owners in the North and East Midlands both at £4,000 and Yorkshire and the Humber at £4,500 face the next lowest Stamp Duty charges. Based on regional average house prices for typical first time buyer homes in 1999, Stamp Duty was only a factor for those first time in London and the South East. By the time these people were ready to move on to their next home (in 2007), the average Stamp Duty for their new property had risen to £2,283. In May 2015, those buyers moving on to their ‘final’ home faced an average Stamp Duty bill of £7,400, some £2,500 or 26% lower than in May 2014. The decline in Stamp Duty is due to the reforms that were implemented last December. Under the new progressive structure of Stamp Duty no tax is paid on any of the value of a property below the… Continue reading
Increase in lending for new homes across the board in Australia
There has been an increase in lending for new homes in Australia to both owner occupiers and investors, according to the latest housing figures from the Australian Bureau of Statistics. The data shows that there was a 4.3% increase in the number of owner occupier loans for construction, while the equivalent number of loans for the purchase of a new property rose by 1.6% in April. The figures include an increase in lending for investment in new residential dwellings which took the annual value to in excess of $9 billion for the first time ever. Harley Dale, chief economist of the Housing Industry Association, said the number of first home buyer loans for owner occupiers remains low, but is running at its highest annual level in a year, although that of course excludes those first time buyers entering the investment market. He also pointed out that the number of trade-up buyer loans reached its highest level since prior to the global financial crisis and described the data as a positive update for the new home building industry. A regional breakdown of the figures, however, shows wide disparities in new housing conditions. The total number of owner occupier loans for new housing increased in six out of eight states and territories. Over the three months to April this year the seasonally adjusted estimate of new loans increased by 4.9% in New South Wales, by 4.7% in Victoria, by 3.4% in Queensland, by 1.6% in South Australia and by 20.6% in the Northern Territory. The number of loans fell over the same period by 4.4% in Western Australia, by 10.3% in Tasmania and by 8.7% in the Australian Capital Territory. Continue reading
