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Residential sales in UK up by almost 5% between May and June
The provisional seasonally adjusted UK property transaction count for June 2016 was 94,550 residential and 10,930 non-residential transactions. Residential property sales recorded in the UK increased by almost 5% between May and June 2016, according to the latest estimated figures to be published. The residential transaction count was 94,550 and while this is up 4.9% month on month, it is 10.2% lower compared with the same month last year. The large increase in transactions for March 2016 followed by the substantial reduction in April is likely to be associated with the introduction of the higher rates on additional properties in April 2016, according to HMRC which publishes the figures. However, whilst April and May 2016 are lower than the corresponding months in 2015, it should be noted that the total for March to May 2016 is still substantially higher than the corresponding period last year, it pointed out. The additional property rates were announced in the Autumn Statement 2015 for England, Wales and Northern Ireland, and in the Scottish Government's draft 2016/2017 budget for Scotland. Non-tax factors may have played a role as well, for example the Bank of England's plans to curb buy to let mortgages resulting in a rush to purchase before April 2016, and the European Union referendum affecting transactions in recent months. The residential count includes properties paying the main and additional rates. For June 2016 the number of non-adjusted residential transactions was about 21.2% higher compared with May 2016. The number of non-adjusted residential transactions was 11.1% lower than in June 2015. According to Doug Crawford, chief executive officer of My Home Move, June’s figures show a market returning to health after a very quiet April and May which was due to investors doing business earlier in the year to avoid the stamp duty changes. ‘While the number of property transactions remain below the levels seen a year earlier, a 4.9% increase between May and June is very encouraging. My Home Move’s own data suggests that the number of completions in June 2016 was actually 2.7% higher than in June 2015,’ he said. ‘The June increase shows that the property market mostly shook off the uncertainty from the Brexit referendum at the end of the month. This reflects our experience as most purchases went ahead without any issues. The big question now is what the impact will be for the rest of the year,’ he explained. ‘While this is less clear, our view is that the fundamentals of the property market are strong enough that there will not be a significant impact. There have been anecdotal reports of a slight slowdown in July from the estate agents we work with, but it is impossible to tell how much of this is actually Brexit related and how much is down to a normal summer slowdown. The picture will only start to be clearer in September after the holiday season,’ he said. Continue reading
Number of first time buyers in UK up by 10% in first half of 2016
The number of first time buyers in the UK increased by an estimated 10% in the first six months of 2016 compared with the same period in 2015, according to new research. Overall there were an estimated 154,200 first time buyers in the first half of 2016 compared with 140,500 in the same period last year, the data from the Halifax first time buyer review shows, more than double the market low in the first half of 2009. For the same six month period since 2012, the number entering the housing market has exceeded 100,000. However the number of first time buyer in the first half of 2016 was nearly a fifth lower, 36,700, than at the peak of the last boom in 2006. The report also shows that the number of first time buyers has increased more rapidly than the number of home movers over the past few years as a whole. As a result first time buyers have increased as a proportion of all mortgage financed house purchasers from 38% in 2011 to an estimated 47% in 2016. However, the percentage has been stable over the past three years as the numbers of first time buyers and home movers have risen at a similar pace since 2014. The average first time buyer deposit in May 2016 was £33,960, more than double that in 2007 when it was £16,400 and the report points out that there has been a 14% rise in the deposit over the past year largely reflecting the increase in house prices over that period. The 10 least affordable Local Authority Districts (LADs) for first time buyers are all in London. The least affordable is Brent where the average first time buyer property price of £457,014 is 12.5 times gross average annual earnings in the area. East Dunbartonshire in Scotland is the most affordable LAD in the UK with an average property price of £97,089, some 2.6 times local annual average gross earnings. Copeland in the North West is the next most affordable and five of the 10 most affordable LADs for first time buyers are in Scotland. ‘There was a further increase in the number of first time buyers in the first half of the year with the total exceeding 100,000 in the first six months of each year since 2012. This rise has been broadly in line with a general improvement in market activity and is likely to have been helped by government measures including the Help to Buy scheme,’ said Chris Gowland, mortgages director at the Halifax. ‘Although numbers remain below their previous peaks and many potential first time buyers are facing escalating house prices and deposit sizes, record low mortgage rates continue to make buying seem a more attractive option than renting,’ he added. The research also shows that the average price paid by first time buyers increased by 12% over the past year from £178,399 to £199,414. Regionally, the average price paid by first time… Continue reading
Affordability for home buyers in Australia eases in second quarter of 2016
Affordability for home buyers in Australia eased back in second quarter of 2016 as price growth returned to the residential real estate market. Overall affordability fell by 3.7% and was 2.1% less than the same quarter of 2015, according to the latest report from the Housing Industry Association, the voice of Australia’s residential building industry. The capital city housing affordability index fell by 4.3% during the quarter, while the regional market index experienced a 1.9% improvement. ‘Home price growth moderated in the early part of the year and the index showed an improvement in affordability during the March 2016 quarter. However, in the June quarter dwelling price growth returned and the index reverted to the level we saw at the end of 2015,’ said Geordan Murray, HIA economist. ‘While there was a decline in the headline index tracking the national picture, there was substantial variation around the country with substantial differences between states, and also differences between capital city markets and regional markets,’ he pointed out. He explained that the geographic variation in affordability is most evident in the comparison between Melbourne and Perth. Over the last year, the median dwelling price in Perth has fallen by 4.7% while Melbourne’s has grown by 11.5%. This has seen the affordability index for Perth increase by 6.2% over the last year, while the index for Melbourne has fallen by 6.2%. ‘These differences in affordability align with the relative economic performance of these two states. The Western Australian economy is navigating the tail end of the mining boom which has seen conditions in the local labour market deteriorate and consequently the rate of population growth has fallen quite sharply,’ Murray said. ‘In contrast, Victoria has experienced a healthy level of growth in the labour force and continues to record the strongest rate of population growth in the country,’ he added. A breakdown of the figures show that during the June 2016 quarter, improvements in affordability were observed in three capital cities with the largest improvement in Perth with growth of 3.2%, Darwin up 2.9% and Hobart up 2.2%. Affordability worsened in the remaining five capital cities with the largest decline recorded in Melbourne with a decline of 7.4%, followed by Canberra down 5.7%, Sydney down 1.6%, Adelaide down 1.3% and Brisbane down 1%. Continue reading
