Uk
Gap between property prices in London and rest of UK widens
The gap between London house prices and the rest of the UK has continued to reach new highs with the latest index showing the regional divergence is growing. Overall UK house prices increased by 0.5% in September and annual house price growth increased to 3.8% in September, the data from leading lender the Nationwide shows. But on a quarterly basis London house price growth increased to 10.6% in the third quarter of the year, up from 7.3% in the second quarter of 2015. This compares to an average house price rise in England of 1.8% in the third quarter. There was a mixed picture across the regions. The rate of annual house price growth accelerated in Southern England, particularly in London, but continued to slow in the Midlands and most Northern areas. London was the strongest performing region and annual price growth also accelerated in the neighbouring Outer Metropolitan region from 6.8% to 9.5%. The price of a typical home in London at £443,399 is more than double the UK aggregate and more than three and a half times the price of the typical property in the cheapest UK region which is the North of England. The North West was the weakest performing English region, with prices down 0.6% year on year. House prices continued to recover in Northern Ireland, with annual growth of 6.5% in the third quarter although average prices are still 44% below their pre-crisis peak. Wales saw a 1.9% year on year increase in average prices, a slight improvement compared with recent quarters. Scotland was the weakest performing region for the second quarter in a row, with a 1.3% year on year fall, similar to the 1% annual decline recorded in the second quarter. Price growth in the South exceeded that in the North for the 26th consecutive quarter. Prices in Southern England were up 8% year on year, whilst in Northern England prices rose by just 1%. In cash terms, the gap in average prices between the South and the North of England is at a record high, exceeding £150,000 for the first time, with average prices in the South now twice as high as those in the North. ‘The data in recent months provides some encouragement that the pace of house price increases may be stabilising close to the pace of earnings growth. However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability,’ said Robert Gardner, Nationwide's chief economist. ‘Indeed, in recent months surveyors have reported historically low levels of properties for sale and increased new buyer enquiries. Therefore it is unsurprising that most surveyors expect a pickup in house price growth in the months ahead,’ he pointed out. ‘The slowdown in house price growth since the middle of 2014 has not been confined to, nor has it been driven primarily by, developments in London. The capital has continued to see price growth at or above… Continue reading
UK mortgage market getting over slowdown of new regulation
Mortgage approvals for home buyers in the UK are improving with the latest figures from the Bank of England showing an 8.2% rise in the six months to August 2015. The number of loan approvals for house purchase was 71,030 in August, up from an average of 65,594 over the previous six months while approvals for remortgaging increased by 14.2%. Lending secured on dwellings increased by £3.4 billion in August compared to the average monthly increase of £2.4 billion over the previous six months. The three month annualised and 12 month growth rates were 2.9% and 2.1% respectively. David Whittaker, managing director of Mortgages for Business, pointed out that mortgage approvals as a whole are going from strength to strength but he warned that beneath this surface current, there are also deeper and more complicated flows. ‘There is an ongoing shift to different sorts of mortgage lending, and a booming remortgage market reflects that interest in new products. Even compared to extremely buoyant house purchase approvals, remortgaging has picked up more quickly, reflecting ongoing expectations of higher interest rates on the horizon, as well as a newfound love for the peace of mind of fixed rate deals,’ he said. ‘It isn’t boom times in every quarter though. Buy to let lending accounts for much of the trend to remortgaging specifically, and we are seeing strong interest from experienced landlords looking to take advantage of record low rates, even for fixed rate deals for five years or longer. But there is also a more muted tone to the buy to let industry now. Alongside an acceleration in overall mortgage lending, this could indicate a gradual correction in the proportion of mortgage lending to landlords,’ he added. He also explained that while buy to let lending accelerated through the first half of 2015 to reach nearly 20% of gross lending, it should now be time for that proportion to drop back again. ‘Fresh interest from the Government and Bank of England have not yet changed the fundamentals of the private rented sector or the long term business models of responsible and experienced landlords. But the real momentum may be turning back towards owner occupiers,’ he concluded. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, the mortgage market has moved on past the slowdown caused by regulatory changes, in particular the MMR regulations introduced in April 2014. ‘It is not just first time buyers who are benefiting from these calmer waters. Remortgaging activity has been making considerable headway recently, as existing home owners secure the best possible deals before an interest rate rise. In the purchase market, buoyant demand is being met with a dried up pool of available homes, and this imbalance will propel property prices on throughout the autumn,’ he said. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that August was the third consecutive month on month increase in house purchase loan approvals…. Continue reading
Monthly residential rents in Ireland up 7.1% quarter on quarter, latest index shows
Monthly rents for private sector accommodation across the Ireland increased by 7.1% in the second quarter of this year compared with the same period last year, the latest published data shows. Nationally, rents for houses were 6.4% higher, while apartment rents were 7.6% higher than in the second quarter of 2014, according to the data from the Private Rented Tenancies Board (PRTB) which is regarded as the most accurate and authoritative rent report of its kind on the private accommodation sector in Ireland. Annual growth in the Dublin market was stronger, up by 9.2%. Dublin house rents were up 8.8% and Dublin apartment rents were higher by 9.4%. However, annual growth in rents for the market outside Dublin remains more subdued, recording growth of 5.8% when compared to the second quarter of 2014. There is also a gap in the performance by property type. The rent for houses outside Dublin increased by 5.8%, while apartments outside Dublin experienced an increase of 5.9%, according to the data which is based on actual rents being paid rather than asking or advertised rents. The rent for private sector accommodation across the whole country in was €878, up from €820 in the second quarter of 2014. The rent for apartments nationally was €922 compared to €857 a year earlier and for a house it was €853 compared to €801 a year earlier. In Dublin, the rent was €1,387 for a house and €1,260 for an apartment compare to €1,275 and €1,152 respectively in the second quarter of 2014. This represents a monthly increase in Dublin rent of €112 for a house and €108 for an apartment over the course of the 12 month period. Outside Dublin, the rent was €677, with houses averaging €695 and apartments €660. A year earlier, these figures stood at €640, €656 and €623 respectively. This represents a monthly increase in rent outside of Dublin of €39 for a house and €37 for an apartment in the 12 month period. Looking at the quarter on quarter picture for 2015, nationally the rate of increase in monthly rent levels was 2.9% in the second quarter of this year compared to the first quarter of 2015. This compares to a national quarterly growth rate of 1.3% in the first quarter of 2015. Looking at trends in more detail, monthly rents for houses recorded quarter on quarter growth of 2.4% in the second quarter of the year, while rents for apartments grew by 3% when compared with the first quarter of 2015. The results show quarterly growth in rents outside Dublin of 2%, with rents in Dublin showing stronger growth of 4.2% in the quarter. Rents for houses in Dublin grew by 2.9% compared to the first quarter of 2015, while Dublin apartment rents were higher by 4% in the quarter The rent indices show, for properties outside Dublin, rents in the second quarter of 2015, when compared with the first quarter… Continue reading
