Uk
UK property prices up 0.2% month on month in July and annual growth slowed
Residential property prices in the UK increased by just 0.2% month on month in July and by 5.5% year on year to £293,318, according to the latest index data to be published. But there has been a gradual decline in annual growth since February when it was running at 8.9%, and excluding London and the South East year on year growth was 4.8%, the figures from the LSL Property Services/Acadata index shows. The index also shows that quarter on quarter sales were down 20% year on year compared with the second quarter of 2015 but the index report says it is too early to say if Brexit is impacting the market. The East of England was the top performing region with annual growth of 9.3%, up from 9.1% the previous month. This was followed by annual price growth of 7.2% in the South East and 6% in Greater London. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, while the vote to leave has definitely resulted in uncertainty, there’s near unanimity among commentators that the impact is yet to show in the figures and for now, we’re left with mixed signals. He explained that on the one hand, house price inflation on an annual basis continues to slow year on year but last month saw the market continue its fight back following price falls in March to May with July recording a modest gain after June’s 0.5% rise, with average prices up 0.2% or £700. However, overall this means prices remain £3,386 below their February peak, but £15,422 above their July 2015 levels. The index report suggests that the fall in sales is less to do with the referendum vote than the surge in activity to beat the 3% stamp duty surcharge introduced in April on second homes and buy to let properties. It points out that the spike in sales in March was followed by a massive decline the following month, from which the market has since been recovering. It also points out that transaction volumes have grown every month since April and are now well above February levels. Moreover, the exceptional sales level in March 2016 more than compensates for the decline since. ‘Overall, for the first six months of each year, we estimate transactions in 2016 at some 4% higher than in 2015. Sales volumes continued to increase in July, but again this still tells us little about the referendum vote, since transactions recorded at the Land Registry for the month mostly relate to offers made by purchasers in June, or even earlier,’ Gill explained. He added that the April stamp duty change may also account for much of the apparent slowdown in prices as prices increased above trend from January to March after the announcement of the change in the Autumn Statement last year. Meanwhile, from April 2016, with the new tax in place, a reduction in the number of higher-valued properties… Continue reading
UK asking prices slowed in August but no more than usual for the summer
The price of property coming onto the market in the UK in August fell by 1.2% but as the summer is often a quieter time it is not necessarily all due to Brexit, according to the latest asking price report. Indeed, the monthly decline is in line with the 1.2% average drop over the last six years at this seasonally subdued time of year and the Rightmove report points out that it is usual for sellers in the summer holiday season to price more cheaply. The monthly fall took the average asking price to £304,222 and prices are still up by 4.1% year in year, the data also shows. A breakdown of the figures shows that while first time buyers are paying 0.5% less month on month at an average of £188,237, it is the top end of the market that has seen asking prices fall the most, down 2.9% month on month to £538,755. The report also points out that larger homes are taking longest time to sell while the number of days to sell increased the most in London and South East in the last two months. It suggests that 2016 on course to be a year of two halves with activity skewed in the first half of year with the buy to let surge boosting property transactions to 12% higher than 2015 but the outcome of the second half of 2016 hangs on the strength of the traditional autumn market rebound How different the two halves will be depends on the strength of the traditional market rebound this autumn, especially at the upper end of the market and within the London commuter belt, which currently appear to be the most subdued, according to Miles Shipside, Rightmove director and housing market analyst. ‘Many prospective buyers take a summer break from home hunting, and those who come to market at this quieter time of year tend to price more aggressively. This summer is also affected by both Brexit uncertainty and the aftermath of the buy to let rush in March to beat the stamp duty deadline,’ he said. ‘The average fall in new seller asking prices at this time of year has been 1.2% over the last six years, so this month’s fall is exactly in line with the long term average. The largest price falls at this time of year were 2% and 1.3% in 2014 and 2010, with the smallest fall being 0.8% after the general election in 2015,’ he pointed out. Shipside explained that the sector that would benefit most from an autumn pick-up is made up of larger homes with four bedrooms or more. They are taking the longest time to sell, with an average of 74 days from being advertised on Rightmove to being marked as sold subject to contract by estate agents. This ‘top of the ladder’ sector is also suffering the largest drop in new seller asking prices this month, with a fall of 2.9%…. Continue reading
Most UK landlords are part time with just one property
Most landlords in the UK still consider renting out a property to be a part time activity and the majority own just one property and manage their portfolio as private individuals, new research show. However, there is an apparent trend towards larger portfolios even although rents make up less than half of a landlord’s total income, according to the report from the Council of Mortgage Lenders (CML). But the research, carried out with BDRC and the London School of Economics, does show there is evidence that rent is increasingly becoming a significant income stream for part time landlords. In 2016 some 87% of landlords sampled manage their portfolio as an individual or as a couple, roughly unchanged from the 89% reported in 2010. The proportion operating as a company or other group comprises 14%, roughly on par with the 11% reported in 2010. Likewise, the vast majority of respondents in 2010 and 2016, 92% and 95% respectively, do not consider letting to be their main business or occupation. While most landlords still own just one property, there is an apparent trend towards larger portfolios. Between 2010 and 2016, the proportion of respondents who manage only one property fell from 78% to 63%. At the same time, the share managing two to four properties rose from 17% to 30%. The report suggests that this could be due to the difference in the samples of the two surveys. However, the sharp contrast between the 2010 and 2016 data is likely to reflect to some degree an underlying increase in average portfolio size. Such a finding would be consistent with CML data on the number of loans for buy to let house purchases, which has increased by about 19% a year since 2010. Generally, rental receipts make up less than half of a landlord’s total income. However, evidence suggests that rent is increasingly becoming a significant income stream. For about 90% of landlords, rental income is less than half of their total income, virtually unchanged since the 2010 survey. However, the share receiving no rent, typically due to a property being unoccupied, has dropped substantially from 21% to 5% over the past six years. At the same time, the share receiving up to one quarter of their income from rent has risen by about seven percentage points, and the share claiming between one quarter to one half of the income from rent has grown by 10 percentage points. The report suggests that this apparent shift may be attributable to differences in sample sizes. However, if it reflects an underlying trend, this would be consistent with the apparent increase in portfolio sizes, as it is easy to see how owning a larger portfolio would allow a landlord to draw a bigger chunk of their income from rent. Overall the report says that while it looks like the typical landlord is still an individual running a rental business on the side, there appears to have been a gradual expansion of… Continue reading
