Uk
New property listings fall in UK with Brexit affecting the market
Some 68% of UK towns and cities saw new property listings fall in June, with supply down 13% in London alone, according to the latest property supply index which suggests Brexit is to blame for the decline. Lichfield and Winchester registered the biggest drop in supply in June, with new property listings down 37% and 36.5% respectively, the index from online estate agents HouseSimple shows. It also reveals that four of the top 10 biggest fallers in June were in the South of England and although the majority of areas saw supply levels fall in June, there were a few areas that bucked the trend. The biggest risers in June were the Scottish towns of Inverness and Stirling, where new property listings were up 30.5% and 18.5% respectively. Out of the top 10 risers, half the towns were in the South of England. In London new properties listed across the capital fell by 12.8%, following a fall of 2.4% in May. Wandsworth and Waltham Forest saw the biggest drop in supply, both down 34.9%. This follows a big rise in supply in both these boroughs in May, with new property listings up 9.5% in Wandsworth and 31% in Waltham Forest. Only five out of 32 London boroughs saw an increase in supply last month, with new property listings in Barnet up 11.4% in June and Barking and Dagenham up 8.8% leading the way. ‘Fear and uncertainty over the Brexit vote definitely had an impact on buyer and seller confidence in June, with many sellers holding off putting their properties on the market until the result was known,’ said Alex Gosling, chief executive officer of HouseSimple. ‘Now we know, and although the decision has come as a bit of a shock, at least a degree of uncertainty has been taken out of the equation. The property market can now roll up its sleeves and get on with it. Nothing has fundamentally changed overnight and people still need to buy and sell homes whatever the market conditions,’ he explained. ‘We still have a supply shortage, and this may well counter any fallout from Brexit. There were concerns about the London market faltering, but demand is still strong in the capital and the weak pound should attract foreign investors looking to pick up bargains, particularly at the top end of the market,’ he added. ‘For the rest of the year, we may see a small dip in prices as there are choppy seas ahead, but it’s certainly not the end of the world levels predicted by some doom-mongers. Supply should hopefully edge up, as fears around the impact of Brexit dissipate, and sellers feel more confident about market conditions and the wider global economy,’ he concluded. Continue reading
Home lending in the UK increased in May, latest CML data shows
Home owners in the UK borrowed £9.4 billion for house purchase, up 15% month on month and 8% year on year in May, according to the latest data. They took out 53,800 loans, up 13% on April and 5% on May 2015, according to the Council of Mortgage Lenders which said that some equilibrium is coming back into the home lending market. A breakdown of the figures show that first time buyers borrowed £4.3 billion, up 10% on April and 23% on May last year. This equated to 27,500 loans, up 9% month on month and 16% year on year. Home movers borrowed £5.1 billion, up 19% on April but down 2% compared to a year ago. This represented 26,300 loans, up 18% month on month but down 5% on May 2015. The data also shows that remortgage activity totalled £5.2 billion, down 15% on April but up 30% compared to a year ago. This came to 30,900 loans, down 12% month on month but up 25% compared to a year ago. Landlords borrowed £2.6 billion, up 4% month on month but down 4% year on year. This came to 16,600 loans in total, up 3% compared to April but down 8% compared to May 2015. ‘There was a sense of the market regaining some equilibrium in May, following the stamp duty driven spike in March and the subsequent dip in April,’ said Paul Smee, director general of the CML. ‘For the second month running, first time buyers borrowed more than home movers, the first time in 20 years that this has been the case. Buy to let continues at lower levels as expected, after the change to stamp duty,’ he pointed out. However, he also pointed out that Brexit, and its likely effect on the market, is a question to which the answer will not immediately be forthcoming. ‘Lenders will continue to be open for business as usual, but lending volumes may be affected by uncertain consumer sentiment,’ he added. The CML report also shows that affordability metrics for first time buyers have remained relatively stable. The typical loan size increased to £131,000 from £130,000 in April, while the household income of borrowers also increasing slightly from £39,700 in April to £40,000 in May, which meant the income multiple went up from 3.46 to 3.51. Home movers showed a similar trend with the average amount borrowed increasing to £166,000 from £163,000 in April, and the average household income of a home mover also increasing to £53,300 from £52,500. This meant the income multiple went down from 3.26 to 3.25 month on month. Remortgage lending saw a month on month decrease in May but a year on year increase by both volume and value, reaching levels similar to those in the first three months of the year. Gross buy to let lending continues to be lower than usual as expected after the surge in activity to beat the stamp duty changes on second properties ahead… Continue reading
Steady growth for UK commercial property returns and rental values in June
Commercial property returns and rental values saw steady growth in the UK in June but capital value growth slowed, according to the latest index report. Overall, rents across the UK grew by 0.2% in June, matching the trend for the year to date despite uncertainty in the build up to the EU referendum, according to the latest CBRE Monthly Index. But capital values grew by 0.1% over the month, a drop on 0.2% in May although the 0.6% total returns for the month matched returns seen almost every month of the year to date. In the first half of 2016 as a whole, rental value growth hit 1.1%, trailing the 1.7% seen in the same period of 2015. Capital values grew by 0.6% for the first six months of 2016, some way shy of the 4.1% in the first half of 2015. Total returns were also lower, from 6.7% in the first half of 2015, to 3% in the first half of 2016. The reports says that this lower return partly reflects an increase in stamp duty land tax in March. The retail sector experienced rental growth of 0.1% in June, above trend for the year so far, but capital values, which had been flat in April and May, fell by 0.2%. Total returns in the sector were 0.3%, compared with 0.5% the month before. The industrial sector experienced a strong monthly performance, with rents increasing by 0.4%, equal to its best monthly performance in 2016. The office sector saw rents grow by 0.3% in June, an improvement on the 0.2% of both April and May and in line with trend so far this year, while capital value growth slowed slightly from 0.4% to 0.3%. London offices mirrored this overall trend. Rental values rose by 0.3%, faster than the 0.2% seen in May, and capital value growth slowed from 0.6% in May to 0.5% in June, producing total returns in June of 0.8%. The London office market saw some outliers. Rental values in West End and Midtown offices were flat, down from 0.1% growth in May, while capital value growth also cooled to 0.2% from 0.5% in May. Offices in the City of London also experienced muted growth in the month, with rental growth of 0.2% and capital value growth of 0.1%, down from 0.6% and 0.3% respectively in May. ‘Overall, rents and capital values continued to grow in June, with the industrial sector in particular showing strong growth in a month of significant uncertainty. Clearly, capital value growth has slowed, but occupier demand has remained high across the country, pushing up All Property rental growth as fast as any other month this year,’ said Miles Gibson, head of research at CBRE UK. ‘These figures reflect CBRE valuations carried out in the days immediately following the referendum vote, but July’s monthly index will give a much clearer… Continue reading
