Investment
Number of British homes worth £1 million or more up 14% since beginning of year
The number of home owners in Britain whose property is worth £1 million or more has increased by 75,796 or 14% since January, according to the latest research. This 14% rise over the past year takes the total number of British so called property millionaires to 622,939, and means that 2.2% of all home owners have a property worth £1 million or more, up 1.9% over the past year. Of these million pound home some 82% are situated in London and the South East, a breakdown of the data from property website Zoopla shows. But Wales has the fewest and the number in Scotland have fallen by 4.5%. London, long the nation’s property powerhouse, has once again dominated the property millionaire league, with well over half (61%) of Britain’s million-pound piles located in the capital. In total, 380,337 homes in the city are now above the million-pound threshold, marking a 33,871 – or 10% increase – since the start of the year. Within London the boroughs with the highest number of property millionaires are notoriously expensive areas such as Westminster with 51,607 and Kensington and Chelsea with 44,972 but they have seen the smallest rise in £1 million plus properties of any borough over the past year, up just 0.9% and 0.6% respectively. Meanwhile, the boroughs that experienced the greatest increases of over 55% are within the top 10 lowest average priced boroughs in London including Barking and Dagenham, Newham, Redbridge and Waltham Forest, Outside of London, the East of England and Yorkshire and the Humber saw the largest increases of million pound properties, up 28% and 24% respectively since January. At the other end of the spectrum, Wales has the fewest million pound properties in Britain with only 1,404 in total despite, an 11% rise since January. Scotland was the only country to see a decrease in number of million pound homes in 2015, falling 4.5% to below 9,000 since the start of the year. ‘It's interesting to see that areas such as the East of England and Yorkshire have seen bigger percentage rises in the numbers of property millionaires over the last 12 months compared with the south which typically dominates each year,’ said Lawrence Hall of Zoopla. ‘However the number of properties valued at more than £1 million in the south still outweigh the rest of Britain boosted by wealthy hotspots such as Kensington and Chelsea and Westminster,’ he pointed out. ‘With an improving economy and the ongoing lack of housing supply, this continues to put upward pressure on house prices at all levels of the market and has nudged a whole new raft of properties over the £1 million mark. A price tag that was once the exclusive preserve of stately homes or massive mansions is now an increasingly common label for more modest houses, particularly in London,’ he added. Continue reading
House and rent prices set to soar in the UK, outlook report suggests
House prices in the UK are set to soar by 50% and rental prices by over a quarter by 20025, according to an outlook report from two key real estate organisations. At the same time the number of households renting is set to rise by 9% while home ownership will fall by 7%, says the analysis from the Association of Residential Letting Agents (ARLA) and the National Association of Estate Agents (NAEA). Other predictions for the next decade included in the report are that buying a house will continue to get further out of reach for many and drastic action is needed to fix what it calls ‘a broken housing market’. With the average house price currently around £280,000, the ARLA and NAEA Housing 2025 report, compiled with CEBR, predicts house prices will reach an average price of £419,000. It’s even worse news for those living in London where house prices are expected to nearly double in the next decade, rising from £515,000 to £931,000. For those planning to enter the rental market in the next few years, rents are predicted to increase by 27% from a current UK average of £134 per week to £171 in 2025. Again, those living in London will be worse off as they’ll need to pay 34% extra in rent per week by 2025, an increase from the current average of £234, up to £314. Lower home ownership rates amongst the working age population and the ageing of the baby boom generation will continue to drive a decline in the proportion of UK households that own their own home, the report also suggest. Currently around 62% of the working population owns their own home and that could fall to 55% in the next decade. The report says that a declining home ownership rate will boost demand for rental properties, and drive house prices up. The Housing 2025 report also predicts the proportion of private renters in the UK will increase from 20% of households in 2015, to nearly 29% by 2025. ‘Buying and renting a home is a giant step, and is out of reach for many. Rent costs are already growing at a rate that people are struggling to keep up with, and they’re due to become even less sustainable over the next decade, particularly when the new landlord tax sets in, which will put off many would be landlords from entering the market,’ said David Cox, ARLA managing director. ‘If we’re to see the property market lifted out of its current state, we need to help the rental market from top down as well as bottom up, ensuring landlords are not penalised for their choice of income, and they can in turn give tenants the best possible price and service they deserve,’ he added. According to Mark Hayward, NAEA managing director, ongoing house price inflation, combined with low wage inflation, tighter lending restrictions and… Continue reading
Sales and prices in Canada still rising but market is balanced, says CREA
Home sales in Canada increased by 1.8% month on month in November with the number of new listings also rising, up 3.1% compared with October, the latest index figures shows. Prices also increased, up by 10.2% year on year but this figure is affected by prices in Greater Vancouver and Greater Toronto as when they are excluded the annual price growth is 3.4%. The data from the Canadian Real Estate Association (CREA) also shows that year on year sales were up 10.9% and overall the housing market remains balanced. There was a fairly even split between the number of markets where sales posted a monthly increase and those where sales declined. The national increase was again led by monthly sales gains in the lower mainland of British Columbia and in the Greater Toronto Area. Sales activity was down sharply in the Calgary region compared to what were historically high levels posted prior to the collapse in oil prices while the number of newly listed homes rose 3.1% led by the Lower Mainland, Calgary, Edmonton, Kingston and Ottawa. ‘Recently announced changes to mortgage regulations will likely boost sales activity in the short term, as buyers jump off the fence to beat the changes before they take effect next year,’ said CREA president Pauline Aunger. Meanwhile, CREA chief economist Gregory Klump pointed out that changes to mortgage regulations taking effect in the middle of February next year are aimed at cooling the Greater Vancouver and Greater Toronto housing markets. ‘Minimum down payments will be going up for homes that sell for more than half a million dollars, so larger more expensive housing markets will be affected most. Unfortunately, the regulatory changes will also cause unintended collateral damage to housing markets beyond Toronto and Vancouver, including places that are facing economic headwinds from the collapse in oil prices,’ he explained. The national sales to new listings ratio eased to 57.3% in November compared to 58% in October. A sales to new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively. The ratio was within this range in slightly fewer than half of all local housing markets in November. Of the remainder, more markets recorded a ratio above 60% than fell below 40%. Markets where demand is tight relative to supply are located almost exclusively in British Columbia and Ontario. The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. There were 5.4 months of inventory on a national basis at the end of November 2015, down from the 5.5 months recorded in October and the lowest level in nearly six years. The national figure is being pulled lower by increasing market tightness in British Columbia and Ontario, according to the index. A… Continue reading
