Tag Archives: shows
UK housing market activity robust despite looming EU referendum
Housing market activity in the UK is robust despite the forthcoming referendum on the future of the country in the European Union, according to new research. Valuation activity in May rose by nearly a fifth on an annual basis with the total number of housing valuations carried out in May 2016 some 18% higher than in May 2015. The data from the latest monthly report from Connells Survey & Valuation also shows that month on month valuation activity in May decreased by 1% compared to April this year. John Bagshaw, corporate services director of Connells Survey & Valuation, believes the market is looking remarkably resilient ahead of June’s vote and he believes that the slight month on month cooling could still be a result of stamp duty changes that came into effect at the start of April. ‘However once that stamp duty related instability has passed, there appears to be a steadier annual growth and a more positive outlook for the housing market. Even if the EU referendum does have a measureable impact, one thing is clear, any slump hasn’t happened yet,’ he said. The report also shows that the first time buyer and remortgaging sectors continue to be stand out areas of activity, as the key driver of annual growth in May’s valuation market, up by 37% and 42% respectively, when compared to May 2015. However, on a monthly basis, May’s first time buyer valuation activity fell back 8% compared with April, whereas remortgaging activity increased by 3% over the same period. The buy to let sector experienced the sharpest year on year decline compared to other sections of the market, down by 38%. However when compared to May 2015, the number of valuations for buy to let purposes has also seen the greatest percentage growth compared to April, up by 8%. ‘Remortgagors are leading the market, underpinned by lenders offering a new set of favourable interest rates for existing homeowners. But first time buyers are also on the up. Factors such as low inflation, rising wages and government schemes are all helping new owners onto the property ladder,’ Bagshaw explained. ‘Even for the much downplayed buy to let industry, May was a good month. Valuations on behalf of landlords have been leading the housing market since April. Annual growth is likely to stay negative for buy to let activity, but the most recent signs are positive,’ he added. The report shows that there has been a relative steadiness of activity among home movers. The number of valuations for existing owner occupiers seeking to move home in May grew by 9% over the 12 months since May 2015 and contracted by just 1% compared to April 2016, in line with figures for total valuations activity. ‘Home movers have had a stable month and appear confident in the strength of the housing… Continue reading
UK rents continue upward trend but growth slowing
Rents in the UK continued to rise over three months to May 2016, although increases slowed more in line with house price growth, according to the latest index report. Average rent in the UK, excluding Greater London, is now £771 per month, some 4.4% higher than a year ago while the average rent in London is £1,563, up 6.2%. The data from the HomeLet rental index also shows that Scotland leads the way with rents rising faster than in any other part of the country. The report said that the figures provide some encouragement for both landlords and tenants. Landlords may have been expecting some impact from the increase in the supply of rental property in May, as those who rushed to complete buy to let property purchases before higher rates of stamp duty came into force in April 2016 began offering their properties to tenants. But HomeLet’s data suggests landlords continue to enjoy healthy rental yields after costs. As for tenants, they will be encouraged to see the pace of rent rises now beginning to moderate, particularly compared to a year ago. While an average rise of 4.4% means increases are still running ahead of inflation, there is some evidence of moderation of the long term trend, perhaps as affordability ceilings are approached. The slowing of the pace of rent rises in May is broadly in line with a similar cooling in the rate at which house prices are rising and may be part of a broader story about economic uncertainty ahead of this month’s referendum on the UK’ s membership of the European Union. Nevertheless, the May 2016 HomeLet rental index reveals that rents continue to rise in almost every area of the country, with 11 out of the 12 regions surveyed seeing an increase over the three months to the end of May. In Scotland, rents are currently rising faster than anywhere else in the UK, with new tenancies costing 10.6% more than in the same period a year ago. However, the East Midlands with a rise of 8.3% in rents compared to last year, is also showing strong gains. London’s rental market, where the average rent on a new tenancy is now £1,563, up 6.2 per cent, also continues to see rents rise more quickly than in most other areas of the country. The rental market is characterised by steady growth in rents as the number of tenants looking for property runs ahead of the supply in the market, according to Martin Totty, chief executive officer of Barbon Insurance Group, HomeLet’s parent company. He pointed out that this remains the picture in most regions of the country. ‘While this growth has begun to slow, which tenants will welcome, landlords will also be encouraged by the vote of confidence in the sector evidenced by the increase in buy to let completions in the past few… Continue reading
EU future uncertainty hitting prime central London sales and lettings
Sales and lettings in the prime central London property market have been hit by uncertainty over the UK’s position in the European Union ahead of the referendum vote on 23 June. After a period of increased activity, as buyers rushed to beat the April stamp duty deadline, the prime central London area is experiencing a subdued time, according to a new report from estate agency WA Ellis. ‘April saw the government collect a record of nearly £1.2 billion in stamp duty, as landlords rushed to beat higher stamp duty rates on second properties. These national figures are reflected by transaction levels within prime central London which have halved since March,’ said Richard Barber, director at WA Ellis. He believes that various apocalyptic visions of what may or may not happen if the UK voted to leave the EU have continued to confound the electorate over the last two months. ‘As a result, it would appear that buying a new property has been put on hold by the majority of potential purchasers until the future of the UK is determined,’ he added. Landlords in prime central London are being hit hard by the uncertainty, according to Lucy Morton, head of agency at WA Ellis and JLL, with rents being adversely affected. ‘There are reports of recruitment freezes across the city and firms delaying relocating staff to London to see what awaits the UK post referendum. This, of course, has had an impact on prices, and the unprecedented surplus of stock has put further downward pressure on the rental market,’ she explained. ‘With this in mind, we have been advising landlords to reduce rents, and this has yielded positive results with enquiry levels up, and a substantial increase in lettings being agreed. In this sort of market, minimising vacant periods is more important than waiting for a slightly premium rental offer,’ she pointed out. ‘For example, over the course of a year, a 5% higher rental offer is negated if it means that a property stays vacant for an extra two and half weeks. As always our message is clear: accurate pricing and pristine presentation should be a landlord’s main consideration in volatile market conditions,’ she added. Continue reading
