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HMRC figures shows UK property sales cooling
Sales of properties in the UK fell by 4.8% between August and September but are still 5% higher compared to the same period in 2013, the latest data shows. The figures from HMRC show that the provisional seasonally adjusted sales count reached 97,450 residential sales and 7,880 non-residential. The pattern since the beginning of the 2013/2014 financial year has been of a general month on -month increase in transactions for the seasonally adjusted data until February 2014, then a gradual decrease followed by a flattening out of transaction numbers. According to David Newnes, director of Your Move and Reeds Rains estate agents, the figures show that the property market is settling back into a period of steadier growth after toning down the temperature in the last few months. ‘Price growth has cooled, with September seeing the lowest monthly increase in property prices so far this year and transactions have also dipped on a monthly basis. Some of that energy loss is a consequence of lower lending levels, which dipped in July and August,’ he explained. ‘Some is down to a drop off in demand at the higher end of the market, as foreign investors rein back their purchases while sterling stays strong. Uncertainty over rate rises completes a trio of hesitation, although it has been made clear that eventual rate rises will be brought in gradually,’ he added. He also pointed out that while the market may appear to rebalancing, demand at the lower end remains positive, with sales of typical first-time buyer properties like flats stable. ‘Greater availability of higher LTV loans enables more new buyers to get onto the housing ladder,’ said Newnes. ‘Help to Buy has played a vital role in this regard, and has inspired much more confidence in the lower end of the market, confidence which is now being translated into a sustained demand for first time buyer property,’ he added. Continue reading
Affordability is the most important factor for UK tenants, research finds
When looking for rented accommodation in the UK the overriding priority for tenants in every age group and in every region is affordability, new research shows. Nearly two thirds of respondents in the Knight Frank UK Tenant Survey, one of the largest of its kind ever carried out, said this was their main concern when compared to location or space in the property. Around a quarter said that location was the most important factor when choosing a rental property, while 10% said that the size of the property was the key consideration. Those earning between £30,000 and £35,000 a year were slightly above average in their concern about affordability with 67% citing it as an issue but moving up the income scale location becomes a bigger priority, with 39% of those earning between £50,000 and £60,000 a year citing this as their main concern. When asked how much of their gross income they would be willing to pay on rent, the average response was 40% but there are some significant regional variations. Only 17% of those in the North East would spend more than 40% of their salary on rent, but this more than doubles in the South West, to 32%. In London and the South East, around a fifth, 22% and 20% respectively, of respondents are prepared to pay between 40% and 50% of their income on rent, while 11% of Londoners are prepared to pay more than 50%, underlining the cost of renting in the Capital. Some 23% of those aged under 25 are also prepared to pay between 40% and 50% of their monthly pay on rent, highlighting the relatively weaker earning power of those just starting out in their careers against the cost of renting a property. There is also evidence of a rent ‘ceiling’, even for those on higher earnings. While a third of those earning between £20,000 and £25,000 a year said they would pay a maximum of between 30% and 40% of their income on rent, only 24% of those earning between £45,000 and £50,000 a year said the same. ‘Even if their income rises, there is still a natural limit to what tenants are prepared to pay on rent,’ the report says. After affordability is factored in, it is clear that location plays a crucial role. Some 55% of respondents said that having a rental apartment or house close to where they work or study was important, with more than a half also identifying proximity to transport links, shops and other amenities as a priority. Breaking down the results by age, it is clear that young professionals value living close to their office, fitting with the trend for demand for city centre private rented sector accommodation. Some 73% of those under 25 and 66% of 25 to 34 year olds said that when looking for a rental property, being within reasonable proximity of where they work and study was a key priority. Around 58% of those… Continue reading
UK property prices expected to rise 9% this year and 5% in 2015
Property prices across the UK are set to finish 2014 up by 9% and rise another 5% in 2015, according to the latest outlook report. Real estate firm Strutt & Parker expects good growth despite prices cooling and the looming general election next year in a report compiles with its retained economic advisors Volterra. But the outlook for the prime central London market is more subdued with Strutt & Parker predicting growth of 3% in 2014, and a further 2% in 2015. These forecasts are a stark contrast to 2010 and 2011 when prime central London prices surged by over 13% year on year. The firm believes that whilst improved economic foundations would certainly suggest that prices will continue to rise over the next few years, the biggest perceived uncertainty surrounding the property markets over the remainder of 2014 and 2015 will continue to be the looming election. ‘Agents are reporting a continued slowdown in some areas as buyers and sellers nervously await news on the upcoming general election and the potential for a mansion tax. This is beginning to feed through into transaction levels. As is often the case in uncertain times, it may also be that transaction levels will decrease in the run up to May 2015, but values could hold up better than expected,’ said Stephanie McMahon, head of research at Strutt & Parker. ‘Above and beyond the general election there are a number of other potential headwinds slowing the property market, including talk of interest rate changes and the Mortgage Market Review (MMR) and the slowdown it is causing,’ she explained. She pointed out that it is important to remember that the property market is all about supply and demand. ‘On the supply side, the government is continuing to boost house building across the country, and recent output figures from the construction sector reflect this. House prices tend to rise when stock is low and with more houses being built, particularly in the lower end of the housing market, this could also have an effect on UK house prices over the next few months,’ said McMahon. ‘The main driver for price market price growth in recent years has indeed been the consistent shortage of good quality housing stock in highly sought after prime locations. Any future increase of supply to the market in central London would therefore put downward pressure on prime central London house prices and we have taken this into consideration in our London predictions,’ she added. ‘In short, we expect that price growth during the remainder of 2014, and even more so in 2015, will be sensitive to prevailing political press and expectations,’ she concluded. Continue reading
