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Signs of a strong house market recovery in the UK regions
The outlook for the UK housing market in 2015 is positive, despite some challenges, with signs of a strong recovery in the regions, according to the latest quarterly analysis report. National estate agent Strutt & Parker is forecasting UK house price growth of 5% in 2015 overall and 9% in the Greater London area. But prime central London is expected to stagnate at 0%. According to Stephanie McMahon, head of research at Strutt & Parker, there is still an imbalance between London and the rest of the UK but there are signs of strong recovery in the regions as buyers outside the capital look for affordability. ‘The holding off of interest rate rises, now not expected before autumn 2015 at the earliest, is a big positive. This combined with continued wage growth and low inflation, should give the national market the momentum it needs. We should see a flurry of activity up until the autumn as buyers take advantage of the low interest rate environment,’ she explained. As part of the report, Strutt & Parker with its retained economic advisors Volterra, also analysed the behavioural profiles of its buyers who purchased country homes in the £2 million plus market outside of London throughout 2014. It was clear that the majority, 79%, were buying a large country home for their primary residence while for 13% it was a second home and 8% were buying as an investment. The firm believes that this could be linked to the increasingly high cost of buying and moving, meaning that people are choosing to buy one large house rather than two smaller ones or numerous buy to let investment properties. ‘The beginning of 2015 has seen a significant increase in new applicants registered with us looking for prime properties in excess of £2 million. We are witnessing at least double the amount of potential purchasers enquiring about properties we are currently offering or are now bringing to the market,’ said James Mackenzie, Strutt & Parker’s head of Country Department. ‘However, our viewing levels are not higher, which would indicate that there are a significant number of people who are beginning to look at moving but are waiting to see what the market has in store for this year,’ he added. The report shows that 2014 saw a significant increase in the number of transactions compared to 2013 especially in the regions outside of Greater London, as well as in Scotland, both of which recorded 7.8% and 11.6% growth respectively. In Scotland, 93,972 homes were sold in 2014, worth a total of £15.4 billion. In Greater London, 110,417 homes were sold in 2014, worth a total of £57.8 billion. ‘Given the pending election, we are pleasantly surprised at the levels of activity, most specifically in those areas closest to London, in the sub £2 million market,’ said Guy Robinson, head of Regional Residential Agency at Strutt… Continue reading
Quarter of UK lettings agents report higher rents in first month of 2015
One in four letting agents in the UK have seen private sector rents rise at the beginning of 2015, according to the first of a new monthly report from the Association of Residential Letting Agents (ARLA). The index tracks key market trends within the private rented sector and also found that London has the highest demand for rental property in the UK and on average it takes five viewings for a property to be let. The January report, which was conducted among ARLA members, reveals that on average 27% of licenced branches saw an increase in the cost of monthly rent for tenants from December 2014 to January 2015. The East of England, which includes Bedford, Cambridge and Norwich, saw the highest number of landlords increasing rent per calendar month, with 35% of ARLA letting agents reporting an increase in the New Year. Welsh agents on the other hand only saw 11% of landlords increasing monthly rent, leaving less tenants facing rising costs. ‘The new ARLA Private Rented Sector Report is designed to gain invaluable insight on the lettings market month to month from ARLA member agents,’ said David Cox, managing director of ARLA. ‘With house prices still high, along with stricter lending criteria for mortgages, the rental market is currently a much more accessible and affordable option to buying. Due to this, the demand for rental property is increasing, which impacts the cost of renting and people are willing to pay more to secure their desired property. If house prices continue to rise in 2015, we expect this trend to continue in the rental sector,’ he explained. Despite rising rent costs, on average, ARLA letting agents reported it takes around five viewings for a property to be taken off the market. Whilst rent increased the most in the East of England, ARLA letting agents revealed it also only takes an average of three viewings for a property to be let in the region. This is less than half the viewings it takes for properties in London, which take an average of seven viewings. ‘With rental properties in the East of England being quickly snapped up off the market, people don’t appear to be put off by the rising cost of rent in the region. Clearly property in the area is popular and this will be an interesting trend to watch,’ said Cox. ARLA licensed agents reported an average of 38 prospective tenants registered per branch in January. Unsurprisingly this was the highest in London, with an average 45 registered prospective tenants per branch. However, it seems that unlike the sales market, there is more supply in the rental market. The average number of managed rental properties per branch was 184. The highest was recorded in East Midlands at an average of 266 per branch, while the lowest was recorded in London at… Continue reading
UK housing market sales at their highest since 2007
Residential sales in the UK in the first 10 months of 2014 were 21% higher than in the same period in 2013 with over three quarters of a million property sales recorded, new research shows. This was the highest for this period since 2007 with the numbers of sales in England and Wales during January through to October 2014 totalling 760,000, according to the research by Lloyds Bank. It also shows that there has been a considerable improvement in sales since the market reached the depth of its recession in 2009. Sales in the first 10 months of 2014 were 60% higher than in the same period in 2009. However, sales remained 27% below the levels achieved at the height of the boom in 2007. Daventry in Northamptonshire experienced the biggest rise in home sales, up by 56%, but all regions saw a rise in sales in 2014. The biggest increases compared with 2013 was 26% in the East Midlands, 25% in the West Midlands and 25% in the North West. The smallest rise was 11% in Greater London. However, London recorded the biggest pick-up in sales over the past five years as a whole with a 74% gain between 2009 and 2014. All regions have seen rises of at least 50% over this period with the smallest rises in East Anglia at 51%, the North at 52% and the South West also at 52%. Sales in all regions, however, remain lower than 2007 levels with transactions in the northern regions furthest below. The North is down 41%, the North West down 37%, and Yorkshire and Humber down 35%. The strongest recoveries have been in southern England with the South West down 19%, East Anglia down 20% and the South East down 22%. The overwhelming majority of towns in this survey, some 97%, saw an increase in sales between 2013 and 2014. The majority of regions recorded an increase in all towns. London, however, experienced a decline in sales in a fifth of its boroughs. In contrast, all towns in the country saw a decline in sales in 2008. ‘The recovery in the housing market continued in 2014 with sales rising further in almost all areas of the country. Low interest rates, improvements in the UK economy and government schemes, such as Help to Buy, all appear to have contributed to the rise in home sales. Despite these improvements, sales both nationally and regionally are still significantly below their pre-recession levels,’ said Andy Hulme, mortgages director at Lloyds Bank. ‘There is a clear north versus south pattern to the housing market recovery with sales closer to their 2007 levels in the south. Indeed, a small number of towns recorded higher sales last year than seven years earlier, but sales remained much lower than 2007 levels in most areas,’ he added. A breakdown of the figures shows that four towns recorded a 50% or more increase in sales between 2013 and… Continue reading
