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Property prices in Northern Ireland set to outpace rest of UK in 2015
The Northern Ireland housing market ended 2014 as it began it, with prices and sales rising and surveyors expecting the trend to continue, according to the latest RICS and Ulster Bank survey. The Royal Institution of Chartered Surveyors expects Northern Ireland house prices to rise by 4% in 2015, which is higher than the expectation of 3% for the UK average. The latest survey suggests that demand in the local housing market remains relatively robust, with new buyer enquiries continuing to rise at a faster rate than new vendor instructions – indicating that there is a continuing lack of supply. In terms of prices, December was the 19th consecutive month that the headline price balance at +65 was in positive territory, indicating an increase in prices. The balance of surveyors expect prices to rise in the three months ahead. With regard to newly agreed sales, a net balance of +17 said that these increased in December, whilst a net balance for sales expectations in the three months ahead was +21. ‘The local housing market is expected to benefit from the reform of stamp duty, with the large majority of homebuyers here paying less of the tax. This will help encourage activity,’ said Samuel Dickey of RICS Northern Ireland. ‘In terms of prices, the gap between demand and supply is creating upward pressure. However, the slowing economic recovery and public spending environment will present challenges for the market. Overall, RICS expects prices to rise on average 4% this year, a moderation in growth relative to 2014,’ he added. According to Derek Wilson, head of lending products at Ulster Bank, mortgage demand remain strong in the final quarter of 2014. ‘We expect that to continue into this year, particularly from the home mover and first time buyer segments. We have a range of mortgage options available at historically low levels and we remain committed to lending to all sectors of the market,’ he added. Continue reading
Price growth and new buyer demand declines in UK housing market
House price growth and new buyer demand in the UK both tailed off in December 2014 but stamp duty reforms are still expected to support market activity in the months ahead. Overall, the number of potential new house buyers dipped for the sixth consecutive month in December and price growth fell to its slowest pace since May 2013, the latest residential survey from the Royal Institution of Chartered Surveyors shows. Across the UK, 10% more surveyors saw the number of potential new buyers decrease in December and London saw the weakest demand, with 45% more surveyors reporting a decline in enquiries, the eighth consecutive monthly decline. The North of England and the South West saw strong rebounds in demand, albeit the underlying picture remains most upbeat in Northern Ireland and Scotland. Despite the slowdown, there is optimism that the stamp duty reforms will deliver a 2% to 5% boost in both sales and prices over the next 12 months, despite members in London expecting sales to decrease by between 5% and 10% and prices to decrease by 2% to 5%, with larger properties and/or those in prime areas expected to see the biggest price decreases. Nationally, as a result of the weaker trend in buyer interest, sales expectations slipped to a net balance of 21%,down from 27% in November, and just 11% more surveyors saw prices rise in December, rather than fall. The volume of agreed sales during December was little changed, while the average number of sales per chartered surveyor slipped to 19 compared to 21.2 in the preceding December. In the month that also saw mortgage approvals fall to their lowest in 18 months, December’s data showed that perceived Loan to Value ratios across properties for first time buyers and existing home owners remained stable at 84.9% and 77.6%, although they are lower compared with the early part of 2014 following the adoption of a more cautious approach to lending as a result of the introduction of the recommendations of the Mortgage Market Review. ‘The changes to stamp duty are expected to provide a timely boost to activity in the housing market across most of the country but there remain significant challenges particularly for first time buyers seeking to take an initial step onto the property ladder,’ said Simon Rubinsohn, RICS chief economist. ‘Critically, the stock of property on the market continues to hover close to historic lows with new instructions to agents falling in ten of the last twelve months. Indeed, there is a risk that with so little housing available any pick-up in demand could rapidly feed through into higher prices rather higher sales,’ he explained. He pointed out that the RICS lead indicators do provide some encouragement that the level of housebuilding will continue to increase over the course of this year but even with further growth, the volume of home starts will still fall well short of the number of new household being formed… Continue reading
Prime central London rental values flat for second month in a row
Rental values in prime central London were flat for the second consecutive month in December as a seasonal year end slowdown and the impact of global economic uncertainty dampened demand. Though monthly growth slowed to zero by the end of the year, the annual increase in rental values was 3.3%, which was the highest rate in three years, the rental index from Knight Frank shows. It points out that annual growth has been climbing steadily since July as the UK economy improved and some buyers switched to the rental market while political uncertainty surrounds the outcome of the general election in May and the prospect of further property taxes remains. ‘However, while the UK’s economic indicators have improved, caution surrounded the world economy in the last quarter of the year, including falling oil prices and the economic outlook in China and the euro zone,’ said Tom Bill, head of London residential research at Knight Frank. ‘The result is that companies or individuals are more likely to postpone decision making while they wait for clarity,’ he added. The report points out that other factors affecting the market include the falling price of oil, events in Syria and Hong Kong, the Ebola outbreak and concerns the Federal Reserve in the United States was going to raise interest rates sooner than expected. ‘Despite this uncertain global economic and political backdrop, prime central London residential property remained a sound investment in 2014,’ said Bill. ‘Total returns, which include rental income and capital value growth, outperformed a series of other asset classes in the year to November, proving its resilience as an investment. For example, while commodity prices have fallen markedly, partly due to concerns over the Chinese economy, demand among Chinese tenants and buyers for prime central London property has increased, buoyed by its safe haven appeal,’ he explained. ‘This is underlined by the fact the number of Chinese tenants increased by almost fourfold in 2014 compared to 2013,’ he added. Continue reading
