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Demand sees US pending home sales reach highest level since August 2013
Improved buyer demand at the beginning of 2015 pushed pending home sales in the United States in January to their highest level since August 2013, according to the latest figures to be published. The data from the National Association of Realtors also shows that all major regions except for the Midwest saw gains in activity in January. The Pending Home Sales Index, a forward looking indicator based on contract signings, climbed 1.7% to 104.2 in January from an upwardly revised 102.5 in December and is now 8.4% above January 2014, the fifth month of year on year gains with each month accelerating the previous month's gain. Lawrence Yun, NAR chief economist, said that for the most part buyers in January were able to overcome tight supply to sign contracts at a pace that highlights the underlying demand that exists in today's market. ‘Contract activity is convincingly up compared to a year ago despite comparable inventory levels. The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth,’ he explained. Yun pointed out that there are now more favourable conditions for traditional buyers entering the market. All cash sales and sales to investors are both down from a year ago, creating less competition and some relief for buyers who still face the challenge of limited homes available for sale. ‘All indications point to modest sales gains as we head into the spring buying season. However, the pace will greatly depend on how much upward pressure the impact of low inventory will have on home prices. Appreciation anywhere near double digits isn't healthy or sustainable in the current economic environment,’ Yun added. The index in the Northeast increased by 0.1% to 84.9 in January, and is now 6.9% above a year ago. In the Midwest the index decreased 0.7% to 99.3 in January, but is 4.2% above January 2014. Pending home sales experienced the largest increase in the South, up 3.2% to an index of 121.9 in January, the highest since April 2010, and 9.7% above last January. The index in the West rose 2.2% in January to 96.4 and is 11.4% above a year ago. Total existing homes sales in 2015 are forecast to be around 5.26 million, an increase of 6.4% from 2014. The national median existing home price for all of this year is expected to increase around 5%. In 2014, existing home sales declined 2.9% and prices rose 5.7%. Continue reading
New starter home initiative launched in the UK
A new website has been launched in the UK for first time buyers where they can register in buying a new starter home under a new government initiative. The starter-home.co.uk website comes as new rules have cut planning requirements for the new starter homes, allowing house builders to slash 20% off the usual price and building on the first properties is expected to start within months. It is the latest major push from the government to boost home ownerships and build more homes and it is claimed that there is the potential for discounts of around £100,000 per house. With average house prices for first time buyers in England standing at around £218,000, a new starter home could save young first time buyers across the country an average of £43,000 while helping to get them onto the housing ladder. The plans will allow young first time buyers the opportunity to secure a new starter home at a 20% discount to the market price and thanks to changes in planning policy, builders that develop commercial and industrial land that is either unusable or surplus for the new starter homes will be able to save on costs by freeing them from the requirement to provide affordable housing. In return, developers will have to offer the homes at a minimum 20% discount on the market price to first time buyers who must be aged under 40. Leading home builders and councils have already have said they would consider bringing forward land to develop the new homes from this year, and from today will be able to start submitting their plans to get work started and pass the savings onto home buyers as soon as possible. As well as reducing the prices of properties for young buyers, a design panel, including world class architects Sir Terry Farrell and Sir Quinlan Terry have drawn on housing designs from across the country for home builders to consider for starter homes developments. Aimed at making sure the new homes are attractive properties that can meet the demands of modern life, the panel’s draft report highlights at a range of exemplar new build styles, which in time it is hoped will become the default approach for starter home developments. They aim to be well proportioned homes, homes that fit in with existing local housing styles, and homes that get the details right with good parking and community spaces. ‘A 20% discount off the price could be a real game-changer for many aspiring home owners. My message is clear: we are on your side and we will help you fulfil your dream of buying your first home,’ said Prime Minister David Cameron. Communities Secretary Eric Pickles said that the number of first time buyers is already at a seven year high and these starter homes will help even more people realise their dream of home ownership. Sir Terry Farrell, founding partner at Farrells, said he believes that the templates developed by the government’s Housing… Continue reading
UK rental market returns to growth, latest rental index shows
Residential rents for new tenancies in the UK increased by 2.5% during first month of the year, according to the latest figures to be published. It means that the rental market has returned to growth with nine out of 12 regions covered by the HomeLet rental index reporting rising rents, taking the average rent in the UK to £889 or £707 excluding Greater London. The figures show the highest growth occurring in the East Midlands, Scotland and East Anglia with rents rising 6.2%, 5.7% and 5% respectively. Only the North East of England, Northern Ireland and the West Midlands have seen a decline in rental prices,’ the index data also shows. Overall the index report says that after a period of seasonal adjustment towards the end of 2014, which saw rental prices falling in many parts of the country, the rental market has started 2015 with a return to growth. The average rent in the UK is now £889, compared to £867 at the end of 2014, and £799 in January 2014. A breakdown of the figures show that the average rent in the East Midlands is now £617, a monthly rise of 6.2% and an annual increase of 7.2%. In Scotland it is £651, a month on month rise of 5.7% and year on year up 9.4%. East Anglia has seen a monthly rise of 5% but year on year average rents are up only 1.6%, taking the average to £762 while in the South West the average is £830, up 3.5% month on month and up 10.2 compared with January 2014. Yorkshire and Humber has seen rents rise by 3.2% month on month and 10.1% year on year to £613. Greater London has seen the steepest rise with average rents reaching £1,425 in January, up 2.3% month on month and an annual rise of 13.4% while other regions have seen more muted rise with Wales seeing a month on month rise of 2.3% and an annual rise of just 1% to an average of £586. The North West saw a month on month rise of just 0.8% and an annual rise of 5% taking average rents to £650 while the South East was up 0.7% month on month but over 12 months average rents were up 4.2% to £873. Everywhere else saw rents fall month on month, down 1.1% in the West Midlands to £635 but the region has seen rents rise by 4.8% year on year. In North East they were down 2.6% month on month to £518 but up 2.6% year on year. Northern Ireland has had the poorest performing rental sector. Average rents were down 0.5% to £556 and down 2.3% year on year, the only annual decline in the whole of the UK. Continue reading
