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Number of people moving home in UK falls in first half of 2015
The number of home movers in the UK in the first six months of 2015 was 9% lower than in the same period in 2014, new research has found. Despite this decline, the number of movers in the first half of 2015 was 32% higher than in the same period in 2009 at the depth of the housing market recession, according to the latest Lloyds Bank home movers review. It explains that the rise in house prices over the past few years has boosted home owners’ equity in their current homes making it easier for them to fund a deposit towards the purchase of their next property. Notwithstanding the improvement since 2009, the number of home movers in the first half of this year was less than half the total in the first six months of 2007 when it was 327,600. The research also shows that the percentage decline in the number of home movers between the first halves of 2014 and 2015 was closely in line with the 10% fall in first time buyers. First time buyer numbers have, however, risen significantly more quickly than home movers over the last few years. As a result, home movers have declined as a proportion of all new mortgage financed home purchasers from 72% in 2004 to 54% in 2015. ‘There was a modest decline in the number of home movers in the first half of the year compared with 2014, which was in line with the general softening in housing market activity,’ said Andrew Mason, Lloyds Bank mortgages director. ‘Whilst the number of home movers has risen significantly since 2009, it remains well below previous levels and has recovered less strongly than first time buyer numbers. This is likely to partly reflect the high costs associated with moving home, as well as highlighting the difficulties that homeowners can face in finding somewhere suitable to move to due to the shortage of properties available for sale,’ he added. The figures show that the average price paid by a home mover has grown by 25% over the past five years from £208,654 in 2010 to £261,524 in 2015, an increase of £52,869, equivalent to a monthly rise of £881. Home mover property prices have increased by 6%over the past year. The average deposit put down by a home mover in 2015 was £87,954, some 8% higher than in 2014 or £81,549. This equates to 34% of the average price paid by home movers of £261,524. Regionally, home movers in London put down the largest average deposit at £175,273 or 36% of the average property value of £492,882. This is more than four times the average deposit put down by home movers in Northern Ireland where it was £43,625 and the lowest. Nationally, the recent changes to the Stamp Duty system have saved the average home mover £4,769, reducing the tax bill for someone buying the average priced home mover property of £261,524 from £7,845 to… Continue reading
Investment in Irish office property market sees record performance
Total returns from investment property in Ireland hit 6.3% in the second quarter of 2015, rising above the 4.3% returned in the first quarter of the year, new data shows. Offices continued to lead the market, returning 7.4% in the last quarter, and 37.7% year on year compared with 33.0% in 2014, another record performance figure for the office sector, according to the figures from the IPD/SCSI quarterly property index. Following a slight dip in the previous quarter, the higher returns for Irish offices stemmed mainly from a strong occupier market, with rental value growth at 6.1% in the second quarter far higher than for the other main sectors. The index report also says that rental growth is now firmly established as the key driver of office returns, taking over from the re-pricing that drove the office market recovery in its early stages, when investor confidence began to return. The 12 month return for Irish commercial property of 33.7% to the end of June 2015 was more than double that for the UK over the same period which was 16.7% according to the IPD UK monthly property index. ‘The index shows that it has once again been a very strong quarter for Irish office investments. That said, we have also seen an improvement in the industrial sector, with total returns rising 250 basis points over the course of the second quarter of 2015,’ said Colm Lauder, MSCI senior associate. ‘The prime retail sector recorded a significant pickup in rental performance during the second quarter, with market rents climbing by 4.4% on Grafton Street as confidence returns to the retail trade. Values on Ireland’s leading high street have grown by 49% in the last 24 months, although this still leaves values 62% off the 2007 peak,’ he explained. ‘Investment pricing on Grafton Street showed an equivalent yield of 4.5% at the end of June, a long way off the 2.6% level achieved during the boom years,’ he added. According to Pauline Daly, of the Society of Chartered Surveyors Ireland (SCSI) said that the increase in returns in the second quarter reflects strong activity levels in the market across all subsectors. ‘An interesting trend has been the change in transaction type in the second quarter from the large portfolio sales in the first quarter to a larger number of individual asset sales in the second quarter,’ she explained. ‘We are also seeing more investment spread to the regions, particularly in Munster, which is good news from a competitiveness perspective and a wider pool of investors involved in the market which is likely to ensure liquidity and continued growth in investment volumes for the rest of the year,’ she added. Continue reading
Survey suggests UK tenants concerned about rent rises due to change of tax regime
Tenants in the UK are concerned about rent rises resulting from the recent decision by the Chancellor of the Exchequer to scrap mortgage tax relief for private sector residential landlords. New research shows that some 38% of tenants are feeling uncertain as to how the cuts will affect them and over 50% are calling for greater rent control measures to be introduced. Indeed 35% of tenants say that they would move to a different property in the event of a rent increase, according to the research from comparison website Makeitcheaper. A breakdown of the survey findings show that just 20% of tenants would stay in their current housing, one in 10 said they would be forced to seek council housing and 17% would be more motivated to buy their own property. These results show that landlords may run a high risk of losing tenants by increasing rent, around 80%, as many would be simply unable to afford a price hike. There are certain rules around rent price increases that landlords must adhere to. For example, landlords cannot raise prices in a fixed term tenancy prior to the end date, without the tenant's agreement. But, even with these precedents in place, there's a good chance that tensions between landlord and tenant could grow in the event of price rises. However, the latest landlord research by buy to let lender Paragon Mortgages has revealed that 75% of landlords are confident their tenants will not get into more difficulty in the next 12 months as rental arrears will remain stable. The lender’s PRS Trends Survey results for the second quarter showed a 4% increase in those landlords who felt tenant rental arrears would remain stable, the third successive improvement. The proportion of landlords reporting an expected increase remained low and unchanged from the previous quarter at 8% whilst those landlords expecting a decline in arrears was 6%. The survey also revealed that 17% of landlords are planning to purchase additional rental properties over the summer quarter. There was little movement in the most popular property types landlords are looking to buy, with terraced properties and semi-detached houses topping the list at 38%, followed by 35% looking to buy apartments. ‘Landlords continue to experience strong tenant demand and are keen to add to their portfolios. The positive signals being picked up elsewhere around the economy also seem to have flowed through to the PRS with landlords experiencing low arrears and low, stable voids,’ said John Heron, director of Paragon Mortgages. Continue reading
