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UK residential sales down 2.8% month on month but up almost 10% year on year
Residential property sales in the UK fell by 2.8% between December 2015 and January 2016, according to the latest data published by HMRC, the UK’s taxman. However, the seasonally adjusted sales figure is 9.7% higher compared with the same month last year, with transactions reaching 105,940. Doug Crawford, chief executive officer of My Home Move, believes that it is significant than January sales are up considerably year on year. ‘This could be accredited to a spike in purchases by additional home buyers looking to escape the rise in stamp duty, set to be introduced in April. This may continue to provide a short term boost for a matter of weeks,’ he said. ‘However, we are now explaining to new clients that it is too late to guarantee completion before 01 April. Looking ahead, the question is whether the market will sustain this level of activity. Supply is likely to be the biggest constraint, so new house building will remain critical,’ he added. However, the figures are published as property experts are being asked what effect the newly announced referendum on the UK’s position in the European Union might have on housing markets. According to Peter Rollings, CEO of Marsh & Parsons, sales activity often cools in times of political uncertainty and the London housing market usually bears the brunt of it. ‘First and foremost, foreign investors may be more tentative given this latest turn in events, especially as it follows hot on the heels of higher Stamp Duty for million pound properties,’ he said. ‘But history shows us that the market recovered quickly from this short term ambiguity in 2015 and in fact, home sales have really been building momentum over the past year. The property market is chock a block with eager buyers, who are being propelled on by cheap mortgage finance and government support schemes,’ he explained. ‘Given the extent of buyer demand, it’s a great time for existing home owners to be thinking about their next step up the ladder, which should drive further purchase activity. For investors, the change in Stamp Duty for second homeowners in April will be an incentive to make purchases quickly over the next month,’ he added. ‘It remains to be seen how much of an impact the EU referendum will have on these current levels of confidence but go or stay, London remains an attractive safe haven in times of uncertainty,’ he concluded. According to real estate services firm Savills the fact that the referendum has been announced now means that the relatively long lead in should minimise the potential impact on property market. ‘We’ve already seen a number of short-term factors impact investors’ sentiment this year, however appetite for UK property remains healthy. Chinese investors remain active in the market and negative interest rates in Japan will also benefit global real estate,’ said Mark Ridley, Savills chief executive officer UK and Europe. ‘As we saw in the run up to the 2015 General Election, one of… Continue reading
Average rents in Scotland up 2.3% year on year
Average rents in Scotland increased by 2.3% year on year in January but remained static month on month at £548, according to the latest index figures. However, the average figure is being distorted by high increases in some regions such as Edinburgh and the Lothians where rents were up by 6.4%, the buy to let index from lettings agent Your Move shows. Meanwhile, rents in the East of Scotland were 1.7% lower than a year ago and they fell by 0.2% year on year in Glasgow. The index also shows that slower house price growth is hampering landlord returns with a fall of 5.8% in the year to January but arrears have improved with 11.1% tenants late paying, the lowest level since July 2015. Previously, arrears surged over the autumn to reach a record high of 13.8% in October 2015, before beginning to improve. However, tenant’s finances remain in worse shape than 12 months ago. In January 2015 as little as 7.1% of all rent due was late. A breakdown of the figures show that in January 2016, rents in Edinburgh and the Lothians were 6.4% or £38 higher than a year ago, the fastest annual rent rise on record. This is nearly three times quicker than average rent growth across the whole of Scotland. On average, across Scotland as a whole rents climbed 2.3% in the 12 months to January 2016, equal to £12 in absolute terms. This is only slightly faster than 2.2% in the 12 months from December, though represents an annual acceleration compared to the 1.3% annual lift recorded in January 2015. ‘In different parts of Scotland, powerful interplays between supply and demand are shaping the regional rent patterns that are emerging. In popular cities like Edinburgh where the jobs market is hottest the competition to find homes means tenants have to act quickly. As a result, we’re seeing exceptional rent growth in some parts of the country while in others, lettings market activity is much calmer,’ said Brian Moran, lettings director at Your Move Scotland. ‘However there’s also another ingredient added to the mix now. The private rented sector is in a state of uncertainty, as landlords wait with baited breath while the Private Tenancies Bill progresses through the Scottish Parliament. Nervous landlords may be acting now before their hands are tied, and they lose control of the rent they can charge. This could have prevented a seasonal dip between January and December instead of the steady picture we have seen,’ he explained. ‘Encouragingly, the latest rent rises are underpinned by good news. We should also be looking at tenants’ bottom line. Arrears are falling which speaks volumes for affordability right now. With rents below their price peak, many tenants have been seizing the opportunity to move out of season, while good deals are available,’ he added. On a regional basis three of the five regions of… Continue reading
House prices increase more than average earnings in over 25% of UK districts
Average house prices have increased by more than the average employees net earnings in more than a quarter of local authority districts across the UK, according to new research. The number of areas where house prices are outpacing earnings over the last two years has increased significantly over the past 12 months from 73 or 19% out of 384 to 108 of 28% out of 380. The Halifax research also shows that the vast majority of these areas are in London, the south east, and east of England with these three regions representing 97 or 90% of the 108, with the biggest gap between rising property values and earnings in Three Rivers in Hertfordshire, where house prices increased by an average of £147,990 over the last two years, exceeding average take home earnings in the area by £97,992. Seven London boroughs appear in the top 10 districts while the top performers outside southern England were Warwick in the West Midlands and South Northamptonshire in the East Midlands, with house price gains in excess of earnings of £24,723 and £14,837 respectively during 2014 and 2015. ‘The housing market recovery over the last few years has led to substantial price rises in some areas of the country, particularly in London, the south east and the east of England. This has resulted in homes increasing in value by more than total take-home earnings for the average home owner in many areas of the country,’ said Martin Ellis, housing economist at the Halifax. ‘Clearly, this is good news for some home owners. However, it does make conditions tougher for those looking to buy their first home in such areas, with prices being pushed increasingly out of range for many young people,’ he added. Over the past five years, 35 local areas in the UK or 9% of the total have seen average house prices increase by more than total average pay, up from 23 districts or 6% in 2015. The biggest differential was in Hammersmith and Fulham, where average property prices have increased by £248,971, surpassing average take home pay during the period by £108,653. The top 10 performers are all in London. All 35 areas are in London, the South East and the East. Over the past decade, house prices have increased by more than total pay in four areas across the UK led by Brent up £11,760, Haringey up £8,255, Hammersmith and Fulham up £4,438 and Cambridge up £1,767. Continue reading
