London
UK housing supply crisis deepens as new stock falls to post economic downturn low
The total stock of property for sale in the UK has fallen to a new post economic crisis low with 45% fewer properties for sale than in November 2007, according to the latest index report. It also shows that average annual asking price growth in England and Wales increased further to 7.3%, driven by lack of supply with the shortage affecting all regions but particularly London, the South East and the East of England. Consequently, prices in these regions continue to rise at an alarming rate, well ahead of the national average. Over the last 12 months, asking prices in London, the East and South East of England have risen by 12.5%, 9.8% and 9.4% respectively. Meanwhile, the number of properties coming on to the market in the same regions is down by 15%, 13% and 10% respectively. However it is not a uniform picture, according to the asking price index from Home.co.uk. Prices have slid in the North East and Yorkshire during the last month. Asking prices were down 0.1% month on month in Yorkshire and Humberside and down 0.5% in the North East where prices are also stagnant compared to a year ago. Indeed, as a whole prices in the northern regions and Wales continue to stagnate. Annualised price changes for the North East, North West and Yorkshire of just 0.0%, 1.2% and 1.9% respectively indicate that demand levels remain depressed relative to the South. Welsh property has fared a little better with home prices rising by 2.7% over the last year, but still a long way behind the mix-adjusted average price rise for England and Wales of 7.3%. Overall, the current mix-adjusted average asking price for England and Wales is now 25.8% higher than it was in November 2010. Further upward pressure on this headline figure will come from London, the East and South East of England over the next year. North of the border, Scottish home prices are rising more quickly, up 4.7% over the last year and 6.4% since November 2010. Sellers there are obviously patient, as the typical time on market is 114 days, 16 days longer than the figure for England and Wales. The Aberdeen property market has been adversely affected by plunging oil and gas prices, and properties on the market there have been piling up. Meanwhile, the Edinburgh market is experiencing a boom, with prices driven up 13% over the last year and supply falling away. Further south, the northern English regions show relatively poor home price growth. Of those, the North East property market has suffered the most over the last five years. Prices are falling in many towns in the region, such as Billingham, mainly due to the downturn in the petrochemical industries. Crime and joblessness continue to adversely affect many of the larger urban areas. However, pockets of significant growth do exist, such as prosperous market towns like Yarm. The South East continues to show massive price growth and… Continue reading
Sales of affordable homes in London fall substantially, new data shows
Sales of affordable homes in London more than halved in the first eight months of 2015 compared to the same period last year, according to a new analysis. The lowest value segment of the market, homes under £250,000, saw a 51% decline in sales, the steepest of any price point across London, the report from Cushman & Wakefield also shows. The data shows that just 10,449 homes in this band were sold in the first eight months of this year compared to 21,337 in the same period in 2014 as the supply of homes coming to market below £250,000 dries up. Total sales of London residential properties fell from 79,226 to 58,322 with volumes in the first eight months declining across the board. A range of factors have contributed to the decline including mortgage availability, the General Election and changes to Stamp Duty which have made buying property over £1 million more expensive. However, the contrast in the rates of decline between price bands is stark. Sales of homes over £250,000 declined by an average of 17%, far less than the 51% drop off below the quarter of a million mark. ‘While Stamp Duty’s impact on sales is undeniable, the rate of decline for homes below £250,000 is far more severe than above the much talked about million pound threshold. Even sales of London’s most expensive homes, above £10 million, where Stamp Duty costs are highest haven’t dropped off to the same extent,’ said Candice Matthews, a director in Cushman & Wakefield’s London residential team. ‘The biggest problem at the value end of the market in London is lack of supply and our analysis is a clear indictment of London’s increasing unaffordability. Rising prices have steadily eroded the number of homes coming to market for less than £250,000. Londoners with this budget are instead being locked into renting where they often face much higher monthly outgoings as a result,’ she added. Since December 2014, stamp duty has been applied like income tax: 0% up to £125,000 of the purchase price, at 2% between £125,000 and £250,000, at 5% over £250,000 to £925,000, at 10% over £925,000 to £1.5 million and at 12% for everything above. David Ramsdale, research analyst at Cushman & Wakefield, believes that the Government is likely to look at revising the tax over the next 12 months, particularly once the Stamp Duty revenue figures for the financial year are released next summer. ‘We believe the greatest focus needs to be on homes below £250,000. One thing that would help affordability in London would be to adjust the Starter Homes Initiative. This helps first time buyers under 40 years old get on the property ladder by making homes available at 80% of the market value up to a limit of £450,000 in the capital,’ he explained. ‘The transaction figures suggest this should be lowered to the national figure of £250,000 in order to have a significant impact,’ he added. Continue reading
House prices up for third month in a row across whole of UK
House prices have risen across all parts of the UK for the third consecutive month in October whilst stocks continue to fall, the latest residential market survey shows. The residential report from the Royal Institution of Chartered Surveyors (RICS) says that prices are expected to rise by 4.5% per annum over the next five years, a cumulative increase of around 25%. It also says that new sales instructions extend their streak of uninterrupted decline stretching back to February but although sales growth has paused, expectations remain a little more positive. In October some 49% more chartered surveyors saw house prices rise across the UK, compared to 44% more in September. As prices rise in all areas of the UK, East Anglia has consistently seen the fastest rises over the last three months and 91% more chartered surveyors reported seeing a rise rather than fall in prices in October. In contrast, 25% more chartered surveyors saw prices rise in London over the last three months, with only 5% more expecting a rise in prices in the capital over the next three months, the lowest reading across the UK over this time period. However the 12 month view for the capital is still relatively strong. Contributing to the rise in prices across the country, demand from potential buyers grew across the UK in October with 12% more respondents seeing a rise in new buyer enquiries. The report also shows that demand continues to considerably outpace supply and the number of new instructions has decreased for the ninth month in succession, with 10% more chartered surveyors reporting a fall. The supply of new stock to the UK market has been in decline since the middle of 2014, with the number of new instructions only increasing in one of these months. Despite the lack of new stock to the market, sales activity is relatively healthy and following a small pick-up in agreed sales in September, activity was little changed this month across the UK. This chimes with HMRC transactions data, which continues to see the number of sales rising consistently over the year. In the UK lettings market, demand is also continuing to outpace supply in the three months to October. This has been the trend nationally for some time, with the growth in demand outstripping that of supply since 2009. Unsurprisingly, rental expectations remain strong and respondents continue to expect rents to rise over the year ahead. Rental growth is anticipated to accelerate to an average of just under 5% per year over the coming five years. ‘It is hard to get away from the issue of supply when it comes to the current state of the housing market. The legacy of the drop in new build following the onset of the global financial crisis is now really hitting home, with both the sales and letting markets continuing to show demand outstripping supply on a month by month basis,’ said Simon Rubinsohn, RICS chief… Continue reading
