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Rural homes more expensive to buy than urban homes in UK
Countryside properties continue to command a substantial price premium over urban homes and are 26% higher in price, new research shows. On average, homes in rural areas in Great Britain are £46,575 higher in price and this is true of all regions although it differs significantly across the country, according to a new report from the Halifax. The rural premium is greatest in the West Midlands at £88,781 or 57% compared to £17,570 in the North East or 13% and the research also shows that prices in urban areas have been rising faster over the past five years. Between 2009 and 2014, the average price of a home in the countryside rose by 12% compared with an average increase of 18% in urban areas. Between 2013 and 2014, the average price of a home in the countryside has risen by 8% compared with an average 10% increase in urban areas, excluding Greater London. There are also fewer firs time buyers in rural areas. They account for 42% of all mortgage financed purchases in rural areas, compared to 54% in urban areas. The report says that recent outperformance of house prices in urban areas partly reflects the relative strengthening of the first-time buyer market in the last few years. Since 2010 there has been a significant increase in the number of first-time buyers, and this group typically represents a larger proportion of the market in urban areas. ‘It typically costs significantly more to buy in rural areas with a substantial premium existing in all the regions of Great Britain. This reflects the aspiration of many to own a property in the countryside, said Martin Ellis, housing economist at the Halifax. ‘The relatively high prices, however, put rural homes out of the reach for many, particularly the young. This is reflected in first time buyers accounting for a smaller proportion of home buyers in the countryside than in urban areas,’ he added. The research also shows that affordability is a bigger issue in many rural areas. The average house price in the countryside is equivalent to 6.8 times gross annual average earnings. This significantly exceeds the comparable ratio for urban areas of 5.6. Social housing provision is typically lower in rural areas of England and Wales, with 12% of the housing stock accounted for by social housing compared with 19% in urban areas. There are only three rural areas where the ratio of prices to earnings is below the historical long term average of four; Copeland in Cumbria and East Ayrshire both at 3.8 and North Lincolnshire at 3.9 which are the most affordable rural areas in the country. Chiltern is the most expensive rural area in Britain with an average house price of £477,526, making it the least affordable rural area in Britain as measured by the house price to earnings ratio, with an average house price that is 9.5 times local gross annual average earnings. Six of the 10 least affordable rural areas in the country are in the South East with… Continue reading
UK and US buyers returning to the Italian property market
UK and US buyers are increasingly seeking properties in Italy as the challenging market conditions and currency shifts makes buying a second home even more attractive. According to Rupert Fawcett, a partner in Knight Frank’s Italian team the food, culture, wine and architecture and lifestyle in the country continues to attract overseas buyers. Italy may be still struggling to shake off the Eurozone debt crisis but with the euro significantly weaker against key currencies than a year ago there are deals to be found. ‘Italy continues to face challenging market conditions with Europe again coming under the spotlight recently over its muted economic growth and with some of Italy’s banks faring badly in the latest stress tests,’ said Fawcett. ‘But la dolce vita remains a permanent feature and continues to draw buyers wanting a slice of Italian life. Buying in Italy is primarily a lifestyle choice not driven by short term investment, but longer term enjoyment, and these factors continue to allow the market a certain level of resilience,’ he explained. He has noted increased interest this year in city living with an upturn in enquiries for Rome, Venice, Milan and Florence. ‘Rome has returned positive growth in the last quarter for the first time in several years, Venice is showing increases at the upper end and all cities have seen increased sales activity. We expect prices to remain stable in these locations over the next year, but we do not expect any price increases for at least the next few years,’ he added. In other areas there continues to be pressure on prices due in part to the availability of a large amount of stock which means buyers tend to deliberate for longer when searching for the perfect property. However, Fawcett said correctly priced properties in the best locations are finding good interest and, in some cases, multiple offers. Where vendors remain reluctant to reduce prices buyers are often not even enquiring let alone viewing. There has been a decline in interest from Russian buyers but both British and US buyers are returning to the Italian real estate market. There are fewer Russians at the upper end of the market around the €5 million plus mark and most notably around parts of Sardinia and coastal Tuscany, but there has been an increase in Russian interest at lower price points especially in Liguria. The influence of British and US buyers has also increased as both the pound and dollar strengthen against the euro. British buyers favour properties in Tuscany, Florence and Umbria as well as the Italian Lakes, Rome and Sardinia while US buyers favour properties in the Italian Lakes, Rome and Sardinia. French buyers are number one in Venice and also showing a lot of interest in property in Liguria and Rome. Germany buyers can be found in the Italian Lakes and Umbria while Scandinavian buyers favour Sardinia. For Dutch buyers Liguria, Venice, Tuscany, Florence and Umbria are the most popular. Fawcett pointed out that Milan will host the… Continue reading
PRS sector in UK benefits from improvement in tenant arrears
The number of UK tenants severely behind on rental payments has fallen by 9% over the last 12 months, new research shows. Improvements mean an overwhelming 98.6% of private sector tenants now avoid significant rent arrears and this is being reflected in the rate of evictions with court orders drown by 16% in the latest quarter. Overall the figures from the latest Tenant Arrears Tracker by estate agency chains Your Move and Reeds Rains, part of LSL Property Services, shows 65,200 UK households remain more than two months behind on rent, compared to 71,700 in the third quarter of 2013. In absolute terms, those more than two months behind on their rent now number just 65,200. This compares to 71,700 tenants at least two months in arrears in the same period last year, or an annual improvement of 6,500 households who no longer face the potential threat of losing their home. As a proportion of all tenants, those in serious arrears of more than two months have also improved, standing at just 1.4% in the third quarter of 2014 compared to 1.6% of all tenants in the same period in 2013. This means 98.6% of tenants in the private rented sector now avoid falling into significant rental arrears. Improvements in the most serious rental arrears also tally with the latest figures on overall levels of late rent, including shorter lapses on payments. According to LSL’s latest Buy to Let Index, overall tenant arrears of any duration now stand at just 7.2% as of September 2014, down from 8.5% in September 2013. ‘The private rented sector has mustered enough new capacity to meet, in part, the growing demand for affordable housing, through the greatest economic depression in modern times,’ said David Newnes, director of estate agents Your Move and Reeds Rains. ‘This isn’t just about those relatively prosperous households forced to put ownership plans temporarily on hold. For many thousands of others, with far tougher monthly budgets, private tenancies have also provided a lifeline. For many renting is now their chosen route as it provides flexibility and mobility,’ he explained. ‘Gradual rent rises, on a par with inflation, have helped. But now a bigger turnaround appears to have happened. For many years more momentary cases of rent arrears have been in decline, yet it’s only recently that the most serious cases where families could actually lose their homes are following suit,’ he pointed out. He said one explanation is the improving jobs market, with the improvement in unemployment constantly outperforming expectations. ‘Wages would however need to rise faster for most households to feel the full effects of economic recovery. Reduced unemployment levels would seem to be far more beneficial for those households who are struggling the most,’ he added. The data also shows that eviction rates see first annual improvement since 2010. In the latest data, for the second quarter, 27,700… Continue reading
