Tag Archives: housing
UK property prices record surprise 1.3% rise in June
Property prices in the UK increased by 1.3% in June but the underlying pace of growth is slowing with year on year prices down to 8.4% from 9.2% in May, the lowest since July 2015. This takes the average price to £216,823 and the data from the Halifax house price index also shows that quarterly growth was 1.2%, also down, compared to 1.5% the previous month and the lowest since December 2014. ‘House prices continue to increase, albeit at a slower rate, but this precedes the European Union referendum result, therefore it is far too early to determine any impact since,’ said Martin Ellis, Halifax housing economist. He pointed out that the month on month changes can be erratic and the quarter on quarter change is a more reliable indicator of the underlying trend. The figures show that despite Brexit the UK housing market is fundamentally strong, according to Russell Quirk, chief executive of eMoov. ‘With a continuing, acute shortage of new housing being built and a growing population even if immigration numbers are now curtailed, the demand and supply imbalance and the prospect of even low interest rates will underpin the market,’ he said. David Cheetham, market analyst and FX broker at XTB, pointed out that the month on month rise could be regarded as unexpected following an increase of just 0.6% the previous month. ‘The rise is somewhat surprising considering the impact on house building shares and property funds that has been seen following Britain's decision to leave the EU last month,’ he explained. ‘The worst hit shares in the FTSE100, in both the immediate aftermath and days that followed the Brexit were in the building sector with the majority of observers forecasting the decision to be negative for UK house prices. So far this week numerous asset managers have taken the steps of suspending trading in their property funds as withdrawals have surged amongst jittery investors,’ he pointed out. Sales should start to pick up in the coming months, according to Rob Weaver, director of investments at property crowdfunding platform Property Partner. ‘The fundamentals in the housing market remain unchanged. People still need a roof over their heads. There’s been a stand-off between sellers and buyers with transactions dropping off since the stampede in March to beat the stamp duty deadline. But sales should start to pick up in coming months with the weight of uncertainty now partially lifted,’ he said. ‘While people clearly delayed house purchases in the lead-up to the referendum, that backlog in transactions should unwind through the second half of the year. Life decisions like moving house can’t be put on hold forever. During periods of volatility in the stock and currency markets, investors tend to prefer assets which can provide a reliable income, combined with lower risk to preserve their wealth. For investors, residential property offers both of these attributes,’ he pointed out. ‘Historically, residential property has been the best performing… Continue reading
First time buyers in the US face higher prices, latest index shows
Entry level home values in the United States for properties popular with first time buyers have increased by 8% in the last year, twice as fast as top tier home prices, new research shows. It means that first time byers are facing stiff competition and buyers looking for more expensive homes have more choice, according to the data from the latest real estate market report from property firm Zillow. The data also shows that the number of expensive homes for sale has dropped slightly, but there are far fewer entry level homes on the market with supply in this sector down by 9% year on year. Nationally, home values rose 5.4% over the past year, to a median home value of $186,100 while rents increased by 2.9% to a Zillow Rent Index of $1,407. Home values for the most expensive homes on the market, which at one point in February 2014 were growing at an average of 7% annually, have stabilised. Those homes have been gaining value at about 4% each year since the beginning of 2015. According to the index report the stark differences between the top and bottom of the housing market shed light on the two very different experiences home buyers will face in most markets this summer. Buyers looking for the most expensive homes will find slashed prices, more options and less competition. It's a much different story for first time buyers, who will be up against rising prices, low inventory and tough competition, with homes selling over asking price in many of the nation's hottest housing markets. Over the past 18 months, the percent of listings with a price cut among the most expensive third of homes has slightly increased, while the percent of listings with a price cut among entry level homes have decreased. Indeed, since the beginning of 2015, top tier homes have had the most price cuts which the report says is another sign that top tier buyers are having an easier time shopping for homes in the current market. The rental market is also stabilizing at the high end. A recent Zillow analysis found that rents aren't rising as quickly for apartments in more expensive zip codes. ‘The top of the market is starting to stabilise, and people are beginning to take notice. Buyers looking for entry level homes are having bidding wars in many markets, while it's not uncommon for high priced homes to stay on the market a few months longer,’ said Zillow chief economist Svenja Gudell. ‘The housing market is much more forgiving for current homeowners looking to move into a bigger, more expensive home. These buyers can be a bit more selective, and may even get a good deal,’ she added. Buyers looking for a home at the top of the market will have more to choose from than those looking for a home in the bottom third of the market, which are often sought after by first time home buyers. The… Continue reading
Commitment to build new homes to cope with demand reaffirmed after EU vote
UK Housing Minister Brandon Lewis and Communities Secretary Greg Clark have reaffirmed that new homes are still a top priority of the Government post Brexit. At a meeting with the Home Builders Federation (HBF), whose members build around 80% of new homes in England and Wales, they reiterated the Government’s ambition to build a million more homes. They pointed out that this ambition is underpinned by a record £20 billion housing package announced in the Spending Review and Government backed schemes, including Help to Buy and Shared Ownership, which have supported over 309,000 home owners since 2010. The HBF and its members stated that all indicators show reservations and sales rates have not been affected by last week’s referendum on leaving the European Union. Members restated their commitment to driving up supply and increasing the number of new home owners. Parties spoke of their confidence in the strength of the housing market with strong demand for housing. The Government and HBF agreed to continue to work jointly over the coming weeks to ensure shared ambitions are met. ‘The action we have taken over the last six years to get the country building again has put the industry in a position of strength. We have doubled investment in housing and set out the largest affordable house building program since the 1970s,’ said Clark. Peter Andrew, HBF deputy chairman pointed out that the need for new homes continues as does the Government’s commitment to getting them built and extending home ownership to anyone that aspires to own a home of their own. ‘We were very pleased to hear the Secretary of State reaffirm the Government’s commitment to increasing housing supply. We welcome his reiteration of support for successful programmes like the Help to Buy: Equity Loan scheme which is underpinning demand and helping tens of thousands of buyers each year to take their first steps on the housing ladder,’ he said. ‘House builders remain confident in the underlying level of demand for housing and will continue to deliver the homes the country needs,’ he added. Continue reading
