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Property market activity soars in England and Wales in March due to stamp duty change
Property sales in England and Wales have seen their strongest March for nine years with transactions up 30%, some 80,000 home sales, the latest index data shows. House price growth also accelerated, up 6.9% year on year and 0.6% month on month, taking the average price to £291,650, the figures from the Your Move house price index also shows. It means that a typical home is now worth £18,745 more than a year ago. When London and the South East are left out of the calculation prices were up 5.1%, suggesting that the market is still strong outside these two growth areas. Indeed, the London market saw the fastest growth of any region as house prices rose 8.2% or £44,548 year on year. Bath and North East Somerset saw the largest March pick-up in property prices, climbing 5.3% or £18,603 month on month According to Adrian Gill, director of Reeds Rains and Your Move estate agents, the impending stamp duty rise for additional properties that was introduced at the start of April helped March record the strongest homes sales for the month since 2007. ‘The surge was widespread across England and Wales. This goes beyond any normal seasonality, with second home and buy to let investors rushing to beat a bigger tax bill,’ he explained. Overall some 73% of local authorities in England and Wales experienced a monthly upswing in home values, the highest proportion of areas seeing positive property price rises since July 2014. ‘This will be welcome news for homeowners, who now have a fantastic opportunity in the current sellers’ market. The pervasive shortage of homes on the market is still driving up values, as buyers have to compete for each available property. If they are going to make it easier to get a foot on the property ladder, the Government will have to double down on its help to first time buyers, or let up on landlords,’ said Gill. He also pointed out that after a bit of a downturn over the winter months, the London property market is growing again with prices up 8.2% higher than a year ago. ‘The lift in London’s house prices seems steep. But we’re actually in a much calmer position than previous years, with the current rise still well below London’s record 20.6% year on year growth, established in July 2014,’ Gill said. He also pointed out that the growth in London property values means it is once again pulling away from the rest of the country, with London and the South East now dragging up national house price growth by 1.8%, double the rate seen at the end of 2015. ‘As a result, we’ve returned to a two speed housing market, as growth in the rest of the country is easily outpaced by London and the South East. But it’s not all about London, as house prices are still advancing in the Northern cities, with the average… Continue reading
Spanish home sales continue their upward trend with prices also showing signs of recovery
Home sales in Spain have recorded their highest figure for three years having increased by 15.8% in February compared to the same month in 2015. The data from the National Statistics Institute is further evidence that the housing market recovery remains underway after a stutter in January saw transactions fall 2.9% after 16 months in a row of growth. It would appear that the recovery is being led by existing homes rather than new builds. Sales of existing homes increased 21.4% year on year while sales of new homes fell by 0.2%. The data also shows that in the first two months of 2016, home sales increased by 6% compared to the same period in 2015 and again this growth was led by existing homes which saw a rise of 13.7% compared to new home sales falling 15.5% in this period. Andalucía saw the largest number of sales followed by Catalonia, Madrid and Valencia. The lowest number of sales were recorded in La Rioja, Navarre and Cantabria. In relative terms, all of Spain’s regions registered increases in home sales, except for La Rioja and Castilla y León with falls of 8.6% and 3.9%, respectively. The regions where housing transactions increased most were the Basque Country with growth of 50.3%, Asturias up 40% and Cantabria up 38.9%. Meanwhile, data from the latest house price index from property portal Fotocasa shows that the price of existing homes increased by 0.5% in the first quarter of the year to an average of €1,627 per square meter. This seems to confirm that the housing market recovery is now being seen in terms of price growth as it is the first quarterly rise for the first quarter of any year since 2007 when prices increased by 1.6%. On top of this a trend is emerging as the Fotocasa index also recorded quarterly price increases in the second and third quarters of 2015 of 1.1% and 0.7%, respectively. The data also shows a year on year price rise of 0.6% for existing homes in March, the highest annual increase since October 2007, when prices rose by 1.2%. Again, a trend is emerging. Year on year prices increases were recorded in 2015 in July, October and November at 0.1%, 0.1% and 0.3% respectively. Since the peak of the Spanish property market in April 2007 when prices averaged €2,952 per square meter, they have fallen by 44.9% so there is some way to go before values catch up but the initial signs of improvement are there. Quarter on quarter the picture is also positive with eight regions seeing increased prices compared to the last quarter of 2015. This was led by the Canary Islands with growth of 6.3%, the Balearic Islands up 2.2%, Valencia up 1.4%, Andalucía up 1.2%, Madrid up 1%, Catalonia up 0.9%, Navarre up 0.2% and Cantabria up 0.1%. The most expensive house prices are in the Basque Country at €2,736 per square meter, followed by Madrid at €2,225 and Catalonia… Continue reading
Rents rising across most of the UK, latest rental index shows
Rents continue to rise in many parts of the UK with Greater London, the East Midlands and Scotland seeing the fastest rent rises in the first quarter of 2016. The figures from the latest HomeLet index also show that overall the average rent in the UK, excluding Greater London, is now £755 per month, some 4.9% higher than a year ago. It also shows that the average rent in London is not £1,536, up 7.7% year on year and the North West is the only area to see a quarterly decline. The figures are published as the private rental sector is anticipating the impact of tax changes and new regulations coming into force, and HomeLet said it has been the busiest ever month for landlord insurance. HomeLet’s research shows that rents continue to rise significantly ahead of inflation, with demand for property remaining strong. However, this comes ahead of reforms that are predicted to have a major impact within the sector, including a stamp duty increase for landlords buying new properties to let, new rules from regulators on buy to let lending and limiting tax relief on mortgage interest payments to the basic rate. HomeLet’s own data already shows evidence of landlords taking action ahead of the stamp duty changes. In March it saw a marked increase in enquiries from property investors, with 37% of insurance policies being purchased by landlords with new properties compared to just 24 per cent in the same period last year. This fits with recent data from the Council of Mortgage Lenders showing a spike in buy to let lending ahead of the stamp duty increase. London’s rental market, where the average rent on a new tenancy is now £1,536, continues to see rents rise more quickly than in other areas of the country. At 2.8 percentage points, the gap between rent rises on new tenancies in London and the rest of the UK, where rents average £755, was almost identical to last month at 2.9 percentage points. Just one area of the country, the North West of England, saw lower rents on new tenancies over the three months to March, with the HomeLet Rental Index recording a fall of 3.5% over the year. ‘We’ve continued to see increases in rents on new tenancies in almost every part of the UK during the first quarter, as the private rental market has responded to the pressures of an imbalance between demand and supply,’ said Martin Totty, Barbon Insurance Group’s chief executive officer. ‘However, external factors may now come into play: the stamp duty increase has already had an impact and that surge in the acquisition of property by landlords could now cause a short term increase in the supply of rental property in some areas of the country,’ he pointed out. ‘In the longer term, changes to rules around buy to let mortgage interest being offset against tax bills, coupled with the… Continue reading
