Tag Archives: housing
House prices in UK cities reach 15 month high
House prices in key UK cities increased by 11.4% in December, a 15 month high due to unseasonal strong market activity, according to the latest index report. Cambridge and London lead growth although sales volumes in these cities are lower over 2015 and the impetus for growth continues to come from regional cities, like Liverpool and Glasgow. Demand is increasing in the face of short supply and while there is some increased interest from buy to let buyers, eight out of 10 sales are still to owner occupiers, the Hometrack index also shows. Cambridge saw the highest annual rate of growth at 14.4% followed by London at 13.8% and then Bristol at 12.8%. All these high growth markets are growing at a broadly similar rate to the levels seen a year ago. The report points out that while residential values may be rising, overall sales volumes across Cambridge and London look on track to be lower over 2015, bucking the national trend of flat volumes, as scarcity of homes for sale and affordability pressures limit overall volumes. It also shows that the falling oil price continues to affect the housing market in Aberdeen. House price growth in the city is down 1.4% compared to a rise of 13.5% and looks set to remain weak over 2016. Newcastle and Sheffield are recording the next lowest growth rates of 3.7%, still higher than average earnings, and in cities where the housing recovery is at a much earlier stage. Overall the impetus for growth continues to come from regional cities where prices are rising off a low base as household confidence improves and home owners utilise record low mortgage rates to access the market. Glasgow and Liverpool have recorded a significant increase in house price growth over the last 12 months in cities where the recovery has been running for just two to three years. A year ago Glasgow price inflation was running at 0.1% but this has risen to 8.5%, similarly Liverpool price growth is up to 5.7% from 1.3% a year ago. A quarter of homes in the 20 cities covered by the index is private rented property and strong private investor demand will explain some of the additional growth in city level house prices relative to the UK rate of growth, the report says. Much has been made of the impact of tax changes for buy to let investors with mortgaged property and the proposed new 3% stamp duty levy from April 2016. Indeed, the latest Bank of England Credit Conditions Survey for the fourth quarter of 2015 points to expected strong demand for mortgages from buy to let landlords in the first three months of 2016. ‘Demand for buying property as an investment is far from dead and 2016 looks set to be a year of consolidation for investors, especially those who are mortgage reliant. A portion of investors are likely to accelerate purchases before April but we should not read… Continue reading
Prime property prices in UK set to vary in 2016 according to location
The rate of overall house price growth in the UK prime property market is expected to continue at much the same pace in 2016 as in 2015, with the regional variations remaining too. Average UK house prices rose 4.5% in 2015, according to the latest residential market update from real estate firm Knight Frank. Average values in prime central London rose by 1% last year on average, but the rate of growth varied across the capital while prime country house prices rose by 3.1% in 2015. The report says that the Bank of England’s decision to keep interest rates on hold in January, coupled with the continued fall in oil prices has prompted some economists to push back the date on which the first UK rate rise is expected to 2017. ‘A longer period of low mortgage rates, alongside firmer wage growth and a continued lack of new and second-hand housing stock, should continue to underpin overall pricing during 2016. Activity has been gradually picking up in recent years, but this trend is likely to be hampered by the continued lack of supply of homes coming to the market across the country,’ said Grainne Gilmore, head of residential research at Knight Frank. She also pointed out that the Government has announced a raft of new policies to boost the supply of housing, a recognition that housing is now one of the key areas of focus for the electorate. A breakdown of the figures in the report show that in prime central London the biggest rise in prices has been in Islington with growth of 6.4%, followed by City and Fringe at 5.7%, Marylebone at 4.7%, Mayfair at 3%, and Kensington at 2.5%. In St John’s Woods prices were unchanged and south of the river Southbank saw prices rise by 1.7% and Riverside growth of 4% but elsewhere prices fell, most notably a decline of 6.1% in Knightsbridge. Prices were down 3.8% in Notting Hill, by 3.7% in South Kensington, by 2.7% in Chelsea, by 1.8% in Hyde Park and by 0.2% Belgravia. Average rents across the country rose by 2.7% in the year to September, with the strongest rental growth across Greater London at 4.1% but rental growth in prime central London eased in the second half of last year, and now stands at 0.7%. This comes after prime central London rents peaked at 4.2% growth in May. ‘This market is quite seasonal, and closely linked to the financial services sector. As a result, rents have been affected by restructuring plans announced by major European banks,’ explained Gilmore. Prime rents increased by 2.7% in the South East and the East of England, by 2.1% in the East Midlands, by 1.9% in the West Midlands, by 1.8% in the South West, by 1.6% in Scotland, by 0.9% in Yorkshire and the Humber, by 0.7% in the North West and by 0.5% in Wales and the North East. The report points out that certain sections… Continue reading
Value of US housing stock in 2015 down from overall growth the previous year
The value of all homes nationwide in the United States grew $1.1 trillion in 2015 and is expected to end the year at $28.5 trillion total. However, the value of the entire housing stock grew 4.1% in 2015, slower than the 6% growth in 2014, according to the data from real estate firm Zillow. The total value of all homes has regained $5.3 trillion since hitting its lowest point during the housing bust in December 2011, but is still $782 billion below the bubble peak value of $29.2 trillion, reached in October 2006. The dollar amount itself underscores the significance of housing to the US economy. In the third quarter of 2015, the US gross domestic product was $18.1 trillion, $10 trillion less than the total value of the housing stock. ‘This reminds us of the large role housing plays in the overall economy. Total home value growth slowed this year, but there was still a significant increase in overall value, and many markets are more valuable than they've ever been,’ said Zillow chief economist Svenja Gudell. ‘At the same time, more renter households and rising rents combined to set new records in rental spending in 2015. Americans are spending a lot of money on housing, and that will make affordability an important issue next year,’ she added. The research data shows that housing value isn't distributed equally across the country. California is home to about 12% of the population but the state accounts for nearly a quarter of the country's total home value, driven by highly valued markets like Los Angeles and San Francisco. Zillow data also shows that Americans shelled out nearly $20 billion more in rent in 2015 than in 2014 as people around the country set up 1.8 million new renter households and median monthly rents rose at a record pace. In all, renters spent $535 billion on rent in 2015, nearly as much as the total budget of the Department of Defence ($575 billion), according to a new Zillow rentals analysis. In 2014, they spent $516 billion. Renters of single family homes and apartments spent about the same amount on rent this year, with apartment renters paying $239 billion and single family home renters paying $245 billion. Renters in the New York/Northern New Jersey metro area spent the most on rent in 2015 at about $56 billion. Los Angeles area renters spent nearly $35 billion, and San Francisco renters spent $17 billion. About two thirds of the total rent paid in 2015 was spent in the 50 largest metros. Home values rose 3.9% annually in November to a Zillow Home Value Index of $183,000, according to Zillow's November Real Estate Market Reports. Denver home values grew fastest for the tenth consecutive month at 15.5% annual appreciation. Miami joined Dallas, San Francisco, San Jose, and Portland as other metros seeing double digit growth. Rents also continued their steady climb, growing 3.8% annually to a Zillow Rent Index of $1,382. The pace of rental… Continue reading
