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Property sales in Spain up over 16% year on year
Residential property sales in Spain are continuing to rise but this may be due to sellers accepting lower offers as prices are falling. The latest data from the General Council of Notaries show that sales increased by 16.2% in April year on year and in seasonally adjusted terms were up 18.9%. But prices are not following the growth trend, down 5.1% on average to stand at €1,241 per square metre. Both houses and apartment prices are falling, down 1.6% and 5.9% respectively. The growth is also reflected in lending with the number of mortgages for the purchase of a home rising by 38.3% year on year. The average amount was €120,125, a reduction of 4.9% compared to a year ago, also suggesting that people are paying less for properties. Meanwhile demand for prime property is also rising, especially in the most sought after areas. Well prices properties are being snapped up fast, often in just a matter of days, according to the latest report from Lucas Fox International Properties. Multiple agencies often find themselves competing with each other for the same clients, all of whom are looking to take advantage of the current low prices, according to the Barcelona based firm. ‘We're having to remove around 40 sold properties from our website each week as the market has picked up significantly. We currently have around 40,000 mainly overseas clients actively searching for homes to buy, the majority of whom want to invest in Barcelona, Madrid and key coastal areas such as the Costa Brava,’ said head of listings at Lucas Fox Ivan Belmonte. The report suggests that the lack of supply is due to the fact that new developments are still fairly slow to come onto the market and some owners are still waiting for prices to rise before they sell. According to Rod Jamieson, head of operations, published price data is often based on asking prices rather than actual sales prices so prices paid are not actually rising. ‘Our statistics show very minimal price increases, even in prime districts,’ he said. The firm’s data also shows that 50% of visitors to its website are from overseas and 50% national buyers. This compares to 56% and 44% respectively during the same period in 2015. The British continue to represent the biggest proportion of overseas visitors to the website at 10%, a slight drop from 2015, most likely due to fears over the European Union referendum outcome. After the UK, most overseas demand for Spanish homes comes from France, the United States and then Sweden. Continue reading
Positive sentiment on future house price growth in UK slips to three year low
Household sentiment on future house price growth in the UK has slipped to a three year low with 23.7% believing that the value of their home increase over the last month. Some 4.4% believe that prices have fallen, according to the latest house price sentiment index from Knight Frank and Markit Economics with the reading falling from 61 to 59.7. Households in the North East perceived that the value of their home fell in June, the first time that households in any English region perceived house prices had fallen since August 2013. The future HPSI, which measures what households think will happen to the value of their property over the next year, fell to 67.7 in June from 70.3 in May. This is the lowest reading recorded by the index since August 2013. The gap between sentiment in the North and South of the UK is now wider than at any time since the inception of the index. But some 6.5% of UK households said they planned to buy a property in the next 12 months, up from 5.4% in May and the highest number since August 2015. ‘The decline in the future household sentiment index to a near three-year low coincides with growing uncertainty over the result of next week’s European Union referendum as the debates over the UK’s future step up a gear,’ said Gráinne Gilmore, head of UK residential research at Knight Frank. ‘The proportion of households who expect the value of their home to fall over the next 12 months rose to the highest level in nearly two years, but overall households still expect the value of their property to continue rising in the coming year, despite the uncertainty about the result of the vote,’ she explained. She also pointed out that the regional disparity in the index readings highlights the multi-speed housing market in the UK at present, with gap between sentiment in the North and the South widening to the biggest margin since the index began in 2009. Tim Moore, senior economist at Markit, agreed that heightened political and economic uncertainty seems to have weighed on house price sentiment to some degree in June, with expectations for the year ahead slipping to the lowest since August 2013. However, he pointed out that the month to month easing in house price sentiment was relatively modest, suggesting that UK households perceived little fundamental change in property market conditions since May. ‘Instead, ultra-low mortgages, improving labour market conditions and little sign of impending interest rate rises all appear to have helped keep house price sentiment at an elevated level in comparison to the survey’s historical average,’ he added. Continue reading
Average rents in England and Wales fall by 0.2% month on month
Average rents for homes to let across England and Wales fell 0.2% in May month on month and now stand at £792 per month, according to the latest index data. This compares to a long term average monthly rise of 0.4% over every May since the recession but they are still up 1.8% over the last 12 months, the data from the buy to let index from Your Move and Reeds Rains shows. However, on an annual basis rents have seen half the annual rate of rental growth seen at the start of 2016, when in January this stood previously at 3.6%. According to Adrian Gill, director of lettings agents Your Move and Reeds Rains, the number of properties to let coming on the rental market has disrupted the normal dynamics of supply and demand. ‘Landlords escaping a much larger stamp duty bill by completing their purchases before 1st April have now finished their repairs and paperwork, with these homes to let competing for tenants in May and into June. That short term mismatch has made May an exceptional month, with excellent deals available for some prospective tenants,’ he explained. He believes that overall the tax changes to the buy-to-let industry will discourage some property investors, and most of the properties that became available to let in May will have been planned purchases brought forward from later in the year. ‘The net effect will not be more properties to let, quite the opposite. If new regulations and taxes produce a drought of homes to let, then the overall shortage of housing in the UK will only bite harder for tenants. Meanwhile, this heightened shortage and possibly higher rents as a result could also protect landlords somewhat from the financial effects of more punitive rules and regulations,’ Gill pointed out. A breakdown of the figures show that rent rises in London have slowed to just 1.0% over the year to May 2016. This compares to a peak seen in September 2015 when rents in London were 11.6% higher than a year before at the time. By contrast, the East Midlands have witnessed rent rises of 7.3% over the year, followed by the West Midlands with 5.5% annual rent rises and the East of England with 3.6%. All 10 regions of England and Wales have seen rents in May higher than a year ago. However the joint slowest annual rent rises have been in Wales and the South East, both seeing rents rise just 0.5% over the last 12 months. London also leads the negative trend on a monthly basis with average rents in the capital falling 0.7% between April and May, a faster drop compared to a more modest drop of 0.2% in the month before. London is followed by the East Midlands where rents are 0.6% lower than a month ago and Yorkshire and the… Continue reading
