Uk
UK households believe that the rate of house price growth has slowed
Households across the UK perceive that the value of their home rose in April, but it was a slight decline compared to the previous month. It indicates that households perceive the rate of house price growth has slowed marginally, according to the House Price Sentiment Index (HPSI) from Knight Frank and Markit Economics. ‘Slightly weaker house price sentiment follows a period of healthy market activity between January and March which was in part promoted by purchasers trying to complete purchases ahead of the April introduction of the extra 3% stamp duty on additional homes,’ said Gráinne Gilmore, head of UK residential research at Knight Frank. ‘Activity across the market may now become more muted, and in addition, the debate around the EU Referendum may convince some buyers to adopt a wait and see approach, although the UK’s position in the European Union will not affect one of the key fundamentals in the market, an undersupply of new homes being built and existing homes for sale when compared to demand,’ she explained. The future HPSI, which measures what households think will happen to the value of their property over the next year, also slipped back in April compared to the previous month. Gilmore pointed out that while still indicating that households across the UK expect the value of their home to rise over the next 12 months, this is the lowest reading recorded by the index so far this year. Sentiment on future house price growth was lower in nine of the eleven regions covered by the index month on month, with the biggest fall in sentiment occurring in the East of England. Tim Moore, senior economist at Markit, believes that after a strong start to the year, UK property market conditions appear slightly more subdued in April, especially in relation to households’ expectations for price growth. ‘While perceptions of current price growth are still firmer than at any time in 2015, expectations for the next 12 months moderated in April and were among the lowest recorded over the past three years,’ he said. ‘This divergence between relatively brisk current price momentum and softer expectations ahead in part reflects heightened uncertainty about the near term economic outlook. Moreover, the latest survey highlights another brake on the number of UK households intending to purchase a property over the next two years, with this index down appreciably from its peak in February 2015,’ he added. The details of the index shows that some 5% of UK households said they planned to buy a property in the next 12 months, down from 5.5% in December. On a slightly longer term basis, the proportion of households across the UK planning to buy a property within the next two years was 10.8%, the lowest proportion since the index began in April 2014. The survey suggests that demand for property from households in London will be amongst the strongest across the country within this time, with 15.6% of households there indicating their intention… Continue reading
North West of England worse hit by negative equity values in UK
Hundreds of thousands of home owners in the UK who bought property in 2007 are still likely to be stuck in negative equity despite the current strong growth in the residential market. Almost 1.5 million property transactions were completed in 2007 when property prices reached peak levels, just before the financial markets imploded in 2008 and according to research from online estate agent HouseSimple, average property prices 53% of towns and cities are still below average prices in 2007. While average London prices have risen by 56% since 2007, that is not the case across large parts of the country, particularly in the North of England where 17 of the 20 towns and cities worst hit by negative equity are located. The research, which looked at 75 major towns and cities in England and Wales, also shows that it is the North West that has been worst hit by post-recession negative equity with 40% of the top 20 negative equity towns and cities in the region. The worst affected towns are Blackpool and Middlesbrough, where house prices are still almost 30% lower than pre-crash highs. Along with Blackpool, Blackburn and Liverpool are both in the top five worst affected towns and cities, with average house prices still 25% and 23% lower respectively than before the crash. Yorkshire and the Humber has also been hit hard, with a quarter of towns in the top 20 list in that region. Average prices in Middlesbrough are still 28% below pre-2008 levels, while in Bradford and Hull, house prices are 20% and 19% lower than 2007 averages. House price recovery in the South has been much stronger than the north. As you might expect, London’s house prices have more than recovered, and average prices today are almost £200,000 higher than 2007 levels. Property prices in Winchester also seem to be recession proof, up 44% to £447,046, compared to average 2007 prices. Meanwhile, average prices in the commuter town of Stevenage are 39% higher than pre-recession values. Sale and Stockport in the North West, where house prices now average £252,203 and £206,368 respectively at 25% and 22% more than 2007, buck the trend in the region. They are the only towns outside the South of England in the top 20 towns and cities where house prices have more than recovered to pre-recession levels. ‘London home owners have watched as their properties have risen in value substantially since 2008 but, thousands of people around the country have had to put their lives on hold, unable to move because they are trapped in negative equity,’ said HouseSimple chief executive officer Alex Gosling. ‘Unfortunately, the North of England has been slower to recover losses suffered during and after 2008. And anyone wanting to relocate for work or family reasons faces a less than appealing choice, either making a loss on the sale of their property or staying put and waiting until the price of their house at least recovers to… Continue reading
Average rent for a two bed home in London set to surpass £2,000 a month
Average monthly rents for two bedroom homes are expected to reach £2,000 by the late summer of this year, according to new research. It currently stands at £1,867 per calendar month, up 2% already since the beginning of the year, according to the London Rental Market Report from estate agents Portico. Given that tenancies which begin in September are typically 11% higher than tenancies that begin in December, Portico is predicting that two bedroom rents will reach £2,008 per calendar month by September this year. And with two people sharing the cost of a two bedroom home, that is £1,004 per calendar month each, this shared rent figure will use 46% of the average London monthly net salary. The report shows that Ealing has seen the largest increase in rent at 6.9%, taking the rent for a two bedroom home to £1,825 per calendar month, followed by Richmond-upon-Thames at £1,934 for two bedrooms per calendar month, a rise of 6%, and Lambeth at £2,051, a rise of 5.8%. However, average rents have fallen for two bedroom homes across seven London boroughs, including Westminster and Kensington and Chelsea where they are down by 5.7% and 1.1% respectively. Bromley has recorded the greatest decline in monthly rents for all properties with a reduction of 6.3% over the first quarter of this year, followed by Hillingdon with a fall of 4.4% and Kingston-upon-Thames down 4.1%. ‘The majority of London boroughs are seeing rent increases anywhere from 1% to almost 7% so for landlords who may be feeling under particular pressure given recent government announcements, this may provide some welcome news,’ said Robert Nichols, Portico managing director. ‘But our latest report also shows some significant rent drops. Bromley is down over 6% with Kingston and Hillingdon also experiencing 4% falls. All in all, these declines won't prevent the average two bed rent tipping over the £2,000 mark later this year,’ he added. A breakdown of the figures show that the largest increase in rent for all home types was in Hammersmith and Fulham along with Lambeth with a rise of 4.7%, followed by Ealing at 4.6%, Westminster at 4.3% and Kensington and Chelsea at 4.2%. For two bedroom homes the largest rent increase was in Ealing at 6.9%, followed by Richmond-upon-Thames at 6%, Lambeth at 5.8%, Lewisham at 5.2% and Wandsworth at 5.1%. The largest decrease in rents for all home types was in Bromley with a fall of 6.3%, while rents were down by 4.4% in Hillingdon, by 4.1% in Kingston-upon-Thames, by 4% in Haringey and by 3.7% in Enfield. For two bedroom homes the largest fall in rents was in Westminster with a decline of 5.7%, followed by Harrow which fell 3%, Bromley down by 2.6%, Redbridge by 1.3% and Enfield by 1.3%. Continue reading
