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UK house price growth continues in first month of 2016
House prices in the UK increased by 2.2% in the last three months compared with the previous quarter taking the average value to £212,430. The January index data from lender the Halifax also shows that prices were up 9.7% year on year and up 1.7% in compared with December 2015. Martin Ellis, Halifax housing economist, pointed out that the quarterly rate of change increased following two successive months below 2% and the annual rate has been in a narrow range between 8% and 10% for nearly the whole period since the start of 2015. ‘The imbalance between supply and demand continues to exert significant upward pressure on house prices. This situation looks set to persist over the coming months. Further ahead, increasing affordability issues, as price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease,’ he said. He also pointed out confidence in the housing market remains strong, according to the latest quarterly Halifax Housing Market Confidence Tracker. Despite declining steadily since last May, house price optimism in the final quarter of 2015 continued to show that a majority of people believe that average UK property prices will be higher 12 months from now. Price growth is largely due to a lack of supply, according to Randeesh Sandhu, chief executive officer of residential development finance provider Urban Exposure. He also pointed out that there could be an increase in activity before the new second home stamp duty tax increases in April. He said that the lack of supply continues to be constrained by developers having a lack of access to finance as well as a shortage of key materials and a skilled workforce. ‘Far more needs to be done to boost development, particularly in London where average house prices in over half of London neighbourhoods are now £500,000 or more,’ he added. Rob Weaver, director of Investments at property crowdfunding platform Property Partner, also believes that supply is the main driver in the housing markets. He also explained that while sales in central London have dropped off the outer boroughs are seeing increased activity. ‘Potential buyers are hunting for more affordable housing, attracted by regeneration in places like Thamesmead and Woolwich, and of course, Crossrail. We’re also seeing a spike in activity in the market as buy to let landlords rush to seal deals before the stamp duty 3% hike in April,’ he explained. ‘After that it is less clear as the spectre of cuts in mortgage tax relief looms next year. But wage growth is just not keeping pace with house prices, and that raises the serious question of affordability. Demand may start to drop leading to a softening of prices. An eventual interest rate rise, possibly at the end of the year, may also lead to a correction in the market,’ he added. Jonathan Hopper, managing director of buying agents Garrington Property Finders, pointed out that the buy to let… Continue reading
Call for UK wide housing review to access impact of buy let tax change
A long term, strategic comprehensive review of housing policy and housing need in the UK is needed as recent changes are set to distort the property market, it is claimed. In particular, the Government ought to recognise the contribution of private landlords as tax changes could seriously affect the buy to let market to the detriment of those who cannot or choose not to buy a home. In a response to the Government’s new stamp duty regime for second homes, Paragon Mortgages says that there should be a comprehensive review looking at the housing dynamics over the last 30 years. ‘Whilst we agree that support for home buyers is an important strand of housing policy, if the interests of home buyers are prioritised above the interests of those in the Social Rented Sector (SRS) and the Private Rented Sector (PRS), then serious distortions may arise as a result to the detriment of those who cannot afford to buy or choose not to buy,’ the document says. ‘Policy changes that may result in reduced supply of properties to the PRS, risk driving up rents and constraining choice to the disbenefit of those who rely on the PRS for a home without delivering corresponding benefits in owner occupation,’ it explains. The document also says that there are more significant structural issues at play in the heart of the housing market so the review is needed to look at housing provision across all tenures. Paragon has been operating in the buy to let market since the inception of this specialist finance for landlords in 1995 and says that it has extensive experience of the market, a deep understanding of how landlords operate and how important buy to let finance is to the supply of property to the PRS. ‘What the Government appears to be overlooking with their focus on driving up home ownership, is that regardless of aspiration, home ownership is not a suitable solution for everyone. Some demographics need and want to live in the PRS because it best suits a variety of their individual requirements including lifestyle choice and financial capability,’ said John Heron, director of mortgages at Paragon. ‘The proposed 3% increase in Stamp Duty will not bring the market to a grinding halt and is unlikely to deter most landlords from their current, immediate investment plans but it will undoubtedly impact on some landlords’ future plans for growing their portfolios,’ he explained. ‘Our fundamental issue with these changes and also the proposed changes to tax relief of mortgage finance is that private landlords provide a valuable contribution to the wider housing market mix and this is not being recognised,’ he added. ‘With a declining social housing sector and with more people choosing not to buy their own home, it is important that the service the PRS provides is not overlooked,’ he concluded. Continue reading
Property sales up 14.5% in Scotland in last quarter of 2015 and prices up 1.6%
Residential property sales in Scotland increased by 14.5% in the final three months of 2015 compared to the same period in 2014, the latest official data shows. Prices increased too, up 1.6% to £167,734, with the highest price rise recorded in Inverclyde at 13.1%, according to the figures from the Registers of Scotland (RoS). ‘As well as a significant increase in the volume of sales this quarter, prices have reached their highest since RoS began compiling quarterly statistics in 2003. Combined, this indicates a more robust and active property market,’ said RoS commercial services director, Kenny Crawford. The highest percentage rise in volume of sales was recorded in Midlothian, with an annual increase of 30.2% compared with the same quarter last year. The City of Edinburgh recorded the highest volume of sales, up 21.4% while the largest drop was in Aberdeen City with sales down 12%. The highest average price is in Edinburgh where values have increased by 3.2% year on year to £233,255, while the largest fall was in Dumfries and Galloway, a drop of 9.9% to an average of £130,275. The total value of sales across Scotland registered between October and December increased by 16.3% to just under £4.83 billion, the highest value of sale for any quarter since the second quarter of 2009. Edinburgh remained the largest market with sales of just under £824 million for the quarter, an increase of 25.3% on the previous year. East Ayrshire recorded the highest increase in value with sales of over £66 million, up 33.9% and Aberdeen had the largest decrease in overall market value, down 13.6 to over £273 million on last year. All property types showed an increase in sales volumes, with flats showing the biggest increase at 18.4%. In terms of prices, flats were the only property type to show an increase in average prices, up 0.6% to £130,679. Detached, semi-detached and terraced properties all saw decreases in average prices of 0.3%, 1.4% and 3.5% respectively. Simon Brown, partner and head of residential sales at CKD Galbraith, pointed out that the Scottish property market as a whole has endured many changes over the last year and more are to come. ‘The 3% levy on second homes being introduced in April will no doubt bring a flurry of property sales to the market to beat the deadline as well as impact house prices as buyers of buy to lets will seek to pass on the extra purchase costs by reducing the price they are prepared to pay,’ he explained. ‘Demand for prime property at the top end of the market looks set to continue, especially in Edinburgh and the surrounding areas. Generally, the Scottish property market is demonstrating healthy growth with good quality properties selling quickly and some very encouraging signs for the year ahead especially as we approach the prime Spring selling period,’ he added. Michelle Grant, investment director at Grant Property, believes that the figures are… Continue reading
