Tag Archives: london
Interest rates and property tax concerns impacting prime central London market
Concerns around interest rates and property taxes have impacted on sentiment within the prime central London residential market, it is claimed. The latest market commentary report from W.A. Ellis says that sentiment within the housing market often reflects the mood of the overall economy and this has resulted in demand falling over the last four months. Richard Barber, director of W.A.Ellis, pointed out that this coincides with the Bank of England’s ‘sabre rattling’ over raising interest rates and increasing taxes on property, particularly those with a high capital value or owned by foreign investors. ‘This, coupled with the run-up to what must be the most property centric general election that we have experienced, is what is now bringing swift realism to our previously bullish market,’ he said. ‘The prime central London market is undoubtedly slower, and the usual withdrawals from the market are becoming more apparent as discretionary sellers now wait and see the result of the general election. Purchasers are also more wary of paying last spring’s frothy prices,’ he explained. ‘There are many factors influencing our market, both negative and positive but undoubtedly higher property taxation, stronger sterling and a fear of the politically unknown has had a cooling effect,’ he added. This has influenced the firm’s more restrained prediction of 1.5% growth within the prime central London market through 2015. ‘More positively, we expect to see 4% growth within the central London new development market and the interest generated from the third phase of the Battersea Power Station development is indicative of the sustainable growth we foresee within this sector,’ said Barber. ‘Furthermore, our research predicts stronger growth in prime central London from 2016 to 2019, once political uncertainty and potential increased taxation has been absorbed, culminating in a predicted rate of growth of nearly 20% from 2015 to 2019,’ he added. In the sector’s lettings market Lucy Morton, director and head of agency, explained that the end of the month has seen the release of third quarter research results from Lonres, the agents’ intranet, which have confirmed that the recovery in the central London rental market that began earlier in the year has continued, boosted by the positive state of both the UK and London economies. There were 43% more properties let in the third quarter of 2014 than in the previous quarter, although this is still 4.6% less than in the third quarter of 2013. ‘While demand from tenants for properties has increased, stock levels have eased back. There were 9.5% fewer properties available to let across central London in the third quarter of 2014 compared to the same quarter in 2013,’ she said. ‘Demand is out stripping supply at the lower levels of the market but there is more of a balance in the middle tier of the market, with the most choice for tenants with budgets from £1,000 to £2,000 per week,’ she pointed out. ‘Competition for properties has increased rents over the last quarter indicating an optimistic outlook… Continue reading
UK house price growth slows as demand slips for fourth month in row says RICS
House price momentum in the UK continued to slow and new buyer demand tailed off in October, according to the latest Residential Market Survey from the Royal Institution of Chartered Surveyors. Nationally, new buyer demand slipped for the fourth consecutive month with London bearing the brunt of the decline, as 62% more surveyors reported a fall in new buyer demand across the capital. Meanwhile across the rest of the UK dipped to a net balance of -18%. As a result of the weaker trend in buyer interest, sales expectations are now at their lowest point since the beginning of the year and the picture regarding near term price expectations is not dissimilar. But Scotland and Northern Ireland have the most optimistic view on house prices in the run up to Christmas with net balances of 36% and 37% respectively. Meanwhile, stock coming onto the market remained virtually unchanged in October with a net balance of -2%, continuing the trend which has been in place for much of the past year. As a result, even with the dip in demand, much anecdotal evidence from surveyors points to an ongoing challenge in securing adequate new instructions. At a national level, the slowdown in buyer activity in the sales market stands in marked contrast to the lettings market, where tenant demand continues to grow strongly. Over the last quarter, this has particularly been the case in East Anglia, the north of England and Scotland and rent expectation remain generally firm with respondents' anticipating an increase of around 2.5% over the next twelve months across the whole of the country. ‘The flatter trend in the market is partly a reflection of potential buyers becoming a little more cautious about making a purchase as more stringent lending criteria has made it harder to access mortgage finance,’ said Simon Rubinsohn, RICS chief economist. ‘An increasing awareness of the approaching general election also appears to be contributing to the softer market if the responses to the latest survey are anything to go by. However, with new instructions still flat at a headline level as has been the case for most of the last year it seems implausible that the dip in demand will result in very much of a decline in house prices,’ he explained. ‘Meanwhile, demand to rent property is growing as the sales market slows and this, coupled with a drop in supply of new stock to let, is helping to underpin the rental outlook for landlords pretty much across the whole of the country,’ he added. Continue reading
US home prices still rising but rate falls to 5% or below
Home prices in the United States showed continued growth in a majority of metropolitan areas in the third quarter, but all four major regions saw increases at or below 5% from a year ago. The data from the latest quarterly report by the National Association of Realtors (NAR) also shows that the median existing single family home price increased in 73% of measured markets, with 125 out of 172 metropolitan statistical areas (MSAs) showing gains based on closings in the third quarter compared with the third quarter of 2013. Some 47 areas recorded lower median prices from a year earlier but the number of rising markets in the third quarter was mostly unchanged from the second quarter, when price increases were recorded in 71% of metro areas. Sixteen areas had double digit increases in the third quarter of the year, a sharp decline from 54 areas in the third quarter of 2013. Nineteen areas experienced increases in the double digits in the second quarter of this year. According to Lawrence Yun, NAR chief economist, home prices in the third quarter continued to stabilise towards a healthier rate of growth. ‘Home price gains returned to more normalized levels of low to middle single digit rate of appreciation in many metro markets as inventory levels steadily increased,’ he said. ‘Moreover, there are a good number of local markets that are still remarkably affordable with median prices at or under $200,000,’ he added. The national median existing single family home price in the third quarter was $217,300, up 4.9% from the third quarter of 2013. The median price during the second quarter of 2014 increased 4.2% from a year earlier. Total existing home sales, including single family and condo, increased 5.2% to a seasonally adjusted annual rate of 5.12 million in the third quarter from 4.87 million in the second quarter, but are still 3.8% below the 5.32 million pace during the third quarter of 2013. ‘Given the improving labour market and historically low interest rates, more buyers are anticipated to enter the market next year,’ said Yun. The data also shows that total housing inventory continued to make strides at the end of the third quarter at 2.3 million existing homes available for sale, which is 6% higher than a year ago. The average supply during the third quarter was 5.4 months compared to five months in the third quarter of 2013. A supply of six to seven months represents a rough balance between buyers and sellers. NAR president Steve Brown said that traditional buyers are entering a more favourable market. ‘With inventory levels at a rate closer to supporting overall demand, bidding wars are occurring less, giving buyers more time to view homes and secure financing,’ he pointed out. ‘Additionally, Realtors across the country continue to report less investor activity and fewer all cash sales in their markets compared to earlier in the year,’ he added. Distressed homes, that is foreclosures and short sales generally sold at discount, accounted for 9% of… Continue reading
