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Industry professionals believe supply shortage is holding back UK property market
The vast majority of property professionals in the UK believe that the residential housing market is being held back, with a shortage of stock the main problem. Overall 90% of those surveyed said the market is being held back and 47% said the shortage of homes for sale is the reasons, according to a poll by conveyancing services firm myhomemove. It says that this suggests that improved confidence from sellers in the wake of the decisive election result could ensure increased stability and predictability that will deliver more confidence, pushing the number of house sales up. The data also shows that 24% of respondents blame a lack of mortgage availability, perhaps reflecting concerns about the impact of affordability rules on lending to older borrowers and 16% said that a lack of new build properties was holding back the market, reinforcing the need for developers to keep building. There was strong support for extending the Help to Buy scheme for new build purchases to 2020. A strong majority of 80% of respondents supported the policy, compared to a mere 8% who opposed it. On top of this some 65% said they support the Conservative Partys’ starter homes scheme put forward in its manifesto in the run up to the general election with just 3% opposed. But the property professionals were divided on one of the other main housing policies of reducing inheritance tax on the family home. Some 42% said they support the policy, while 38% opposed it. The research also found that 38% believe that a target of building 200,000 new homes is achievable. The new Conservative Government promised to build 200,000 starter homes for first time buyers in its manifesto. They think that the new Government will find it easier to implement its Right to Buy scheme for tenants of housing associations than it will to deliver its Right to Build programme. Both policies were outlined in the party’s manifesto. And 43% said that a Right to Buy scheme for housing association tenants was realistic, with 27% not sure. There was, however, greater uncertainty over whether the party could implement the Right to Build scheme with 26% thinking that this policy was achievable, whilst 41% were not sure. ‘Property professionals are clearly concerned about the obstacles that are holding back property transaction numbers. The good news is that the decisive election result could provide a confidence boost to consumers that will mean more properties are put on the market,’ said Doug Crawford, chief executive officer of myhomemove. ‘The main housing policies outlined by the new Conservative Government in its manifesto are, for the most part, popular within the industry. The question now is whether the Government can deliver on its promises and how quickly it can do so. Some policies, like extending Help to Buy, are far simpler to deliver than others, like the proposed Right-to-Build scheme. This will undoubtedly be a big topic of debate at our conference, just one week… Continue reading
UK property market picks up but shows signs of pricing expectation gap
The UK property market is set to see a pick-up in activity due to an election result that was positive for real estate markets but there is evidence of an ‘expectation gap’ emerging, new research suggests. Buyers and vendors have different expectations when it comes to pricing, according to the latest market update report from property firm Knight Frank. It shows that UK house prices rose by 1% in April, taking the annual increase to 5.1%, while prime central London prices rose by 0.3% in April, an annual uptick of 2.8%, and prime outer London rose by 0.4%, and are up 4.8% year on year. Overall prime country house prices rose in value by 2.5% in the year to March, while prime properties in Scotland climbed 1.2%. Meanwhile, the rental market in prime central London is showing continued growth, outpacing that seen in the sales market with growth of 4.1% while overall UK rents rose 2.1% in the year to March. Rates of growth are not uniform across different areas, for example there has been 6.2% growth in Kensington and just 0.1% in Mayfair. Rents in the Home Counties climbed by 4.7% in the year to the end of March. ‘Uncertainty had been the byword in most corners of the market in the run-up to what was considered the most closely fought election in decades. Now, with a majority government, there is clarity on the way forward on housing policies and a Conservative majority means that the approach is likely to be largely a continuation of what we have seen over the last five years,’ said Grainne Gilmore, head of UK residential research. She pointed out that housing supply will continue to be a priority as the current levels of new homes being delivered is far below the generally agreed target of 240,000 homes a year. Indeed, Knight Frank’s recent house building report revealed the measures house builders and developers think should now be a priority for policymakers to boost development and these include beefing up planning departments and releasing more public sector land. ‘The Conservatives have already pledged to extend the Help to Buy Equity Loan to 2020, something which has encouraged developers to take on larger schemes. Their plans to extend Right to Buy to more Housing Association tenants will provide the opportunity for home ownership among this group,’ explained Gilmore. ‘However in terms of housing supply, the policy of replacing each home purchased with another, new, home available for rent must be implemented, otherwise the scheme will result in a net loss of affordable homes,’ she added. Knight Frank expects sales to pick up. ‘In terms of activity and pricing in the market, it is likely that transactions will pick up now that the uncertainty in many parts of the market, especially the prime market which is no longer dealing with the prospect of a mansion tax,’ said Gilmore. ‘However, there is evidence that an expectation gap in pricing may be starting to… Continue reading
Houses in areas of low unemployment in UK have seen biggest property rises
British home owners in local authorities with the lowest levels of unemployment have seen the value of their property rise by almost £65,000 since the trough of the last housing market cycle in 2009, new research shows. The average house price in the 20 local areas that recorded the lowest unemployment rate between 2009 and 2015 rose by 25%, or £64,783, according to new research by Lloyds Bank. In contrast, the 20 areas with the highest unemployment experienced an average house price increase of just £4,100 or 3%. The report says that there is a clear link between levels of unemployment and house price performance in recent years. Those areas with the lowest average levels of unemployment since 2009, as measured by the claimant count, have, on average, recorded bigger house price gains. For example, the 20 local authority districts with the lowest unemployment have experienced average house price rises of 25% since 2009 compared with an increase of 17% for Great Britain as a whole. The outperformance is more marked once the impact of London is removed from the calculations with Great Britain excluding London recording an 11% price increase. The capital has seen the biggest price gains in recent years but none of the lowest 20 unemployment areas are in Greater London. The position for the 10 areas with the lowest levels of unemployment is even more marked with an average house price rise of 28% for these areas since 2009, more than 60% higher than the Great Britain gain and 150% more than Great Britain excluding London. Hart and Winchester, which have had the lowest average unemployment rates since 2009, have recorded house price gains of 33% and 37% respectively in the last six years. Similarly, those areas with the highest levels of unemployment have typically under performed compared to the Great Britain average. The 20 areas with the highest levels of unemployment have recorded an average house price gain of 3%. Hull and Middlesbrough, the two areas with the highest unemployment, have seen house prices increase by only 2% and 1% respectively over the past six years. ‘There has been a very clear relationship between conditions in the local jobs market and house price performance during the period since the housing market downturn between 2007 and 2009,’ said Andy Hulme, Lloyds Bank mortgages director. ‘Those areas with low unemployment and high levels of employment have tended to record above average house price growth. Areas with high unemployment and relatively low employment have, on the other hand, typically under performed,’ he explained. ‘The past few years have underlined the importance of local economic health in determining house price behaviour. Other factors, however, are also key drivers of house price trends including the strength, or otherwise, of housing supply,’ he added. The 20 local areas with the highest employment rates have experienced average house price rises of 19% since 2009 compared with an increase of 17% for Great Britain as a whole,… Continue reading
