Tag Archives: london
Northern UK cities catching up in house price growth terms
UK house prices in key cities rose by 7.9% in the 12 months to January 2015, however prices were up just 1.1% in the last quarter of the year as the slowdown continued. The data from the latest Hometrack cities house price index shows that year on year house price growth ranged from 4.1% in Glasgow, where house prices average four times average earnings, to 8.6% in Oxford and London where house prices average 12 times average earnings. The high growth cities of 2014 continued to see the rate of growth slow with London down to 13.6%, Bristol at 10.8%, Oxford at 8.6% and Cambridge at 5.3% while six out of the 20 cities hit their post downturn lows just two years ago, but are now up by an average of 9% and will drive future growth. It means that house prices have risen by as much as £144,000 in cities that bottomed out in 2009 but as affordability has affected growth elsewhere Overall the impetus behind continuing UK house price growth is shifting towards cities like Liverpool, Sheffield and Glasgow, which bottomed out only two years ago, away from the cities that started to recover in 2009 but have since slowed due to pressures on affordability. Over the last six years, London and Oxford have experienced house price growth of 55.2% and 42.1% respectively since the trough. However affordability pressures will limit growth in the medium term with both cities registering over 12 times the price to earnings ratios, almost twice the UK average of 6.3 times. By contrast in cities that only started their recovery two years ago such as Edinburgh (10.7%), Leeds (10.1%), Newcastle (8%) and Glasgow (6.3%), house prices are averaging between three and six times the average earnings. There are 14 UK cities in total that have been recording house price growth since 2009, but the length of the recovery does not provide a guide to the level of house price growth. While London has seen the average house value increase by 55% or £144,000, the rebound in house prices in Manchester and Birmingham have been just over 10% or £12,500 over the same period. The six cities that have been recovering for the last two to three years have recorded an average increase of just 9% or £11,000 led by Belfast and Edinburgh. The weakest growth has been seen in Glasgow with average prices up 6.3% or £6,300 since July 2012. ‘A focus on average UK house price movements masks critical trends at a city and sub-regional level. This is important for both businesses operating in the housing market and policy makers trying to address the challenges of growing housing supply,’ said Richard Donnell, director of research at Hometrack. ‘House price growth within cities reflects the strength of their local economies and the demand for housing. While Manchester and Birmingham saw prices bottom out in 2009, growth has been more subdued than in other cities… Continue reading
UK housing market sales at their highest since 2007
Residential sales in the UK in the first 10 months of 2014 were 21% higher than in the same period in 2013 with over three quarters of a million property sales recorded, new research shows. This was the highest for this period since 2007 with the numbers of sales in England and Wales during January through to October 2014 totalling 760,000, according to the research by Lloyds Bank. It also shows that there has been a considerable improvement in sales since the market reached the depth of its recession in 2009. Sales in the first 10 months of 2014 were 60% higher than in the same period in 2009. However, sales remained 27% below the levels achieved at the height of the boom in 2007. Daventry in Northamptonshire experienced the biggest rise in home sales, up by 56%, but all regions saw a rise in sales in 2014. The biggest increases compared with 2013 was 26% in the East Midlands, 25% in the West Midlands and 25% in the North West. The smallest rise was 11% in Greater London. However, London recorded the biggest pick-up in sales over the past five years as a whole with a 74% gain between 2009 and 2014. All regions have seen rises of at least 50% over this period with the smallest rises in East Anglia at 51%, the North at 52% and the South West also at 52%. Sales in all regions, however, remain lower than 2007 levels with transactions in the northern regions furthest below. The North is down 41%, the North West down 37%, and Yorkshire and Humber down 35%. The strongest recoveries have been in southern England with the South West down 19%, East Anglia down 20% and the South East down 22%. The overwhelming majority of towns in this survey, some 97%, saw an increase in sales between 2013 and 2014. The majority of regions recorded an increase in all towns. London, however, experienced a decline in sales in a fifth of its boroughs. In contrast, all towns in the country saw a decline in sales in 2008. ‘The recovery in the housing market continued in 2014 with sales rising further in almost all areas of the country. Low interest rates, improvements in the UK economy and government schemes, such as Help to Buy, all appear to have contributed to the rise in home sales. Despite these improvements, sales both nationally and regionally are still significantly below their pre-recession levels,’ said Andy Hulme, mortgages director at Lloyds Bank. ‘There is a clear north versus south pattern to the housing market recovery with sales closer to their 2007 levels in the south. Indeed, a small number of towns recorded higher sales last year than seven years earlier, but sales remained much lower than 2007 levels in most areas,’ he added. A breakdown of the figures shows that four towns recorded a 50% or more increase in sales between 2013 and… Continue reading
Rents in England and Wales up almost 3% in last 12 months
Residential rents in England and Wales increased by 2.8% in the last year to an average of £763 and are now 16% higher than in 2010, according to the latest rental index to be published. The data also shows that over last five years rents have grown by an average 3% per year but after inflation is taken into account this amounts to just 0.6% annually, the buy to let index from Your Move and Reeds Rains shows. In absolute terms, the average residential rent across England and Wales has grown by £107 since January 2010, to reach £763 as of January 2015. This amounts to an average annual rent rise of 3.0% over the last half decade. However, this represents a real terms increase of 0.6% per annum when adjusted for inflation over the same period. Most recently, rents have fallen on a monthly basis, down 0.6% between December 2014 and January 2015. On an annual basis, rents are 2.8% higher than was seen last January. ‘The nature and affordability of UK housing is transforming before our eyes. In the last five years the private rented sector has successfully absorbed an unprecedented influx of tenants, while rental prices have broadly tracked inflation,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘As ever, the devil is in the detail but as this growth accelerates, even more investment will be necessary for the industry to keep up. So we need more buy to let landlords to help solve the crisis in demand for homes to rent,’ he explained. He pointed out that it is also important to recognise that these figures don’t float in a hermetically sealed chamber. ‘Many other aspects of finance and the housing market feed into this sector. Rents represent a landlord’s attempt to recoup investment at a reasonable market rate dictated by consumer prices, inflation, and basic principles of supply and demand. Over the long term, rents also tend to reflect higher house prices,’ he said. ‘In real terms, rents have risen only incrementally. But any real and sustained growth in rents should offer a clear lesson. As with the purchase market, the only clear way to make rented housing dramatically more affordable is to build far more homes, far more quickly than is currently the case. And until this happens, landlords are likely to continue to earn double digit returns on their investments,’ he added. Eight out of 10 regions saw lower rents in January 2015 than in December 2014. Only the East of England and the North East defied this downward trend, with 1.3% and 0.7% monthly increases in market rents, respectively. The dominant movement towards lower rents in January was led by a 2% month on month drop in the South West, closely followed by the North West with a 1.7% drop, and the East… Continue reading
