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UK house price growth falls in UK for sixth month in a row
UK house price growth in November dipped for the sixth consecutive month but changes to the Stamp Duty property tax is expected to boost sales, according to the latest report from the Royal Institution of Chartered Surveyors (RICS). The tax changes announced last week in the Chancellor’s Autumn Statement could result in a sales boost of between 2% and 5%, according to the RICS Residential Market Survey. Despite 15% more surveyors reporting a decline in new buyer enquiries and a fourth consecutive fall in supply to the market, surveyors are expecting more house sales in response to the reforms, although expectations in the capital were more muted. As speculation continues over how much the new changes will encourage existing property owners to put properties on the market, the reforms come in a month that saw house price growth fall to its slowest pace since May 2013, a 13% net balance, and the number of houses for sale per branch fall back to its second lowest reading of 56. It was also clear from member comments that uncertainty surrounding the outcome of the forthcoming general election is providing potential purchasers with a reason to sit on their hands and new buyer enquiries have now declined for five consecutive months. Across the UK, price growth was strongest in Scotland and the South West, both with a net balance of 37%, and weakest in the North of England and London. Meanwhile in the rental market, tenant demand was steady in November, but landlord instructions declined for the eighth successive month and member' forecasts for rent over the next 12 months now stand at 2%. ‘The Stamp Duty reform could reverse the softer trend in buyer enquiries that has been visible in recent months but a critical issue in terms of how it plays out with prices is whether it also encourages more vendors to consider putting their properties back onto the market,’ said Simon Rubinsohn, RICS chief economist. ‘The expectation from members that transactions could increase by up to 5% over the next year on the back of this measure suggests that there is a belief that supply will indeed respond to the tax change. This is all the more important given that the latest RICS data suggests that the average level of inventory on surveyors' books is close to a historic low,’ he added. According to Jeremy Blackburn, head of policy at RICS, it is no surprise that surveyors are expecting an uplift in the market in response to the long overdue reforms to the stamp duty tax system. ‘Removing the dead zones will reduce the distortion in the market and ensure that those at the top end of the market will now contribute fairly, while those at the bottom will be given a fairer chance to get on the ladder,’ he explained. Continue reading
Bank of England figures show home buying lending has gained ground this year
Overall lending for buying homes in the UK gained much ground in the third quarter of 2014 compared to last year as the residential property market continued its recovery. The latest figures from the Bank of England shows that the proportion of lending for house purchase was 71.8% of total residential loans to individuals, approximately 1.7% higher than in the second quarter of the year. The figures also show that the amount of gross advances for house purchase was 20% higher compared with the third quarter of 2013 at £40.1 billion. However, the proportion of lending to first time buyers decreased by 0.4% to 21.7% after reaching a peak in the second quarter of 2014. But the value of residential loans advanced to first time buyers increased over the quarter to £12.1 billion, the highest quarterly amount since the third quarter of 2007. The proportion of gross advances at a loan to valuation (LTV) of over 90% decreased by 0.3% over the quarter to 4.3% while the proportion of gross advances to borrowers with a single income multiple of more than four times decreased by 1.1% to 10.8% after having increased for five quarters in succession. The proportion of gross advances to borrowers with joint income multiple of more than three times decreased slightly by 0.2% quarter on quarter to 28.6%. The proportion of gross advances that is a combination of an LTV over 90% and loan to income multiple of over 3.5 times for single income borrowers or 2.75 times for joint income borrowers, decreased over the quarter by 0.3% to 3.1%, having increased for the previous three successive quarters. According to David Newnes, director of Your Move and Reeds Rains estate agents, initiatives like Help to Buy and higher LTV lending provided welcome relief for potential first time buyers combatting stagnant interest rates on their savings and underwhelming wage growth in their quest for a deposit. But he warned that the loan to income caps could become a potential sticking point for first time buyers, and layers of mortgage regulation are threatening to further dampen demand for homes. ‘However, the government has extended an outstretched hand to aspiring buyers with last week’s stamp duty reform, which is a welcome gesture for the lower rungs of the housing ladder,’ he added. Continue reading
Major new development announced for London’s Canary Wharf
Plans to create a new waterside community on the eastern edge of Canary Wharf in London with up to 3,610 homes and more than 17,000 jobs have been approved by the Mayor of London. Major new development announced for London’s Canary Wharf Plans to create a new waterside community on the eastern edge of Canary Wharf in London with up to 3,610 homes and more than 17,000 jobs have been approved by the Mayor of London. It is the latest in a series of new developments that Mayor Boris Johnson hopes will help tackle the severe shortage of homes in the capital city, especially affordable homes. The new development, on land formerly known as Wood Wharf, will transform a vast 13.6 hectare site that has been semi derelict and underused for decades. In addition to new housing, including affordable housing options, the scheme will include a variety of business and retail units, hotel, leisure facilities, a new primary school and a doctor's surgery. There will also be up to 35,000 square meters of retail floor space, a community centre and a network of parks and public squares and the centrepiece will be a 57 storey cylindrical residential skyscraper facing the waters of South Dock, designed by Herzog & de Meuron, the Swiss architects behind the Tate Modern and the Bird's Nest Olympic stadium in Beijing. Developer Canary Wharf Group will also be contributing in excess of £60 million towards Crossrail and an additional £27.5 million for other infrastructure needs. This will include over £10 million for local transport improvements, some of which will be used to improve the nearby Preston's Road roundabout. At least 25% of the new homes will be affordable but a review mechanism has been put in place that could see the number of affordable homes rise to 40% and 80% of the affordable homes will be affordable rent and the remainder will be intermediate housing. ‘This vast development will transform a currently derelict brownfield site beyond all comprehension into a thriving new community with thousands of new homes and jobs. This is exactly the kind of scheme that we need to accommodate London's booming population that is set to break through the nine million mark within the next decade,’ said Johnson. According to Sir George Iacobescu, chairman and chief executive officer of Canary Wharf, the new development will reinforce Canary Wharf's position into the future as one of the most exciting and vibrant places to live and work in London. ‘The new phase of Canary Wharf will include up to 3,610 new homes, and 1.9m square feet of office buildings designed to accommodate the fast growing technology media and telecoms sector as well as financial and professional services firms,’ he explained. ‘It will offer high street retail units to complement Canary Wharf's existing retail offer, as well as affordable housing on site. It will also include substantial new green parks and dockside walks, a library, a large GP surgery, a school for 420 children, a community sports hall… Continue reading
