Tag Archives: housing
British property rents up 2.7% annually, fastest rate in three years
Private rental prices in the UK increased by 2.7% in the 12 months to September 2015, but there are considerable regional variations, according to the latest data from the Office of National Statistics. Private rental prices grew by 2.8% in England, 1.6% in Scotland and 0.5% in Wales, while excluding London they increased by 1.8% year on year. In the capital city they were up 4.1%. Rental prices increased in all the English regions. The largest annual rental price increases were in London followed by the South East at 2.7% and the East also at 2.7%. Rental price increases have been stronger in London than the rest of England since November 2010. The ONS index report says that the rental market in Great Britain continued to show signs of strength with rental prices now growing at their joint fastest annual rate since October 2012. Increasing demand for rental properties coupled with low supply may be supporting price growth, it adds. August’s ONS House Price Index showed that house price growth has typically been stronger than rent price growth for a number of years. The Bank of England’s Agents’ Summary of Business Conditions for the third quarter of 2015 reported the long term growth in demand for rental properties continued in the three months to September. The Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS) for September confirmed this robust growth, noting the strongest tenant demand since the second quarter of 2012 in the third quarter of 2015. Despite signs of a slight increase in supply growth, growth in demand continues to outpace supply. While the latest RICS release did suggest a marginal increase in new landlord instructions, the longer term trend within the wider housing market is one of under supply, the report points out. Reflecting the Bank of England’s August Inflation Report, which noted that supply remains weak within the housing market, the Association of Residential Letting Agents reported a dwindling supply as the average number of properties held per branch fell by 5.8% in August. According to Rob Weaver, director of investments at property crowdfunding platform, Property Partner, it is no surprise than rents rose the most in London, as the supply issue in the capital is especially pronounced. ‘We need to build more homes, but there are a number of obstacles getting in the way, from slow moving planning departments to the practice of land banking. Recent initiatives such as the Government's decision to make it easier to convert commercial property into residential property are a step in the right direction,’ he said. ‘Unused office space is a way to tackle the housing shortage without eroding the green belt. We need more initiatives like this from both the public and private sector if we are to get Britain building and genuinely improve supply,’ he added. Steve Bolton, founder of Platinum Property Partner, also believes that a shortage of suitable properties, coupled with strong demand, both… Continue reading
UK building industry facing severe shortages, says RICS survey
The UK’s construction industry is facing its greatest skills crisis since 1998, with bricklayers and quantity surveyors in shortest supply, a new survey shows. These highest skills shortage on record are set to limit sector growth potential but despite this a sharp growth in construction is reported across UK, according to the report from the Royal Institution of Chartered Surveyors (RICS). Over half of respondents, 53%, reported difficulty sourcing labour, with 71% saying they had particular difficulty sourcing bricklayers and 64% highlighting a shortage of quantity surveyors. During the same period in 2011, just 1% of respondents were struggling to find bricklayers and only 15% noted a shortage of quantity surveyors. In addition to labour supply, 69% of firms said that financial constraints, such as access to credit, were among the biggest constraints to growth, while 60% said that regulatory and planning issues were potent constraints. However, despite these challenges, the survey shows significant areas of growth, with the number of new construction projects increasing, particularly in private housing and commercial sectors. While official figures, which are often subject to revision, highlighted a slight contraction in output over the three months to August, a substantial proportion of respondents in the RICS survey reported an increase in their workloads, a net balance +39%, with 29% of firms saying that they were operating at full capacity. The private housing and commercial sectors continue to lead the growth in workloads with net balances of 47% and 46% respectively reporting an increase. However, momentum was least firm in the public sector with net balances of 12% and 21% reporting growth in workloads in the housing and non-housing segments respectively. Meanwhile, in the infrastructure sector, growth accelerated somewhat with a balance of 34% seeing workloads rise, up from 25% in the previous quarter. ‘While it’s exciting to see that the UK is experiencing growth across the construction sectors, future growth will only be sustainable if the growing skills crisis is addressed. The availability of both blue collar and white collar construction workers is reaching crisis point,’ said Simon Rubinsohn, RICS chief economist. ‘We haven’t witnessed a labour shortage of its kind in nearly 20 years. Without the relevant skills, we will not be able to grow many of the Government’s priority construction sectors such as infrastructure,’ he pointed out. ‘Currently, while we know that there is a serious shortage of skills, we don’t yet know why we have seen such a dramatic drop in the labour market over the past five years. Part of the problem is the legacy of the collapse in the sector following the onset of the Global Financial Crisis,’ he explained. ‘Many professionals and other skilled workers chose to leave the industry and quite simply have not returned or been replaced. A real focus on attracting more young people into the industry is critical alongside an expansion of apprenticeship opportunities,’ he added. Continue reading
UK property prices set to rise by almost 20% or average of £60,000 in next five years
Property prices in the UK are predicted to continue their upward trend, rising by nearly £60,000 over the next five years, according to new research. Prices are expected to rise by 3.5% in 2016 with further annual increases of around 4% in the four years that follow, says the latest analysis from the Centre for Economics and Business Research (Cebr). Indeed, the forecaster says that 2015 annual house price growth has been revised up from 4.7% in June to 5.6% this month and the average price of a UK property is set to stand at a record high of £263,000 this year. The research also shows that the price gap between a terraced house and a purpose built flat in London nearly quadrupled from £46,000 in 2000 to £176,000 in 2014. It points out that a lack of properties coming onto the market is one of the reasons behind the upward revision to the forecast. Households expect property values to keep rising so as such individuals want to sell at the top of the market, but at the moment few anticipate a downturn in prices. Yet overall home ownership has risen dramatically among older households since 1981, but has collapsed among younger households. With retired individuals less likely to move home, this is curbing the number of individuals putting property up for sale, the report explains. It also reveals a substantial increase in the cost of moving up the property ladder, especially in London. Moving up the property ladder has historically been a key reason to sell a home but for many this has become infeasible. The high cost of moving home, with stamp duty costs curbing house moves and the report says this is particularly the case at the prime end of the property market which saw a substantial increase in stamp duty rates in last December’s Autumn Statement. Low levels of housebuilding are also reducing the number of new builds being put up for sale in the UK. The Cebr suggests that the new Housing and Planning Bill will not go far enough in controlling rising home prices. It claims that reconsidering various other housing market features is also necessary. For example, the UK’s population is getting older and with retired individuals less likely to move home, added incentives are necessary to encourage ‘rightsizing’. For example, a stamp duty exemption or reduction for those looking to ‘rightsize’ would encourage pensioners to put larger properties on the market. ‘A reduction in the number of properties being put on the market has placed further upward pressure on house prices in some parts of the UK. This is a result of low levels of house building, but also other factors such as an ageing population and the rising cost of moving up the property ladder,’ said Nina Skero, Cebr economist and main author of the report,. ‘The price gap between a first time home and a larger family home has skyrocketed… Continue reading
