Tag Archives: real-estate
Consumer confidence in UK housing market outlook rebounds
While house price growth continued to slow in March in the UK, consumer confidence in the outlook for the housing market has rebounded to its highest level since July last year, new research shows. Consumer confidence in the outlook for the housing market has bounced back to a net balance of +64 in March from +60 in February, according to the latest quarterly Halifax Housing Market Confidence Tracker as measured by Ipsos MORI. Conversely, house prices increases have slowed over the same period and in the three months to March this year house prices were 8.1% higher than in the same three months a year earlier, compared to 8.5% in January 2015, and 10.2% in July 2014. As to just how confident consumers are in the outlook for the housing market over the next 12 months some 33% are expecting the average property price to be higher by up to 5%, while 25% anticipate increases of between 5% and 10%. ‘We’ve seen a strong start to the year in terms of the net sentiment regarding the outlook for the housing market, and this has translated into an increase in transaction volumes. This increase in optimism is likely to be the result of a combination of factors, including the improving economic figures, greater numbers of higher loan to value mortgages, and extremely competitive mortgage rates,’ said Craig McKinlay, Halifax mortgages director. There has been an increase in the net proportion of consumers who believe mortgage interest rates will be higher in 12 months’ time at +41 compared to +35 in February. Nevertheless, only 12% spontaneously cited concerns about interest rate rises as one of the main barriers to being able to buy a property, down from 15% in the first quarter of 2014. The main perceived barriers to homeownership are the ability to raise enough deposit for 61% while 44% have concerns about job security). A year ago, 60% and 51% respectively identified these as among the main barriers. ‘The results highlight that an increasing number of consumers believe interest rates will begin to rise in the next 12 months, but at the same time it is falling as a perceived barrier to homeownership,’ McKinlay explained. ‘This is perhaps a result of rising incomes and the current low mortgages rates. The fact that consumers’ ability to raise a deposit remains the greatest perceived barrier to home ownership shows there is more work to be done in terms of letting people know what support is now available,’ he added. Overall a net +33 of consumers think the next 12 months will be a good time to sell, compared to +24 at end of December 2014. This is the highest score on this measure since the survey’s inception in April 2011. At the same time the proportion who believes it is now a good time to buy has slumped from +26 at end of December 2014 to +21 as at end of March 2015. Regionally, house price optimism… Continue reading
Election uncertainty and higher taxes affecting prime London property market
Higher taxes and election uncertainty have put the brakes on prime London house prices which fell by 0.5% in the first quarter of 2015, new research shows. This follows an average 2.6% downward price adjustment in the final quarter of 2014 that was triggered by the stamp duty reform announced in December’s Autumn Statement, according to the analysis by real estate firm Savills. It means that the 12 month rolling average for house price growth in the prime London market has now slipped into negative territory. ‘As we forecast in November, uncertainty regarding the general election and the potential for further taxation of high value property have contributed to a subdued market in the first part of 2015,’ the report explains. ‘The prime central London housing markets, that have been most affected by increased stamp duty charges, are looking fully taxed. This has meant sellers are typically having to factor in price adjustments equivalent to the stamp duty increase. Consequently, in central London values are down 4.3% year on year,’ it adds. The study shows that the markets of prime south west London have been similarly, but less significantly, affected. Buyers have become increasingly aware of the high cost of moving, which has tempered demand in the higher value parts of that market. By contrast, the markets of Islington, Wapping and Canary Wharf continue to show positive annual growth, despite a general sentiment-led easing in values in the past six months. ‘In part, this reflects the fact that lower tiers of the prime market have remained the most robust, with the market below £1 million generally benefiting from the stamp duty changes and unaffected by the political focus on taxation,’ Savills says. ‘Interestingly, the softening in the London markets has corresponded with a pick-up in the number of Londoners circling the country market. Prices of homes below the £2 million threshold in the prime regional markets beyond London continue to show year-on-year price growth, and rose by 1.1% in the first quarter of the year. However, market activity beyond London is still partly constrained by pre-election caution,’ it points out. ‘While the fundamentals of demand and supply remain sound, the short term outlook for the prime property market is heavily dependent on the extent to which the election brings political certainty and whether the sector is subject to further taxation. Certainty will, at least, allow buyers and sellers alike to take account of the impact of any fiscal change, as the all-important autumn market approaches,’ it adds. Savills is forecasting that prices in the prime London market will rise by 22.7% over the five years to the end of 2019 assuming no further taxation of high value property. In this case there would be a relatively swift bounce back in values as was seen in 1998 and 2002, when price falls in central London were contained to less than 5% and recovered lost ground very quickly thereafter. In the event of a mansion tax, Savills… Continue reading
Scottish house prices see biggest monthly jump since 2007
Scottish property prices increased by 1.7% in February, the biggest monthly jump since the 2007 taking the average value to a new record high of £169,742. The latest data from the Your Move Scotland house price index also shows that the annual price growth has now reached 6% and there was a spike in sales of homes worth over £1 million, probably due to the introduction of the new property tax in April. The annual growth is the strongest it has been since August 2010 and Stirling experienced the fastest increase in property values across Scotland during February, with house prices soaring 5.3% while Aberdeen, Edinburgh, East Lothian and Angus all set new house price peaks in February. The index data also shows that overall sales were up 14% month on month but they are still 4% below the same levels seen in February last year. Christine Campbell, regional managing director of Your Move, explained that the monthly growth was much higher than in England and Wales where it was just 0.4% in February. ‘The impressive rise in house prices in February has been influenced by the introduction of the new Land and Buildings Transaction Tax (LBTT) in April, as high end buyers sought to complete expensive purchases under the old stamp duty rates,’ said Campbell. She pointed out that 15 properties priced at £1million or more were sold in Scotland during the month of February, compared to just six the previous month. ‘Tactical tax considerations have helped foster price growth in the Scottish housing market, and are likely to play a significant role in the months to come too,’ she said. ‘Now that the LBTT has come into force, we expect to see a temporary drop-off in the number of properties sold above £750,000, now liable for the top rate of tax, similar to the impact we’re currently seeing in London among £2 million properties in light of December’s stamp duty changes,’ Campbell added. She also pointed out that typically in the housing market cycle home sales ease back in February, in the aftermath of the costly Christmas period but this February moved against the seasonal grain, with completed home sales up 14% on January levels. A breakdown of the figures shows that over the past three months, completed home sales have fallen in every local authority area of Scotland on an annual basis, with Midlothian seeing the sharpest 31% drop. ‘However these year on year benchmarks have been artificially propped up following the extraordinary headway in sales activity over 2014, and as well as having to recalibrate onto a steadier course, the housing market this year also has an upcoming general election to contend with,’ said Campbell, who added that the slowdown in Scottish sales activity is being mirrored south of the border, as all across the UK political uncertainty is infusing home buyers with a new hesitancy. ‘But as soon as there is a… Continue reading
