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UK regional cities house price growth outperforms central London, says latest index
House prices in larger regional cities in the UK have outperformed central London for the first time since 2005, the latest property index shows. Although central London recorded year on year house price growth of 3% in the first quarter of 2015 the capital’s most expensive boroughs are being eclipsed by growth in large regional cities, according to the UK Cities House Price Index from residential analysts Hometrack. Some 12 of the UK’s largest regional cities have registered higher price rises year on year than Central London including Glasgow with growth of 7.6%, Manchester 6.8% and Leeds 6.6%. Indeed, Kensington and Chelsea and Hammersmith and Fulham have seen price declines of 3.4% and 5.1% respectively amidst uncertainty due to the threat of mansion tax and affordability pressures in the run up to the general election. Newcastle, Sheffield, Manchester, Leeds and Glasgow registered the strongest pick up in house price growth in the first quarter of 2015 as households gain in confidence over the economic outlook and attracted by record low mortgage rates. Together these cities account for 30% of housing stock covered by the Hometrack index and this pick-up in growth is supporting the headline rate of house price growth which was 0.8% in the first three months of the year. Average house prices across the 20 cities included in the index registered growth of 3.8% in the first quarter compared to 3% over the same period in 2014. While the UK picture is polarised by a North/South reversal in house price growth, the London market is divided by its East/West compass points. The balance of house price growth across the index for London has shifted from high value markets driven by international capital to the lower value markets favoured by owner occupiers. Newham, Barking and Dagenham, Greenwich, and Croydon registered 14.2%, 12.5%, 12.4%, and 12.1% growth respectively in the last quarter compared to the same period 12 months ago. The index report says that these boroughs are sustaining the capital’s growth, despite house prices in the affluent central London areas falling. The report also suggests that areas of London that are still undergoing regeneration or are benefiting from new investment have proved popular with owner occupiers priced out of the boroughs favoured by international buyers and investors. The highest year on year growth rate was recorded in Newham and Barking and Dagenham, where average house prices are £275,000 and £215,000 respectively, and track 33% and 50% below the London average of £417,000. ‘House price growth is holding up better than expected as a result of a lack of new supply of homes for sale and record low mortgage rates attracting buyers into the market,’ said Richard Donnell, director of research at Hometrack. ‘Growth in London is still running in double digits and high capital growth rates in recent years have pushed down average loan to values in London, creating further capacity for additional borrowing for households that can pass tighter affordability… Continue reading
Cornwall is top spot for holiday homes in England and Wales
Some 165,000 people in England and Wales have holiday homes with Cornwall the most popular location for this type of second property, new research shows. Indeed, the county in the south west of England has over 10,000 holiday properties, according to a new analysis from Direct Line’s SELECT Premier Insurance. That means Cornwall has 6% of the nation’s holiday homes and according to estate agents its 300 mile coastline makes it the top holiday home hotspot. In second place is Gwynedd in Wales with 7,784 or 4.7% of holiday homes with its proximity to Snowdonia National Park adding to its attraction, followed by North Norfolk with its sandy beaches and salt marshes, which has 4,842 or 2.9% of holiday homes. South Lakeland with 4,684 holiday homes, East Lindsey with 4,472, Pembrokeshire with 4,310, the East Rising of Yorkshire with 4,059, South Hams with 3,738, Scarborough with 3,687 and Kings’ Lynn and West Norfolk with 3,539 complete the top 10. Across England and Wales there are almost 1.6 million people who have a second property in a different area to where they live permanently and 11% of these are used as holiday homes with the remainder being used for purposes such as work, or accommodation for student children. According to Nick Brabham, head of SELECT Premier Insurance, holiday homes are very valuable to owners as they are often a place to relax and spend quality time with loved ones. ‘This time is often limited, which means it is essential to keep the property and its contents in top condition all year round,’ he added. Peter Olivey a partner at Cornish based estate agents Cole, Rayment & White in Padstow, explained that Cornwall ticks a number of important boxes for second home owners with its coastal location and abundance of activities. ‘It’s a true holiday haven without the hassle or cost of going abroad. The local property market here is competitive but with a number of new developments springing up and mortgage rates much lower than they have been, there’s still plenty of opportunity for prospective buyers,’ he said. Continue reading
UK gross mortgage lending showing signs of picking up
Mortgage lending in the UK is still down on a quarterly basis on what it was a year ago but there are signs of a pickup, according to the latest figures to be published. Estimates from the Council of Mortgage Lenders shows that gross mortgage lending reached £16.5 billion in March, some 21% higher than February but lending for the first quarter is 12% down on the final quarter of 2014 and 3% down on the first quarter of 2014. However it is up month on month for the month of March, some 7% higher than March of 2014 and CML chief economist Bob Pannell said that the underlying lending picture is stabilising. ‘Sentiment and activity are showing early signs of improvement, and should be further supported by the effects of stamp duty reform. We expect to see lending strengthen over the next few months, albeit from a relatively sluggish start in 2015,’ he said. But buy to let lending is stronger. Data from the Bank of England shows that gross lending for buy to let purposes was £27.4 billion in 2014 and over the past five years the share of total buy to let lending in overall mortgage lending picked up to 15% in the fourth quarter of 2014 Q4, higher than in the pre-crisis period. The Bank’s network of Agents noted that the rental market had continued to grow strongly in recent months, supporting continued steady growth in buy to let activity and gross buy to let lending has grown faster than overall gross mortgage lending in recent years. Gross buy to let advances for remortgaging have also increased in recent years. As a share of the total it grew from 32% in 2002 to 52% in 2014, with the share of gross advances for house purchase at 45%. According to David Whittaker, managing director of Mortgages for Business, buy to let is not subject to the nerves and jitters of this spring’s home owner mortgage market. ‘Election uncertainty might be putting some people off buying a home, but in the meantime millions of tenants still need somewhere to live and landlords are investing in new properties, as buy to let mortgage rates reach new lows,’ he said. ‘Underpinning this, rents are picking up on the back of a strengthening jobs market, supporting yields while steady price growth is still providing an additional bonus of capital growth to many landlords,’ he explained. However he pointed out that there are uncertainties on the horizon. ‘The latest noises from the Bank of England indicate how the powers that be seem as unsure about the future path of interest rates as the man on the street. However, when rates do rise, or if the economic recovery does slow, landlords will be in a better position to stand up to headwinds than a year ago as their tenants’ financial health improves,’ he added. In general the mortgage lending market is improving, according to… Continue reading
