Tag Archives: housing
UK house prices up 10.4% annually, but inflated considerably by growth in London
UK house prices increased by 10.4% in the year to October 2014, down from 12.1% in the year to September 2014, the latest index from the Office of National Statistics shows. England saw the steepest price rises with an annual increase of 10.8% in England, while in Wales it was 5.7% and Scotland and Northern Ireland both saw year on year gains of 4.9%. But a closer look at the figures show that annual house price increases in England were driven by an annual increase in London of 17.2% and to a lesser extent increases in the South East of 11.9% and the East at 9.6%. So, excluding London and the South East, UK house prices increased by 6.7% in the 12 months to October 2014. And on a seasonally adjusted basis, average house prices increased by 0.1% between September and October 2014. The ONS data also shows that in October 2014 prices paid by first time buyers were 12% higher on average than in October 2013. For existing owners, prices increased by 9.7% for the same period. David Newnes, director of Reeds Rains and Your Move estate agents, pointed out that it is good news that annual house price growth across England and Wales has more than doubled over the last 12. ‘The considerable uplift in values over the year to November 2014 has pushed the average price of a home in England and Wales above £280,000 for the first time. These figures are spurred on by London and the South East, where the housing recovery has been fast tracked,’ he said. ‘When these regions are removed from the calculations, a calmer annual rise in house prices materialises. After a temporary hiatus at the highest tiers of the property market, growth has rallied again in the capital with values in prime spots such as Kensington and Chelsea, and Hammersmith and Fulham surging 5.3% over the course of the month, hitting new price records along the way,’ he explained. ‘Yet after a solid advance in activity throughout 2014 to date, completed house sales withdrew last month, from a particularly busy October. This doesn’t undermine the strength and stability of the growth in activity experienced over the year as a whole in some locations,’ he added. He believes that the changes to the Stamp Duty system should also allow activity to build further at the bottom rungs of the ladder, facilitating hefty savings. ‘This should help erode the upfront barriers of purchasing a home for the significant majority of buyers and sellers may feel the benefit of weightier demand, as well as being able to price their homes more realistically, without having to tactically negotiate threshold barriers,’ said Newnes. ‘In the year to September 2014, 69% of completed house sales on properties worth £1,125,000 or more were in London, and a further 19% took place in the South East. These more expensive regions will bear the brunt of stronger Stamp Duty tax at the highest levels,’… Continue reading
UK house prices predicted to rise by 6% in first quarter of 2015
UK house prices are predicted to rise by up to 6% in the first quarter of 2015 but then start slowing as the May general election approaches, according to one forecast. Prices could even start to drop by around 2% in the last half of the year and it could be a worse scenario if the current opposition Labour party wins, says the prediction report from low cost online estate agents Hatched. Hatched also predicts growth to continue at somewhere around 4% to 5% in 2015, whilst warning home owners to be prepared for a rocky spell around April, May and June, with the uncertainty that a general election inevitably brings. According to Adam Day, the firm’s managing director, a Labour victory in May could potentially have a hugely disruptive effect on the property market as the party is known for surprising voters with unexpected measures and excessive red tape. He pointed out that the last Labour win led to the introduction of Home Information Packs which then had to be scrapped. ‘The way they were introduced wasn't thought through. The government announced the specific date that HIPs were to become a legal requirement, which led to hundreds of thousands of home owners rushing to put their house on the market in an attempt to avoid the cost and bureaucracy associated with their production,’ he explained. ‘It was this slapdash strategy, which consequently led to an oversupply of properties that brought on the beginnings of the crash in 2008,’ he added. Interest rates are also expected to rise in 2015, although for many home owners it will not have a huge impact. But it is likely to affect first time buyers who tend to spend a higher percentage of their income on home costs. However, Hatched expects interest rate rises to be a contributor to the slowdown for the housing market in the final half of the year. Day also expects there to be a significant reduction in high street agents. ‘Many agents will have over staffed themselves this year because it has been so busy, so when the property market does begin to slow in the middle of the year, they will have over extended themselves,’ he suggested. He believes that 2015 will see online estate agencies continue to prosper and traditional agents who decide to join the online revolution and thus respond to customer demand by driving efficiencies with the aim of lowering their fees, should also enjoy success and stand out in a market which is likely to get tougher as the year progresses. Continue reading
House developers looking outside London for land
Over the last six months, there has been a shift in direction of the residential development land market in the UK and urban locations with London links are increasingly being sought by developers, new research suggests. Developers are looking for opportunities beyond London as the capital city has seen much slower growth in land prices over the six months to September than the previous half year, according to the research from real estate firm Savills. Values for residential land in London rose by 4.1% from the first quarter to the third quarter of this year compared to 15.2% in the six months to March 2014. The slower increase in the value of residential land follows the cooling housing market in the capital over the same period. Sites with good transport links across all zones however are still highly sought after. The main flow of this movement is the south western corridor from London out to commuter hotspots, Guildford, Woking and Farnborough, according to the report. London based developers as well as those from other regions are interested in investing in the area. Values for urban land in Guildford and Woking are amongst the highest outside London, but despite this they have seen steady growth of 2.4% over the last quarter and 5.5% in the last year. Other cities have seen the influence of developers investing in land from London. An example is Manchester which two years ago only saw regional interest. Development land in Manchester has seen growth for the second quarter in a row after six years of stagnation. Many parties are now interested in land in and around the city although access to finance remains a potential barrier to delivery of homes. Urban land has seen stronger growth in the last quarter having previously lagged behind the growth seen for green field development land since the downturn. Along with Manchester, places in the Midlands, such as Northampton, Nottingham, Leicester and Derby, have stood out as having seen strong growth in urban values, into double digit percentage figures in some cases, indicating that the market has picked up again. Further south, Cambridge has seen increased growth in urban land values along with a large volume of development in recent years. The report points out that here development is supported by a strong and growing local economy, a significant London commuter base and its vibrant historic centre. Construction on urban extensions in Cambridge began at the end of 2011, and an additional 5,000 units will be built in and around the city in the next five years. Sales rates here have been the highest in the country outside London, indicating a strong demand for property. However, not all of the UK is seeing land value increase and in many places land values have remained stable, particularly where there has been high supply of consented land. One example is Telford, where there has been a high supply of sites controlled by the HCA. Continue reading
