Tag Archives: london
Prime London property market still adjusting to tax changes
Prices of prime London residential properties fell marginally in the first quarter of 2016, as uncertainty regarding the global and domestic economic outlook continued, says a new analysis. Overall values across the whole of the prime property market in London fell by an average of 0.3% in the three months to the end of March, according to the report from real estate firm Savills. But there continues to be a distinction between the higher value, discretionary prime central London markets and the more domestic, needs-based outer prime London locations. In the most expensive markets of prime central London prices fell by 0.8% in the first quarter. This leaves values at the very top end of the market some 6.7% below their 2014 peak, when an adjustment was triggered by the Chancellor’s announcement of new stamp duty rates for higher value properties in his autumn statement. By contrast, in the less expensive and more domestic outer prime London housing markets, which run from Richmond and Wimbledon, though Battersea and Wandsworth in the south and west, and Islington, Wapping and Canary Wharf in the north and east, prices remained flat in the first quarter of the year, having risen between 2.6% and 4.2% over the past 12 months. The report points out that it is notable that price growth across all prime London markets has been slower than the mainstream over the past three years. It says that this is because the lower value outer London markets were slower to recover post downturn, have benefited from stamp duty reform and remain more accessibly priced. ‘Unlike other parts of the London housing market, the prime markets remain fairly price sensitive and increasingly dominated by needs based buyers,’ said Lucian Cook, Savills head of UK residential research. “’he recent Budget statement confirmed that the stamp duty take form the top end of the market has risen following the reforms of December 2014, despite lower transactional activity, effectively signalling that this policy is here to stay and will continue to influence buying and selling decisions and assessment of value,’ he explained. ‘Given historic levels of price growth, the increased tax burden and political uncertainty stemming from the pending mayoral election and EU referendum, our view is that we are unlikely see any price growth over the course of 2016 as the market continues its adjustment,’ he added. Continue reading
Property prices in England and Wales down slightly month on month
Residential property prices in England and Wales increased by 6.1% in the year to February 2016 taking the average value to £190,275. The latest data from the Land Registry also shows that overall month on month prices fell by 0.2% but most regions have seen prices rise. London has seen the greatest increase in average property values over the last 12 months with a rise of 13.5% to £530,368 but at the opposite end the North East saw prices fall by 3.2% year on year. The North East also saw the most significant monthly price fall with a decrease of 1.2% the North West saw the greatest monthly price rise with a rise of 1.8%. According to David Brown, chief executive officer of Marsh & Parsons, the monthly dip in property prices disguises the fact that the majority of regions are experiencing striking growth. ‘There have been a lot of stimulants spurring on the housing market this spring To beat the 01 April implementation of additional stamp duty, second home buyers and buy to let investors have been frantically pushing through purchase completions as quickly as possible,’ he pointed out. ‘We’ve had documents collected and delivered by hand across London to solicitors to avoid postal delays, and our teams have been in at the crack of dawn to make sure all parties involved in the transaction are meeting their deadlines,’ he explained. ‘This short term whirlwind should go some way to balance out the slower sales activity seen at the end of last year, but only time will tell how buy to let demand tapers off as we enter into new territory. As buy to let investors face yet another blow from the banks, the incredibly strong buyer demand we’re seeing will take the reins, and keep the market on a stable course,’ he added. Rob Weaver, director of investments at property crowdfunding platform Property Partner, pointed out that price rises in London are more than double the rate compared to all other regions excluding the South East and the East. ‘High demand, a shortage in supply and out of reach properties in prime central London, has seen potential buyers flocking to outer London boroughs for more affordable housing and in turn that’s pushed prices ever skyward. Six of the outer boroughs have experienced annual price rises of more than 15% with Hillingdon top of the league at 17.1%,’ he said. ‘Again the upward trends continue west of the capital along the M4 corridor with Slough notching up a 19% annual increase. There’s a widening gulf with the rest of England and particularly Wales with the average house at a fifth of the price you pay in London. And sadly, we’re likely to see downward pressure on prices in south Wales over increasing uncertainty around Steel jobs in Port Talbot,’ he added. Continue reading
UK new house building target not over ambitious, analysis suggests
The UK Government’s target of building a million new homes over the next few years is not as ambitious as some may think, according to a new analysis from the Royal Institution of Chartered Surveyors (RICS). The individual components of the goal includes 200,000 Starter Homes, an initiative still working its way through parliament, and 135,000 shared ownership properties about which little has been said to date. Trying to access the success of such a programme it about the official data on housing starts, according to RICS chief economist Simon Rubinsohn, and these show that a mere 144,000 new units were begun through the course of 2015. But he points out that other data produced by the Department for Communities and Local Government (CLG) casts some doubt on the accuracy of the quarterly figures which are produced on a high frequency basis and released within a short period following the end of the quarter. He explains that there is arguably more value to be gained by focusing on the less frequently released net supply numbers, which are based on completions rather than starts, as they reflect the additions to the stock of housing units for habitation. The quarterly completions series showed an additional 125,000 homes built in 2014/2015, the last full year for which data is available, while the annual net supply series puts completions at 155,000. Rubinsohn adds that net conversions added close to nearly 5,000 additional units over the period and this was supplemented more than 20,000 units from ‘change of use’. The latter figure has increased sharply over the past few years as a result of Permitted Developments Rights enabling the shift from office class to residential. And then demolitions amounted to just over 10,500 in 2014/2015. ‘So pulling this altogether, in the last financial year, there may have been 125,000 housing completions in England, 155,000, just over 180,000 or, after demolitions, 170,000. And on the basis of the higher number (gross additions to supply), the government doesn’t appear that far off its ambition for 2020,’ Rubinsohn argues. ‘None of this is designed to minimise the fundamental nature of the housing crisis which reflects the fact that household formation is still projected to comfortably outstrip projections for the supply of new units even on the most generous calculations,’ he says. ‘This is also clearly visible in the estimates by our professionals for medium term growth in house prices and rents. The February Residential Market Survey suggested both are likely to increase by at least another fifth over the next five years comfortably outstripping the probable rise in wages,’ he adds. Continue reading
