Tag Archives: housing
UK house prices to rise between 3% and 5% next year, it is predicted
A further moderation in house price growth in the UK is likely next year and house prices nationally are expected to increase in a range of 3% to 5% in 2015. The prospect of higher interest rates at some point in the year and the deterioration in affordability over the past year are expected to be key factors curbing housing demand, according to the latest house price inflation report from the Halifax. But housing demand should be supported by solid economic growth, higher employment, still low mortgage rates and the first gain in ‘real’ earnings for several years, the report suggests. Halifax said it expects to see a more even regional pattern in house price growth during 2015. Global economic worries could reduce demand and activity at the top end of the London market in 2015. Further ahead, price growth is expected to rise broadly in line with income growth, as rising interest rates increase the affordability constraint on the market. Higher levels of house building should also limit upward house price pressure. ‘The fortunes of the housing market are closely tied to developments in the wider economy. The strengthening in the UK economy has contributed to higher housing demand over the past 18 to 24 months. There has been an increase in the number of buyers, fuelled by rising confidence and the improved cost and availability of credit. Higher demand, however, has not been matched by an increase in the number of sellers in the market, resulting in strong upward pressure on house prices in some parts of the UK,’ said Halifax’s housing economist, Martin Ellis. ‘The deterioration in housing affordability as a result of higher house prices, earnings growth that has been consistently below consumer price inflation until very recently and increased talk of an interest rate rise, appear to have combined to temper housing demand since the summer. Tighter mortgage rules may also have acted as a brake on activity. The weakening in housing demand has led to a modest easing in both price growth and sales,’ he explained. He pointed out that house prices in the three months to October were 0.8% higher than in the preceding three months. This was the third consecutive decline in the quarterly rate of increase and the smallest rise since December 2012. Annual price growth in the three months to October slowed to 8.8% from 9.6% in September. Activity has also declined with mortgage approvals in September falling for the third successive month to a 14 month low, whilst home sales are at their lowest level since October 2013. ‘There has been a slight easing in economic momentum during the second half of 2014, mainly reflecting global economic developments, particularly the slowdown in the euro zone. Despite slowing moderately, the pace of growth remains robust. Moreover, the UK economy has moved from a period of prolonged stagnation to growth at, or above, its long run trend over the past 18 months or so. Overall, UK economic activity is… Continue reading
New build completions in Scotland at their highest level in over three years
The number of new homes being built in Scotland is at its highest level for over three years, new official figures have shown. Across all sectors, 4,583 homes were completed in April to June this year, the highest quarterly figure since 2010, and 29% higher than in the same quarter last year. The latest completion figures also bring the Scottish Government closer to its target of delivering 20,000 homes for social rent by March 2016, with 80% of homes completed. ‘I welcome the fact that the number of new homes built across all sectors is at its highest level for over three years, and I am particularly pleased that we are nearing our target of delivering 20,000 homes for social rent by March 2016,’ said Housing Minister Margaret Burgess. ‘The Scottish Government’s investment in affordable housing, together with measures to support the industry and help people into home ownership, have undoubtedly helped to stimulate housing supply,’ she pointed out. ‘Making sure everyone in Scotland has access to good quality housing is a vital part of the Scottish Government’s drive to secure economic growth, promote social justice, strengthen communities and tackle inequality,’ she added. She explained that the government has delivered over 4,500 new council houses since 2009 and has acted to preserve Scotland’s social housing stock by abolishing the Right to Buy from 01 August 2016, which will protect up to 15,500 social houses from sale and safeguard social housing for future generations. ‘In addition, the supply of affordable housing continues to be a high priority for us, and we are now three quarters of the way towards our target of 30,000 affordable homes by March 2016. This commitment is underlined by our £1.7 billion investment in affordable housing over the current parliamentary term, which supports an estimated 8,000 jobs each year,’ Burgess added. Continue reading
Saudi Arabia set to see continued growth of its residential real estate market
Saudi Arabia has seen its residential property market expand rapidly over the last year due to increased demand caused by various government initiatives to boost the housing sector. Over the past year, residential prices in Riyadh have risen by 5% to 7% overall, according to the Riyadh residential research report from international real estate firm Knight Frank. However, it points out that there have been variable performances across the capital’s districts, with congestion issues in the south, for example, responsible for prices stagnating. Meanwhile, in the north, which has seen notable development activity, prices have seen a healthy uplift of around 9%, the report says. In the short to medium term, with new supply unlikely to be able to fully offset pent-up demand, the firm expects residential prices to continue to move in an upward direction. In recent years, Saudi Arabia’s residential construction sector has been expanding rapidly. Indeed, the latest available data from the Saudi Arabian Monetary Agency shows that the value of residential building construction across the kingdom rose for the ninth consecutive year in 2012, increasing by 11.4% year on year. Riyadh is an important driver of construction activity in Saudi Arabia and the capital city accounted for an average of 27% of all residential and commercial permits issued across the Kingdom between 2003 and 2013. Moreover, the number of permits issued in the capital rose by 319% over the 10 year period, outperforming Saudi Arabia as a whole, which experienced a 215% increase. The report points out that despite rising development activity demand for residential units continues to outstrip supply in Riyadh. Indeed, the capital has a requirement for around 50,000 housing units per annum over the next five years and has an estimated housing inventory of just 1.15 million units. However, due to construction delays and the lack of available land, developers have found it increasingly difficult to bridge the gap between supply and demand. What’s more, although there are a number of large housing schemes planned to be completed in the short term, there is unlikely to be enough capacity in the system to deliver the required number of units to satiate current levels of pent up demand. Figures from the Central Department of Statistics and Information (CDSI) show that just 60% of housing units in Saudi Arabia are owner occupied and in Riyadh this drops to 53%. By comparison, the levels of owner occupation in neighbouring countries is much higher at 75% in the United Arab Emirates, 80% in Qatar, 82% in Bahrain and 83% in Oman. The report explains that in order to address the housing undersupply issue, the government has launched a number of projects in recent years although not all of these have achieved the success that had been envisioned. For example, in 2011, the government announced a programme of works to build 500,000 homes across the kingdom.’ However, the scheme struggled to gain traction due to issues related to a lack of land availability, complexities in allocating aid and slow moving… Continue reading
