Uk
Home renovations sector in Australia seeing a slow recovery, says new report
The home renovations sector in Australia is being held up and frustrated by the hesitant pace of the current real estate market, according to a new report. The comprehensive review of the country’s renovations market from the Housing Industry Association shows that the current recovery has been slow since the slump in activity between 2011 and 2013. Indeed, the hesitant pace of the current recovery is mainly due to patchy consumer sentiment and challenging labour market conditions in several states, according to HIA senior economist Shane Garrett. . ‘Dwelling price growth is also pretty unspectacular in a number of important markets,’ he said, adding that there is considerable geographic variation. The report says that demand for renovations in New South Wales has been greatly boosted by the strength of prices. Many Sydney households that had been planning on moving house find that it is now much more affordable to undertake a major renovations job instead. ‘Australia’s home renovations market is a major strand of consumer spending and will be worth just under $30 billion this year. Its labour intensive nature means that it has substantially positive knock-on effects for employment,’ said Garrett. ‘Over the coming years, the modest recovery will continue. This will be spurred on by very favourable interest rate settings as well as improvements in economic growth and the labour market over the medium term. However, the recent tightening of mortgage credit conditions casts an unwelcome shadow,’ he explained. The Spring 2015 edition of the HIA’s Renovations Roundup projects that renovations activity will increase by 3.9% this year with a slight 0.4% increase forecast for 2016. The HIA is forecasting that activity will grow by 0. Continue reading
House prices up 0.1% in the UK in November, latest growth index shows
House prices across the UK increased by 0.1% in November but softened slightly year on year with annual growth of 3.7%, down from 3.9% in October. The latest data from lender the Nationwide shows it was the weakest performance in monthly price growth since June 2015. The latest increase takes the average house price to £196,807. But Nationwide chief economist Robert Gardner pointed out that growth rates have fluctuated throughout the year. Annual growth has been in a fairly narrow range between 3% and 4% over the past six months, which he said is broadly consistent with earnings growth over the longer term. ‘While this bodes well for a sustainable increase in housing market activity in the period ahead, much will depend on whether building activity can keep pace with increasing demand. Surveyors have continued to report a dearth of properties on the market in recent months, with the number of available homes reportedly at the lowest level since the late 1970s,’ said Gardner. ‘Therefore it is positive that policymakers are focusing on the need to increase home building, with the Chancellor announcing a range of measures aimed at boosting housing supply in his Autumn Statement,’ he explained. ‘The current rate of construction activity is well below the projected rate of household formation. Only 135,000 new homes were built in England in the 12 months to September 2015, well below the 220,000 new households that are projected to form each year over the next decade,’ he added. Neal Hudson, associate director at Savills research, described the figures as showing a relatively strong end to the year. ‘Previous trends suggest that prices tend to weaken in December and so the 4.1% total growth seen in the year to date may be closer to 4% by the end of the year. These price rises are in a large part due to increased competition in the mortgage market which have led to record low mortgage rates and record high lending multiples,’ he added. According to Alex Gosling, chief executive officer of online estate agents HouseSimple, the main issue in today’s market is that demand continues to massively outstripping supply. ‘We have an immediate supply crisis in the UK and it's hard to see how home builders can build houses fast enough to free up the demand supply bottleneck,’ he said. ‘We need measures to stimulate the housing market and it can't be just about building more homes to meet demand in the future. Sellers need to be encouraged back to the market. But home owners are finding it harder to climb up the property ladder, which means people are renovating and extending rather than moving,’ he pointed out. ‘High prices remain a barrier for first time buyers but also second and third steppers and price growth is unlikely to cool in the coming months, especially with more investors expected to come to the market to buy before the new buy to let stamp duty rates come into… Continue reading
Residential property prices in London up over 10% year on year
House prices in England and Wales increased by 0.4% month on month and 5.6% year on year in October, taking the average value to £186,350, according to the latest data, but much higher in London. On a regional basis London experienced the greatest increase in its average property value over the last 12 months with a rise of 10.6%, well above other parts of the country, the figures from the Land Registry show. The North East saw the greatest monthly growth with an increase of 1.9% while Yorkshire and the Humber saw the lowest annual price growth at 1.4% and the most significant monthly price fall with a decline of 1.8%. Sales and repossessions during August 2015, the most up to date figures available, show that the number of completed house sales in England and Wales decreased by 15% to 74,596 compared with 87,895 in August 2014. Repossessions in England and Wales decreased by 54% to 376 compared with 826 in August 2014 and the region with the greatest fall in the number of repossession sales was Yorkshire and the Humber. The data also shows that the number of properties sold in England and Wales for over £1 million decreased by 13% to 1,280 from 1,473 a year earlier. Adrian Gill, director of Reeds Rains and Your Move estate agents, pointed out that the average price of a home in London is now above half a million and already rising in value much faster than elsewhere across the country. ‘In addition, the reverberations from last year’s stamp duty surprise are still echoing around the market, and million pound property sales have suffered significantly,’ he added. Regarding future price increases, he also pointed out that only time will tell whether the extra 3% stamp duty levy on buy to let and second home buyers will affect the market. ‘In the meantime, there will be a scramble for second home purchases before the April deadline, which will only amp up the existing competition between landlords and first time buyers in the housing market,’ he said. ‘While intending to help more households get that crucial foothold onto the ladder, the Chancellor may find himself responsible for pushing up prices in the short term, and pricing out many prospective homeowners, despite the other initiatives in place. Any hit against the supply of rental homes will hurt tenants’ finances, and delay their realisations of home ownership,’ Gill added. Rob Weaver, director of investments at property crowdfunding platform Property Partner, believes that although the prime central London market seems to be faltering partially due to affordability and last year’s stamp duty changes, the outer boroughs are powering ahead, driven by regeneration in places like Thamesmead and Newham, and of course, the Crossrail effect. ‘This is clear evidence that the UK housing market is incredibly diverse across the regions, highlighting a north-south divide with Yorkshire and The Humber seeing a relatively tiny annual increase. However, the issue of supply still… Continue reading
