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Average home prices in areas of high employment rise faster, research has found
Average house prices in the 20 top performing employment areas in the UK have risen by 45% over the past decade, more than double national average of 21%, new research has found. Home owners in the local authorities that have seen the largest rises in employment have also seen the average value of properties rise by over £100,000 over the past 10 years, according to the study by the Halifax. The average house price in the 20 local areas recording the largest increases in employment in the decade to June 2014 rose by 45% or £103,785. This was more than double the national average increase in house prices over the period at 21% or £35,456. At the same time, employment in these areas rose by an average of 26% well ahead of the average national increase of 4%. According to Martin Ellis, housing economist at the Halifax, there is a clear relationship between employment patterns and house price performance over the past decade. ‘Top performing areas for employment have generally seen well above average house price gains while the worst performing employment areas have typically recorded much more modest property house price rises. This demonstrates the importance of economic conditions to the health of the local housing market,’ he explained. The research also shows that over the past decade, the top 10 performing house price locations have been evenly split between northern Scotland and central London. Seven of these top 10 areas also feature among the top 25% of local areas in terms of employment growth over the period. Aberdeen and Aberdeenshire both feature in the top 10, with prices in these areas boosted by the strong performance of the oil sector during the past ten years. Tower Hamlets, Hackney and Lambeth also feature in the top 10, with prices in these areas boosted by the wider house price growth in London. Southwark and Lewisham have also recorded significant price gains. The top 10 performing house price locations have significantly outperformed the rest of the country as a whole, with an average house price gain of 89%, more than four times the national average of 21%. Employment in these 10 areas of house price growth has increased by an average of 15%; well above the national average of 4%. At the other end of the spectrum, the 20 areas experiencing the worst employment performance over the past 10 years have typically underperformed the national average in terms of house price gains. On average, these areas have recorded an increase in property values of less than £20,000. The average house price in the 20 local areas recording the smallest increases in employment rate in the decade to June 2014 rose by 13% or £19,698. This was little more than half the national average increase in house prices over the period. Employment in these areas fell by an average of 11%, well below the national average increase of 4%. The bottom 20 employment areas are concentrated in northern England (8) and the… Continue reading
Home value growth rate in key Oz cities continues to moderate
Property values across Australia’s capital cities fell by 0.3% in November compared with the previous months as growth continues to slow, according to the latest index. Home values rose in Sydney by 1%, in Brisbane by 0.4%, in Perth by 0.9% and in Hobart by 0.2% but fell across the remaining capital cities, the data from the CoreLogic RP Home Value Index shows. Research analyst Cameron Kusher said this recent slowdown in the rate of capital growth is further highlighted by the fact that over the three months to November 2014, values rose by just 0.8% across the combined capitals. Over the three months, values increased in Sydney, Brisbane and Perth but fell across all other capital cities. The slowdown in capital growth is further evident when looking at annual growth rates. Although combined capital city home values increased by a healthy 8.5% over the 12 months to November 2014, the annual growth rate is now at its lowest level in the year. The data shows that the rate of annual home value growth across the combined capital cities continued to slow after peaking at 11.5% over the 12 months to April 2014. Excluding Hobart, across each capital city the annual rate of capital growth is now lower than its recent peak. Kusher said this suggests that most cities have now moved past their cyclical peak. ‘Importantly, this has become apparent in the two largest capital cities of Sydney and Melbourne, where annual value growth peaked at 16.7% in April 2014 and at 11.9% in January 2014 respectively,’ he explained. ‘Although Sydney and Melbourne appear to have moved through their peaks, capital growth these two cities have consistently been the main driver of value growth over the past 12 months,’ he added. A breakdown of the figures shows that over the past year, Sydney home values increased by 13.2% and Melbourne home values rose by 8.3%. Sydney has seen much stronger growth over the year than Melbourne. However, Melbourne’s growth remains quite higher than the third strongest performing city for capital growth, Brisbane. Brisbane home values increased by 6% over the past year while Hobart at 5.2% is the only other capital city to record annual value growth in excess of 5%. ‘Market indicators such as auction clearance rates remain quite strong, but also point to slightly weaker overall housing market conditions,’ Kusher said. Auction clearance rates reduced noticeably across the two largest auction markets, Sydney and Melbourne, over recent weeks while clearance rates were typically recorded at around the high 70% and mid 70% mark respectively at the start of Spring. Clearance rates are now sitting at a low 70% in Sydney and mid 60% in Melbourne. The number of new properties listed for sale across the combined capital cities continues to trend higher. Although this occurred throughout the last two months, Kusher pointed out it wasn’t until recently that the total number of property listings also started to trend higher. ‘This may indicate a slower rate of sale and is… Continue reading
Large group of UK first home owners can’t afford to move up the housing ladder
Over four million young home owners in the UK are frustrated middle movers who cannot afford to move up the property ladder, new research reveals. Some 68% of home owners aged 18 to 34 are still in their first property and 63% said that the main barrier is the need for property prices at the lower end of the market to increase so that they can afford a bigger home. The research from Santander Mortgages also shows that 89% have made compromises on their first home such as location or size, at 63% and 55% respectively. Some 47% bought a home with fewer bedrooms that they would have liked. Of the home owners aged 18 to 34 who would like to buy their next home within the coming 24 months some 71% think it is unrealistic that they will be able to do so. Overall 50% of home owners in this age group expected to live in their first property for more than five years, but 59% have already had to do so. ‘There are a lot of frustrated middle movers who made compromises on their first homes and have now been stuck with these for longer than they wanted, as they are finding it difficult to move up the property ladder,’ said Miguel Sard, head of mortgages at Santander. ‘There are a lot of great deals to be had for buyers at the moment, however, both in terms of properties and mortgages, so it’s worth looking around,’ he added. Of those homeowners aged 18 to 34 who would like to purchase a new home in the next two years, the average time they think they will realistically have to wait until they can do so is over three years, the research also found. Whilst the main barrier is the need for property prices to increase, as cited by 63% of those surveyed, 28% blame a lack of suitable properties on the market and 51% say they need to do work on their current home to increase its value before putting it on the market while 34% say they are waiting for property prices to fall further. Others see wider economic issues as barriers to purchasing a new home, with 53% citing personal fears about the state of the economy as an obstacle, while 38% are concerned about the stability of their own or their partner’s job. Upfront costs are also a big issue, with 58% saying they need to save for a bigger deposit. Continue reading
