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UK property prices set to rise by over 4% next year
Overall UK house prices are expected to tie by 4.1% in 2016 and by 20.3% cumulatively in the five years to the end of 2020, according to new research. However, as always national average performance disguises large regional variations that still characterise the UK market, the analysis report from international real estate firm Knight Frank shows. In the prime London and prime country markets higher transaction costs will continue to weigh on activity and price growth in 2016 as the market absorbs stamp duty, it points out and prime central London prices are forecast to rise by 2% in 2016 and by 20.5% cumulatively by 2020. Overall, values are growing more strongly in the South of England, particularly London and the South East, compared to slower growth in the North of England, Scotland and Wales. ‘These regional differences are unlikely to unwind significantly in 2016, although the improving economic and employment picture, especially in the regions, will underpin pricing,’ the report says. It also explains that interest rates continue to play a key role in the market. ‘While capital values will continue to be supported by ultra-low interest rates, the discussion has now turned to when, not if, the Bank of England will start to raise rates and markets are pricing in a rise in the second half of 2016,’ it adds. The report also points out that current ultra-low base rate, alongside an increased appetite for lending among banks, has led to record low mortgage rates, and mortgage lending has risen during 2015. The flip-side of this trend however, is that the best mortgage rates are generally only available to those who have access to sizeable deposits or equity. ‘While there are now more mortgage deals available to those with only a 5% deposit, a trend which will continue into 2016, the MMR mortgage rules mean that clinching a mortgage deal will continue to be challenging for some, especially for first time buyers,’ the report says. ‘Activity in the market has stabilised at around 100,000 transactions a month, although it is interesting to note that the cut in stamp duty for homes worth less than £1.1 million in December last year and the definitive general election result failed to produce an increase in activity. This was closely linked to a lack of stock on the market, particularly second hand stock,’ it adds. The analysis also looks at supply and demand and says that a lack of available homes to buy will likely continue to put a floor under pricing in 2016. ‘There is now even more emphasis on the delivery of new homes, and while levels of house building have picked up in recent years, the supply of new build dwellings is still far below Government targets,’ it points out. It also points out that the prime London property market faced a number of headwinds in 2015, led by the increase in stamp duty and higher transaction costs will continue to… Continue reading
World Heritage status boosts property values
Living near a world heritage site in the UK might mean putting up with a lot of tourists but it certainly helps property prices with new research showing homes in these locations are worth 27% more. Whereas the average UK home is valued at £284,127, properties in or near locations with World Heritage Status awarded by UNESCO status can carry a heftier price tag of £77,993, according to research from property portal Zoopla. The Orkney Islands are the UK’s most affordable World Heritage Site to buy a property near while homes near the Palace of Westminster and Westminster Abbey are the most expensive. Homes close to the Neolithic monuments in Orkney currently cost an average of £130,169, coming in at 178% less than the average house price near to a World Heritage Site in the UK at £362,120. UNESCO sites in Bradford and Liverpool are the least expensive urban sites. Saltaire, an industrial village from the second half of the 19th century within the city of Bradford is the most affordable urban site with a typical property here costing £155,868. Liverpool’s Maritime Mercantile City, includes the Albert Docks and the largest collection of Grade I-listed buildings anywhere in the UK, has a typical property price of £167,771. Zoopla analysis found the longer an area has enjoyed World Heritage Status, the higher the property values are, as the area reaps the economic benefits. The first 10 UK locations to be granted World Heritage Status between 1986 and 1987, including Bath, Stonehenge and Blenheim Palace, have an average value of £424,873, compared to just £274,611 for the locations chosen since 2000. In July of this year the Forth Bridge in Scotland became the UK’s latest World Heritage Site. Located between Edinburgh and Dunfermline, average homes in the area currently cost £202,011. The traditional World Heritage Sites in London are the most expensive to live near. Properties in the proximity of the Palace of Westminster and Westminster Abbey are comfortably the priciest heritage location in the country, with a typical value of £1,715,292. ‘Bradford and Liverpool offer fantastic opportunities for potential buyers to live in cities which have shaped world culture,’ said Lawrence Hall of Zoopla . ‘Britain’s World Heritage Sites have contributed massively to our history and our research shows that living near to one can add significantly to a property’s value. Looking at the most recent site to gain World Heritage Status, home owners near the Forth Bridge could expect to see property values increase in future, as the full benefits the award brings to the area begin to be felt,’ he added. Continue reading
Homes in London, the south east and south west sell more often
Homes in London and the South East and South West of England change hands much more frequently than those in other parts of the country, according to a new analysis. Properties are held by their owners for an average of just 16 years in the South East and 17 years in London and the South West. By contrast, home owners in the North East are keeping their homes the longest, with property changing hands every 22 years on average, 36% longer between sales than the South East. The research report from mover conveyancing services firm My Home Move, says that a higher rate of property ‘turnover’ between owners is a sign of a healthy housing market as people move to new areas for work, upgrade to a larger home to accommodate a growing family or downsize when they no longer need the extra space. ‘Homes in healthy property markets change hands often, as people move up the housing ladder or move to new areas for jobs or a change of lifestyle. Our research reveals that the stronger job market and higher incomes in the South mean that people buy and sell homes more often than in the North,’ said the firm’s chief executive officer Doug Crawford. ‘Interestingly, it’s not just the South East that has a relatively healthy number of homes changing hands as the West Country is also thriving. Regional towns like Exeter, Bath and Bristol have vibrant housing markets and the region as a whole also benefits from people moving there from other parts of England for a slice of the good life,’ he added. The research also found that the amount of time between house sales has fallen dramatically over the last five years, down by 24% across England as a whole from once every 25 years to an average of every 19 years. The greatest improvement was seen in the Yorkshire and Humberside region which saw the time between sales fall from once every 28 years to once every 19 years. This was followed by the East Midlands, improving from once every 25 years to once every 18 years. Crawford believes that it is reassuring to see that homes are changing hands much more often than they were five years ago. ‘This has been a period of economic growth and the house market has been improving hand in hand with the economy. The combination of low inflation, reduced unemployment and improving wages means that people feel confident in their prospects and are more enthusiastic about moving to a new home,’ he explained. ‘At the same time, improving mortgage availability and low interest costs have made it easier for consumers to finance a home purchase. With interest rates set to stay low for longer, according to the latest Bank of England predictions, the next 12 months could see a further improvement in the housing market across the country,’ he added. Continue reading
