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London and South East skewing average house price figures, latest index shows
The average property price in England and Wales has reached £274,302 but this drops to £185,496 if London and the South East are removed, the latest monthly index shows. This means that these two regions are skewing average house prices by a record £89,000, the biggest disparity since 1995, according to data from the LSL Property Services index. It is due to cooling house prices in some regions and the figures shows that the slowdown outside of London and the South East on an annual basis has dropped to 4.3%. This contrasts with average house price growth of 10.7% in the past year across all of England. On a monthly basis prices have increased by 0.9%, according to the data from the August index report. According to Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, a game of two halves is being played out in the UK property market. ‘In terms of average house price growth, a gap has developed between the South East corner and the rest of the country. If we exclude the key players of London and the South East from the game, a whole different playing field is revealed,’ he said. ‘House prices across the remaining parts of England and Wales have only increased 4.3% in the past year, or less than half of the overall measure of 10.7% when we include London and the South East. In absolute terms the difference would seem to add £88,806 to the average price tag for a home across England and Wales, the highest absolute difference since 1995,’ he explained. ‘This obscures cooler prices in much of the country. Further afield, it is critical that support mechanisms like Help to Buy aren’t dismantled. In July, house price growth slowed across all regions except for London, the South East and East Anglia. While these three regions continue to set new house price highs, the rest of the country is nowhere near these levels of growth,’ he added. Sexton also pointed out that compared to the nadir of 2008/2012, activity in the housing market has improved, but is not completely out of the woods yet, and still needs to recapture some of the vitality of its pre-recession health. ‘There is also much more to be said beyond the headlines for London. The annual rate of growth in London house prices is the fastest witnessed since 2000. Most recently we’re seeing asking prices in the capital start to be reined in, which will apply the brakes on annual house price inflation as the market steadies,’ said Sexton. ‘What’s happening in London may be eye-catching, but it is akin to looking through a kaleidoscope and skews any view of the current total housing landscape. Peeling back the regional layers gives a much more informed view of the core reality of the current housing market,’ he added. ‘With evidence of London starting to cool off after strong growth earlier in the year, it is critical that the underlying momentum… Continue reading
Activity in prime central London property market stable, says latest monthly report
Activity across all prime price ranges in central London are stable although sales at the top end of the market are down, according to the latest estate agent research. Overall transactions between £2 million to £5 million have increased by 11.7% this year but sales above £5 million are down by 5.5%, the latest sales and lettings report from W.A. Ellis shows. But the sector’s lettings market is buoyant with a 14% increase in tenancies starting in August compared to the same period last year. ‘If we compare the current year's activity from January to August with the same period in 2007, within our area of expertise of Chelsea, Knightsbridge, Mayfair, Belgravia and Kensington, we see a 35% diminution in activity,’ said Richard Barber, partner at the prime central London estate agency. However, he pointed out that when the inflation that the capital has enjoyed over the last four years, some 18.5% in the last year alone according to Land Registry data, a more interesting picture emerges. Property transactions between £2 million and £5 million have increased by 17.5% and those in excess of £5,000,000 have increased by 72% on 2007. ‘Whilst the media are reporting more bearish sentiments across the market and reduced levels of new buyer registration, we should not necessarily predict that the bubble is about to burst,’ said Barber. ‘Activity across all price ranges is very stable, and our research suggests that between January and August 2013 there were 1,288 transactions, and in the same period in 2014, 1,242, a reduction of only 3.5%,’ he explained. ‘Whilst the Damoclean sword of mansion tax continues to hover over the market, the figures suggest that it has not as yet impacted. Indeed, sales between £2 million and £5 million have increased by 11.7% this year. However, sales of properties over £5 million have diminished by 5.5%. ‘The reduction in activity over £5 million is perhaps indicative that the foreign investor may tolerate a tax of £15,000 per annum, based on the current ATED charges, but not the more punitive £35,000 charge per annum currently applied to properties held in company names with values in excess of £5 million,’ he added. But he pointed out that there is always a healthy appetite for the right product, and if vendors' expectations are realistic, there is no reason why we should not enjoy a normal market. Lucy Morton, senior partner and head of lettings at W.A.Ellis, said that the firm has been surprised by the level of activity over what is usually a very quiet month, with a 14% increase in tenancies starting compared to the same period last year. ‘The seasonal student market is in full swing, with students focusing on finding accommodation for the upcoming year and demand exceeding supply,’ she explained. Overseas tenants are even agreeing tenancies without seeing the property. Clients living in California were talked through the property over the phone and using Face-Time on an iPad, and went on to complete, as did two students from Norway… Continue reading
Research reveals how little mortgage holders in UK know about their finances
Almost half of all UK mortgage holders are unaware of their current mortgage rate and over a third are surprised to learn that if the base rate rises by just 1%, it could add £91 to the average UK variable mortgage payment. The figures, from research conducted by the Keep Me Posted campaign, suggests that many home owners with a mortgage don’t know enough about their finances. Overall 42% don’t know what the current rate is, 31% think they will have to make sacrifices if the interest rate rises 1% and 11% would get into financial difficulty. The research also found that when asked how they would like to be notified of a change to their mortgage rate, 67% preferred a printed letter, rising to 77% of those aged over 55. This is compared to just 22% who would like an e-mail and 5% who would like a text. Furthermore, 65% of mortgage holders admitted that a printed letter would make them most likely to take action including shopping around for a better deal compared to just 23% for e-mail and 5% for text. When asked how a base rate rise would affect them, 31% of mortgage holders polled believed that a rise of 1% would not be affordable. Of these, 20% state that they would have to make significant sacrifices to afford their mortgage, and 11% think it would tip them into financial difficulties. A further 42% claimed they could afford it but they would find themselves financially stretched by this change. ‘There’s no doubt that at present, a large number of people stand to be affected significantly if the base rate rises, meaning many may be left struggling to afford their monthly mortgage payments,’ said Judith Donovan, chair of the Keep Me Posted campaign. ‘What was particularly shocking to us was the number of people that currently aren’t aware of their mortgage rate. It is also clear from our research that home owners are more likely to react to any changes if notified via a posted letter. Companies should be aware that digital channels may not be suitable for all their customers and should be careful not to take a one size fits all approach,’ she added. Keep Me Posted champions communications choice for everyone in society. The campaign believes that when it comes to important financial information, consumers should be communicated with in a manner more likely to encourage them to take the best action for them. More importantly, consumers should be able to choose how they are communicated with by their service providers. The campaign believes legislative and regulatory action needs to be taken before this becomes a serious issue. Continue reading
