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UK asking prices see strong rise in last month, latest index shows
Confidence has returned to the UK property market after the election and is so high that asking prices in London increased by more than £10,000 in the last month. The latest Home.co.uk index from shows that average prices rose in all English regions and Wales for a fourth consecutive month and momentum is on the rise even in the formerly stagnant North East property market with a 13% improvement in the average marketing time. The report also points out that the supply of property for sale remains behind buyer demand in all regions except Greater London, where marketing times have increased considerably over the last year. Asking prices increased 2% over the last month in the London region and by 1.1% overall in England and Wales during the last month. The growth takes the average annual home price appreciation for England and Wales to 5.9% and further price rises are predicted this year. The Prime central London market may have been freed from the political uncertainty regarding a mansion tax and non-dom legislation but has yet to regain the momentum lost over the last 18 months. Pricing remains stagnant and flats in locations such as Belgravia are typically spending around 50% more time on the market than they were in June 2014. Time on market data for the rest of the UK shows that the northern regional markets, Scotland and Wales have all increased their momentum over the last 12 months. However, the southern regions such as the South East, East of England and South West are indicating slight increases in marketing times as higher prices have lessened demand. ‘Whilst 2015 is looking like a much better year for the northern regions, Scotland and Wales, hopes that the market in London and surrounding southern regions might slow to a more sustainable pace have been swept aside by further relentless price rises,’ said Doug Shephard, Home.co.uk director. ‘This will create significant cause for concern at the Bank of England. For the time being the key economic drivers of ultra low interest rates and low supply of property for sale remain. Buy-to-let landlords and first-time buyers alike are able to borrow very large sums to purchase property at very low rates of interest. And this situation looks set to drive prices higher in the near term,’ he added. Continue reading
Surge of new home sales in the US due to demand outpacing supply
New home sales in the United States surged in April and they are selling quickly as not enough are being built to meet demand. Specifically, new home sales rose 26% from one year ago in April to an annualised pace of 517,000 annualised pace, the third highest monthly activity in eight years, according to data from the National Association of Realtors. The data also shows that the median price was $297,300, which is 8.3% above last year’s price and on average it took four months to find a buyer. The gap between new home price and existing home price still remains very wide, however, and according to Lawrence Yun, Nar chief economist, it implies that existing homes provide a relatively better bargain in relation to newly constructed homes. ‘Even though new home sales are rising strongly in percentage terms, they are only at about half the activity as during the bubble years nearly a decade ago. This implies, first, that today’s strong activity is not likely to be a bubble. Second, there is more room to grow,’ Yun explained. He also pointed out that the median number of months to find a buyer of new homes remains near historic lows. ‘Given the low supply of both existing and new home inventory, as evidenced by low months supply of inventory, there is zero concern over any over production,’ he said. For the year as a whole, new home sales are projected to rise by about 30% in 2015 and then another 20% to 25% in 2016. ‘It’s a good time to be a home builder. If only the banks would make more construction loans or, depending upon your point of view, if there were less financial regulations to permit banks to make more construction loans,’ Yun added. Continue reading
London mayor opens up new homes planning guidance for consultation
The Mayor of London Boris Johnson has released updated planning guidance that aims to maximise the construction of quality homes in the city. Johnson regards this as a vital step in achieving the goal of building 49,000 houses a year in order to keep up with London's booming population but he wants quality to be as important as quantity. Interested parties are being invited to comment on the new guidance, which includes detail on building specifically for long term private rentals, the potential introduction of affordable housing targets in new areas, and more details on vacant building credits for developers. London's Deputy Mayor for Planning, Sir Edward Lister, said that the new Supplementary Planning Guidance will be vital in helping developers and boroughs understand how to achieve the Mayor's ambitious aims for housing in London. ‘Delivering the homes that London needs requires us to work together, so I would encourage anyone with an interest to let us know what they think,’ he added. The latest revision of the Mayor's Supplementary Planning Guidance for Housing builds on the Mayor's Plan to provide extra detail where needed, and is open for consultation until 07 August. It recognises that in the drive to increase housing capacity in London, quality is just as important as quantity and seeks to make sure that people have decent homes and enough space to live. The plan includes detail on the Mayor's policy to encourage an increase in developments designed specifically for long term private rentals, so-called build-to-rent. He says that done correctly, this could help meet specific population needs in certain urban centres. There is also more detail on the concept of applying fixed affordable housing targets in Housing Zones and Opportunity Areas, which will be the source of significant growth in housing supply in coming years. Advice for local boroughs is included on how to incorporate the Vacant Building Credit into their local planning policy to ensure the credit delivers the aim of the Government policy, which is to bring forward brownfield sites that otherwise wouldn't come forward for development. The credit allows the existing gross floor space to be credited towards affordable housing contributions. Continue reading
