Investment
Home owner confidence in UK housing market up 4% year on year
UK home owners’ confidence home owners in the property market has risen 4% year on year with expectations that prices will rise by more than 7% in the coming six months, new research shows. Some 92% are anticipating prices in their area to rise within the next six months, a steady increase from a year ago when only 88% were confident, according to the latest Zoopla Housing Market Sentiment Survey. The research also found that almost half of home owners, 41%, were planning to improve their property. In addition, 9% of respondents said they plan to refinance their house, a 3% increase from the end of 2014, as mortgage rates remain at historical lows. The proportion of respondents planning to sell property has risen to 19% having bottomed out at 15% last year as more home owners look to capitalise on rising prices. The East of England has the highest percentage of optimistic home owners, with 97% expecting the price of property in their area to rise over the next six months. Home owners in London and the South East are almost as confident, with 96% of respondents across those regions expecting price appreciation. Despite home owner confidence around house prices, sentiment around the accessibility of funding is more volatile. While the percentage of respondents declaring it harder to get a mortgage now than three months ago has almost halved from 49% to 26% since the Mortgage Market Review (MMR) was introduced in April 2014, the fact that more than a quarter of homeowners have noticed a recent increase in difficulty suggests that it isn’t all plain sailing, the report says. It also suggests that with ongoing speculation around when the Bank of England will raise interest rates and lenders maintaining a watching brief, it may well be that competitive products aren’t quite as freely available as they were in the earlier part of the summer and borrowers previously spoilt for choice are noticing the change. ‘As the end of the year approaches, homeowners are the most optimistic they have been in some time. With the brightening national economic outlook this bodes well for the property market in 2016,’ said Lawrence Hall of Zoopla. ‘While traditionally the estate agency market tends to take a break over Christmas in terms of completions and viewings, home owner confidence shows no sign of slowing down and many individuals use the end of the year as a landmark to evaluate how much their property has appreciated over the calendar year,’ he explained. ‘The only slight chink in the armour is the fact that a sizeable number of people still feel securing a mortgage is becoming more difficult, despite the fact that the MMR was implemented with consumers’ best interests at heart,’ he pointed out. ‘It could also be an indication that the supply of… Continue reading
Global property prices up 4.7% year on year led by Hong Kong, latest data shows
Global house prices have increased by a median of 4.7% year on year led by Hong Kong, Turkey, Ireland, Sweden and Australia, a new international report shows. Overall prices have increased in 21 of the 26 countries tracked by the Economist House Price Index but growth does vary from nation to nation. The growth is topped by Hong Kong with annual price growth of 20.8%, followed by Turkey with a rise of 18,8%, Ireland up 13.4%, Sweden up 10.3% and Australia up 7.5%. At the bottom end of the index the country with the biggest annual drop in property prices is Greece with a fall of 5.9%, Singapore down 3.7%, Italy down 3.3%, China down 2.4% and France down 2.3%. All other countries has seen annual price growth according to the index which measures national affordability by comparing prices to the long run average of their relationship with rents and income. In Hong Kong prices have now doubled in five years despite seven separate round of cooling measures being introduced but with little effect. The latest, in March this year, reduced the average loan to value ratio for new mortgages from 64% to just 52%. But the index report suggests that in practice it is China’s recent stock market crash is likely to be a bigger dampener on demand as mainland investors put off new purchases. Meanwhile, China’s own housing market, it is one of only five in the index where prices are falling, but the report points out that prices are falling at a slower rate than before. The government has been trying to boost the market over the past 10 months, cutting interest rates by 1.4% and relaxing rules on down payments. Prices are now rising on a monthly basis in many cities including Beijing and Shanghai. The report points out that in the United States annual growth of 4.7% shows the real estate market is well into recovery. Some cities are seeing strong growth such as San Francisco with prices up by 10% in the year to July and up by 75% since 2009. Other countries’ housing markets are already well above fair value and the report reckons that houses are more than 30% overvalued in six markets, including Canada and Australia, with the UK the most supply constrained of this group where demand is outstripping the number of properties coming to the market. It points out that in the UK although prices have risen by 35% since their trough in January 2009, house building is failing to respond. Just 140,000 homes were completed in the year to March 2014, some 25% below the long term norm. Continue reading
Sales of UK property priced over a million fell in first half of 2015
The number of property sales worth at least a million pounds in the UK has fallen in the first half of 2015, down by 11% compared to the same period in 2014. This is in stark contrast to the 46% increase seen in the first half of 2014 and is the first decline in sales since the first half of 2012 when the number of property transactions in this market segment fell by 7% over the corresponding period in 2011. However, since the first half of 2005 million pound home sales have grown by 264%, the data from the latest research report from Lloyds Bank also shows. It adds that whereas last year the top end of the market outperformed the rest, the decline in million pound home sales this year has tracked the rest of the market with sales of properties under £1 million also falling by 11%. Despite falling sales nationally, some areas continue to buck the trend. Virginia Water, Cobham and Beaconsfield are the most expensive towns, with an average house price of over £1 million. This is the first time the average property price has hit £1 million outside of London. Virginia Water, in the historic Borough of Runnymede, where the Magna Carta was signed 800 years ago, is Britain's most expensive town with an average house price of £1,168,992. To live amongst the celebrities of Cobham in Surrey will require paying, on average, £1,042,552 for a home, making it the second most expensive town. In third place is Beaconsfield where the average property price is £1,003,367. ‘The number of homes sold for over £1 million has fallen sharply over the past year, with a pronounced slowdown in the prime and central London market. This may be the effect of the new Stamp Duty rates introduced last December and uncertainty generated by the election in May,’ said Sarah Deaves, private banking director at Lloyds Bank. However, the regional picture is much more mixed and we’re seeing the emergence of towns where the average price is at least £1 million. Whilst there are several London neighbourhoods where prices are already at this elevated level, outside of the capital this is a first,’ she added. Overall there is a mixed regional picture, as sales fall in London but rise in Scotland. Sales of million pound homes in London fell by 15%, the largest decline in the capital since the first half of 2009 when transactions fell by 43% during the lowest point of the housing downturn. In the South East sales in this sector fell by 9% in the first half of 2015 compared to a year earlier. However, in Scotland the sale of million pound homes has more than doubled with a rise of 158%. The only other regions to have seen an increase in sales were Yorkshire and the Humber with growth of 10% and the East of England up 8%. In Wales transactions rose by 29%, albeit… Continue reading
