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UK asking prices up 1.4% this month, latest index shows
The price of property coming to the market in the UK increased by 1.4% in January at a time of year when prices usually fall, according to the latest index from Rightmove. It takes the average national asking price to £273,275 and means prices have increased by 8.2% in the last 12 months. But it points out that even although the number of properties on sale has increased by 2% this if failing to replenish agents’ historically low stock and currently levels are 10% below the same period last year. Sales activity has been boosted by Stamp Duty savings of up to £1,250 for some first time buyers and average property prices in this sector are down by £1,132 this month. However the firm reckons that despite continued low mortgage and inflation rates, sellers will have to work harder in 2015 than in 2014 due to election jitters and mortgage restrictions. It believes that lenders are selecting buyers who are good risks to lend to, and in turn buyers are very selective with the properties they choose. A closer look at the figures show that prices and activity both cooled in the second half of 2014, though there are signs of a New Year bounce back. More people are looking for property than last year, and more sellers are putting their property up for sale. ‘Early 2015 statistics currently point in the right direction for home movers, with the Chancellor’s Stamp Duty reform perhaps being the spur for people to get on with moving. There are more positive signs of early bird activity rather than pre-election jitters or economic worries deterring prospective movers,’ said Miles Shipside, Rightmove director and housing market analyst. ‘The unseasonably high 1.4% jump in new sellers’ asking prices suggests that there are more rises in the pipeline for the next few months. Early-bird buyers, including trader-uppers, can potentially catch a good deal by getting off the mark quickly in 2015, and get a better pick of the housing crop,’ he explained. Rightmove’s updated House Price Index now tracks typical property prices and supply for the main market sectors, including first time buyers, second steppers and the top of the housing ladder. It says that with the average first time buyer property coming to the market at £163,251, the reform to Stamp Duty announced in the Autumn Statement could mean potential savings of up to £1,250. ‘Should prices rise, as they look set to over the next few months, potential Stamp Duty savings will diminish, but they will still be helpful to first time buyers struggling to save enough to cover the Stamp Duty bill as well as the mortgage deposit,’ said Shipside. ‘First time buyers are in a potential win-win savings window this month with the price of property coming to market in this sector being over £1,100 cheaper, coupled with up to £1,250 in Stamp Duty savings. This is a welcome boost given that the price of property coming to market… Continue reading
Multi freehold blocks provide highest gross yields in UK for landlords
Multi-unit freehold blocks have overtaken houses in multiple occupation and now provide UK landlords with the highest gross yield at 9.3%, new figures for the fourth quarter of 2014 show. This compares to 8.6% in the third quarter and is the highest yield on record for this property type, according to the latest complex buy to let index from Mortgages for Business. Houses in multiple occupation (HMOs) saw rental yields rise to 9% in the fourth quarter of 2014, from 8.9% in the previous quarter, slightly lower than the yields recorded earlier in the year where HMO yields stood at 9.6% in the first three months of the year. However, the index report points out that compared to vanilla and semi-commercial property, houses in multiple occupations still provide one third more than standard buy to let investment. The only exception to this trend is semi-commercial property which saw yields fall to 6.4% from a high of 9.7% in the third quarter. Gross yields on vanilla buy to let properties have returned towards the levels seen in early 2014. For a standard buy to let property the equivalent figure is now 6.3%, up from 5.9% in the third quarter. ‘Rental yields for HMOs and MUFBs are typically higher than those for vanilla buy to let. For a multitude of reasons, not least stagnant wage growth for half a decade, many tenants simply can’t afford an enormous flat with a spare bedroom. As such, the attraction for many of renting a room rather than whole property will ensure that there is a steady yield-boosting demand for HMOs over 2015,’ said David Whittaker, managing director of Mortgages for Business. Across all types of buy to let property landlords have seen loan to value ratios (LTV) fall. The average LTV on a vanilla buy to let mortgage in the fourth quarter was 63%, considerably down from 68% in the previous quarter. Loan to value ratios for HMOs have fallen the most, from 71% in the third quarter to 64% in the fourth quarter, while both multi-unit freehold blocks and semi-commercial properties have fallen by four percentage points each to 64% average loan to value in the fourth quarter. ‘While property prices have slowed a little in recent months, landlords have on the whole seen enormous price growth compared to the indecisive direction of property prices a few years ago,’ explained Whittaker. ‘Looking ahead, this might spur some landlords to expand their existing portfolios further and diversify as a result of the high yields on non-standard properties,’ he added. Continue reading
New Zealand housing market saw a sales surge at end of 2014
Last year ended with a sales surge in the New Zealand residential real estate market with transactions up 24.2 in December compared with the same month in 2013. It was the strongest December sales since 2006 and the second strongest December on record, according to the data from the Real Estate Institute of New Zealand (REINZ). The index also shows that the national median price at $450,000, is up $23,000 on December 2013 but down $5,750 on November 2014. However, the Auckland median price reached a new record of $678,000. Overall there has been an annual increase in the national median price of 5.4% over 2014 compared with 9.8% over the 2013 and year on year sales were down 7% on the number sold in 2013. ‘The data for December shows very strong sales growth compared to 12 months ago and a much higher level of sales that we would normally expect for the final month of the year,’ said REINZ chief executive Helen O’Sullivan. ‘The effect has been seen right across the country, with a number of regions seeing further increases in sales in December after a strong November. The normal December slow down hasn’t really happened in 2014,’ she explained. However, she pointed out that apart from Auckland, median prices across the country have moderated somewhat. For the year ended December, Auckland’s median price rose by 13%, but the national median rose by only 5.4%. Even Canterbury, which has seen strong price growth during 2014 has seen its rate of price increase pull back to under 2% for the 12 months to December 2014. ‘The real estate market remains split between Auckland, with strong demand and price growth, and the rest of the country. While a number of regions are experiencing listing shortages the situation in Auckland is acute, with less than three months’ supply available and demand continuing to be robust,’ she said. ‘Vendors are simply not coming forward in large enough numbers to meet the demand, despite the strong price rises seen in Auckland over the past three years,’ she added. A breakdown of the data shows that four regions recorded an increase in sales volume compared to November with Hawkes Bay recording the largest percentage increase of 7.2%, followed by Nelson/Marlborough with 6.8% and Northland with 4.2%. All regions recorded an increase in sales volume compared to December 2013 with Manawatu/Wanganui recording the largest increase of 39.7%, followed by Waikato/Bay of Plenty with an increase of 34.8% and Wellington with an increase of 32.5%. The national median house price declined $5,750 or 1.3% to $450,000 compared to November. Compared to December 2013 the national median house price increased by $23,000 or 5.4%, with six regions recording an increase. On a seasonally adjusted basis the national median house price rose 0.2% compared with November and 4.7% compared to December 2013. Taking total volumes and prices into account, Auckland accounted for 98% of the increase in the median price between December 2014 and… Continue reading
