Investment
UK asking prices reach new record of £294,834
The price of property coming to the market in the UK this month has hit a new national record, up 0.9% to £294,834, the latest index figures shows. Demand is being fuelled by cheap borrowing yet supply is limited by some home owners’ reluctance to sell, according to the monthly index report from Rightmove. The average £2,550 asking price rise is the largest amount seen in the month of September since 2002, driven by price jump in family home sectors of 1.2% while owners of first time buyer properties have seen prices stall with a fall of 1.1%. Prices at the top end are rising faster with the research showing that the top 15 highest priced counties have all seen values rise this month by double the national average at 1.8%. These counties are all in the higher-priced southern regions which have all risen this month, driven by supply shortages with fewer home owners selling. The lower priced northern regions have seen prices fall, reducing would be sellers’ ability to raise adequate funds to move and exacerbating supply shortages while overall new seller numbers are down on the same period last year in both the north and the south with a drop of 4.9% and 7.1% respectively. ‘Prices are at an all-time high, yet borrowing is historically cheap and positive sentiment is aided by the ongoing postponement of rate rises from these six-year lows. Demand from those who can afford to buy remains high, and suitable supply remains tight, with the number of properties coming to market down 6% on the same period in 2014,’ said Miles Shipside, Rightmove director and housing market analyst. ‘The result is the biggest monthly price rise seen at this time of year for 13 years. High demand, lack of suitable supply, and increasingly stretched affordability are leading to some extremes in market forces in different sectors and parts of the country,’ he explained. ‘One of the effects is that those who own property that is in most demand, either by type or location, are seeing their values continue to rise. Their properties are rich in features and benefits that others want to buy, and as a consequence they are getting proportionately richer than either owners of less desirable homes or those who are not on the housing ladder at all,’ he pointed out. It is the typical family home market sectors that have risen most this month. Second stepper and top of the ladder properties, covering all property types with three or more bedrooms, went up by an average of 1.2%. In contrast first time buyer type properties with two bedrooms or fewer fell by 1.1%. ‘This year’s price surge in the first time buyer sector has stalled this month, and has now been overtaken by second stepper homes both in terms of monthly and annual increases. It looks like some of those buying typical first time buyer properties are now struggling to afford prices in this bracket… Continue reading
UK lettings agents report fewer rent rises and new homes on market also falls
The number of letting agents reporting rent increases for tenants has fallen month on month while the number of homes for rent is also down, according to the latest UK rental sector report. The analysis from the Association of Residential Letting Agents (ARLA) shows that for the first time this year, the number of ARLA agents seeing rent hikes for tenants has decreased from the previous month. The report reveals only three in 10, some 33%, of agents reported an increase in August, the lowest since April this year and a drop from 37% last month. Tenants in the South West however are not benefiting from this. Some 42% of agents in the region are continuing to see rent prices hiked, up four percentage points from last month. This is compared to only 12% of agents in the North West who have witnessed a rent increase. In Wales, tenants are worse off too. The number of landlords putting rents up for their tenants has increased threefold from July. This month 36% of letting agents in Wales saw increases, up 25% from July when just 11% agents reported rent hikes. The data in the report also shows that after a spike in the number of houses available to rent last month, supply has fallen back down to levels seen in June 2015. ARLA letting agents managed an average 178 properties per branch in August, compared to 189 in July. The report found that the number of house hunters in the rental sector increased marginally in August. Letting agents reported an average 36 prospective tenants registered per branch, compared to 35 in July. The number of properties available to rent in London continued to fall in August, pushing demand for housing even harder in the capital and putting further pressure on house hunters. With 110 properties registered per branch, compared to 117 in July, the task of finding a property in the capital’s rental sector is becoming increasingly difficult. ‘Our findings this month are good news for the majority of tenants, as less are experiencing rent hikes. However, a third of agents are still seeing landlords pushing rents up, which reflects the sorry state of affairs in the market,’ said David Cox, ARLA managing director. ‘With increasing pressure on the dwindling supply of housing, and the number of house hunters growing, rent increases are unfortunately very common as one in three tenants are experiencing,’ he pointed out. ‘Despite the fact they have fallen this month, it’s likely they will go back up again over the next few months,’ he added. Continue reading
Average property prices in Canada set to rise by 2% in 2015, says latest forecast
The national average property price in Canada is forecast to increase by 2% to $442,400 in 2016, according to the latest forecast from the Canadian Real Estate Association. But there is likely to be regional variation. For example, increases are forecast to be slightly larger but less than 3% in British Columbia, Saskatchewan, Manitoba, Ontario, New Brunswick, and Prince Edward Island, with gains in some provinces reflecting an expected rebound from levels in 2015. Price growth in 2016 is forecast to be strongest in Ontario with growth of 2.8% due to an ongoing supply shortage of listings for low rise homes in and around the Greater Toronto Area, the CREA forecast report says. ‘Alberta and Quebec are forecast to see average home price growth of about 1.7% and 0.8% respectively in 2016, while Nova Scotia and Newfoundland and Labrador are forecast to edge slightly lower. The report explains that the national average price has run higher than expected since CREA’s last forecast, in part reflecting a jump in the proportion of higher priced home sales this spring and early summer in B.C.’s Lower Mainland, in and around the Greater Toronto Area (GTA) and Calgary. This trend now appears to be receding, causing the national average price to follow suit. However, recent trends in the Home Price Index, which is not affected by changes in the mix of sales activity the way that average price is, suggest that prices are still accelerating across much of B.C., in and around the GTA and Montreal. B.C. continues to see some of the strongest economic growth in the country, coupled with strong demographics. Home sales there have been drawing down inventories and boosting prices across the province. In Alberta, home sales have gone from setting records in 2014 to running at or below their 10 year average, as uncertainty surrounding the outlook for oil prices and employment continues to side line potential home buyers. In Ontario, the ongoing shortage of single family homes for sale in and around the GTA continues to drive very strong price gains. Record levels of activity in the province would likely be higher were it not for a shortage of low rise homes coming onto the market. In Saskatchewan, Manitoba, Quebec, and most of Eastern Canada, supply remains elevated. Home prices outside of B.C. and Ontario are forecast to keep pace with or lag inflation, as elevated supplies are drawn down by sales and return to better balance. The forecast for national sales in 2015 has been revised slightly higher, reflecting stronger than anticipated activity in B.C. and Ontario. National sales are now projected to rise by 3.3% to 495,800 units in 2015, marking the second strongest year on record for home sales in Canada. Across the country, British Columbia is projected to post the largest annual increase in activity in 2015 with growth of 18.1. Alberta, Saskatchewan, and Nova Scotia are expected to post the largest annual sales declines 21.6%, 12% and 12.1%… Continue reading
