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UK prices down 0.2% in June, market sees smallest annual growth since 2013
UK house prices fell by 0.2% in June which meant that annual house price growth moderated to 3.3% from 4.6% in May, according to the latest index report. This takes the average price of a home to £194,258, according to the monthly index from lender Nationwide. The data also shows that in the second quarter prices increased by 1% and are up 4.1% compared to the same quarter in 2014. Eleven of the thirteen UK regions covered in the index saw a slowdown in the annual rate of growth in the second quarter of the year and it is the smallest annual rate of increase for two years. However, most parts of the country continued to see annual house price gains apart from Wales and Scotland which recorded small declines. The North remained static while Northern Ireland and London have the highest annual growth. Indeed, Northern Ireland overtook London to become the strongest performing region, with average prices up 8% year on year but prices remain around 45% below their 2007 peak. London saw a further softening in annual price growth to 7.3%, compared with 12.7% in the first quarter of the year. The Outer Metropolitan area followed closely behind, with annual price growth of 6.8%. The North was the weakest performing English region, with prices essentially unchanged compared with the same period a year ago. Wales saw a 0.8% year on year fall in average prices, similar to the previous quarter while Scotland was weakest performing region with a 1% fall in prices. ‘This maintains the gradual downward trend that has been in evidence since the middle of 2014,’ said Robert Gardner, Nationwide's chief economist, but he added that house price growth continues to outpace earnings. He also pointed out that the slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London. In quarter on quarter terms, London has continued to see price growth at or above the rate in the UK overall over the past three quarters, while the annual rate of price growth in the capital remains the second highest in the country. He believes that given the gap between population growth and rates of house building, housing stock is likely to be used increasingly intensively until building activity catches up. ‘There are signs that this has been occurring, with the number of vacant properties trending down since 2008, though council tax changes in 2013 impacted reporting and probably overstate the decline in the last two years,’ Gardner explained. He added that the strong relationship between supply constraints and vacancy rates is clearly visible at the regional level. ‘As you might expect, regions where affordability is more stretched see far fewer vacancies. For example, in London, the UK region where affordability is most stretched, only 1.7% of the housing stock was vacant in 2014, around half the 3.5% rate prevailing in the North of England,’ said Gardner. ‘Given… Continue reading
Average price of a home in Auckland reaches new all-time high
The average price of residential property in Auckland, New Zealand, increased to a new all-time high of $822,148 in May, a month on month rise of 2.2%. Indeed, since February prices in the city have now increased by 10% and sales are also strong, according to the latest data from real estate agent Barfoot & Thompson. The data also shows that the median price in May at $750,000, a fall of $3,500, or 0.5% compared to April but since February the median prices has increased by 9.2%. In May sales activity was extremely strong with sales numbers up over those for April by 14.5% and buyers have continued confidence in the market, according to Peter Thompson, managing director of Barfoot & Thompson. ‘Buyers are mindful that prices are at an all-time high, but the combination of a sound economy, low mortgage rates and a housing shortage gives them confidence prices are not on the verge of retreating,’ he added. He pointed out that measures announced in the May Budget had no impact on market activity. ‘If the budget initiatives are to have any influence they are likely to show up in June’s activity,’ he added. With sales in May at 1,225 it was the third month in a row that the firm sold more than 1,000 homes in a month, a milestone that was never achieved in 2014. The firm experienced a major listing drive in April and early May, and through this achieved 1,740 new listings in May, the highest number in a May for eight years. ‘As a consequence of high sales in May by month end we had only 3,060 properties on our books. There have been only two months over the past 16 months when we have ended the month with a lower number of properties,’ said Thompson. Sales of properties for in excess of $1 million attracted strong buyer interest and the firm sold 362 properties in this high end category, the second highest number on record behind March’s 420. However, property sales for under $500,000 at 163 were, for the third consecutive month, below the number of $1 million sales. Continue reading
Prime central London rents adjust downwards, latest analysis shows
Annual residential rental value growth in prime central London eased to 3.4% in June, reflecting a positive but hesitant mood in the lettings market, a new report suggests. While June marked the twelfth consecutive month of annual growth, demand has been inconsistent ahead of an expected seasonal upturn in the summer as companies digest the outcome of the general election. In similar fashion to the sales market, the prime central London lettings market is in a period of adjustment following an election result that few predicted, according to the report from international real estate firm Knight Frank. The report also reveals that prime gross yields remained at 2.96% for the second month running and high stock levels in some areas means setting realistic asking rents has become more important. ‘One example is high stock levels in some areas, the result of landlords having waited for clarity around the result of the vote before deciding whether to let their properties,’ said Tom Bill, head of London residential research at Knight Frank. ‘The health of the prime central London lettings market is linked to that of the UK economy and some perceive it to be on a firmer footing under a majority Conservative government, which has caused stock levels to rise,’ he explained. ‘Properties for sale are also moving across to the lettings market, the result of some vendors choosing the rental option after a post-election spike in prices failed to The result of higher stock levels is that prospective tenants are shopping around to a greater extent than before, which means setting realistic asking rents has become increasingly important,’ he added. However, the picture is mixed across different markets and there is a shortage of family houses in areas including Kensington and St John’s Wood, as more families opt to rent due to affordability constraints in the sales market. The report also points out that the impact of the election on decision making by large financial institutions over whether they remain in the UK will also have a bearing on demand in the second half of 2015. For example, some banks are reviewing whether to stay against the background of an in-out European Union referendum as well as a wider debate surrounding the merits of the bank levy and plans to claw back bonus payments. Continue reading
