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UK housing market boosted by April additional homes stamp duty deadline
The UK housing market received a fillip from increased activity among those looking to beat the April deadline for the new stamp duty charges on additional homes, a new report shows. The latest analysis from real estate firm Knight Frank points out that demand rose in many regions, with the Council for Mortgage Lenders reporting that gross mortgage lending in February hit the highest level since 2008. It says that activity may ease from April, but in the wider UK market the fundamentals of a lack of supply and low mortgage rates are underpinning the market. Also, in the London and South East markets the effect of uncertainty in the run-up to the European Union referendum is likely to be felt more keenly. ‘In the prime central London market, we expect differing levels of growth in the east and the west this year, underlining the very localised nature of the market,’ said Gráinne Gilmore head of UK residential research at Knight Frank. The report explains that property prices in prime central London fell by 0.1% in February, taking the annual change in values to 1% and the market remains highly localised with stronger performance in areas such as Islington, City and Fringe and South Bank. In comparison, price falls were seen in markets including Knightsbridge, South Kensington and Chelsea over the last year. ‘Overall, demand in prime central London was relatively subdued in the first two months of 2016 as a result of the higher levels of stamp duty and ongoing volatility in global financial markets,’ said Gilmore. ‘Further domestic uncertainty, in the shape of a London Mayoral election in May and an EU referendum in June, means this is likely to continue as buyers adopt a wait and see approach,’ she added. In the country market, prices rose by 3.1% in 2015 and the report says that the market is still being driven by prime properties in urban locations, with buyer demand concentrated on areas with effective transport links and good schools and amenities. In Scotland, prime country house prices ended the year up by 0.1%. Prime central London rents fell by 0.1% in February, the fifth consecutive monthly decline. As a result, the annual rental value growth in prime central London fell to -0.2%. ‘Uncertainty over taxation and slowing price growth in the sales market has resulted in relatively high supply levels, especially at above £1,500 per week. As a result, tenants feel little urgency to agree deals, putting pressure on rental values,’ Gilmore pointed out. The report adds that average UK rents rose by 2.6% in Great Britain over the 12 months to January 2016, according to latest figures from the Office of National Statistics. Continue reading
Research reveals how much home prices change in London commuter areas
Home owners who work in London can save £3,000 on a property for every minute of commuting outside of the UK’s capital city. New research from real estate firm Savills that looked at 100,000 house sales recorded around 314 stations on the outskirts of the capital found how prices rise as addresses edge closer to the city. It found that for each minute less spent on the train into central London, buyers should expect to pay a further £3,048 to secure the property. The average house price in inner London is £606,000, but by comparison, commuter locations within half an hour’s train ride from London have an average property price of £458,000. Further out the average price is just £337,000 for those with a journey time between 60 and 69 minutes. The most expensive place to buy at the furthest reasonable distance from the city, said to be 60 to 69 minutes commute, was close to Shelford station in Cambridge where the average house price is £622,451. In contrast, homes near Southend Central in Essex which is also just over an hour from London tended to sell for around £188,000, suggesting buyers pay not just for journey time but location too. Moving just 10 minutes closer to London results in a huge difference in price. In Sunningdale in Berkshire, for example, where the train takes 50 to 59 minutes, the average family home costs £930,000. Cutting another 10 minutes off the commute to work brings in Shiplake station in Oxfordshire where houses last year changed hands for around £1 million. The research report points out that house prices in London are currently 2.3 times the UK average, the largest differential since records began in 1973, according to data from the Nationwide. This has led many households currently living in the capital to face a choice of accepting a twice daily train journey, commuting costs and hassle in return for more affordable house prices and lifestyle benefits. Of course, any house price savings must be set against the cost of commuting. An annual rail and underground season ticket now costs from £2,400 to nearly £10,000, depending on length of journey and rail provider. Despite this, savings on house prices will more often than not outweigh the travel costs. An analysis of Savills buyers in the London commuter belt shows 30% of sales over the first quarter of 2016 were to those relocating from London compared to just 23% during the same period in 2015. The firm expects this trend to continue as the ripple effect continues to take hold. Continue reading
Housing market cooling in Sydney and Melbourne, latest index data shows
House price growth in Australian capital cities moderated in March with market conditions slowing in Sydney and Melbourne, according to the latest index. The remaining capital cities recorded a range of outcomes from small value increases to moderate declines, the data from the CoreLogic RP index shows. Overall prices increased by 0.2% to take capital city home values 1.6% higher over the first quarter of 2016. The quarterly increase in home values was broad based across the nation’s capitals, with Perth seeing a fall of 0.9% and Brisbane a fall of 0.1%. They were the only two cities to record negative movements in dwelling values over the past three months. ‘The March quarter rise in capital city dwelling values is in stark contrast to the first quarter of 2015, when values increased by 3% which is almost double the current pace of quarterly growth,’ said CoreLogic RP Data head of research Tim Lawless. ‘However, compared with the final quarter of 2015 when capital city dwelling values were down 1.4% the housing market has shown a modest rebound in growth which is well below the strong capital gains recorded over the first half of 2015,’ he explained. But he added that the annual pace of home value appreciation across Australia’s capital cities highlights the slowing growth trend and year on year growth across the capital cities has now reached its lowest point in 31 months, with values up by 6.4% over the past 12 months. Furthermore, no Australian capital city has recorded an annual growth rate in the double digits over the past year. Melbourne has seen the strongest annual growth, with values up by 9.8% over the past 12 months. ‘The housing market has been losing momentum since July last year, when capital city dwelling values were increasing at the annual rate of 11.1%,’ Lawless pointed out. Overall the median price across the capital cities is now $550,000, a rise of 0.2% month on month, up 1.6% quarter on quarter and 6.4% year on year. A breakdown of the data shows that the median price in Sydney is $730,000, up 1% month on month, 2% quarter on quarter and 7.4% year on year while in Melbourne it is $560,000, down 0.6% month on month, up 2.2% quarter on quarter and 9.8% year on year. In Brisbane the median price is $470,000, down 1.2% on a monthly basis, down 0.1% quarter on quarter but up 4.5% year on year while in Adelaide the median is $415,000 with a 0.5% monthly rise, 2.4% growth quarter on quarter and up 3.2% year on year. In Perth the market is actually recovering with a median price of $495,000 which is up 1.2% month on month but down 0.9% quarter on quarter and own 2% year on year with Darwin seeing a similar picture with a median price of $505,000 which is up 2.1% month on month and 2.4% quarter on quarter but down 1.8% year on year. In Hobart the… Continue reading
