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UK asking prices down 3.3% in December, latest Rightmove index shows
This year is ending with the largest ever monthly fall in the price of property for sale in the UK with the average asking price down by 3.3%, the latest index figures show. This has reduced annual price growth to 7% compared with 8.5% the previous month and is a further indication of the slowing pace of growth, according to the data from Rightmove. However, it points out that it is important to note that the recovery remains countrywide with all regions recording positive price growth for the year and Rightmove forecasts a national average rise in new seller asking prices in the range of 4% to 5% for 2015. According to Miles Shipside, Rightmove director and housing market analyst, whilst a near £9,000 drop is the biggest ever reduction in the price of newly marketed property compared to the month before and a sign of a market continuing to cool, a fall is not unexpected in December. ‘Though sellers are fewer in number at this time of year, those that do come to market are often keener to sell so price lower in a bid to stand out. The overall picture for the year is still one of a much recovered property market, with sellers and their estate agents confident enough to be putting property on the market at a higher price on average than a year ago, although we predict a slower pace of price growth in 2015. This means that sellers and agents will have to work harder to achieve a sale next year,’ he explained. Rightmove predicts the South East will see the highest growth in prices next year as the London ripple effect continues and stock shortages remain acute. These factors mean that the East and South West regions also look set to perform better than the northern regions. It also says that London will not be the price rise powerhouse leading the rest of the country as it has been in 2014. Sectors of the London market will continue to re-adjust with several different forces at play. Shipside pointed out that affordability has already been stretched to its limit in some inner London locations, and there are also winners and losers with the Stamp Duty changes. The threat of mansion tax on properties over £2 million will remain a deterrent until at least May’s election. While buyer demand has tailed off during the second half of the year, there are now signs of fewer sellers coming to market too. In the last four weeks, 76,823 new sellers have come to market, down 4% on the same period a year ago and the second consecutive month that there has been a year on year fall. Rightmove also says that there are factors that could see this trend continue into 2015, exerting some modest further upwards price pressure. Stricter lending criteria may prevent some home-owners from being able to fund the trade up to the next… Continue reading
Consumer confidence in UK property price growth falling
Consumer confidence in the outlook for UK house prices has continued to fall from its peak in July 2014, according to the latest Halifax Housing Market Confidence Tracker. While the overall picture for house prices over the next 12 months is still robust, it has dropped to its lowest level since June 2013. With Halifax forecasting an easing of house price growth to 3% to 5% for 2015, the report shows there has been a reversal of recent momentum, with a higher proportion of consumers now believing the next 12 months will be a better time to buy than to sell and the proportion thinking the next year will be a good time to sell falling to its lowest level since the fourth quarter of 2013. Despite recent forecasts indicating economic growth is expected to reach 3% in 2015, the recent fall in house price expectations mirrors a relative fall in consumer confidence for the economic outlook in the next year having peaked in the second quarter of 2014. Of those surveyed, a net balance of +25 now believe the next 12 months will be a good time to buy, an increase of 14 points since September 2014. Sentiment towards buying is stronger among those who already own their own home, with 62% of owner occupiers stating 2015 will be a good time to buy, compared to 29% who think it will be a bad time, a net balance of +33. In contrast, selling sentiment has fallen to a net balance of +14, a drop of five points since September 2014. And positive selling sentiment fell by six points among owner occupiers between September and November 2014 to +25. ‘The strengthening in the UK economy over the past couple of years has seen a steady convergence between the proportions of people who believe it is a good time to buy and a good time to sell,’ said Craig McKinlay, mortgages director at the Halifax. ‘The outlook for house prices in 2015 is for growth to moderate but continue to increase, which perhaps explains why the proportion thinking it will be a good time to buy is again greater than the proportion thinking it will be a good time to sell,’ he explained. ‘With an interest rate rise expected late 2015, possibly into early 2016 it will be interesting to see what impact the slight reduction in affordability has here,’ he added. The survey also shows that people in Scotland are significantly more likely than those in other regions overall to say 2015 will be a good time to buy at 65% compared to 56%, respectively. Conversely, almost half of those surveyed in the Midlands, 48%, think next year will be a good time to buy, significantly lower than the 56% who say this across Britain. People in Scotland and North England are significantly less likely to say it will be a good time to sell at 38% and 42% compared to 51%, respectively. And people… Continue reading
Fierce competition of rental properties continues despite supply increase
The level of supply in the private rental sector in the UK is showing signs of improvement but there is still fierce competition for rental property as the level of demand remains high. Available rental properties have increased by 10% since the last quarter, according to the latest report from the Association of Residential Letting Agents (ARLA), and this should help ease demand. The average number of buy to let properties managed by ARLA licensed members increased in the last three months from 135 properties in the third quarter to 148 properties this quarter, although two thirds of ARLA members say would be tenants still outweigh available properties Members believe the number of landlords increasing their investment in buy to let properties was driving the improved outlook for supply in the private rented sector, with the number of landlords purchasing properties now exceeding the number selling their investments, a reverse on figures reported three months ago. Those landlords increasing their investment in buy to let properties rose from 27% to 30% in the last three months. Meanwhile landlords looking to sell their current buy to let investments fell 9% from 32% to just 23%. Although the increase in available buy to let property is a step in the right direction for the private rental market and good news for renters, the bad news is that demand still strongly outweighs supply. Some 65% of ARLA Licensed member agents said there were still more would be tenants than properties available on their books, a decrease from 68% last quarter, suggesting that the market could be heading towards a more level playing field. ‘This quarter we’re seeing promising signs that the market is taking small steps towards achieving a better balance between supply and demand, or at least it is easing slightly,’ said David Cox, ARLA managing director. ‘With more landlords investing in their portfolios, ARLA licensed members have reported a growth in supply, while the level of demand witnessed last quarter has fallen slightly. Of course, the market has a fair way to go in terms of completely balancing out,’ he added. The report says that the increase in supply is down to more investment in buy to let property; however a number of ARLA Licensed members also reported an increase in rental property coming back onto the market following failed attempts to sell, rising for a second consecutive quarter, from 16% to 24%. It also points out that as supply and demand levels ease, tenants are taking advantage of the slightly less competitive market as the number of would-be tenants haggling with landlords over rents increased from 32% to 35% over the past six months. ‘It’s great to see an increase in consumers making an active play to agree on rent prices. Letting agents should be able to help tenants to get the fairest deal, and to ensure the process… Continue reading
