Uk
Prime London homes continue to feel stamp duty effect
Prime London house prices grew marginally over the summer months as the market continues its adjustment to the higher stamp duty charges introduced in December 2014, the latest index shows. This means that average values are back to levels seen a year ago, according to the Savills prime London index. Overall average prices across all prime London’s housing markets rose by 0.7% in the three months to the end of September, while the prime central London average fell slightly, by 0.4%. The data also shows that year on year prime central prices are down 4.6% while the whole of the London prime market saw no change. But prices are still up considerably over five years by 28% and 35.8% respectively. However, Savills says, these averages mask variations in price growth, which now relate as much to the different value bands as to location. Over the past year, price changes have broadly reflected stamp duty increases at different price points and therefore growth has been concentrated in the sub £2 million market. Homes in the £500,000 to £1 million range, which are subject to lower stamp duty charges, have risen by 3% year on year, and in the £1 million to £2 million range by a marginal 0.9%. By contrast, those over £2 million have fallen by an average of 2.6%. ‘The increased transactional costs over £1 million have undoubtedly made buyers more cautious, offsetting any post-election euphoria, particularly as the stamp duty change came when parts of the market were beginning to look fully priced after five years of steady growth,’ said Lucian Cook, head of residential research at property adviser, Savills. ‘For all but the very best in class properties, many buyers are expecting a discount on last year’s prices at least equivalent to the additional tax. By contrast, stamp duty changes have benefitted properties in lower tiers of the prime market, which have performed more strongly,’ he explained. ‘The prime London market now looks fully taxed and buyers are slower to commit, which is likely to continue to constrain the market in the short term, however the medium term fundamentals of demand for prime property in the UK capital remain positive. This has been reflected in a busy September in the new build market, where best in class is recognised,’ he added. Continue reading
Number of tenants seriously behind with rent reaches two year high in UK
The number of tenants seriously behind on rent has risen to the highest level in the UK for two years in the second quarter of 2015, according to the latest tracker report. There are now 74,000 tenants owing more than two months’ rent which means 5,000 more households are in significant arrears than a year ago, or an annual increase of 7.2% since the second quarter of 2014, when this figure previously stood at 69,000 across the UK. On a quarterly basis, the number of cases of severe arrears has risen by 4.4% or 3,100 households, since standing at 70,900 in the first quarter of the year, the report from estate agency chains Your Move and Reeds Rains, part of LSL Property Services, also shows. However, the report points out that the recent worsening in the number of tenants in serious difficulties remains relatively mild by historical comparison. Compared to the worst peak of serious rent arrears, seen in the third quarter of 2012, when 116,600 households owed more than two months in late rent, this has moderated significantly. The report also points out that the chance of a given tenant falling seriously behind on rents is still extremely low. As a proportion of all tenancies, those in severe arrears represent just 1.4% of all tenants, stable compared to the previous quarter and the same as was seen a year before in the second quarter of 2015. This compares to 2.9% of tenants in the first quarter of 2008, twice the current proportion, even before the worst of the financial crisis and recession. ‘Across the UK most households are beginning to earn more, and it is this majority of tenants who are able to bid up the price of rented homes in the face of constricted supply. Rents are accelerating in response, rising by more than 5% over the last year according to our separate research,’ said Adrian Gill, director of estate agents Your Move and Reeds Rains. But he warned that behind this headline buoyancy, there is a less positive story. ‘For a small minority there has been no transformational boost to household earnings, and it is this more marginal population of tenants who are feeling the squeeze of rising rents most sharply,’ he explained. ‘Severe arrears are still much lower than their previous peaks but a lack of further progress highlights the underlying and fundamental supply shortage. Tenants need more available properties on the market, and landlords should be encouraged to invest further in order to keep up with growing demand,’ he added. The data also shows that eviction rates have improved. In the second quarter of the year a total of 27,910 tenants faced a court order for eviction, on a seasonally adjusted basis. This represents a 3.9% improvement since the first quarter of 2015 and is 5.9% lower on an annual basis compared… Continue reading
US pending home sales fall slightly but still well above a year ago
Pending home sales in the United States retreated in August but remained at a healthy level of activity and have now risen year on year for 12 consecutive months, the latest real estate data shows. A modest increase in the West was offset by declines in all other regions but demand continues to outpace supply, according to the index report from the National Association of Realtors. The Pending Home Sales Index, a forward looking indicator based on contract signings, decreased 1.4% to 109.4 in August from 110.9 in July but is still 6.1% above August 2014 when it was 103.1. Lawrence Yun, NAR chief economist, said that even with the modest decline in contract signings, demand continues to outpace housing supply and elevate price growth in numerous markets. ‘Pending sales have levelled off since the middle of summer, with buyers being bounded by rising prices and few available and affordable properties within their budget. Even with existing housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago,’ he explained. According to Yun, sales in the coming months should be able to roughly maintain their current pace. However, he warns that there are looming speed bumps that have the potential to impact housing. ‘The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being. Furthermore, adapting to the changes being implemented next month in the mortgage closing process could delay some sales,’ Yun added. The national median existing home price is expected to increase 5.8% in 2015 to $220,300. Yun forecasts total existing home sales this year to increase 7% to around 5.28 million, about 25% below the prior peak set in 2005 when they were 7.08 million. A breakdown of the figures shows that the PHSI in the Northeast fell 5.6% to 93.3 in August, but is still 8.9% above a year ago. In the Midwest the index inched down 0.4% to 107.4 in August and is now 6.5% above August 2014. Pending home sales in the South declined 2.2% to an index of 121.5 in August but are still 4.1% above last August. The index in the West rose 1.8% in August to 104.9 and is now 7.6% above a year ago. Continue reading
