Property
UK house prices up 2% in first month of 2015, latest index sho
House prices in the UK increased by 2% between December and January, the biggest rise for January since 2009, according to the latest property index figures. The data from the Halifax also shows that in the three months from November to January prices were 1.9% higher than in the previous three months and the quarterly rate of change increased for the first time since July 2014. But it remains below the rates recorded between June and September last year and overall the Halifax expects a moderation in house price growth during 2015. It predicts that house prices nationally will increase by 3% to 5% compared with 8% in 2014. Prices in the three months to January were 8.5% higher than in the same three months a year earlier. This was an increase from 7.8% in December. This measure of annual house price growth was at its highest since October 2014 when it was 8.8%, but remains significantly below the peak of 10.2% in July 2014. It points out that sales increased by 15% in 2014 but despite this annual rise, sales peaked in the first quarter before steadily declining during the course of the year with sales in the final quarter 5% lower than in the first quarter and 1% lower than in the third quarter. ‘This bounce-back in house price growth in January coincides with reports of the first rise in mortgage approvals for six months in December. These improvements may indicate that the recent declines in mortgage rates, the reform of stamp duty and the first increases in real earnings for several years are providing a modest boost to the market,’ said Martin Ellis, Halifax housing economist. ‘It is, however, too early to draw any firm conclusions. The monthly figures in January can be particularly volatile due to the lower volumes of activity at this time of year and there have been unusually large rises on occasion in the past, such as in 2007 when it was 2.3% and 2.4% in 2009,’ he explained. ‘Housing demand should continue to be supported by an expanding economy, continuing low mortgage rates and a boost to households’ spending power resulting from lower consumer price inflation and reduced fuel bills. Nonetheless, we expect the overall downward trend in house price growth seen since last summer to continue over the coming months. Nationally, house prices are predicted to increase in a range of 3 to 5% in 2015 compared with 8% last year,’ he added. According to Rob Weaver, director of investments at property crowdfunding platform Property Partner, the figures confirm that the property has still got some punch. ‘A strong January and the first quarterly rise for six months could suggest another buoyant year but I suspect we are more likely to see a period of gentle and sustained growth,’ he said. ‘It's hard to see how the property market could under-perform in 2015. Undershoot 2014, yes, but under-perform, no. Economic conditions at home… Continue reading
Farmland values in England expected to be steady in 2015
Farmland values in England increased by 2.5% over the last six months of 2014 and are expected to rise by 3% in 2015, a new report shows. But there is considerable regional price variations. Farmland in the South and East of England achieved values of around £14,000 per care whilst in the South West it was £9,000 per acre, according to the data from Carter Jonas. Location, type and quality remained key factors in achieving prime values together with the strength of the local market, the firm points out. The report also shows that the supply of land remained increasingly restricted, with a total of almost 120,000 acres being openly marketed across the UK in 2014, a 15% decrease from its previous year's level. As a result of the tightening supply of openly marketed land, the volume of off market sales increased significantly during 2014, accounting for a third of all Carter Jonas transactions in 2014 as clients increasingly considered seeking out private deals in order to gain exposure within the sector. This trend is expected to continue and will help to sustain the continued capital value growth forecast during 2015. Overall, demand became increasingly localised across the farmland market during 2014, with lot sizes over 1,000 acres proving most attractive. The diversity of demand is shown by the fact that farmers accounted for the highest proportion of transactions completed by Carter Jonas during 2014 at 28%, closely followed by lifestyle at 24% and investors at 20%. ‘The halo effect surrounding London remained significant and is expected to build momentum during 2015 as the Capital continues to thrive in performance and remuneration levels are set to outpace inflation. The halo effect is particularly prevalent in the country house market with a maximum of 50 acres, although holdings with larger parcels of land continue to benefit, albeit to a lesser extent,’ said Andrew Fallows, partner in Carter Jonas' national farms and estates team. ‘The inevitability of increasing interest rates, currently predicted to occur in the second half of 2015, is also expected to impact the general tone of the land market and our forecasts predict that average land values will increase 3% during 2015,’ he added. Continue reading
Prime central London transactions slowing but prices remain stable
The introduction of a new stamp duty propertytax structure in December, the forthcoming general election and the spectre of a mansion tax have created a level of uncertainty within the UK’s prime property market, it is claimed. New research from prime central London agency W.A.Ellis, a JLL company, shows a sharp reduction in prime central London transaction levels. The firm compared sales transactions within Knightsbridge, Chelsea, Belgravia and Kensington post code areas and found that transactions in January 2015 fell by 34% compared to a year ago. This reduction is most sharply felt within the house sector, with only nine sales occurring in January 2015, contrasting with 25 in January 2014, a reduction of 64% and the firm has seen a large number of houses being withdrawn from the market as discretionary sellers adopt a ‘wait and see’ more cautionary approach until after the election. The research also shows that while the transaction levels have dropped year on year, the average rate per foot of all the houses sold across the postcodes has remained stable at around £1,800 per foot. ‘Comparing year on year transactions within the same month only provides a snapshot, but the overriding sentiment at the upper end of the market is undoubtedly one of caution until the political path becomes clearer,’ said Richard Barber, director at W.A.Ellis. ‘At the lower end, however, we predict an increase in activity from the over 55s, releasing deposit monies from pensions to fund either buy to lets or investments for their children and we expect this to have a strong upward effect on the market between £200,000 and £1 million,’ he explained. He also explained that whilst the Mortgage Market Review (MMR) has had a curbing effect on the amounts that first time buyers can borrow, the so called bank of Mum and Dad is likely to subsidise the shortfall in mortgage funds, particularly as the market in equities and gilts is looking unpredictable. The firm’s research also shows that the prime central London lettings market saw a flourish of activity in the first week of January, followed by a steady stream of enquiries, viewings, and subsequent new tenancies. The firm forecasts that central London rents will rise 3% over the course of 2015. ‘January saw activity across the entire breadth of the market, with well-presented one and two bedroom properties letting with relative ease. Substantial houses gained much deserved attention, too, from families who have, no doubt, been hibernating over the Christmas period,’ said Lucy Morton, director and head of agency. She pointed out that demand for new build property, particularly in W2's prized Merchant Square development, is most definitely on the up, and the firm is seeing tenants’ expectations on quality of finish and furnishing increase considerably. ‘Stock levels remain high as many would be vendors with pre-election nerves opt to list their properties on the rental… Continue reading
