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Underlying trend shows house price quarterly slowdown in UK
UK house prices in the third quarter of 2015 were 8.6% higher than in the same three months a year earlier and up 2% quarter on quarter, according to the latest residential index. However, the quarterly rate of growth fell from August’s 3%, to its lowest since May and the annual figure was lower than the 9% recorded in August, the date from leading lender The Halifax shows. The index report says that the movements are in line with the average so far this year and points out that monthly data can be volatile and the quarter on quarter change is a more reliable indicator of the underlying trend. Separate research shows that there has been a 60% increase in the average price of a flat over the past 10 years, significantly higher than the 38% rise for all residential properties. Detached homes with growth of 21% and bungalows at 28% have recorded the smallest rises over the last decade. ‘Housing demand has been strengthening recently, underpinned by economic growth, rising real earnings and very low mortgage rates,’ said Martin Ellis, Halifax housing economist. ‘Increasing demand is combining with very low supply to drive robust underlying house price growth. There is little reason to expect any fundamental shift in the key market drivers over the coming months,’ he added. Continue reading
Three bed homes in UK see fastest rent rises, new index shows
UK rents are rising fastest for three bedroom homes with 4.6% year on year growth in August compared to a rise of 3.3% for all UK properties, according to a new index. The new index from Landbay Rental is the first to track rental trends to the county and London borough level in combination with the number of bedrooms. Areas where three bed rental growth is highest are mainly located within commutable distance of London, such as Windsor and Maidenhead up 22% to £1,936, Southend on Sea up 20% to £1,121 and Swindon up 13% to £813. The data shows that across the UK as a whole, rents climbed by 3.3% in the last year to £1,281 and this is well ahead of inflation but while rents continue to climb year on year, the rate at which they are growing has eased from a high of 4.9% in February. It also points out that average UK rents fell between May and July 2015, with August seeing the first monthly rise in rents since March. Across all property sizes, the top rental rises outside of London were Southend on Sea up 12.6%, York up 12.1% and Wrexham up 11.1%. At the other end the biggest fall was in Cheshire were rents were down 6.9%, Aberdeen City down 5.7% and Buckinghamshire down 3.5%. ‘At the national level, rents performed very strongly in 2014 after a dip in 2013. This year has seen rents continue to grow, but at a slower rate. The macro trends at the national level aren’t uniform when you drill into the local level and look at different types of property, which is why we want to establish a rental index that gives landlords, tenants and others interested in the private rented sector access to a more granular level of insight,’ said John Goodall, chief executive officer of Landbay. ‘For investors in the private rental sector, our data makes family homes in the south east look like an attractive proposition. As well as performing well now, rents for three bedroom homes saw the smallest falls when rents dipped in 2013. The challenge for investors looking to benefit is finding suitable properties for professionals at a cost that produces a good yield,’ he added. Continue reading
Rising demand and falling supply boosts recovery of Portuguese property market
Solid demand and falling supply is helping the recovery of the residential property market in Portugal as price rises are seen across all regions. However, new sales instructions have fallen at a time when demand is growing and there has been a modest upturn in rental values, according to the August 2015 RICS/Ci Portuguese Housing Market Survey. The report shows the imbalance between rising buyer enquiries and falling new sales listings continues to underpin a steady increase in house prices. Likewise, in the lettings market, solid tenant demand growth has pushed rents up marginally although a relatively flat trend is still projected in the near term. In the sales market, new buyer demand rose again month on month, with the pace of increase edging up gently relative to the previous month. At the same time, new instructions to sell dropped back modestly for the first time since December 2014. Despite the solid demand backdrop, sales volumes only recorded the most marginal of increases. Nevertheless, going forward, transactions are expected to pick up at a smart pace in the near term. The report explains that with demand outstripping supply, house prices continued to recover across all regions. What’s more, the latest data suggest the rate of house price inflation accelerated across each market during August. Overall, respondents to the survey remain confident that prices will rise further over the next quarter and the next 12 months. Indeed, over the year ahead, contributors forecast national prices will increase by around 3% and on average by roughly 5% per annum over the next five years. Meanwhile, the national confidence indicator, a composite indicator of three month sales and price expectations, rose to +32 from +28 previously, extending its run in positive territory into a twenty second consecutive month. In the lettings market, tenant demand increased sharply alongside a steep fall in new landlord instructions. Consequently, rents inched up again following last month’s marginal increase. Notwithstanding this, rents are expected to hold broadly stable in the near term, although expectations for future lettings market activity strengthened notably. ‘In August, the Algarve benefited from strong demand and price dynamics, showing greater improvement in the results compared to Lisbon and Oporto regions in some Algarve cities, there is already a lack of new houses to sell at a time when demand is expected to remain high,’ said Ricardo Guimarães, director of Ci. According to Simon Rubinsohn, Royal Institution of Chartered Surveyors chief economist, employment growth has been encouraging over the past year, driving an increasingly widespread revival in housing market activity. ‘Nonetheless, the labour market recovery still has a way to go and sustained progress is needed to underpin the residential property sector going forward,’ he added. Continue reading
