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UK property sales up to 16 month high, says RICS report
Property sales in the UK have picked up across the country, reaching a 16 month high, according to the latest index report from the Royal Institution of Chartered Surveyors (RICS). There were also further price increases nationwide in September, a modest improvement in mortgage availability but no improvement in the supply situation with new buyer demand continuing to outweigh instructions to sell. Across the UK, agreed sales rose at the quickest pace since May 2014, with 14% more chartered surveyors seeing a rise. This is a 16 month high and the fifth consecutive month that sales have increased. The North, East Anglia and Scotland posted the sharpest rises in activity over the month with the East Midlands the only region to see a material drop in sales albeit following an increase in the region in August. The report says that the stronger sales trend in the UK is broadly reflective of an upturn in demand which has been visible in the data since the early spring. Indeed, the number of new buyer enquiries rose for a sixth consecutive month across the country with 18% more chartered surveyors reporting a rise in demand. The pattern being seen by chartered surveyors echoes recent lending data including that highlighted by the Bank of England, showing mortgage approvals at an 18 month high and up 12% compared to a year ago. As the availability of mortgage finance appears to be improving, the average ‘perceived’ LTV ratio captured by respondents to our survey edged up to 79.3% with first time buyers seeing credit conditions relax most noticeably over the month, the report also reveals. Although activity is picking up, the ongoing lack of new instructions and the resulting limited stock on the market continue to be an issue for the sustainability of the market. The number of new instructions has fallen in 13 of the last 14 months. RICS says that it is significant that 40% of respondents feel the biggest factor behind the negative trend in new instructions is the lack of stock already for sale which is deterring would be movers as they struggle to find a suitable property to move on to. The next most cited influence was economic uncertainty, followed by stretched affordability. As a result of the persistent supply demand imbalance, the national house price indicator continues to rise strongly which is likely to be reflected in key house price indices over coming months and into the first half of 2016, according to the report. In the lettings market, tenant demand increased once more continuing the pattern seen by respondents since December 2014, and while new landlord instructions increased slightly for the third month in a row, they were still significantly outstripped by tenant demand. Indeed, over the next 12 months, chartered surveyors are forecasting rents to rise by 3% at the headline level. ‘Activity is now picking up which is encouraging, but unless the stock being sold is replenished… Continue reading
Property market recovery in the Alps spreads out from top resorts
The recovery in the Alpine residential real estate market, led by the ultra-prime resorts, has spread to the rest of the region with infrastructure investment spurring new development, according to a new report. British buyers are returning as a weak euro poses buying opportunities in France, Austria and Italy but a strong Swiss franc has made property in Switzerland more expensive for foreign buyers, says the report from Savills World Research and Alpine Homes. Courchevel 1850 tops the Savills ultra-prime ski resorts index with typical prices of €31,340 per square meter for the best properties. The French resort is followed by the Swiss resorts of Gstaad, St Moritz, Zermatt and Verbier at between €26,450 and €31,220 per square meter. In spite of limited price growth, a strong Swiss franc has pushed these markets up the rankings in currency terms, the report explains. In North America, only Vail is on par with the top European competition at €25,200 per square meter. ‘A home in a top tier Alpine resort is a key component of global property portfolios for the world’s wealthy. A property in Courchevel 1850, Gstaad or St Moritz complements a city residence in London, Paris or Moscow,’ said Paul Tostevin, associate director of Savills World Research. According to Jeremy Rollason, managing director, Alpine Homes, 2015 has been a tale of two currencies for UK buyers in the Alps. ‘The de-peg of the Swiss franc caught markets off guard, but sterling has since recovered and now trades within a 5% range of the pre-January 2015 exchange rate,’ he said. ‘The weakening euro has helped buyers in euro denominated countries. Currency swings have the effect of either suppressing or stimulating markets through affordability, but the net effect has little influence on property values per se,’ he added. The report shows that buying activity in the Swiss resorts cooled in 2015 with foreign buyers, particularly important to the top end of the market, impacted by the strong Swiss franc. However, despite limited supply of second homes, investment in infrastructure continues and the cache of Swiss resorts remains. Grimentz gained a new lift in the 2014/2015 season linking to neighbouring Zinal and new apartment schemes have followed. La Tzoumaz is also set for revival thanks to a planned lift upgrade, improving connectivity with neighbouring Verbier. Villars, a year round resort with high quality international schools, has seen high levels of new supply in recent years and has suffered from poor snowfall. This has had some impact on pricing and, for those who shop around, there are deals to be done. Prime apartments here trade at between CHF10,000 and CHF12,000 per square meter. The Austrian Alpine resort market has remained strong on the back of a vibrant local economy, which has generated house price growth nationally of 41% since 2008 and the report says that Austria continues to offer excellent value for money compared to the more established French and Swiss resorts. Committed investment in resort… Continue reading
New property tax regime hits prime property sales and prices in Edinburgh
Demand for prime properties for sale at £1 million and above is on the rise again in Edinburgh after a sharp decline in activity immediately after the introduction of the new property tax. The Land and Buildings Transaction Tax (LBTT), introduced on 01 April this year, is credited with leading to surge in demand beforehand and a dampening of demand afterwards. But now, according to Scottish property consultants CKD Galbraith, there are signs that prime property buyers are coming back to the market, although the available data shows how strong the effect has been. The first three months of 2015 saw 56 properties sold at £1 million plus in Edinburgh alone and there was a surge in the week before the introduction of LBTT when 30 of the 56 sales were completed under the old Stamp Duty system. Under LBTT, the buyer pays different rates of tax on the portion of the purchase price that falls within various bands, rising to 12% for the portion of the purchase price over £750,000. Registers of Scotland recorded a dramatic decline in subsequent sales at the £1 million mark from April until September with only three sales successfully completed in Edinburgh. ‘Our recent research shows that buyer and seller confidence is returning following the introduction of LBTT in April and the UK general election in May, with an increase in the number of properties coming to the market in Edinburgh,’ said Jamie McNeill, head of residential at CKD Galbraith’s Edinburgh office. ‘We are currently handling a number of private sales in the £1 million plus market in Edinburgh and are experiencing a rise in the number of local, national and international buyers registering with our Edinburgh office looking for prime property in the city centre,’ he explained. ‘With the tax changes for properties over £1m, the number of sales at this level is considerably lower than at its peak in March this year, however we expect the number of transactions at this level to continue to increase throughout the remainder of the year,’ he added. The new tax has affected the price of prime property in Edinburgh, according to the latest research from Knight Frank, with values up by just 0.4% between July and September and the rate of annual price growth in the city slowed to 2.5%, its lowest level since September 2013. The Knight Frank report points out that a £900,000 property now attracts a LBTT bill of £66,350. Previously, buyers would have paid £35,000 in stamp duty. Against this backdrop, a two speed market has emerged in the city. Price growth has been driven primarily by the sub-£500,000 market, which has proven to be more resilient to the recent tax change. As a result, price growth at this level has been stronger than the average for prime Edinburgh properties, the report explains. The average value of homes below £500,000 has risen by 1.1%… Continue reading
