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Growing demand and short supply is pushing up house prices, says RICS
House prices in the UK continue to be squeezed higher by growing demand and contracting supply, according to the latest residential market survey from the Royal Institution of Chartered Surveyors (RICS). The report shows that while 44% more chartered surveyors saw prices rise in July, supply to the market continued the decline with 22% more surveyors reporting a drop in new instructions. Additionally, the shortage of housing inventory worsened further during July, with the average number of properties for sale per surveyor slipping to a record low. Consequently, all areas of the UK are projected to see sizeable house price gains over the next 12 months, with confidence most elevated in East Anglia and Northern Ireland. The report also says that near term expectations for prices also continue to reflect the imbalance between demand and supply with 41% of members expecting prices to continue to rise over the next three months. However, rising prices have not dampened interest as new buyer enquiries rose for the fourth month in succession, with 25% of respondents reporting a rise in demand. Despite this steady and sustained improvement in demand, newly agreed sales were more or less unchanged at the national level in July. Going forward, there is a little more optimism regarding the prospects for activity with 37% more respondents expecting sales to gain momentum over the next three months and 40% more taking the same view on a one year perspective. ‘This government has put home ownership at the very heart of its agenda, with Starter Homes and extending Right to Buy the strongest evidence of that ambition. However, this continues to be demand driven and fails to address the real issue of supply,’ said Jeremy Blackburn, RICS Head of Policy ‘A coherent and coordinated house building strategy is required across all tenures. This should include measures that will kick start the supply side, such as mapping brownfield, addressing planning restrictions and creating a housing observatory to assess the underlying economic and social drivers of housing and provide the impetus for solutions,’ he explained. ‘The changes brought in through Fixing the Foundations, the Chancellor’s productivity plan, were welcome and refreshingly on the supply side, such as zonal planning, dispute resolution for S106 and local plan enforcement. But these alone are not a strategy for increasing housing supply across all tenures,’ he added. Blackburn also pointed out that in the lettings market, tenant demand continued to rise while landlord instructions, despite increasing slightly, failed to keep pace once more. As a result 34 % of respondents expect rents to increase right across the UK with members in the West Midlands expecting 4% growth over the next year and in the South East 3.3% growth. The housing market is facing some very real challenges, according to Simon Rubinsohn, RICS chief economist, but more worrying still is the suspicion that the imbalance between supply and demand will lead to even strong price gains over the next 12 months. ‘This… Continue reading
UK properties with an address in a lane are much more expensive, new research shows
UK home owners in a street with the name ‘lane’ have a property worth over £100,000 more than those on a ‘street’ according to new research. The data, generated by findings provided by property market specialists Hometrack shows that the first line of an address really can say something about the value of a home. The results of the research by Barclays Mortgages show that while homes on lanes have an average property value of £245,906, some 22% higher than the national average while homes on streets come towards the bottom of the list with properties averaging £142,374 or 29% under the national average and 42% below lanes. After lanes the next most expensive addresses are found in ways and roads with average values of £218,742 and £212,717 respectively, followed by closes and avenues at £204,964 and £192,344. Regionally, there’s also some significant variation revealed by the figures. The biggest divide in direct cost between street name prices occurs in the South East, where properties on lanes are an average of £137,145 more expensive than those on streets. The most pronounced gap in price in relative terms is actually in Wales, with properties on streets barely reaching half the value of those on lanes with a price difference of 53%. By contrast, the region with the least fluctuation in price is the East of England, where prices vary between the above street names by just 36%. Comparing this to data released in 2001, all of the street names have massively increased in average value in the last 15 years. The average price for a lane property has doubled, from approximately £123,000 in 2001 to the £246,000 of last year, while even streets have jumped up from £92,000 to £142,000. ‘As this data highlights, the last few years have been incredibly buoyant for the housing market and economy, and this is great news for buyers and sellers across the nation,’ said Craig Calder, Barclays Director of Mortgages. ‘While this data paints a clear picture of victory for ‘lanes it’s interesting to see the varying statistics from around the country, and a huge growth in value overall,’ he added. Continue reading
First time buyer lending up but still down on a year ago, latest mortgage data shows
Lending to first time buyers in the UK increased in June but overall has changed little since the same month a year, ago, according to the latest report from the Council of Mortgage Lenders. Home mover lending also increased and saw a slight yearly increases in volume and value while home owner remortgage activity increased by over a third month on month and year on year. The CML data also shows that buy to let continues to grow year on year and month on month, mainly driven by buy to let remortgage activity. The first quarter of the year saw the mortgage market slow but now lending to first time buyers increased in number and amount by over 20% in the second quarter of 2015. ‘Notable this month is the uptick in remortgage activity among home owners, perhaps reflecting an increased desire to lock into competitively-priced mortgage deals in advance of any rise in rates,’ said Paul Smee, director general of the CML. ‘It is likely that people are now beginning to feel a rate rise is a realistic prospect and not just a distant theoretical possibility. After a slower than expected start to the year, lending now appears to be picking up as we expected, and in line with our recently revised forecasts,’ he added. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, a shortage of affordable properties is affecting the prospects for first time buyers. ‘While the demand hasn’t gone anywhere, the goalposts have shifted. Even with a leg up from government schemes, those looking to make their first foray onto the ladder are having to be more open minded about what they can afford, and these home buying incentives and cheap mortgage finance won’t hang around for ever either,’ he said. ‘In the long term, those who can’t act now will be reliant on more house building to replenish the stock of homes available, and keep mortgage repayments and deposits within grasp,’ he added. Tougher regulation is restricting lending for affordable homes, according to Patrick Bamford, director of mortgage insurance Europe for Genworth. ‘Even improved affordability of loans is not enough to produce a notable increase in first time buyer activity year on year,’ he explained. He also pointed out that following the recession there has been a drastic fall in home ownership, particularly among younger people, across all regions of the UK impacted by high house prices and a lack of supply. ‘The South East and North West have been particularly hard hit, with the shortfall in numbers when compared to pre-recession greater than the entire populations of Brighton and St Helens respectively. We are still a long way from closing the gap and returning to a normal first time buyer market,’ said Bamford. ‘It is crucial for the government to introduce a permanent system of private mortgage insurance to accompany its planning reforms and drive a thorough recovery of the… Continue reading
