TSI
Housing rents up across the whole of the UK, latest index data shows
Residential rental prices increased in every region of the UK in the three months to May taking the average rent to £935 a month or £738 excluding London. The latest HomeLet rental index shows that the pace of growth in London has picked up again after a period of slower growth, with average rents agreed on new tenancies in May 2015 exceeding £1,500 per month for the first time. With rents now 10.7% higher than the same time last year, it is only the third time that rents have risen across the country since the index began, once in October 2014 and once in December 2010. The South West of England saw the largest increases, with average rent prices 13.6% higher than a year ago while Scotland saw growth of 9.6%, the South East of England 9.4% and Greater London 9.2%. In Greater London, the average rent now stands at £1,472 for the three months to May 2015, however, when looking solely at new tenancies agreed in the month of May, the average rent has exceeded £1,500 for the first time in the history of the Index. The average rent on new tenancies signed during May 2015 was £1,506 per month. ‘Rental values are now increasing year on year across the country, with no exception. After a short period of London rents rising more slowly, when it seemed the rest of the UK may catch up or even exceed the capital in the speed at which rent prices were increasing, we now see the rate of price rises in London returning towards double digit growth, while the rest of the UK continues to rise steadily,’ said Martin Totty, chief executive officer of Barbon Insurance Group, the parent company of HomeLet. ‘With the whole of the UK experiencing increases in rent prices agreed on new tenancies, it is possible this is an early indicator of a post-election private rental market where both landlords and tenants might expect rent prices to keep rising as demand continues to grow,’ he added. Continue reading
Barriers to expansion need to be removed to boost UK house building
Private house builders in the UK could potentially start building 150,000 new homes in England by 2020 if barriers to expansion like finance are removed, new research shows. Private house builders currently build the majority of new homes in the country and the largest have the capacity to increase output through measured and planned expansion, according to the analysis from real estate firm Savills. The operating margins of major house builders are only just returning to their target, the report says and suggests that better finance availability would allow the medium sized, often regional, house builders to expand. But smaller house builders are not expected to recover back to their former levels but will be able to expand output via niche opportunities and through custom and self build. The data from the report shows that private house building levels have been increasing over the last six years since the economic downturn. Not only are house builders increasing their output to meet demand, they built approximately 45% of all new affordable homes last year. The majority of new homes, 54%, are being built by the 11 largest house builders, that is those building over 2,000 homes a year, and levels of starts have recovered to 20% below their 2007 peak. One third of new homes are being built by medium sized house builders, those who complete 100 to 2,000 homes a year, who are back to the levels of building in 2007. The group that has struggled the most since the downturn are smaller house builders. Although some have expanded to produce more than 100 homes per year to become medium sized, others have stopped registering new homes altogether contributing to a 10% decline in registered house builders in 2014 compared to 2013. The report explains that the government’s Help to Buy Equity Loan and NewBuy schemes supported 30,146 sales of new homes in England in the year to March 2015 and among many of the largest house builders an average of 32% of sales are supported by Help to Buy. ‘We estimate Help to Buy will support 30,000 new home sales per year and our estimate of potential delivery of homes by the private sector up to 2020 relies on its continuation. If Help to Buy comes to an end after its current funding expires in 2020, we are likely to see start volumes tapering off up to two years before the end of the scheme in anticipation,’ the report says. It points out that access to funding is easing for SME house builders and competition among lenders means that the range of choice continues to grow. According to SPF Private Clients, a financial services broker, there are currently 45 different borrowing options available to SME builders. This is in sharp contrast to the very restricted market following the downturn. Big banks which previously preferred to focus on major house builders are now prepared to advance in the region of 60% of the cost of… Continue reading
UK asking prices see strong rise in last month, latest index shows
Confidence has returned to the UK property market after the election and is so high that asking prices in London increased by more than £10,000 in the last month. The latest Home.co.uk index from shows that average prices rose in all English regions and Wales for a fourth consecutive month and momentum is on the rise even in the formerly stagnant North East property market with a 13% improvement in the average marketing time. The report also points out that the supply of property for sale remains behind buyer demand in all regions except Greater London, where marketing times have increased considerably over the last year. Asking prices increased 2% over the last month in the London region and by 1.1% overall in England and Wales during the last month. The growth takes the average annual home price appreciation for England and Wales to 5.9% and further price rises are predicted this year. The Prime central London market may have been freed from the political uncertainty regarding a mansion tax and non-dom legislation but has yet to regain the momentum lost over the last 18 months. Pricing remains stagnant and flats in locations such as Belgravia are typically spending around 50% more time on the market than they were in June 2014. Time on market data for the rest of the UK shows that the northern regional markets, Scotland and Wales have all increased their momentum over the last 12 months. However, the southern regions such as the South East, East of England and South West are indicating slight increases in marketing times as higher prices have lessened demand. ‘Whilst 2015 is looking like a much better year for the northern regions, Scotland and Wales, hopes that the market in London and surrounding southern regions might slow to a more sustainable pace have been swept aside by further relentless price rises,’ said Doug Shephard, Home.co.uk director. ‘This will create significant cause for concern at the Bank of England. For the time being the key economic drivers of ultra low interest rates and low supply of property for sale remain. Buy-to-let landlords and first-time buyers alike are able to borrow very large sums to purchase property at very low rates of interest. And this situation looks set to drive prices higher in the near term,’ he added. Continue reading
