Tag Archives: yahoo
Research signals the end of the reluctant landlord
A rise in property sales in the UK is leading to a reduction in potential rentals which could mean the end of the reluctant landlord, according to lettings agents. The latest research from the Association of Residential Letting Agents (ARLA) reveals that the number of people letting out properties because they have been unable to sell has dropped to a record low. According to ARLA’s latest quarterly report, the percentage of letting agents seeing an increase in rental property entering the market because it cannot be sold has fallen to just 13%. This figure represents the fourth consecutive fall, and is far below the 94% high recorded when the question was first asked at the start of 2009, during the post credit crunch property crisis. The association points out that the renewed ability to sell property is having a significant effect on the overall shape of the residential investment market. The proportion of ARLA members who think landlords are currently decreasing their net investment by selling properties is up sharply, from 15% to 20%. This is while the proportion of respondents who think landlords are increasing their net investment by buying properties declined from 43% to 42%. Of the landlords who are retaining their property interests, the vast majority now appear to be investing for the long term, with the average time between purchase and sale now standing at 19.8 years. Again, this contrasts significantly with the comparable figure recorded at the start of 2009, when the average period was 16.4 years. Additionally, only 1.5% of respondents said that they had become a residential landlord in order to make a short term capital gain over a period of less than five years. The majority, 45%, said that they had let their property to achieve a combined yield from rental income and capital appreciation while 37% had done so in order to create a ‘nest egg’ for their long term future. ‘The resurgence of property prices and buyer demand in many areas is reducing the number of so called accidental landlords. Despite the reduction of landlords in this situation, wider investment in rental properties remains strong across the market. The shape of the private rented sector is changing once again, with long term landlords returning to the fore,’ said Ian Potter, managing director of ARLA. ‘As investment landlords make decisions that can affect their income for years to come, quality advice and information becomes ever more important. I would always advise choosing an ARLA agent to ensure you are getting the best possible advice about a rental property, whatever stage you are at,’ he added. Continue reading
UK property prices forecast to grow by over 30% in next five years
The Office for Budget Responsibility (OBR) as revised its forecast for house price growth in the UK in the next five years from 27% to 30.8%. According to the OBR, growth of 8.6% is expected in 2014/2015, 7.4% in 2015/2016, 4.3% in 2016/2017, 3.7% in 2017/2018 and 3.7% again in 2018/2019. It says in its latest forecast report that by the end of the forecast period, house prices are expected to be 0.5% below their pre-crisis peak in real terms and the house price to income ratio to be 2.3% below its pre-crisis peak. The OBR also expects transaction volumes will rise at a faster pace than originally forecast over the coming five years. The independent fiscal body estimates that housing transactions in 2014/2015 will be 1.28 million, some 6% higher than it forecast in December. According to Grainne Gilmore, head of UK Residential Research at Knight Frank, this bump up in the forecasts for price growth and activity, especially over the next year, reflects the additional stimulus in the market via Government policies as well as the underpinning of record low interest rates. She also pointed out that several different measures have been announced to help boost housing supply. The Chancellor of the Exchequer George Osborne had already announced a £6 billion four year extension to the Help to Buy Equity loan, which has been welcomed by house builders. ‘The extra longevity of the support to the market will allow house builders to commit to achieving planning on and building out much larger schemes, something that is crucial to deliver the step up in housing supply that is desperately needed,’ she added. Also, Osborne’s announcements on additional funding support for smaller developers through the £500 million Builders Finance Fund is also welcome, as smaller developers are still being hit by an effective funding crunch, finding it hard to secure funding or finding that they are being charged higher premiums for loans. The consultation on Right to Build measures to encourage self build could also help boost the numbers of people developing their own homes if they come to fruition. Self build accounts for just 8% of all new build development in the UK, compared to 40% in the US and an even higher proportion in Europe. Opening up the Equity Loan to mortgage borrowers who are building their own home will also be welcomed. The Federation of Master Builders (FMB) said the announcements are a major boost for housing supply which is so lacking at present. ‘Access to finance is a major stumbling block for viable small house builders so this government intervention is much needed as many major banks are still reluctant to lend for small residential developments. This additional support will provide the necessary finance to small house builders and help increase the overall supply of new housing,’ said Brian Berry, chief executive of the FMB. Michael Holmes, spokesperson for The Homebuilding, Renovating and Home Improvement Shows and editor in chief of Homebuilding and Renovating magazine, said… Continue reading
Estate agents see signs of improved property supply in the UK
A sharp rise in home owner equity in the UK is set to increase the property supply as even first time buyers in London seem undeterred by property price increases, it is claimed. Indeed, the latest data from haart estate agents shows that first time buyers in London reached a new annual high with registration up 55.3%. This comes at a time when UK property prices have increased 7.9% annually to £191,375, while in London prices are up year on year by 23.6% to £474,359. The firm also says that the national property market is buoyant with a 21.3% increase in property sales. ‘Home owners across the UK, who have on average accumulated equity of over £14,000 in their property over the past year, are expected to take advantage of their growing assets by remortgaging or downsizing this spring,’ said Paul Smith, chief executive officer of haart. ‘The downsizers will ease the current shortage of supply which will help to quell rising house prices. The increase in equity is now more than £90,000 annually in London. First time buyers are undeterred by property price rises and are now at their highest level in London over the past 12 months as banks continue to support lending to this group of buyers,’ he explained. He also said that a lack of reform for the much criticised Stamp Duty property tax means the continuation of a dysfunctional housing market. ‘In one fell swoop the Chancellor George Osborne could have increased the supply of homes for sale and capped rising house prices helping every level of the housing ladder,’ Smith pointed out. ‘Instead he’s turned a blind eye and given nothing to the majority of home buyers and sellers rather than throwing them a lifebelt,’ he added. Continue reading
