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Average house prices in UK’s biggest cities up 6.4% in first half of 2015
House prices across the UK’s 20 largest cities increased by 6.4% in the first half of 2015, led by Oxford, London and Glasgow, the latest index data shows. Oxford was the fastest growing city with a ride of 8%, followed by London with house price growth of 6.6% and Glasgow with growth of 6.4%, according to the Hometrack UK Cities House Price Index. Aberdeen was the weakest performer with house prices flat in the first half of the year, while northern cities like Leeds, Manchester, Liverpool and Sheffield, while seeing growth, still have average prices below the peak of the market in 2007. The data also shows that on a quarterly basis prices in these top cities increased by 4.3% while Oxford and Cambridge continue to perform overall like direct extensions of the London market. On a year on year basis growth across all 20 cities covered by the index is 8.4% with an average price of £226,200. At a city level this ranges from 11.6% in Cambridge to 2.9% in Liverpool. Looking to the second half of the year, the index report suggests that the headline rate of growth across the 20 cities index looks set to move higher as continued growth in house prices pushes the year on year rate towards 10% as the recovery spreads and households continue to price low mortgage rates into house prices. The greatest risk on the horizon is an increase in interest rates, recently highlighted by the Bank of England Governor. The report points out that 57% of outstanding mortgage debt is on variable rates, which is lower than the 73% high registered in the middle of 2012. While a year’s worth of new buyers have been subject to tougher affordability tests, the majority of mortgagees have not, Hometrack director of research Richard Donnell pointed out. Donnell explained that many home owners have continued to pay off debt while rates have been low, so any increase in mortgage rates is likely to impact market sentiment which, given the shortage of supply, would result in a marked slowdown in the rate of house price growth. ‘Rising demand for property against a backdrop of low supply continues push city level house prices higher. At 8.4%, city level house price inflation is running higher than the overall UK rate. While house price growth might moderate slightly in the second half of the year, it looks increasingly likely that city level house price growth will return to double digits by the year end,’ said Donnell. ‘The greatest risk facing the housing market is an upward movement in interest rates which would check market sentiment, cool demand and result in a marked slowdown in house price growth,’ he added. Continue reading
New committee formed to promote Build to Rent sector in UK
The British Property Federation (BPF) has announced the creation of a new committee that will focus on promoting the emerging build to rent sector. At a time when the housing crisis is acute and private renting has overtaken the social housing sector as the second largest tenure in the England, the committee will reinforce the important role that build to rent can play in increasing housing supply and tenant choice. It will work to ensure that both local and central government continue to support the sector, and create the right conditions to encourage investment and speed up delivery of this new housing product. The committee, which will be formed as a sub-set of the BPF’s residential committee, will be chaired by Andrew Stanford, UK residential fund manager at LaSalle Investment Management and former head of the government’s Private Rented Sector Taskforce. Adam Russell, acquisitions manager at FizzyLiving, will act as vice-chair. ‘Build to rent fits so well with so many of the new government’s priorities, delivering new supply of quality rented homes, accelerating the speed of housing development, making good use of brownfield sites, supporting place making and meeting customer needs,’ said Stanford. ‘There are many innovators in this new market and I am so pleased we have brought many of them together, in this new group, to drive that important dialogue with local and national government forward,’ he added. Continue reading
US home sales reach eight year peak and prices all time high
Existing home sales in the United States increased in June to their highest pace in over eight years, according to the latest monthly data report from the National Association of Realtors. It also shows that the cumulative effect of rising demand and limited supply has helped push the national median sales price to an all-time high of $236,400. Sales increased by 3.2% and all regions experienced sales gains in June and have now risen above year on year levels for six consecutive months. Sales are now at their highest pace since February 2007 and have increased year on year for nine consecutive months and are 9.6% above a year ago. ‘Buyers have come back in force, leading to the strongest past two months in sales since early 2007. This wave of demand is being fuelled by a year plus of steady job growth and an improving economy that's giving more households the financial wherewithal and incentive to buy,’ said Lawrence Yun, NAR chief economist. ‘June sales were also likely propelled by the spring's initial phase of rising mortgage rates, which usually prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher,’ he added. The median existing home price for all housing types in June was $236,400, which is 6.5% above June 2014 and surpasses the peak median sales price set in July 2006 of $230,400. June's price increase also marks the 40th consecutive month of year on year gains. The data also shows that total housing inventory at the end of June inched 0.9% to 2.3 million existing homes available for sale, and is 0.4% higher than a year ago when it was 2.29 million. Unsold inventory is at a five month supply at the current sales pace, down from 5.1 months in May. ‘Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers. Local officials in recent years have rightly authorized permits for new apartment construction, but more needs to be done for condominiums and single family homes,’ Yun explained. The percent share of first time buyers fell to 30% in June from 32% in May, but remained at or above 30% for the fourth consecutive month. A year ago, first time buyers represented 28% of all buyers. Properties typically stayed on the market for 34 days in June, down from 40 days in May and the shortest time since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 129 days in June, while foreclosures sold in 39 days and non-distressed homes took 33 days. Some 47% of homes sold in June were on the market for less than a month, the highest percentage since June 2013. According to NAR president Chris Polychron, real estate agents are reporting drastic imbalances of supply in relation to demand in many metro areas, especially in the West. ‘The demand for buying has really… Continue reading
