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UK home owners confident about prices rises in 2016, latest sentiment index shoes
Households across the UK expect house prices to rise in 2016 believe that the value of their home rose in December, according to the latest research. People in London perceived the strongest rate of price growth over the course of the month, while households in the North West reported the most modest rate of growth, the data from the House Price Sentiment Index from Knight Frank and Markit Economics. The strongest growth expectation was in the East of England but the rate of growth expected over the next year eased in six of the 11 regions in January. The figures shows that 20.9% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 3.6% said that prices had fallen. This resulted in a HPSI reading of 58.7. This is the thirty fourth consecutive month that the reading has been above 50. Any figure over 50 indicates that prices are rising, and the higher the figure, the stronger the increase. Any figure below 50 indicates that prices are falling. January’s reading was a slight decrease from the 59.4 recorded in December, but returns the index to the same level as seen in November. It is just slightly higher the average reading of 58.5 recorded throughout 2015, but remains below the peak of 63.2 in May 2014, reflecting the easing in average UK house price growth seen since then. Households in all of the 11 regions covered by the index reported that prices rose in January, led by households in London at 68.1 and the South East at 64.3, although in both cases these sentiment index readings were slightly lower than in December. The current sentiment index was lowest for the North West at 51.3 and the East Midlands at 52.3, indicating that households in these regions perceived the most modest rise in prices across the UK in January. The future HPSI, which measures what households think will happen to the value of their property over the next year, rose slightly in January to 70.5 from December’s 70.3. This is the highest reading since June 2015, but remains below the peak of 75.1 reached in May 2014. Households in the East of England chalked up a record high reading for future house prices expectations at 81.1, indicating they anticipate the largest increase in the value of their home over the next 12 months. Londoners at 79.1 continue to expect strong growth in prices over the next year, with the highest reading for the region since May 2014. Meanwhile, there was a notable drop in the future reading for the North West, down from 67.5 to 62.3 in January, as well as Scotland, which fell to 61.8, down from 65.8 in December, and an average reading of 65.1 throughout 2015. Mortgage borrowers are the most confident that prices will rise over the next year at 76, followed by those who own their… Continue reading
Tax figures confirm the December was a buoyant month for UK property market
Figures from the UK’s tax collector confirm other evidence from index reports that the property market continued to be buoyant at the end of last year when it would normally be slowing. Sales increased by 1.9% between November and December 2015 and were up by 11.6% year on year, according to the data from HMRC. Over all there were 108,710 residential and 9,700 non-residential transactions. Residential sales increased by 3.6% month on month and 10.6% year in year. According to Peter Rollings, chief executive officer of Marsh & Parsons, it is clear that December defied the normal seasonal slowdown in the UK property market. ‘After a cautious start, there was a clear key change in sales levels after the conclusion of the general election, and the year closed on a high note and defied the usual seasonal slowdown with December experiencing the largest volume of property sales of any month in 2015, as buyers rushed to complete transactions before Christmas,’ he explained. ‘This steady build-up of activity and buyer confidence is even more impressive when you consider some of the adverse changes the housing market has had to stomach over the past 12 months,’ he pointed out. ‘While the shakeup of stamp duty was indeed welcome for many first time buyers and those purchasing property at the lower bands, it has been harder to digest at the middle and top-end, where the increased levy is particularly onerous,’ said Rollings. ‘With an additional 3% of stamp duty coming into effect for second home owners in April, 2016 may well see the opposite with a growth spurt in the early stages of this year that could then taper off in the short term while the market retunes,’ he added. Continue reading
Residential property sales in Hong Kong up over 40% month on month in December
Residential property sales in Hong Kong rebounded in December, up 43.1% from the previous month, according to data from the land registry. A total of 2,153 primary residential sales transactions were recorded, more than doubling those in November, while secondary home sales increased 6.4%. The data also shows that in December, over half of new home sales involved three major developments: Capri in Tseung Kwan O, The Bloomsway in Tuen Mun and Yuccie Square in Yuen Long. The latest monthly Hong Kong review report from international real estate firm Knight Frank points out, however, that total residential sales volume for 2015 was still down 12.3% from 2014, with primary sales dropping only 0.2% and secondary sales losing 16.6%. The report suggests that both landlords and buyers held a wait and see attitude amid various uncertainties in both local and external markets. The housing supply target in the coming 10 years was reduced from 480,000 to 460,000 units, according to the Transport and Housing Department, as the projected number of new households during the period was less than previously forecast. ‘With the US interest rate hike and a projected increase in housing supply, home prices are expected to come under pressure this year. We expect luxury home prices to fall up to 5%, while mass residential prices could decrease by 5% to 10%,’ the report says. When it comes to the office market, the report explains that, facilitated by various policies to enhance cross border financial integration, mainland Chinese financial firms expanded rapidly in Hong Kong’s CBD, driving up Grade-A office rents in Central by as much as 13.7% in 2015. In December, for instance, a Mainland firm secured a 14,773 square foot office space in Cheung Kong Center in Central and Kowloon East continued to see robust leasing activity, with many companies relocating from Hong Kong Island and other business districts to the area, attracted by the abundant supply of cost effective new space. The Knight Frank report suggest that in 2016 landlords will face pressure in rental negotiations as they compete for tenants to drive down vacancies. This comes on the back of a year in which the office sales market improved, with the total volume and value of transactions rising 21.7% and 49.6% respectively, driven by increased demand from both investors and owner-occupiers seeking to reduce rental costs. However, the report point out that some Mainland firms which had actively taken up Grade-A office space run into various problems. For example, some delayed renovating the space they had let, while others failed to take up the units at the start of the lease term. There were even cases of firms exiting their Hong Kong business. ‘However, with limited supply in core business areas, we still expect their vacancy rates to remain low and their rents to rise by 5% this year. In decentralised areas, however, rents could drop by up to 5% in 2016,’ the report adds. In the retail… Continue reading
