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Prime property in south west London outshines rest of capital
Price growth in the prime south west London property market marginally outperformed the prime London average in the second quarter of 2015 with values rising 2% and 1.6% respectively. The data from the latest analysis report from Savills shows that the large leafy district running south from Fulham to Wimbledon and stretching west from Clapham to Ham, also shows that annual growth was 0.8% compared with year on year falls in other prime London markets. The strongest growth across all the prime south west London submarkets was recorded for properties below £1 million, where buyers benefited modestly from the stamp duty reform announced in the Autumn Statement of December 2014, the report says. However, price growth was just 2.1% as the mortgage market review continues to restrict the amount people can borrow and at the top end of the market, buyer caution has been most evident, with properties valued over £2 million seeing small price falls of 0.7% over the past year. The report points out that this has particularly affected some of the higher value markets such as Fulham and Battersea, where values of property worth over £1.5 million fell by 2.5% and 3.5% respectively over the past year. Price falls were largely a result of the stamp duty changes and the uncertainty surrounding a mansion tax in the run up to the general election, the report suggests and since the election, some of the deferred demand is beginning to flow back into the market, although the new stamp duty rates are still keenly felt by buyers. This has restricted any significant boost to prices and transaction numbers and we expect this to continue over the rest of 2015. Nonetheless, Savills is forecasting price growth to return to the market in 2016 and values to rise by 22.7% over the five years to the end of 2019. In the rental market average rents in prime south west London have increased by 1.7% over the past 12 months, despite seeing very small falls of 0.1% over the three months to the end of June. This compares to a more subdued annual increase of just 0.5% across all prime London. The report explains that the area attracts a wide range of tenants. Corporate relocators, both from the UK and overseas, account for 42% of tenants, and the higher value markets of Richmond and Battersea are particularly popular. Additionally, many affluent families are becoming more flexible in their location preferences and increasingly attracted to south west London where the average rent per square foot is £28 per year, less than half of that in prime central London. In the first half of 2015, 17% of tenants moved from either the borough of Kensington and Chelsea or City of Westminster, compared to 13% of tenants in 2014. This is particularly evident in Fulham which, despite being the most expensive south west London rental market, is 42% cheaper than neighbouring Chelsea. A potential risk to the sector is… Continue reading
Home prices and sales up in Scotland after property tax blip
House prices in Scotland increased by 2.6% in June, taking the average price to £169,227, according to the latest index figures, with sales up 25% month on month. It means that year on year prices have increased by 1.2% over a period that have seen a number of changes in the property market including the introduction of the new Land and Buildings Transaction Tax (LBTT) tax earlier this year in April. There was a flurry of sales at the upper end of the market before the tax was introduced and a dearth of sales in this sector afterwards but the Your Move index shows that June’s price growth was driven by a revival in million pound plus sales. The data also shows that home sales surged 25% in June compared with May, reaching the highest monthly total since July 2014. Glasgow saw the strongest jump in sales activity in the second quarter, up 18% in the past year on back of increased demand for flats. ‘The calm annual house price change of 1.2% recorded in June 2015 belies tumultuous currents of activity beneath the surface. The Scottish housing market has been buffeted around by taxation,’ said Christine Campbell, Your Move managing director in Scotland. She pointed out that on average in 2014, there were 12 £1million plus properties sold in Scotland during a month, but in June 2015 there were six, signalling an improvement in this sector of the market in just one month. On the mainland the biggest monthly rises were recorded by the two most expensive local authorities across Scotland with properties in East Renfrewshire and East Dunbartonshire experiencing price jumps of 26% and 21% respectively in June. ‘More generally, the LBTT front loaded sales into the start of the year, and activity dragged its heels throughout April and May, with the general election adding to the dampening effect,’ added Campbell. In Aberdeen, for example, sales of detached homes fell 39% between March and April. But June saw a 25% month on month leap in home sales, higher than what would typically be expected for this time of year, and 5% up on June 2014. Overall, Scotland saw 9,265 home sales during the month, the most activity since July 2014 and during the second quarter of 2015 flats have seen the most significant year on year increase in sales, up 7%. ‘This stems from the stamina of the first time buyer market, as this property type tends to be the most affordable for those getting their first footing on the property ladder. This is especially the case in cities, and Glasgow and Edinburgh accounted for 45% of all Scottish flat sales during the second quarter of 2015,’ said Campbell. ‘But affordability is the biggest steer to Scottish housing market at the moment. At £200,000, the average price of a flat in Edinburgh is more than one and half times as much as the cost of the… Continue reading
First time US buyers rent an average of six years before buying a home
Americans are renting more than twice as long before buying their first home as they did in the 1970s, new research has found. Aspiring home buyers are now renting for six years compared to an average of 2.6 years compared to 40 years ago, according to an analysis from real estate firm Zillow. The analysis report also shows that first time buyers are older and less likely to be married than they were in the past and overall Americans are buying increasingly expensive first homes and spending more relative to their incomes than any time in the past 40 years. In the 1970s, first time buyers bought homes that cost about 1.7 times their annual income. Now they're buying homes that cost 2.6 times their annual income. The firm says that part of this can be attributed to the housing markets where people are moving which are more expensive cities on the coasts, where there are growing job markets. The average first time buyer is about 33 with a median income of $54,340, which is about the same as what first time buyers made in the 1970s, when adjusted for inflation. In the late 1980s, some 52% of first time buyers were married but today that has fallen to 40% married, the research also shows. ‘Millennials are delaying all kinds of major life decisions, like getting married and having kids, so it makes sense that they would also delay buying a home,’ said Zillow chief economist Svenja Gudell. ‘We know millennials value home ownership and want to buy. The next challenge will be figuring out how they can save for a down payment and qualify for a mortgage, especially while the rental market is so unaffordable all over the country. The last hurdle will be finding a home they like amidst very tight inventory, especially among starter homes,’ added Gudell. Continue reading
