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Brexit uncertainty affects prime country houses in UK
Prime country house prices in the UK fell by 0.2% between April and June as uncertainty surrounding the outcome of the EU referendum filtered through to the market. On an annual basis, price growth over the year to the end of June 2016 eased to 1.3%, down from a recent high of 5.2% in 2014, according to the latest index from real estate firm Knight Frank. It is the first quarterly fall since late 2012 and prices for larger properties in the £2 million and above sector fell by even more, down 1.1%, the data also shows, taking the annual rate of growth to 0.7%. In contrast, properties priced at under £2 million recorded an average rate of growth of 0.4% over the quarter, taking the average rate of growth to 3.3%. The index reports that there was a softening in demand in the immediate run up to the vote, with potential purchasers awaiting the outcome of the referendum. The number of viewings conducted in June was 10% lower than the same month last year, and there was also a dip in new buyer enquiries. However, it points out that the EU referendum has not been the only factor at play in the market. ‘Higher purchase costs as a result of two stamp duty increases in the space of 18 months have also had an impact, weighing on price growth in some sectors of the market, most notably for homes valued in excess of £2 million,’ said Knight Frank associate Oliver Knight. The strongest markets continue to be in prime urban locations, where price growth has outperformed that in more rural locations, the report also points out. Looking ahead, the report explains that all eyes will now turn to the impact of the UK’s vote to leave the EU on the market. ‘There is likely to be a further period of uncertainty as the terms of the UK’s exit are worked out and this has the potential to affect some parts of the market as discretionary buyers weigh up the implications,’ said Knight. ‘However, the primary drivers of this market remain unchanged, with schools and key transport links remaining a draw for town and city markets. Prime prices are still 14% below their previous market peaks on average and, as such, there may be scope for outperformance in the short to medium term,’ he added. Continue reading
Number of rental sector tenant evictions up in England and Wales
The number of households evicted from rental accommodation in England and Wales rose by 5% in the first three months of the year, while the repossession rate for home owners fell to a record low. Seasonally adjusted figures from the Ministry of Justice show there were 10,732 repossessions of rented homes by bailiffs between January and March 2016, up from 10,253 in the final three months of 2015. The number of tenants evicted from their homes by bailiffs reached a record high in 2015, according to official figures for England and Wales, which shows that 42,728 households in rented accommodation were forcibly removed. Housing campaigners blamed welfare cuts and the shortage of affordable homes for the rise in repossessions over the year and more than half the evictions are thought to have been by private landlords. These figures are echoed by a new report from online letting agent PropertyLetByUs which shows that a quarter of landlords have served an eviction notice to tenants over the last 12 months and 5% have pursued an eviction through the courts. Furthermore, almost half of landlords have also experienced rent arrears over the last 12 months. ‘Landlords are increasingly facing rent arrears, as rent escalation continues to outstrip gross income. They are also facing a financial squeeze due to restrictions on their tax breaks and some may be raising rents to supplement their income. Pushing up rent rises further will put huge pressure on those tenants who are already struggling to pay their rent. We may well see evictions continuing to rise over the next few months,’ said Jane Morris, managing director of PropertyLetByUs. She pointed out that the statistics highlight the need for landlords to protect their rental income and ensure they carry out thorough references with all new tenants. ‘Times are very tough for many tenants and demand for rental accommodation is soaring in many parts of the UK. Landlords need to extra vigilant when they take on a new tenant. But a few simple checks will help identify if a tenant is in a good financial position or not,’ she added. Meanwhile, changes to the process of accelerated possession through applying to use High Court Enforcement Officers (HCEOs) to evict a tenant has brought an end the so called seven day eviction which were misleading for landlords as well as increased costs, according to legal experts, Landlord Action. The majority of residential possession claims are dealt with in the county court and enforced by county court bailiffs. However, with a backlog of cases and a reduction of bailiffs leading to longer waiting times in some courts, it can take several weeks for bailiffs to carry out an eviction, which is longer than most landlords wish to wait when suffering further loss of rent. In some cases, landlords can apply for their case to be transferred to the High Court once a possession order has been made, so that… Continue reading
Over half a million have taken up UK flagship home buying savings product
Over 500,000 people have opened Help to Buy ISAs, which offer government bonuses of up to £3000, as they save towards buying a home, the latest data shows. Figures also show that since the launch of the Help to Buy equity loan, mortgage guarantee and ISA schemes over 160,000 completions under the schemes have taken place, with 80% having been made by first time buyers. The average house price being purchased with support from the Help to Buy schemes is £189,795, significantly below the national average and 94% of Help to Buy completions have taken place outside London. The figures also show that over half of Help to Buy completions have been for new build homes. The Help to Buy schemes continue to benefit first time buyers overwhelmingly, with 129,000 households buying their first home thanks to the scheme. This is 80% of overall Help to Buy buyers, demonstrating that the scheme is successfully helping people get on the housing ladder. The highest number of homes completed through both the Help to Buy: ISA and mortgage guarantee schemes has been in the North West region. The equity loan, a scheme for new build properties, is particularly popular in the South East region. First time buyers and second steppers have been supported further by the London Help to Buy scheme launched in February 2016. The scheme supports purchases of new build homes in the capital by offering a 5% deposit backed by an equity loan of up to 40% from the government. There were 256 completions in London between 01 February 2016 and 31 March 2016 using the equity loan. Help to Buy was designed to support responsible lending and the figures show that the average house price for the three schemes combined is £189,795, significantly below the national average house price of £292,000. The average house price-to-income multiple under the mortgage guarantee scheme is capped at a four and half times ratio to ensure responsible lending. More than 1,000 households a month on average have purchased their own home through Right to Buy since the scheme was reinvigorated in 2012, over 52,500 households in total. The latest quarterly figures show more than 3,250 people bought under the Right to Buy scheme between January and March 2016. In total, more than 309,000 households have now been helped to purchase a home through government backed schemes since 2010, that’s 141 new home owners a day and around 4,350 a month. ‘It’s hugely encouraging that over 500,000 people have already opened Help to Buy ISAs. The Government’s Help to Buy schemes offer responsible lending, and the vast majority of those who are benefiting are first time buyers,’ said Chancellor of the Exchequer George Osborne. Anyone who aspires to own their own home should have the opportunity to do so, wherever they are in the country, according to Communities Secretary Greg Clark. ‘Today's figures clearly show how we’re helping people realise home ownership dream, with… Continue reading
