Tag Archives: real estate
More British buyers in the prime London property market, research suggests
Domestic buyers have risen to a new level of prominence in the London property market as overseas purchasers are being put off by current property tax levels, it is claimed. In the third quarter of this year some 79% of property purchases were made by domestic UK buyers, up from 75% a year ago, according to the latest London Property Monitor from March & Parson. The firm says that sales activity from domestic buyers has surged forwards to fill the gap left by overseas buyers and investors, who have been left more cautious by the strong sterling, stricter Government measures on non-domicile status, and heftier Stamp Duty for higher value purchases. As a result of this new hesitation, domestic mortgage buyers and first time buyers have become more prominent in the London market, with the proportion of mortgage buyers in Prime London soaring from 53% in the second quarter to 65% in the third quarter. At the same time, overseas and foreign nationality buyers accounted for 21% of all prime London property purchases during the third quarter which has fallen quarter on quarter, and is also down from 25% of all sales during the third quarter of 2014. This pattern is also being mirrored in the prime central London market traditionally favoured by overseas investors, with the proportion of foreign buyers standing at 32%, down from 34% in the second quarter and 37% a year ago. The investor share of the market has also dipped in the prime central London market over the past three months. Investors accounted for 35% of all prime central London sales during the third quarter, a considerable drop from 42% in the second quarter. Yet with domestic buyers stemming this shortfall, overall demand for Prime London homes has grown in the three months to September 2015, and the number of registered buyers has climbed 4%. Combined with a 5% drop in the supply of properties available on the market, and buyer competition is building as these trends diverge. There are currently 14 buyers for every available property for sale in London, increasing from 12 in Q2, and 10 at the end of 2014. According to Peter Rollings, chief executive officer of Marsh & Parsons the strength of sterling and government encroachments on nom-dom status make investing in the London property market seem daunting for foreign buyers. ‘This has cast some shadows over the capital, but the millions of Londoners who live and work in the city have acclimatised much more quickly to the property taxation changes, and have risen up to fill the void left by overseas purchasers and investors,’ he pointed out. ‘We’re noticing longer purchase chains than ever as domestic buyers really start to dominate the market, and demand is really putting a strain on supply. This should ensure that London houses prices and sales activity continue their ascent into 2016,’ he… Continue reading
House prices start seeing growth again in Scotland
House price growth in Scotland has quickened after a tempestuous year with prices up 1.4% year on year, more than double the 0.6% annual growth seen in the previous month. Month on month prices were up 0.5% taking the cost of an average home to £167,505, according to the Your Move house price index. Growth is yet to hit a third of the speed seen in September last year when annual growth was 5.4% but sales have soared to reach their highest rate for the month of September for eight years, up 10% on a year ago. Christine Campbell, Your Move managing director in Scotland, explained that usually there is a decline in house purchase activity between August and September, as a lagged effect of the summer holidays. ‘However, this month’s figures go against this trend. Despite other headwinds, this could be down to Scotland’s rising employment rate, increasing by 3,000 in the three months to September to 2,614,000 according to the ONS. With interest rates unlikely to change until 2017, low borrowing costs and near zero inflation should also help to pull up prices in the future,’ she said. Regionally, this means that 23 of Scotland’s local authorities have seen annual price growth, up from 22 last month. However, prices are still lower in seven of the nine most expensive local authorities, and Campbell said that the Land and Buildings Transaction Tax is still preventing the top end of the market from taking off. There have been fewer high value sales since the introduction of the tax. She also pointed out that if September’s pace of growth has been seen throughout the year it would translate to 6.2% annual growth but year on year growth is four times slower than the 5.4% recorded in September 2014. ‘Looking back at the past half decade, Scotland has seen the second lowest price house price growth across Great Britain. Only house prices in the North of England have risen slower. Scotland’s house price increases have been generally steadier, growing by a total of 4.3% over five years, an increase of £6,866. However, this house price growth is much more sustainable than the 26.7% total increase in Scottish house prices, seen between 2005 and 2010 when prices shot up by £33,826,’ said Campbell. But Scotland’s sales have bucked the usual seasonal trend, increasing 3% over the previous month, while sales in England and Wales fell by 1.5% over the same period. ‘In Scotland, sales will typically fall by 6% during this period which make the growth particularly significant. This month Scotland has had the strongest September sales since 2007, with 10% more sales this month than last year,’ Campbell added. Continue reading
UK house prices see high growth in East and South East
UK house prices increased by 0.8% in September and were 6.1% year on year, according to the latest data from the Office of National Statists (ONS). House price annual growth was strongest in Northern Ireland at 10.2% followed by England at 6.4% and there was a 1.1% rise in Wales and Scotland. Annual house price increases in England were driven by the East with year on year growth of 8.4% and the South East up 7.4%. But excluding London and the South East, UK house prices increased by 5% in the 12 months to September 2015. The data also shows that in September 2015, prices paid by first time buyers were 4.3% higher on average than in September 2014. For owner occupiers prices increased 6.9% for the same period. Neal Hudson, associate director of Savills research, pointed out that the continued growth in the ONS house price index highlights the impact of increasing competition by mortgage lenders on a low stock housing market. ‘Potential buyers that have a deposit are benefiting from historically low mortgage rates, increasing net lending, and are now able to borrow record high multiples of their income. That is despite the introduction of tougher affordability tests following MMR last year. The average buyer no longer has an average income, and so home ownership remains a dream for the many who still aspire to it,’ he added. The growth is being driven by constricted supply and fewer home owners selling, according to Rishi Passi, chief executive officer of Oblix Capital. ‘Improving economic conditions, rising wages and postponed interest rate rise expectations are all also bringing more buyers to the market, stoking up demand and inflating prices in the lower end of the market,’ he said. ‘The good news is that rising prices in this band will attract further investment and provide opportunities for developers, especially SMEs and should lead to an increase in attention paid to providing houses for this underserved end of the market,’ he added. Alex Gosling, chief executive officer of online estate agents HouseSimple, believes that there is likely to be a slight cooling in price growth in the coming weeks leading up to Christmas. ‘But, while demand continues to significantly outstrip supply, and interest rates remain static, we could well see a price spurt at the beginning of 2016. The market desperately needs a boost in new properties being listed if supply is ever to come close to catching up with demand,’ he added. First time buyers could be being outbid by existing home owners because they are more reliant on mortgages which are constrained by tougher lending criteria, according to Rob Weaver, director of Investments at property crowdfunding platform Property Partner. ‘Despite cheap finance, the tightening of the lending rules has made it increasingly difficult to get a mortgage and hence may be having a negative impact on supply. Longer term, property remains a good, solid investment… Continue reading
