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UK asking price growth cooling but there is still momentum in some locations
Recent data is showing house price growth in the UK has been cooling but the latest index report suggests there is considerable momentum, especially in the South where demand remains high. However, prices are not rising as quickly as they were, according to Home.co.uk's latest Asking Price Index, and supply is rising. Asking prices increased in September by 0.6%, the ninth consecutive monthly rise, taking the average annual appreciation in England and Wales to 8.5%. But overall the market is cooling and vendors' expectations are being moderated outside of the current hotspots of London and the South East. The total number of properties on the market that have been reduced in price has risen in recent months to a two year high and now represents 13% of the total stock of property for sale. Moreover supply is growing across the UK as vendors are being encouraged by rising prices. Last month, 10% more properties entered the market than in September 2013. The rise in supply in London is much more extreme, up 49% by the same measure. A breakdown of the figures show that home prices rose across most of mainland UK over the last month but slipped in the North East, North West and Wales by 0.1%, 0.1% and 0.4% respectively. However the firm says that this is consistent with the normal seasonal price variations. Asking prices increased significantly in the more vigorous southern regions. Asking prices in East Anglia, where supply remains very tight, jumped 1.1% over the last month, and prices look set to keep rising as long as the shortage of property for sale continues as in this region the monthly rate of new instructions has fallen 70% over the last seven years. London prices also rose by 1.1% following the previous month’s dip and, for the time being, supply is historically low, down 67% compared with September 2007. However, the report points out that this situation is changing rapidly. The number of properties being put up for sale in the London region has soared by 49% over the last 12 months. Looking back further, the data shows that only five of England’s nine regions have prices that are nominally higher than they were in October 2007, whilst home prices in Scotland and Wales remain below those levels. If the effects of inflation are taken into account then only Greater London has shown any real price gains since October 2007. The data also shows that the average mix-adjusted 12 month change in asking prices for England and Wales reached a maximum in June of 9.6% and is steadily falling back. The year on year price trend confirms that average price increases are moderating overall. ‘We expect this trend to continue in 2015 as rising supply will tend to stifle further price rises, as already seen in Greater London,’ said Doug Shephard, Home.co.uk director. ‘Whilst much coverage is given to the best performing property locations, currently Stratford, Stepney, Mill Hill and Canning Town, it is equally important to… Continue reading
Prime property prices in Edinburgh up for fifth quarter in a row
Property prices in the Edinburgh City prime market rose for the fifth consecutive quarter between June and September despite a slowdown due to the referendum vote. Prices increased by 1.3% and are 4.9% higher on an annual basis and so far in 2014 transactions are 8% higher than a year ago, according to the latest report from real estate firm Knight Frank. Low stock levels and high demand are the main two characteristics which have typified the Edinburgh market so far this year and they have put upwards pressure on price. A snapshot of stock levels at the end of September reveals that there were 27% fewer properties available for sale than the same time last year. However, applicant numbers were 19% higher in 2014 to date compared to 2013 and viewings increased by 1% over the same time. According to Knight Frank, it is evidence of just how resilient the Edinburgh property market has been this year in spite of the uncertainty surrounding the outcome of the referendum. Indeed, agents reported activity only noticeably slowed in the three week period before the vote. Since the result was announced activity has returned to more normal levels, suggesting that at least for now it is back to business as usual. The result means there is now a more certain environment for the property market to function and it is expected that this, combined with growing consumer confidence, should act as a further boost for the city’s already robust prime market. ‘While the flurry of activity that was predicted in the event of a No vote hasn’t materialised yet, we have dealt with a number of buyers and vendors who put off making decisions until after the vote,’ said Edward Douglas-Home, head of Edinburgh City sales at Knight Frank. ‘The recent figures highlight just how buoyant the Edinburgh market has been. Premiums have been paid for the very best homes in the best locations and high demand from would-be buyers is evident across the market. We expect that activity will continue to pick up in the coming months,’ he explained. However, despite the optimism in the market, the market has more hurdles to clear, most notably the ongoing negotiations between Holyrood and Westminster concerning further devolution and the upcoming May 2015 UK general election could create more uncertainty, especially when it comes to tax changes affecting high-value residential property. Additionally, from April 2015, Stamp Duty for Scottish residential and non-residential property sales (SDLT) will be replaced by a new Land and Buildings Transaction Tax (LBTT), which will be administered and collected within Scotland. Guidance surrounding the final rates will be provided this month, but it is expected that buyers of more expensive homes will have to pay more tax up front when purchasing a property. Meanwhile, the No vote in the referendum could Now that the uncertainty of the referendum is over there could be a rise in the number of people from London who would rather own property in Edinburgh and commute,… Continue reading
London prime rental market see strong demand, new research reveals
London’s prime rental markets of London saw annual growth of 1.4% on the back of strong demand for one and two bedroom flats over the past three months in particular, new research shows. Similar rental growth of 1.3% has been seen for prime properties in the commuter zone, however a significant value gap remains, with the average pound per square foot less than half of that in prime London, according to the report from Savills. In London, strong demand for smaller properties resulted in the highest quarterly rental growth in prime central London, prime North London and East of City locations, albeit from different tenant groups. ‘As is typical at this time of year, when the University year begins, wealthy international students drove the demand most evidently in prime central London due to the proximity of world class universities,’ said Lucian Cook, director of residential research as Savills. ‘In contrast, young professional sharers or couples are drawn to less expensive prime locations such as Canary Wharf, Wapping or Islington. This reflects the fact both areas provide easy access to the financial services centres of Canary Wharf and the City, as well as the emerging tech centres in East London,’ he pointed out. ‘As a result of a younger generation driving prime rental growth, landlords may have to be prepared to adapt to their changing requirements. Being able to compete with new build developments which provide on-site facilities such as a concierge will become increasingly important, particularly in PCL and in the East of City where our data shows the largest proportions of renters under the age of 29 choose to locate,’ he added. Among 30 to 60 year olds, Hampstead and St John's Wood in the North West and areas such as Fulham and Richmond in the South West have more appeal. Although rental growth here has been weaker over the past year than in the student/sharer markets, families continue to be attracted to the stock on offer and relative value for money achievable, particularly in the South West where the average pound per square foot is just £29, the lowest across all prime London. The research also shows that across London's commuter belt, the strongest annual growth was seen in the outer commuter zone, with average rents rising 2.5%. Cambridge, Farnham and Winchester, all particular favourites with families, saw the highest growth, due to their popularity for schooling and easy access to London. Regardless of location, since the peak of the prime rental market in 2008, three bed properties have seen the strongest growth with average rental values across the prime commuter zone 3% above their peak. However, over the past three months, one and two bed properties have seen the strongest growth, at 1.3%. This has been driven partly by young sharers unable to afford to buy, but the most significant factor is young professionals relocating for work as the economic recovery outside of London continues to strengthen. ‘As demand for rental properties continues to grow due to affordability… Continue reading
