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Housing supply in UK fell significantly in July, new index shows
The number of UK home owners putting their properties on the market fell dramatically in July, down 13.2% across the UK and almost 15% in London, according to the latest property supply index. The majority of locations have seen new stock levels fall in the past month with Glasgow and Edinburgh seeing new property listing fall by 30.3% and 29.7% respectively while supply was down 28.2% in Milton Keynes and 28.1% in Sunderland The index from online estate agent House Simple, which used new listing on Rightmove in July compared to the previous month of more than 100 major towns and cities and all 32 London boroughs, also shows that while Swindon saw a 40.5% rise in new property listings in June, they fell 25.2% in July. Meanwhile, a quarter of the towns and cities that saw the biggest falls in new property listings in July were in the south west of England. A fifth were each in the south west of England and the West Midlands. In London new property listings fell 14.9% in July and only the borough of Bromley saw increase in new stock, but this was still less than 1%. Bexley saw new property listings fall by 31.4%, while new stock levels in Kensington and Chelsea, a favourite with foreign buyers, fell by 24.5% ‘Any hope that sellers were finally returning to the market seems to have been a vain one for the time being,’ said Alex Gosling, chief executive of House Simple, adding that the reasons are not easy to ascertain but it could be due to prices rising. ‘Or maybe they’re not confident about market conditions, despite the strength of the economy and the highly competitive mortgage rates on offer at the moment. Somehow, sellers need to be encouraged back to the market because there are buyers galore waiting when they do. It’s a very attractive market right now for motivated sellers,’ he pointed out. ‘The next few months are going to be important as the property market looks to gather momentum heading into the last quarter of the year. We fully expected activity to drop off in the summer months, but come the Autumn the market needs to replenished with stock to realign the supply versus demand balance,’ he concluded. Continue reading
Home prices rising steadily in most metro areas in the US, new data shows
A climb in home sales throughout the United States amidst insufficient supply caused home prices to steadily rise in most metro areas during the second quarter of 2015. The median existing single family home price increased in 93% of measured markets, with 163 out of 176 metropolitan statistical areas (MSAs) showing gains, according to the latest quarterly report from the National Association of Realtors. Just 13 areas or 7% recorded lower median prices from a year earlier and the number of rising markets in the second quarter increased compared to the first quarter, when price gains were recorded in 85% of metro areas. The data also shows that 34 metro areas or 19% experienced double digit increases but this was a decline from the 51 metro areas in the first quarter while 19 or 11% double digit increases in the second quarter of 2014. Lawrence Yun, NAR chief economist, said that the housing market has shifted into a higher gear in recent months. ‘Steady rent increases, the slow rise in mortgage rates and stronger local job markets fuelled demand throughout most of the country this spring,’ he explained. ‘While this led to a boost in sales paces not seen since before the downturn, overall supply failed to keep up and pushed prices higher in a majority of metro areas. With home prices and rents continuing to rise and wages showing only modest growth, declining affordability remains a hurdle for renters considering homeownership, especially in higher priced markets,’ he added. The national median existing single family home price in the second quarter was $229,400, up 8.2% from the second quarter of 2014 when it was $212,000. The median price during the first quarter of this year increased 7.1% from a year earlier. The five most expensive housing markets in the second quarter were the San Jose, California metro area, where the median existing single family price was $980,000, followed by San Francisco at $841,600, Anaheim-Santa Ana, California at $685,700, Honolulu at $698,600, and San Diego at $547,800. The five lowest cost metro areas in the second quarter were Cumberland where the median single family home price was $82,400, Youngstown-Warren-Boardman, Ohio, at $85,000, Rockford, Illinois, at $94,700, Decatur, Illinois at $96,000, and Elmira, New York at $98,300. Total existing home sales, including single family and condo, increased 6.6% to a seasonally adjusted annual rate of 5.3 million in the second quarter from 4.97 million in the first quarter, and are 8.5% higher than the 4.89 million pace during the second quarter of 2014. ‘The ongoing rise in home values in recent years has greatly benefited homeowners by increasing their household wealth,’ said Yun. ‘In the meantime, inequality is growing in America because the downward trend in the home ownership rate means these equity gains are going to fewer households,’ he added. At the end of the second quarter, there were 2.3 million existing homes available for sale, slightly above the 2.29 million homes for sale at the… Continue reading
First time buyer lending up but still down on a year ago, latest mortgage data shows
Lending to first time buyers in the UK increased in June but overall has changed little since the same month a year, ago, according to the latest report from the Council of Mortgage Lenders. Home mover lending also increased and saw a slight yearly increases in volume and value while home owner remortgage activity increased by over a third month on month and year on year. The CML data also shows that buy to let continues to grow year on year and month on month, mainly driven by buy to let remortgage activity. The first quarter of the year saw the mortgage market slow but now lending to first time buyers increased in number and amount by over 20% in the second quarter of 2015. ‘Notable this month is the uptick in remortgage activity among home owners, perhaps reflecting an increased desire to lock into competitively-priced mortgage deals in advance of any rise in rates,’ said Paul Smee, director general of the CML. ‘It is likely that people are now beginning to feel a rate rise is a realistic prospect and not just a distant theoretical possibility. After a slower than expected start to the year, lending now appears to be picking up as we expected, and in line with our recently revised forecasts,’ he added. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, a shortage of affordable properties is affecting the prospects for first time buyers. ‘While the demand hasn’t gone anywhere, the goalposts have shifted. Even with a leg up from government schemes, those looking to make their first foray onto the ladder are having to be more open minded about what they can afford, and these home buying incentives and cheap mortgage finance won’t hang around for ever either,’ he said. ‘In the long term, those who can’t act now will be reliant on more house building to replenish the stock of homes available, and keep mortgage repayments and deposits within grasp,’ he added. Tougher regulation is restricting lending for affordable homes, according to Patrick Bamford, director of mortgage insurance Europe for Genworth. ‘Even improved affordability of loans is not enough to produce a notable increase in first time buyer activity year on year,’ he explained. He also pointed out that following the recession there has been a drastic fall in home ownership, particularly among younger people, across all regions of the UK impacted by high house prices and a lack of supply. ‘The South East and North West have been particularly hard hit, with the shortfall in numbers when compared to pre-recession greater than the entire populations of Brighton and St Helens respectively. We are still a long way from closing the gap and returning to a normal first time buyer market,’ said Bamford. ‘It is crucial for the government to introduce a permanent system of private mortgage insurance to accompany its planning reforms and drive a thorough recovery of the… Continue reading
