Tag Archives: housing
Annual UK house price growth puts on a spurt, especially in Scotland
UK house price growth is increasing again with the latest figures from the Office of National Statistics showing an annual rise of 9.6% in the year to March 2015. This is up from annual growth of 7.4% in the year to February 2015 and some parts of the country have seen record increases. House price annual inflation was 9.4% in England, 5.7% in Wales, 14.6% in Scotland and 7.5% in Northern Ireland. This is the highest annual increase in Scotland since July 2007. Annual house price increases in England were driven by an annual increase in the East of 11.4%, London 11.2% and the South East 11.2%. Excluding London and the South East, UK house prices increased by 8.1% in the 12 months to March 2015. On a seasonally adjusted basis, average house prices increased by 1.1% between February and March 2015 and prices paid by first time buyers were 7.8% higher on average than in March 2014. For existing owners prices increased by 10.3% for the same period. But there are concerns that house price growth is so strong. ‘House prices are going up four times faster than people’s wages. No wonder mortgage approvals are falling and first time buyers are struggling to save a large enough deposit. And we all know that housing bubbles burst and cause economic chaos,’ said Frances O’Grady, general secretary of the Trades Union Council. ‘There is no sign the government yet understands the challenge of ending the housing crisis. Their headline policy is an incredibly unpopular plan to sell off social housing to the private market. This would reduce the supply of affordable homes when we should be adding to them as quickly as possible,’ added O’Grady. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that it is worth bearing in mind that these figures concentrate on March. ‘The country was still convinced that we had a close-run election on our hands and vendors and buyers in London were holding their breath about what impact mansion tax and other possible policies might have,’ he said. ‘Now the reality is far different, a frisson of excitement has returned to the high-end market,’ he added. Continue reading
New home building not meeting demand for housing in Australia
Despite a record level of home building activity in Australia, this is still falling short of the current demand for new homes, according to the Housing Industry Association, the voice of Australia’s residential building industry. The HIA Autumn 2015 National Outlook report shows new housing construction is at record levels and is single handedly propping up Australia’s domestic economy. But HIA chief economist, Harley Dale, said that on-going momentum in 2015 is narrowly driven compared to last year, in terms of both geographical area and dwelling type. ‘It is disappointing that despite record new housing supply, many Australians are being priced out of the market due to the excessive and inefficient taxation and regulation governments’ impose on the new housing sector,’ he pointed out. ‘Super low interest rates are doing their job, but there is a lack of complimentary policy reform. The detached house construction cycle had peaked well below its potential because households can’t pay the cost of waiting up to 14 months for titled land, or multiple months for a simple building approval, or borrow the additional amount required to cover government-imposed gold-plating of user pays infrastructure,’ he explained. ‘A lack of focus on housing policy reform is shutting Australians’ out of their new home at a time when they could borrow responsibly at attractive interest rates and be part of the great Australian dream,’ he added. New dwelling commencements are projected to see a third consecutive year of growth in 2014/205. An increase of 12.9% is forecast to bring commencements to an all-time high of 205,490. The ultra-low interest rate environment means that there is some upside risk to this forecast. The latest projections indicate that dwelling commencements will fall by 10.6% in 2015/2016, with a further reduction of 4.7% in 2016/2017. The bulk of the decline will be concentrated in the ‘multi-unit’ market segment. The further upward momentum to new home building in 2015 is confined to two states, New South Wales and Queensland. The report also says that detached house commencements have peaked for the cycle at a level of 112,232. There is unrealised demand for detached housing due to a lack of shovel-ready land and a plethora of other supply side obstacles. Detached house commencements would have increased further in 2015 without these barriers to supply. Across the distinct types of new dwellings constructed, the upward momentum in 2015 is most evident for units of four or more storeys. There is some upward momentum evident for semi-detached/townhouse product. Housing renovations continue to struggle, increasing by just 0.8% during 2014. For 2014/2015 as a whole, the report expects that the volume of renovations will fall by 4.1% to $27.4 billion. That will be the lowest value since 2001/2002. Continued low interest rates and an economic recovery will eventually start to lift the renovations market. During 2015/2016 growth of 2.3% is forecast followed by a slight increase of 0.5% during 2016/2017. A further rise of 2.5%… Continue reading
Lending to first time buyers in the UK falling, latest CML data shows
First time buyer and house purchase lending in the UK has slowed, according to the latest figures from the Council of Mortgage Lenders. The figures show the full impact of new mortgage rules introduced a year ago and suggests that people are staying put for longer with mortgage pricing at record lows. The total number of loans advanced to first time buyers in March was up 20% compared to February but 5% down compared to March 2014. First time buyers borrowed £3.4 billion, which was up 21% on February and 3% up on March last year. Loans to home movers increased by 14% compared to February but was down 3% year on ear. These loans were worth £4.9 billion, up 17% on February and 7% compared to March 2014. Remortgage lending increased 19% month on month and 6% year on year. The value of these loans at £4.2 billion also increased month on month by 24% and was up 14% year on year compared to March 2014. Buy to let loans also increased month on month and year on year, up 12 compared to February and up 21% compared to March 2014. These loans were worth £2.7 billion, up 13% compared to February and up 35% on March 2014. The quarterly figures show how much lending has slowed. First time buyers took out 61,300 loans in the first quarter 2015, down 24% on the fourth quarter of 2014 and 11% down on the first quarter of 2014. They borrowed £9 billion, down 23% on the fourth quarter of 2014 and a year on year decrease of 5% compared to the first quarter of 2014. Home movers took out 70,400 loans, a decrease of 25% compared to the fourth quarter 2014 and a decrease of 11% year on year. These loans totalled £13.5 billion, down 22% on the previous quarter and 5% down year on year on the first quarter of 2014. Remortgage lending increased quarter on quarter with 75,400 loans advanced, up 3% on the fourth quarter 2014 but down 5% on the same quarter last year. The value of these loans at £11.8 billion also increased quarter on quarter by 6% and was up 2% year on year compared to quarter one of 2014. There were 52,300 buy to let loans advanced in the first quarter of 2015, down 3% on the previous quarter but up 15% on the same period in 2014. These loans were worth £7.8 billion in value, up 1% compared to the first quarter and up 28% on the first quarter of 2014. ‘It was a slow start to activity in the first couple of months of 2015 but the market started to get out of the dip in March, a trend that we think will continue as the year goes on,’ said Paul Smee, director general of the CML. ‘We will have to wait and see how the housing market reacts to the general election result and the… Continue reading
