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UK property sales up to 16 month high, says RICS report
Property sales in the UK have picked up across the country, reaching a 16 month high, according to the latest index report from the Royal Institution of Chartered Surveyors (RICS). There were also further price increases nationwide in September, a modest improvement in mortgage availability but no improvement in the supply situation with new buyer demand continuing to outweigh instructions to sell. Across the UK, agreed sales rose at the quickest pace since May 2014, with 14% more chartered surveyors seeing a rise. This is a 16 month high and the fifth consecutive month that sales have increased. The North, East Anglia and Scotland posted the sharpest rises in activity over the month with the East Midlands the only region to see a material drop in sales albeit following an increase in the region in August. The report says that the stronger sales trend in the UK is broadly reflective of an upturn in demand which has been visible in the data since the early spring. Indeed, the number of new buyer enquiries rose for a sixth consecutive month across the country with 18% more chartered surveyors reporting a rise in demand. The pattern being seen by chartered surveyors echoes recent lending data including that highlighted by the Bank of England, showing mortgage approvals at an 18 month high and up 12% compared to a year ago. As the availability of mortgage finance appears to be improving, the average ‘perceived’ LTV ratio captured by respondents to our survey edged up to 79.3% with first time buyers seeing credit conditions relax most noticeably over the month, the report also reveals. Although activity is picking up, the ongoing lack of new instructions and the resulting limited stock on the market continue to be an issue for the sustainability of the market. The number of new instructions has fallen in 13 of the last 14 months. RICS says that it is significant that 40% of respondents feel the biggest factor behind the negative trend in new instructions is the lack of stock already for sale which is deterring would be movers as they struggle to find a suitable property to move on to. The next most cited influence was economic uncertainty, followed by stretched affordability. As a result of the persistent supply demand imbalance, the national house price indicator continues to rise strongly which is likely to be reflected in key house price indices over coming months and into the first half of 2016, according to the report. In the lettings market, tenant demand increased once more continuing the pattern seen by respondents since December 2014, and while new landlord instructions increased slightly for the third month in a row, they were still significantly outstripped by tenant demand. Indeed, over the next 12 months, chartered surveyors are forecasting rents to rise by 3% at the headline level. ‘Activity is now picking up which is encouraging, but unless the stock being sold is replenished… Continue reading
UK mortgage sector competition to be examined
The UK’s financial watchdog has launched a consultation process on competition in the mortgage sector to seek input from interested parties to identify both good points and potential areas for improvement. ‘For millions of consumers a mortgage is one of the biggest, if not the biggest, financial transaction they will enter into in their lifetime. The mortgage sector also plays a vital role in the financial services industry and many areas of the economy,’ said Christopher Woolard, director of strategy and competition at the Financial Conduct Authority (FCA). He explained that competition can play a key role in ensuring that the sector works well, delivering consumer benefits through lower prices, better customer service, and more product choice. ‘We are seeking stakeholders’ views on competition in the mortgage sector. These views, together with evidence from the FCA’s wider programme of work on mortgages, will help inform any future FCA work on this key sector of the economy, including any future competition market study,’ he added. The FCA is interested in the range of factors that might affect competition in the provision of loans secured against a property, whether regulated or unregulated, including as a result of changes introduced following the Mortgage Market Review and any other barriers to entry, expansion or innovation. It also wants to examine consumers’ ability to effectively access, assess and act on information about mortgage products and services and firms’ conduct and relationships and the deadline for input is 18 December 2015 with feedback scheduled for the first quarter of 2016. The Council of Mortgage Lenders welcomed the announcement and described it is an excellent opportunity for the regulator to review the effect of regulation, as well as market practice, on lenders as well as their customers. ‘The FCA's role in promoting competitive markets is the part of regulation that best helps foster creativity, innovation and a sharp focus on what drives customers,’ said CML director general Paul Smee. ‘It's also essential in delivering the kind of environment in which reputable lenders of all shapes and sizes can thrive. We will be working with all our members to ensure that their perspectives are fully reflected as we work with the FCA on this vital issue,’ he added. Continue reading
Property prices in England and Wales up for ninth month in a row
Property prices in England and Wales increased by 0.4% in September, the ninth month in a row when values have grown, taking the average price to £284,742, the latest index shows. Year on year prices increased by 4.2% and overall average house prices across England and Wales have risen £11,500 in the last year, after 42 months of annual growth, the LSL index also shows. The London housing market moved upwards after a period of decline with its biggest monthly price rise since June 2014 at xxx and the South Est saw the strongest year on year rise of any region. The growth is primarily being underpinned by sturdy demand and solid activity at the bottom of the property ladder, according to Richard Sexton, director of e.surv chartered surveyors. ‘The most frequently paid property price across England and Wales is just £125,000, mirroring the level at which stamp duty becomes payable, and reflecting the impetus that has been injected in the first-time buyer market recently,’ he said. ‘It is also the lower to mid-range properties priced between £180,000 and £360,000 which are seeing the fastest increases in value, while the shift in stamp duty bands continues to slow growth at the higher end of the market, and prices above £600,000 are largely stationary,’ he explained. He also pointed out that a price surge in London in September has halted its stalled market. ‘As in the rest of the country, it’s the more affordably priced London boroughs which are behind this renaissance, as the strengthening of sterling, rising stamp duty rates and moves against non-doms take their toll on the high end market,’ he said. The index shows that the 10 London boroughs with the lowest average house prices all set new record highs in August, and it is Barking and Dagenham, at the very bottom of the price rankings, that recorded the fastest year on year increase in property values at 15.7%. ‘While London is once again leading the pack in terms of monthly price growth, the South East region has soared two places in the rankings to top the charts with the highest annual increase in property values. Average house prices in the South East have grown 5.8% over the past twelve months,’ said Sexton. ‘Combined, these two regions are now having a much greater influence on national measures of price growth. Compared to July, when they were only pushing up the overall annual change by 0.1%, this has grown to 0.7%. As house price growth becomes more southern-centric again, the London commuter belt is spurring some of the fastest rates of change with Luton witnessing the steepest price rise compared to last year, jumping 14.9%,’ he added. Sexton also pointed that it has been the strongest September for home sales since 2007. Monthly sales totalled 84,000, an increase of 3% from August, and making September only the second month this year in which sales have overtaken 2014 levels. Meanwhile, the… Continue reading
