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North West of England worse hit by negative equity values in UK
Hundreds of thousands of home owners in the UK who bought property in 2007 are still likely to be stuck in negative equity despite the current strong growth in the residential market. Almost 1.5 million property transactions were completed in 2007 when property prices reached peak levels, just before the financial markets imploded in 2008 and according to research from online estate agent HouseSimple, average property prices 53% of towns and cities are still below average prices in 2007. While average London prices have risen by 56% since 2007, that is not the case across large parts of the country, particularly in the North of England where 17 of the 20 towns and cities worst hit by negative equity are located. The research, which looked at 75 major towns and cities in England and Wales, also shows that it is the North West that has been worst hit by post-recession negative equity with 40% of the top 20 negative equity towns and cities in the region. The worst affected towns are Blackpool and Middlesbrough, where house prices are still almost 30% lower than pre-crash highs. Along with Blackpool, Blackburn and Liverpool are both in the top five worst affected towns and cities, with average house prices still 25% and 23% lower respectively than before the crash. Yorkshire and the Humber has also been hit hard, with a quarter of towns in the top 20 list in that region. Average prices in Middlesbrough are still 28% below pre-2008 levels, while in Bradford and Hull, house prices are 20% and 19% lower than 2007 averages. House price recovery in the South has been much stronger than the north. As you might expect, London’s house prices have more than recovered, and average prices today are almost £200,000 higher than 2007 levels. Property prices in Winchester also seem to be recession proof, up 44% to £447,046, compared to average 2007 prices. Meanwhile, average prices in the commuter town of Stevenage are 39% higher than pre-recession values. Sale and Stockport in the North West, where house prices now average £252,203 and £206,368 respectively at 25% and 22% more than 2007, buck the trend in the region. They are the only towns outside the South of England in the top 20 towns and cities where house prices have more than recovered to pre-recession levels. ‘London home owners have watched as their properties have risen in value substantially since 2008 but, thousands of people around the country have had to put their lives on hold, unable to move because they are trapped in negative equity,’ said HouseSimple chief executive officer Alex Gosling. ‘Unfortunately, the North of England has been slower to recover losses suffered during and after 2008. And anyone wanting to relocate for work or family reasons faces a less than appealing choice, either making a loss on the sale of their property or staying put and waiting until the price of their house at least recovers to… Continue reading
Average rent for a two bed home in London set to surpass £2,000 a month
Average monthly rents for two bedroom homes are expected to reach £2,000 by the late summer of this year, according to new research. It currently stands at £1,867 per calendar month, up 2% already since the beginning of the year, according to the London Rental Market Report from estate agents Portico. Given that tenancies which begin in September are typically 11% higher than tenancies that begin in December, Portico is predicting that two bedroom rents will reach £2,008 per calendar month by September this year. And with two people sharing the cost of a two bedroom home, that is £1,004 per calendar month each, this shared rent figure will use 46% of the average London monthly net salary. The report shows that Ealing has seen the largest increase in rent at 6.9%, taking the rent for a two bedroom home to £1,825 per calendar month, followed by Richmond-upon-Thames at £1,934 for two bedrooms per calendar month, a rise of 6%, and Lambeth at £2,051, a rise of 5.8%. However, average rents have fallen for two bedroom homes across seven London boroughs, including Westminster and Kensington and Chelsea where they are down by 5.7% and 1.1% respectively. Bromley has recorded the greatest decline in monthly rents for all properties with a reduction of 6.3% over the first quarter of this year, followed by Hillingdon with a fall of 4.4% and Kingston-upon-Thames down 4.1%. ‘The majority of London boroughs are seeing rent increases anywhere from 1% to almost 7% so for landlords who may be feeling under particular pressure given recent government announcements, this may provide some welcome news,’ said Robert Nichols, Portico managing director. ‘But our latest report also shows some significant rent drops. Bromley is down over 6% with Kingston and Hillingdon also experiencing 4% falls. All in all, these declines won't prevent the average two bed rent tipping over the £2,000 mark later this year,’ he added. A breakdown of the figures show that the largest increase in rent for all home types was in Hammersmith and Fulham along with Lambeth with a rise of 4.7%, followed by Ealing at 4.6%, Westminster at 4.3% and Kensington and Chelsea at 4.2%. For two bedroom homes the largest rent increase was in Ealing at 6.9%, followed by Richmond-upon-Thames at 6%, Lambeth at 5.8%, Lewisham at 5.2% and Wandsworth at 5.1%. The largest decrease in rents for all home types was in Bromley with a fall of 6.3%, while rents were down by 4.4% in Hillingdon, by 4.1% in Kingston-upon-Thames, by 4% in Haringey and by 3.7% in Enfield. For two bedroom homes the largest fall in rents was in Westminster with a decline of 5.7%, followed by Harrow which fell 3%, Bromley down by 2.6%, Redbridge by 1.3% and Enfield by 1.3%. Continue reading
Survey reveals many home owners support additional home stamp duty charge
Twice as many home owners in the UK support the new 3% stamp duty surcharge on additional homes as oppose it, despite loud opposition from landlord groups, new research shows. Some 47% support the extra charge which was introduced on second homes and buy to let properties on 01 April while 18% are against it and believe that it supports first time buyers. The results of the poll, conducted by YouGov for the HomeOwners Alliance and BLP Insurance shows that overall concerns about stamp duty have fallen dramatically since the reforms in 2014. In 2014, some 64% of UK adults believed that stamp duty was a serious problem but in 2016 that has fallen to 52%. Supporters of the stamp duty surcharge on second homes believe the measures are a good way to level the playing field between those buying a home to live in and those making an investment purchase. ‘The buy to let market is slowly destroying the overall housing market and making affordable properties less available for those wanting to own a home as their principal place of residence,’ said one survey respondent. The research also found that some feel there has been a shortage of homes available for first time buyers and this will make it harder for buy to let investors competing to purchase similar properties. Indeed it found that there are some anti buy to let feelings, a sense that buy to let may have been inflating house prices and pricing out local residents in some areas. Some also feel that those able to afford to buy a second home or to buy a property for the purpose of letting it out and making profit should be able to afford to pay higher stamp duty on their purchase. Those who oppose the stamp duty surcharge on second homes suggest the policy could have unintended consequences such as the surcharge being passed on to tenants in the form of higher rent. Comments also indicate that they feel the government is making another tax grab or that the policy is anti-enterprise. ‘I have been saving for five years to be able to afford to purchase an investment property. This change has now meant that it is not feasible for me to do so. It is unfair to penalise people who work hard and save,’ said another respondent. Paula Higgins, chief executive of the HomeOwners Alliance, thinks that the British public believe that homes are for living in and not speculating with. ‘The stamp duty surcharge might be bad for landlords but it will allow more young people to realise their dream of owning the roof over their head,’ she said. ‘This is why we initially called for the tax system to differentiate between aspiring homeowners and property investors. However, we must see the money raised ploughed back into building more affordable housing,’ she added. According to Kim Vernau, chief… Continue reading
