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Property prices in England and Wales up just 0.5% in September
In many regions in England and Wales average property prices have yet to reach levels before the economic downturn and price growth is slowing, the latest index shows. House prices increased by just 0.5% in September, taking the average price to £275,820, the smallest monthly increase this year, according to the LSL house price index. On an annual basis prices are up 10.6% but when London and the South East is excluded from the calculation prices are up just 4.5% and overall prices are up just 2% a year since the crisis. For six regions of the UK, average property prices achieved on completion are yet to match their pre-crisis score and a North/South divide in the remains evident. The North has the furthest ground to travel, with average prices still 8.3%, or £13,400, below their housing boom high in March 2008. However, average house prices on sales completion in the South West set a new record in August, surpassing their October 2007 peak for the first time. This makes it the fourth region after London, the South East and East Anglia to scramble out from under the shadow of the financial crisis. Areas further afield like Warwickshire, Northamptonshire, and York are breaking cover too, with prices also towering to new heights. David Newnes, director of Reeds Rains and Your Move estate agents, pointed out that the London property scene is on a different scale to the rest of the country. Overall, the capital has seen the strongest housing market recovery, with prices having now grown 47.3% from their previous peak in February 2008. However, the rate of annual house price inflation in the capital eased off by 0.1% in August, as we see growth relaxing into a slower tempo from the heady pulse earlier this year. ‘Across all of England and Wales, house prices have risen on average by 2% every year in the aftermath of 2007/2008 housing boom and bust. But this growth falls short of the 2.8% annual increase in CPIH over the same period meaning it is only home owners in London who have seen their properties climb in value in real tangible terms,’ said Newnes. ‘September saw the lowest monthly increase in property prices in 2014 so far, as a new spell of market adjustment sets in for the autumn. But while price growth dulls, activity in the market is still vibrant, and total house sales completions are up 16% year on year in September,’ he explained. ‘First time buyers have been bringing much of the vitality and optimism to the party. Over the three months from June to August, the sale of flats, typically the preserve of new buyers making their inaugural property purchase, has risen 26% when compared to the same period in 2013,’ he pointed out. ‘While the market adapts to a mellower beat, schemes like Help to Buy and an accessible lending environment are essential to ensure that confidence isn’t silenced, and activity continues to sing,’ he added. Continue reading
House valuations increase in the UK despite house price growth falling
House price growth in the UK may be falling but last month saw a rebound in valuations activity on a monthly basis, according to the latest research from Connells Survey & Valuation. The total number of valuations conducted in September increased by 42% compared to August. However, this was not enough of a seasonal rebound to take valuations volumes ahead of September 2013. On an annual basis, housing market activity has decreased by 12%, a steeper fall than the 4% annual drop seen in August 2014. ‘Sustainability is the new watchword for the housing market. Higher interest rates are getting closer and caps on mortgage to income ratios officially come into force in October, both closely following the Mortgage Market Review which has now become a settled feature of the landscape,’ said John Bagshaw. ‘In particular a base rate rise isn’t just a factor for the financial world. In the property market, buyers and sellers are increasingly factoring in slightly higher interest costs and a potential slowdown in house price growth,’ he added. He pointed out that steadier progress isn’t necessarily bad news. ‘Autumn last year was exceptionally good for housing market activity. Now, as the UK searches for a long lost measure of normality, the housing market is displaying sensible levels of caution, a healthy and often life-preserving characteristic. Stability will be important as activity keeps growing into 2015,’ he explained. Remortgaging was the strongest performing of all sections of the housing market in September. Compared to August remortgaging activity is up 57%, leaving remortgaging valuations down 9% since September 2013, the smallest annual fall. According to Bagshaw remortgaging levels appear to reflect the wisdom of crowds. ‘Most people don’t follow the detailed workings of monetary policy, and no-one can predict inflation or UK growth in six months’ time. And yet households are taking advantage of cheaper mortgage rates now, as the perception grows that locking in to that market will not be possible for ever,’ he added. First time buyers have seen the second fastest monthly pick up in activity since August, up 39% on a monthly basis. On an annual basis, this leaves first time buyer activity down 13% compared to September 2013. Activity was slightly more muted for those owner-occupiers moving home further up the property ladder, with such home mover activity up 32% compared to August. However on an annual basis the number of home mover valuations has seen the same 13% drop as first time buyers since September 2013. Bagshaw believes that first time buyers are proving unwavering and many are now ready and determined to buy their first home after putting off the move for many years due to the financial crisis. ‘Alongside this sheer number of potential home owners, lenders are increasingly playing their part and are even more willing to back new buyers, partly thanks to Help to Buy. The overall result is a consistent buoyancy… Continue reading
Consultation launched in Scotland on tenancy reform
The Scottish Government has launched its consultation on tenancy reform, the first major overhaul of tenancy legislation in the private rented sector for 25 years. The New Tenancy for the Private Sector consultation aims to give tenants a greater sense of security, and provides appropriate safeguards for landlords, lenders and investors. Through the proposals landlords must offer a minimum tenancy of six months and the Notice to Quit will be linked to how long the tenant has lived in the property. It is part of the Scottish Government’s commitment to reform the private rented sector tenancy by enabling more effective regulation, applying tougher enforcement and attracting new investment. The document will consult on proposals to modernise the reasons a landlord can use to get back possession of their property; to enable tenants to stay in their home at the end of their lease unless one of the new reasons above occur; and introduce longer notice periods for landlords and tenants. It will also explore issues relating to rent levels. ‘If tenants have more security in their tenure, they may feel more confident in asserting their rights and flagging any concerns about their rented property without fear of eviction. In addition to this if tenants know they can only be asked to leave their home on certain specified grounds they will have a greater feeling of security,’ said Housing Minister Margaret Burgess. ‘But equally a new tenancy system provides an opportunity to improve the private rented sector for landlords. We can tackle some of the long standing issues they face, like problems around recovering the possession of their property and rent arrears. These changes could give landlords more reassurance in the system,’ she explained. ‘Housing is a priority for this Government which is why we are consulting on these proposals to make sure our private rented sector is a strong as it can be. Our vision is for Scotland’s private rented sector to be an attractive and affordable housing option for anyone who wishes to live in it,’ she pointed out. ‘Reforming the tenancy system is an important part of achieving this vision. By creating a new and simplified system we will have better property management, while tenants and landlords will be provided with more clarity and understanding of what the tenancy agreement means for them,’ she added. However the National Landlords Association (NLA) is questioning the viability of some of the proposals. The NLA is concerned that if implemented as proposed, there is a significant risk of undermining the private rented sector, and of exacerbating the housing crisis Scotland is currently facing. As the proposals will affect all landlords, letting agents and tenants in Scotland the NLA urges all involved to submit their views to the Scottish Government. ‘The consultation raises some interesting ideas for reform, but the Scottish Government seems to be considering worrying changes that would only undermine the private rented sector at a time when its role in housing provision has never been more important,’ said Richard Lambert, NLA… Continue reading
