TSI
Underlying trend shows house price quarterly slowdown in UK
UK house prices in the third quarter of 2015 were 8.6% higher than in the same three months a year earlier and up 2% quarter on quarter, according to the latest residential index. However, the quarterly rate of growth fell from August’s 3%, to its lowest since May and the annual figure was lower than the 9% recorded in August, the date from leading lender The Halifax shows. The index report says that the movements are in line with the average so far this year and points out that monthly data can be volatile and the quarter on quarter change is a more reliable indicator of the underlying trend. Separate research shows that there has been a 60% increase in the average price of a flat over the past 10 years, significantly higher than the 38% rise for all residential properties. Detached homes with growth of 21% and bungalows at 28% have recorded the smallest rises over the last decade. ‘Housing demand has been strengthening recently, underpinned by economic growth, rising real earnings and very low mortgage rates,’ said Martin Ellis, Halifax housing economist. ‘Increasing demand is combining with very low supply to drive robust underlying house price growth. There is little reason to expect any fundamental shift in the key market drivers over the coming months,’ he added. Continue reading
UK govt to change planning rules to free land for new homes
Planning rules on brownfield sites in the UK are being removed to free up land for development with more homes being built for first time buyers, the government has announced. The housing budget is to be directed towards new low cost homes for sale for first time buyers and housing association tenants are to be given the right to buy, Chancellor George Osborne has confirmed. He also announced that the government will bring forward sales of land, buildings and other assets the government bought or built, raising up to £5 billion over the course of this Parliament with the funds from these sales being recycled to help fund new infrastructure projects. Osborne added that a new independent National Infrastructure Commission (NIC) is being created charged with offering unbiased analysis of the UK’s long term infrastructure needs. The NIC will begin work immediately with Lord Andrew Adonis as its first chairman. It is likely that up to 40 towns and cities in southern England could be doubled in size to deal with the country’s housing crisis as Lord Adonis has spoken about bold initiatives needed to deliver the huge number of new homes required. He is known to favour the idea of building a new generation of garden cities or garden extensions to existing towns. Indeed, in an article written just weeks before his appointment, he said central government should intervene to massively extend towns including Guildford, Norwich, Reading, Oxford and Stratford-upon-Avon. He is also known to back the idea of a new requirement on local authorities to use more of its public land for housing. His vision is likely to be bold and include central and local government leading development in partnership with the private and voluntary sectors. Melanie Leech, chief executive of the British Property Federation, welcomed the announcements. ‘In order to create places where people will live as well as work, we would hope to see discussion as to whether large scale housing schemes could be considered within significant infrastructure projects. This would enable the development industry to deliver a large number of homes, quickly,’ she said. Continue reading
Rental values in prime central London down to lowest level for a year
Annual rental growth in prime central London fell to 2.4% in September, which was the lowest level it has been since September last year, the latest data shows. The report from international real estate firm Knight Frank also shows that the number of tenancies agreed in the three months to August fell 5.9% versus 2014 while prime gross rental yields remained at 2.96%. The slowdown came against the backdrop of jittery financial markets, with nerves over the state of the Chinese economy spreading to commodity and mining stocks, compounded by declines among carmakers, according to Tom Bill, head of London residential research at Knight Frank. ‘This current overriding mood of uncertainty means companies are more hesitant about recruiting and are more conservative with relocation budgets for senior executives, which has dampened demand in the prime central London lettings market,’ he said. ‘As a result, the number of tenancies agreed in the three months to August fell 5.9% compared to the previous year and the number of viewings declined 10.2%. Such declines suggest the trend for falling rental value growth will persist in the short term,’ he added. He pointed out that the trend is less marked in both lower and higher price brackets. ‘Demand among younger professionals remains strong while demand at the super prime level of £5,000 per week and above has been buoyed by the fact tenants have moved across from the sales market due to last December’s stamp duty increase,’ explained Bill. Continue reading
