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Expectations for future house price growth in the UK eases to 13 month low
Home owners in the UK still perceive that the value of their home increased in September but at the slowest rate for eight months, the latest property market sentiment index shows. Some 26.7% of the 1,500 households surveyed across the UK for the Knight Frank and Markit Economics index said that the value of their home had risen over the last month, while 5.5% reported a fall giving the HPSI a reading of 60.6, the eighteenth consecutive month that the reading has been above 50. However, the reading was down on the 61.8 achieved in July and was the fourth consecutive month that households’ perceptions about house price growth have moderated. Households in all 11 regions covered by the index reported that prices rose in September, with those living in London perceiving that the value of their home had risen at the strongest rate at 67.7, followed by households in the South East at 67.5 and the East of England at 64.4. The future HPSI, which measures what households think will happen to the value of their property over the next year, fell in September to 69.2, its lowest level since August 2013 and well below its peak of 75.1 in May. Expectations for price growth weakened in ten of the 11 regions covered by the index, with households in Wales the only ones more confident of future price rises than the previous month. In London expectations fell to a seventeen month low. Some 5.7% of UK households said they planned to buy a property in the next 12 months. This is down from 5.9% in August. Looking at the figures on a regional basis reveals that 9.3% of households in Yorkshire and the Humber plan to purchase a property in the next year, compared to just 3.4% in Scotland. Men are more likely to be considering buying a home in the short term, with 6% of such respondents saying they planned to purchase a home within the next 12 months compared to 5.4% of female respondents. House prices are rising across the UK, but our index signals a continuing slow-down in the pace of growth. The index started to ease in June and the trend is continuing. Some 46% of respondents expect the price of their home to rise over the next year, the first time this proportion has been under 50% this year,’ said Gráinne Gilmore, head of UK residential research at Knight Frank. ‘The strengthening economy, job creation and low base rates are helping underpin property values, but there are signs that households across the board are becoming more circumspect about the scale of price growth they expect,’ she added. According to Jack Kennedy, senior economist at Markit, these figures continue to lead other indicators and point to ongoing evidence of a cooling in the UK housing market. ‘With the index tracking property price expectations easing to a 13 month low in September, expectations weakened across all regions with the exception of Wales,’ he said. ‘The prospect of… Continue reading
Flat prices have risen the most in the UK in last 10 years, new research shows
Flats prices in the UK have risen by more than twice the average for all properties in the last decade but most of the growth is down to increases in London, new research shows. The average price of a flat in the UK has risen by nearly £51,000 or £425 per month, from £157,172 in 2004 to £208,169 today, according to the research from the Halifax building society. The 32% increase in the average price of a flat is more than double the 15% rise for all residential properties over the same period. Detached homes at 12% and bungalows at 13% have recorded the smallest rises over the past 10 years. Whilst flats have increased most in price nationally since 2004, much of this rise is due to the performance of flat prices in London, where flats represent a relatively high proportion of the property market. Terraced homes have been the best performing property type in the greatest number of regions. These five are the North West, Yorkshire and the Humber, West Midlands, East Midlands and East Anglia. Semi-detached and terraced homes have remained the most popular types of property purchased over the past ten years. These two types represent 60% of all home sales in 2014; up from 56% in 2004. For first-time buyers, semi-detached homes have risen in popularity, accounting for 29% of purchases in 2014 compared with 25% in 2004. Detached sales have fallen from 21% of all property sales to 16% over the past decade. In the last five years prices have improved across all property types with flats recording the largest increase between 2009 and 2014 at 43%. Terraced properties at 31% growth experienced the next biggest rise. Bungalows have seen the smallest gain of 15%. The increase in flat prices nationally has been led by London with growth of 44% with a more subdued performance elsewhere in the country. All property types recorded substantial price falls during the housing market downturn between 2007 and 2009. Terraced houses fell 33% and flats were down 32% while bungalows fell by 21% and detached homes were down 26%. The report says that the tightening in credit criteria and the reduction in mortgage availability following the onset of the financial crisis made it more difficult for first time buyers in particular to enter the market. This helps to explain why terraced houses and flats, which are very popular with first time buyers, recorded the largest price falls during 2007 to 2009. ‘There has been a significant increase in the number of first time buyers since 2010 compared with a modest decline in the number of those moving home. This difference is reflected in a bigger rise in prices over the past five years for those property types that are most popular with first time buyers,’ said Martin Ellis, housing economist at the Halifax. ‘Since 2009, larger property types such as detached homes, semis and bungalows have underperformed flats and terraces. The demand for such properties has… Continue reading
Survey reveals opposition to big housing developments in UK
With general agreement that a major uplift in new home building is crucial to resolution of the UK's housing crisis, half of the population would oppose a major house building programme if it was in their immediate neighbourhood, a survey has found. Some 49% of Britons would be opposed to building more than 300 properties in their neighbourhood and 53% are anti-developments of 100 and 299 properties, according to the Property Tracker survey from the Building Societies Association (BSA). But when asked how much of the UK they believe should be ‘urban’, which is defined as housing, gardens, train lines and parks, nine out of 10 said more than 10% of the country should be developed when currently just 7% of the country is. The majority of Britons are only willing to support developments of one to 10 properties being built in their local area. Against that, the research also shows that Britons are increasingly open to the types of properties they want to live in and want greater diversity in the types of properties and tenures available to them. One in five people say they would be open to buying a shared ownership property, living in an off the shelf kit home, living in a converted retail or office space and even renting long term. And despite the fact that less than 10% of properties built in the UK are custom build, more than a third of Britons are open to building their own home. The research also shows that access to mortgage finance is now the single biggest barrier to owning a home among first time buyers, rising above raising a deposit for the first time since 2012. Now 57% of these buyers say that getting a mortgage is the most difficult hurdle to overcome, compared to 41% in June 2014 and 33% in September last year. Difficulty in accessing finance for home movers has been marginally less striking, rising from 42% in September 2013 to 51% in September 2014. Substantial press coverage around the changes to mortgage regulation implemented in April may be one of the reasons why first-time buyers are especially concerned about getting a mortgage. Recommendations from the Financial Policy Committee (FPC) to bring in a cap of 15% on the total number of mortgages available at or above 4.5 times a borrowers' income may also have affected confidence, especially to those buying for the first time in London and the South East. ‘These consumer views results illustrate the major barrier that governments has to overcome when it comes to boosting housing supply in the UK. People are open to new developments and even different types of housing and tenure, but the message is clear: not in my backyard,’ said Paul Broadhead, head of Mortgage Policy at the BSA. ‘Local opposition is a major barrier to any government building its way out of the current housing crisis and is why we need the position of Housing Minister to be a full Cabinet position… Continue reading
