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Extensions and alterations add £6.5 billion to the value of UK homes
Home owners in the UK have added an estimated £6.5 billion to the value of the country’s housing stock in the 12 months to March 2015, according to new research. Some 220,000 owner occupiers in the UK extended or altered their home in past year, equivalent to one in 74 home owners, the report from international real estate adviser Savills also shows. Based on the assumption that the average extension or alteration adds 10% to the value of the average home, this would create an average uplift of £30,000 per property, the report points out. By contrast mortgaged home movers are still only at half the level they were 10 years ago pre credit crunch, at 358,400 in the year to the end of March 2015, according to data from the Council of Mortgage Lenders (CML). ‘The cost of taking the next step up the housing ladder and the difficulties in acquiring the mortgage finance to do so appear to have encouraged a significant proportion of owner occupiers to extend or alter their existing home,’ said Lucian Cook, head of Savills UK residential research. ‘Changes made by the mortgage market review and increased stamp duty for properties over £1 million are both likely catalysts to home improvements, impeding the rate and volume of transactions in the market,’ he added. The report also suggest that there is a far greater propensity to alter or extend in high value markets. Savills estimates one in 44 home owners did so in London the year to end March 2015, while £3.6 billion of the £6.5 billion was added to the value of housing stock of London and the South East. ‘High value markets have generally been the strongest performers post credit crunch. Extending has therefore been both more financially viable, with owners recouping the money spent on home improvements through house price growth and more attractive given the relative costs of upsizing,’ said Cook. The research also shows that Hammersmith and Fulham and Kensington and Chelsea top the list of local authorities with the highest propensity to extend, both creating an uplift in property values of over £100 million before fixtures and fittings are taken into account. Beyond London, areas such as St Albans, Cambridge, Winsor and Maidenhead and Guildford have all seen significant numbers of home owners extending their home. Continue reading
Average residential rents in Australian capital cities falling
Residential rental rates in Australian capital cities fell by 0.2% last month, down to $487 per week, but are up 1.1% over the past 12 months. It is the slowest annual rise in capital city rents recorded by the CoreLogic RP Data monthly rental report since date was first gathered in December 1995. The firm’s research analyst Cameron Kusher said that the sluggish pace of rental appreciation continues to be attributed to the ongoing boom in home construction across Australia’s capital cities accompanied by record high participation in the housing market from investors. A breakdown of the figures shows that Sydney and Hobart have recorded the greatest increases in weekly rents and over the past three months rents are lower in all cities except for Sydney, Melbourne and Canberra. The report says that Sydney and Melbourne are recording relatively stronger rental growth despite a large surge in new supply and high levels of investment purchasing. Sydney and Hobart also recorded the greatest annual increases in weekly rents while rents in Perth, Darwin and Canberra continue to decline. With home values growing faster than rents, gross rental yields are at a record low level and continue to edge lower, the report adds. Continue reading
New single UK wide property index set for early 2016 launch
A new official UK wide residential property index is set to be published for the first time in the first half of next year, it has been confirmed. Work on the index has been slower than anticipated due to access to property data delaying the finalisation of the methodology to be used, according to an update report from the Office of National Statistics. Since a consultation was launched last year work has been focussed on securing the necessary approval for implementation of the new house price index, taking forward the legal work to secure access to property attributes data and further investigating the commitments made in the consultation response. The ONS said that good progress has been made in a number of areas. Firstly, each of the departments involved has now had approval for implementation of the new index. Secondly, in response to feedback from the consultation, the use of GOV.UK has been investigated as a central publication point for the new index. Indeed, as a result of this investigation, it is proposed that the new UK house price index will be published via the Land Registry pages of GOV.UK providing a single and central access point for users. Further details will be made available in due course. However, a spokesman explained that securing the access to property attributes data has been slower than anticipated, which has meant the analysis required to finalise the methodology for the new index has been delayed. ‘It is expected that this access should be resolved shortly,’ the spokesman added. Over the next few months the focus of the development work will be to finalise access to the data required for the new index. This will allow the index methodology to be finalised and subsequently an article to be published fully explaining the new methodology and production process for users. Work will also be done to begin testing the production of the new index and start planning the implementation of the new index and the transition for users. Further details regarding the transition for users will be made available later in the year. ‘Whilst there is still a large amount of work to take forward, it is anticipated the new index will be ready for publication in the first half of 2016,’ the ONS spokesman added. Continue reading
