Uk
Residential rental prices up 2.5% in UK in 2015
Private rental prices paid by tenants in Great Britain rose by 2.5% in the 12 months to December 2015, according to the latest index from the Office of National Statistics. Private rental prices grew by 2.7% in England, 0.7% in Wales and 0.9% in Scotland with rental prices increasing the most in London at 3.9%. When London is excluded the national year on year growth is 1.8%. Some of the more detailed ONS figures show that since January 2011 England rental prices have increased more than those of Wales and Scotland. The annual rate of change for Wales continues to be below that of England and the Great Britain average. Rental growth in Scotland has slowed to 0.9% in the year to December 2015, from 2.1% in the year for the months of January through to June 2015. The index series for England starts in 2005. Private rental prices in England show three distinct periods: rental price increases from January 2006 until October 2009, rental price decreases from December 2009 to October 2010, and increasing rental prices from November 2010 onwards. Of these three periods, 2008 showed the largest rental price increases. When London is excluded, England shows a similar pattern but with slower rental price increases from around January 2011. Since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year, with December 2015 rental prices being 2.7% higher than December 2014 rental prices. Excluding London, England showed an increase of 1.9% for the same period. In the 12 months to December 2015, private rental prices increased in each of the nine English regions with the largest in London at 3.9% followed by the East at 2.8% and the South East also at 2.8%. Rental price increases have been stronger in London than the rest of England since November 2010. The rental market continued to show signs of strength overall in the fourth quarter of 2015 as prices increased by 2.5% in the year to December 2015 but this was a slowdown of 0.2% in the annual growth rate compared with September 2015. The ONS report says that this slowdown is partly driven by Scotland, where prices increased 0.9% in the year to December 2015, a fall of 0.7% compared with the annual growth rate in September 2015. It also points out that conditions in the housing market as a whole may have been supporting rental price growth. Data from the ONS house price index for November 2015 shows that house price growth has typically been stronger than rent price growth for a number of years. The Bank of England’s Agents’ Summary of Business Conditions for the fourth quarter of 2015 reported that private rental demand continued to grow steadily in the three months to December. Data from RICS’ Residential Market Survey for November 2015 confirmed this growth, noting that national tenant demand continued to grow in the three months to November 2015. The strength… Continue reading
UK first time buyer market saw seasonal slowdown at end of 2015
First time buyer activity in the UK saw a seasonal slowdown at the end of 2015 despite price for this type of buyer falling, the latest property index shows. First time buyer numbers fell in December by 1,300 on a monthly basis, down 4.7%, as the traditional slowdown hit the UK property market but over the course of 2015, the longer term outlook remains healthy for first time buyers, with numbers up by 1.1% between December 2014 and December 2015. The data from the Your Move and Reed Rains first time buyer tracker report also shows that first time buyers find cheaper homes with smaller deposits and secure more affordable mortgages. Also, the average mortgage rate remains at a rock bottom level, with lenders buoyed by recent news that the Bank of England does not intend to raise interest rates for the foreseeable future. According to Adrian Gill, director of estate agents Your Move and Reeds Rains, first time buyers have been buoyed by a positive economic climate and a range of Government incentives such as the reduction of Stamp Duty on lower priced properties, designed to lessen at least the immediate costs of home ownership. ‘They increasingly came into their stride as 2015 has progressed. Some of the credit for this revival in activity should also go to first time buyers themselves. Over the course of the year they have toughened up their act and sought to get the best property they can at the best price and it’s a skill that will serve this group well as they head into 2016,’ said Gill. The cost of an average first time buyer home fell on a monthly basis in December from £153,275 to £152,470, a drop of 0.5%. However, over the course of the year, the average purchase price rose by 3.8%, representing an increase of £5,518 between December 2014 and December 2015. In addition, December saw a dip in the costs of getting on the property ladder. The average deposit put down by a first time buyer in December fell by 0.5% month on month to £25,292. This is indicative of a broader trend of deposit costs falling over the course of the year, with the average cost of a deposit dropping by £2,151 or 7.8% between December 2014 and December 2015. The decline in the burden of the average deposit on a first time buyer is reflected by the fact the proportion of an average first-time buyer’s income that is eaten up by the deposit fell from 64.6% in November to 64.3% in December. Between December 2014 and December 2015 the proportion fell by 6.8%. First time buyers in December also benefitted from a reduction in the regular burden placed on their finances by mortgage repayments. In November 19.3% of a first time buyer’s average income was consumed by monthly mortgage payments, by December this had fallen to 19%, the second lowest figure on record. Meanwhile, the average loan to… Continue reading
US pending homes sales more or less unchanged in December
Pending home sales in the United States were mostly unchanged in December, but inched forward slightly, fuelled by a large increase in the Northeast that outpaced declines in the other three major regions. The latest index from the National Association of Realtors increase by just 0.1% month on month and is now 4.2% above December 2014, the 16th month in a row that it has risen. ‘Warmer than average weather and more favourable inventory conditions compared to other parts of the country encouraged more households in the North east to make the decision to buy last month,’ said Lawrence Yun, NAR chief economist. ‘Overall, while sustained job creation is spurring more activity compared to a year ago, the ability to find available homes in affordable price ranges is difficult for buyers in many job creating areas. With home building still grossly inadequate, steady price appreciation and tight supply conditions aren't going away any time soon,’ he added. According to Yun, although healthy labour market conditions will persuade more households to buy, it's possible overall demand could be somewhat curtailed in coming months. The stock market's sizeable losses since the start of the year and the effect slowing manufacturing activity is having in some areas, especially in the energy sector, could cause some to hold off on buying. ‘The silver lining from the market turmoil in recent weeks is the fact that mortgage rates have slightly declined. Buyers looking to close on a home before the spring buying season begins may be rewarded with a mortgage rate at or below 4%,’ Yun explained. Existing homes sales this year are forecast to be around 5.34 million, an increase of 1.5% from 2015. The national median existing home price for all of this year is expected to increase between 4% and 5%, down from the 6.8% in 2015. Rents, which have far outpaced wages in recent years, are expected to slightly slow to 3.3% growth in 2016 from 3.6% a year ago. Multifamily housing starts are expected to reach 420,000 units this year, the highest level since 1987. A breakdown of the data shows that the data increased 6.1% in the North east in December, and is now 15.3% above a year ago. In the Midwest the index decreased 1.1% to 103.6 in December, but is still 3.6% above December 2014. Pending home sales in the South declined 0.5% to an index of 119.3 in December but are 1% higher than last December. The index in the West decreased 2.1% in December to 97.5, but remains 3.4% above a year ago. Continue reading
