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The value of housing stock in the UK reaches over five trillion
The value of UK's private housing stock in August 2015 reached an estimated at £5.1 trillion, a rise of 53% over the last decade, with London doubling since 2005. The increase of £1.8 trillion since 2005 is equivalent to £76,316 per household in the owner occupied and private rented sectors and means that the value of the UK private residential housing stock has grown at a faster rate than consumer prices, with the retail price index up by 35% in the past decade. In the past year, the value of private housing stock grew by £262 billion, mainly reflecting average house price growth of 4% in the year to August, according to the research from the Halifax. The research also shows that the value of mortgage debt has also grown, up by 35% since 2005 from £942 billion to £1.28 trillion. Nonetheless, the value of the private housing stock has grown by over five times as much as outstanding mortgage debt at £1.8 trillion compared with £334 billion. As a result, housing equity has increased by £1.4 trillion or 60% over the decade from £2.4 trillion in 2005 to £3.8 trillion. Regionally, there is a wide variation in the level of housing equity, with a higher balance in the south compared to northern areas. The highest is in London where housing equity is estimated at £798 billion, which is equivalent to £305,749 per household. The next largest is South East at £722 billion or £223,197 per household, and the East at £461 billion or £212,263 per household. Outside southern England, the highest equity levels are in the North West at £283 billion or £109,043 per household, the West Midlands at £251 billion or £128,703 per household and Scotland at £241 billion or £124,679 per household. ‘The combined value of all privately owned houses in the UK is estimated at close to £5.1 trillion in 2015. The increase in total housing value over the past decade is equivalent to over £76,000 per privately owned property,’ said Martin Ellis, housing economist at the Halifax. ‘Aggregate net housing equity held by UK households is in a healthy state with total housing assets worth nearly £4 trillion more than the total value of mortgage debt. Despite the rapid rise in mortgage debt over the past 10 years, net housing equity has grown by £1.4 trillion since 2005,’ he added. The research shows that there has be a strong rise in the value of the private housing stock across all regions, with values more than doubling in London at 105% from £552 billion to £1.1 trillion over the decade. The next largest increases were in Scotland at 72% or £136 billion, the South East at 55%, the East at 54% and the South West at 36%. The value of housing in the north increased by 36% compared to 66% in the south during the last ten years. As a result, the South's share of total UK housing assets rose… Continue reading
Call for UK property sales to be more transparent to get rid of dodge foreign investors
The UK Government is being urged to launch a promised policy to make ownership of property in the UK fully transparent and deliver on its plan to make sure there is no laundered money going into the real estate market. With more buyers from countries like Russia, China and the Middle East looking to invest in property in London there have been concerns that unscrupulous buyers could be using property to hide their wealth and assets. In July the Government committed to tackling corrupt money in UK property, but so far it has not published plans or a timeline for their consultation on providing more transparency over foreign and offshore ownership of UK property. Now the National Association of Estate Agents (NAEA) and Transparency International are calling for the consultation to get underway as quickly as possible. Mark Hayward, NAEA managing director, said that a recent documentary From Russia with Cash demonstrated that there is still not absolute clarity in relation to anti-money laundering among those in the property sector, despite the very clear legislation in place and regular training and updates from within the industry. ‘It is now time to step up the level of scrutiny that the sector comes under to ensure that a small minority of agents do not support criminal activity and those that do are appropriately sanctioned,’ he added. Continue reading
Property prices down in Cyprus, but decline is slowing
The residential property market in Cyprus is still struggling despite the island’s economy showing signs of stability in the third quarter of 2015, with sales volumes low. Across Cyprus house prices fell by 0.5% and apartment prices by 0.4%, according to the latest index from the Royal Institution of Chartered Surveyors (RICS). The biggest drop was in Famagusta where apartment prices fell by 1.2% and in Limassol where house prices fell by 3.2% while house prices were down 0.3% in Nicosia. However, the RICS index report points out that the rate at which prices are falling has slowed in most cities across Cyprus and there were few sales overall due to the prevailing economic conditions although the volume was higher year on year. In addition certain locations such as Paphos, Larnaca and Famagusta are showing signs of stability where the housing markets are progressively bottoming out. The RICS index also shows that on a quarterly basis rental values increased by 0.3% for apartments, 1.5% for houses and 2.6% for offices while retail units saw a fall of 1.1% and warehouses a fall of 0.1%. Compared to the third quarter of 2014, rents dropped by 1.5% for flats, 0.5% for houses, 4% for retail, 2.5% for warehouses, and 0.2% for offices. Areas that had dropped the most early on in the property cycle now nearing or at the trough and Paphos and Famagusta are showing some signs of price stability. Paphos is the only place with positive returns in all asset classes when compared to the third quarter of 2014. At the end of the third quarter of 2015 average gross yields stood at 3.9% for apartments, 2% for houses, 5.2% for retail, 4.3% for warehouses, and 4.5% for offices. The parallel reduction in capital values and rents is keeping investment yields relatively stable and at low levels compared to yields overseas, the RICS report says, adding that it suggests that there is still room for some re-pricing of capital values to take place, especially for properties in secondary locations. Meanwhile, the latest monthly data from the Department of Lands and Surveys, shows that sales increased across Cyprus apart from Larnaca where they fell by 1%. Sales in Nicosia were up 64%, in Paphos up 30%, in Limassol up 28% and in Famagusta up 4%. But it must be remembered that sales volumes are low. There was a total of 463 sales contracts recorded covering residential, commercial and building plots. However the Land Registry data also shows that during the first 10 months of the year sales are up 8% compared with the same period in 2014 with 3,993 transactions completed. Continue reading
