Tag Archives: shows
Top end of prime central London property market still seeing low activity
Buyers in the prime central London property market are still cautious with the £5 million plus sector seeing particularly low activity levels, according to new research. There is an increasingly polarised market in this sector where growth is still being seen at the lower end and high end sales are limited in volume, according to the latest statistics covering the third quarter of 2015 from Strutt & Parker. ‘Whilst some commentators are predicting falls in values across the market, we believe these positions are being disproportionately impacted by the £5 million plus segment of the PCL market, which has experienced particularly low activity levels in 2015,’ said Stephanie McMahon, head of research at Strutt & Parker. A total of 720 properties were sold during the third quarter of 2015, a fall of 3.7% compared to the same period last year. Compared to the five year quarterly average, the total volume of transactions were 17% down and flats remain the preferred purchase, accounting for nearly 57% of . The research also shows that the downturn in price growth in 2015 has reduced the number of these properties entering the market as discretionary vendors are willing to wait for prices to recover. This is matched by increased buyer caution as Stamp Duty reforms, an accumulation of recent tax revisions aimed at high net worth property owners, and a strong pound, have discouraged foreign investors from entering the UK market. Overall, this has resulted in investors taking longer to make decisions and considering alternatives. These trends look set to continue for the remainder of 2015 with the ultra-prime segment likely to show zero and in some cases negative growth. However, sellers placing properties on the market that are sensibly priced and good quality will continue to do well. ‘Since the summer break, increasing activity in PCL shows that buyers and tenants are making the most of relative aligning of asking prices. There is no doubt that confidence is on the up and the considerable tax changes of the last few years are now being regarded as the new norm,’ said Charlie Willis, head of London residential at Strutt & Parker. The data also shows that there were 3,936 property lets agreed in PCL during the third quarter of 2015, which was just 1.9% below the five year quarterly average. Zoë Rose, head of London lettings at Strutt & Parker, explained that the PCL lettings market has experienced a slowdown, particularly affecting the three and four bedroom mid-market. ‘That said, demand for one and two bed properties from young professionals remains robust and uncompromising. Properties that are well presented continue to rent successfully,’ she added. ‘The prime London markets have slowed over the past 12 months with the spate of intervention from the government, combined with a strong pound. The coming year brings further uncertainty with the Mayoral election and lobbying around Brexit,’ McMahon pointed… Continue reading
High loan to value lending declining in overall UK mortgage market
The UK government’s Help to Buy scheme is boosting lending to first time buyers but high loan to value lending activity has fallen year on year, new data shows. Overall 95% LTV mortgage almost doubled under Help to Buy in the first 18 months of the scheme from January 2014 to June 2015 making up £3.43 of every £100 worth of mortgage lending, according to research from private mortgage insurer Genworth. This was up from £1.77 in the previous 18 months as more options have appeared for home owners with smaller deposits. However first time buyer and 95% LTV lending activity fell year on year in the second quarter of the year, marking the second quarterly decline in a row, the first time this has happened since 2010/2011 Total mortgage lending across the whole market grew by £48.2 billion which means that as the mortgage market has grown during this period, £12.24 of every extra £100 lent has been via 95% LTV mortgages. Genworth’s analysis shows that first time buyers account for almost £21 in every £100 lent during the first half of the Help to Buy 2 (HTB2) scheme compared with £19.33 in the previous 18 months. This compares with just £11.41 per £100 in 2007/2008 and highlights how the scheme has played an important role in encouraging first time buyer lending. The growth in 95% LTV is an encouraging sign for a sector that was hit hard by tightening credit conditions during the recession, exacerbating the challenges of raising a big enough deposit to buy a home. But the report suggests that concerns linger for long term health of the 95% LTV market. Both 95% LTV lending and first time buyer lending declined by value year on year during the second quarter of 2015 for a second successive quarter. This is the first time this has happened for two consecutive quarters since the lending drought from the fourth quarter of 2010 to the third quarter of 2011. It contrasts with the substantial growth achieved when Help to Buy was first introduced, and raises doubts about how well activity will fare when it is withdrawn at the end of 2016, particularly with expectations that historically low interest rates will finally start to rise next year, raising costs for borrowers. ‘There is no denying that Help to Buy has played an important part in revitalising the first time buyer and high LTV mortgage market following a significant lending drought. Some participating lenders are now moving towards launching non-HTB2 products, but it remains to be seen whether this will be enough to sustain the benefits of the scheme once it expires,’ said Simon Crone, vice president for mortgage insurance Europe at Genworth. ‘We are potentially facing a situation where the high LTV market could easily fall back into decline with the end of Help to Buy now just over a year away. Even… Continue reading
Not all estate agents ask about neighbours when selling a house
Only 40% of estate agents ask people selling their home if they have issues with their neighbours at a time when issues from next door can knock thousands off the price of a property, new research shows. It is clear that not all estate agents want to ask the question when it comes to neighbourly problems and 10% rely solely on the purchasers’ solicitor or conveyancer to investigate existing issues with neighbours. The research from Churchill Home Insurance also found that according to estate agents the most contentious disputes are over communal space. Over half, 56%, of the estate agents surveyed identified this as the major issue while 10% said it was noise and 8% boundaries. Dogs and anti-social behaviour were also cited. Some 14% of estate agents highlighted cases where the seller had to drop the price of a property because of issues with neighbours. The average price drop was 3.8%, around £7,000 in England and Wales and £6,400 in Scotland. Churchill’s research also reveals that 20% of estate agents ask sellers if they have had issues with their council and 15% of these would pass this information on to the prospective buyer. As such, it is vital that prospective buyers ask the right questions to ensure they get all of the information they require to make an informed purchase, the firm said. Buyers are relying on their solicitors or conveyancers to investigate issues with potential new neighbours. The conveyancing process can unravel any open disputes or circumstances that could lead to disagreements, but the subjectivity of loud music or an aggressive neighbourhood dog means these checks may not capture potential day to day problems. ‘Buying a property is one of the most expensive decisions many of us will ever make. As such, we are well within our rights to be informed about issues that may affect our buying decision,’ said Martin Scott, head of Churchill Home Insurance. ‘Buyers should ask their estate agent to disclose as much as information as they can about the property, seller and neighbours to help the buyer make the right decision,’ he added. He also pointed out that since the demise of the Property Misdirection Act in 2013, estate agents are required under the Consumer Protection from Unfair Trading regulations to reveal any negative issues about a property, if known to them, which may affect the buying decision. If an estate agent has been made aware of a nightmare neighbour or previous council disputes, they are obliged to inform the buyer. Withholding information that could affect the buying decision could land estate agents in hot water. They may be subject to legal action and fines of up to £5,000 and/or two years in prison. Churchill says that buyers should not be afraid to ask questions and when they meet the estate agent or seller they should specifically about issues such as past/ongoing disputes and the… Continue reading
