Tag Archives: investment
Index shows UK prices increased by just 0.3% in February
Residential property prices in the UK increased by 0.3% in February and there was a slight growth taking the annual increase to 4.8%, the latest house price index shows. This took average prices to £196,930 and overall the annual rate of growth has remained between 3% and 5% since the summer of 2015, according to the data from lender the Nationwide. The index report also says that the number of mortgages approved for house purchase increased sharply in January to almost 75,000, up from around 71,000 approvals in December and the highest number since January 2014. However, Nationwide’s chief economist Robert Gardner pointed out that much of the increase is likely to be related to the impending increase in Stamp Duty on second homes which is due to take effect in April 2016. He pointed out that after declining gradually over the past 12 years, the rate of home ownership in England stabilised in 2014/2015 but at 63.6%, this is well below the peak of 70.9% recorded in 2003. ‘This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring/summer. Looking through this volatility we expect the underlying pace of activity to increase in the quarters ahead as improving labour market conditions and low borrowing costs provide ongoing support,’ he said. Gardner pointed out that after declining gradually over the past 12 years, the rate of home ownership in England stabilised in 2014/2015 but at 63.6%, this is well below the peak of 70.9% recorded in 2003. ‘If we look at the shift in tenure patterns by age over the past decade, we see a particularly marked decline in home ownership rates amongst the younger age groups, especially amongst 25 to 34 year olds, traditionally the segment containing most first time buyers. While there was a marginal uptick in 2015, the proportion of younger adults who own their own home, currently 37%, remains considerably lower than 10 years ago,’ he explained. ‘Over the same period, the proportion of people renting increased from 43% to 63%. For 16 to 24 year olds, the proportion renting increased from 73% to 92% over the same period. The increase has occurred in the private rental sector, which currently houses 19% of total households. Over the past 10 years, the number of privately rented households has increased by 75% to 4.3 million,’ Gardner said. He also pointed out that the latest English Housing Survey showed that the proportion of private renters who expect to buy a home at some point in the future declined from 61% to 57%, the lowest reading since the survey began in 2008/2009. Even amongst those who expect to buy a home, for most this remains a longer term aspiration, with 75% expecting it to take at least two years. March is likely to be similar in terms of house prices and sales, according to Alex… Continue reading
US pending homes sales fall month on month after record breaking 2015
Pending home sales in the United States fell by 2.5% in the first month of 2016 following the highest average year in nearly a decade, the latest index shows. On the South saw sales rise, but sales are still 1.4% higher than they were a year ago, according to the forward looking index from the National Association of Realtors. Although the index has increased year on year for 17 consecutive months, last month’s annual gain was the second smallest and NAR chief economist Lawrence Yun said that a myriad of reasons have contributed to the drop in January. ‘While January’s blizzard possibly caused some of the pullback in the Northeast, the recent acceleration in home prices and minimal inventory throughout the country appears to be the primary obstacle holding back would be buyers. Additionally, some buyers could be waiting for a hike in listings come spring time,’ he explained. Existing home sales increased last month and were considerably higher than the start of 2015, but price growth quickened to 8.2%, the largest annual gain since April 2015 when it was 8.5%. While the hope is that appreciating home values will start to entice more homeowners to sell, Yun said that supply and affordability conditions won’t meaningfully improve until home builders start ramping up production, especially of homes at lower price points. ‘First time buyers in high demand areas continue to encounter instances where their offer is trumped by cash buyers and investors. Without a much needed boost in new and existing homes for sale in their price range, their path to home ownership will remain an uphill climb,’ Yun pointed out. Existing homes sales this year are forecast to be around 5.38 million, an increase of 2.5% from 2015. The national median existing home price for all of this year is expected to increase between 4% and 5%. In 2015 existing home sales increased 6.3% and prices rose 6.8%. A breakdown of the figures show that the index in the Northeast declined 3.2% but is still 10.9% above a year ago. In the Midwest the index fell 4.9% but is still 1.4% above January 2015. Pending home sales in the South inched up 0.3% but remain 1.3% lower than last January. The index in the West decreased 4.5% but is still 0.4% above a year ago. Continue reading
Need for affordable housing not likely to be met by Starter Homes scheme
The vast majority of councils in England do not think that Starter Homes should be classified as affordable housing and only 7% of councils think they will address the need for affordable housing in their local authority areas. Indeed, new research shows that local councils, of all political parties, believe that the Government's Starter Homes policy will hinder rather than help to tackle the growing need for genuinely affordable housing in England. They have also raised concerns about the impacts of the Government's plans to reduce social rents by 1% a year for the next four years and the extension of the Right to Buy to housing association tenants, according to a survey commissioned by the Town and Country Planning Association (TCPA) and the Association for Public Sector Excellence (APSE). It found that over two thirds of councils, 69%, anticipate that they will be building less social and affordable housing as a result of the Government's plans to reduce social rents by 1% a year for the next four years. Only 3% say they plan to build more social and affordable homes as a result. ‘Low cost home ownership, such as starter homes, may help some people get a first step on the housing ladder, but as the survey of council's highlights this will not address the need for genuinely affordable homes,’ said Kate Henderson, chief executive of the TCPA. ‘We need a housing strategy for the nation that provides decent homes for everyone in society, including those most in need in the current housing crisis. Our survey has revealed that four out of five councils do not think starter homes should be classified as affordable housing because they are simply not affordable for essential low paid workers or for many people on average incomes,’ she added. Almost three fifths of councils described their need for more affordable housing as severe and 37% as moderate, and 89% of respondents think that the extension of Right to Buy will lead to less housing available for social rent, with only one council thinking that it would be beneficial. ‘What is clear from these survey results is that the headlong rush to extend Right to Buy to housing associations is an ill-thought out measure which enjoys little support, and this is reflected across the different political parties at a local level,’ said Paul O'Brien, chief executive of APSE. ‘With Nine out of 10 councils genuinely concerned that the extension of the Right to Buy to housing association tenants will further diminish the already short supply of socially rented homes, available in their local communities, we say to Government now is the right time to listen on Right to Buy,’ he added. Continue reading
