Taylor Scott International News
House prices in key UK cities increased by 11.4% in December, a 15 month high due to unseasonal strong market activity, according to the latest index report. Cambridge and London lead growth although sales volumes in these cities are lower over 2015 and the impetus for growth continues to come from regional cities, like Liverpool and Glasgow. Demand is increasing in the face of short supply and while there is some increased interest from buy to let buyers, eight out of 10 sales are still to owner occupiers, the Hometrack index also shows. Cambridge saw the highest annual rate of growth at 14.4% followed by London at 13.8% and then Bristol at 12.8%. All these high growth markets are growing at a broadly similar rate to the levels seen a year ago. The report points out that while residential values may be rising, overall sales volumes across Cambridge and London look on track to be lower over 2015, bucking the national trend of flat volumes, as scarcity of homes for sale and affordability pressures limit overall volumes. It also shows that the falling oil price continues to affect the housing market in Aberdeen. House price growth in the city is down 1.4% compared to a rise of 13.5% and looks set to remain weak over 2016. Newcastle and Sheffield are recording the next lowest growth rates of 3.7%, still higher than average earnings, and in cities where the housing recovery is at a much earlier stage. Overall the impetus for growth continues to come from regional cities where prices are rising off a low base as household confidence improves and home owners utilise record low mortgage rates to access the market. Glasgow and Liverpool have recorded a significant increase in house price growth over the last 12 months in cities where the recovery has been running for just two to three years. A year ago Glasgow price inflation was running at 0.1% but this has risen to 8.5%, similarly Liverpool price growth is up to 5.7% from 1.3% a year ago. A quarter of homes in the 20 cities covered by the index is private rented property and strong private investor demand will explain some of the additional growth in city level house prices relative to the UK rate of growth, the report says. Much has been made of the impact of tax changes for buy to let investors with mortgaged property and the proposed new 3% stamp duty levy from April 2016. Indeed, the latest Bank of England Credit Conditions Survey for the fourth quarter of 2015 points to expected strong demand for mortgages from buy to let landlords in the first three months of 2016. ‘Demand for buying property as an investment is far from dead and 2016 looks set to be a year of consolidation for investors, especially those who are mortgage reliant. A portion of investors are likely to accelerate purchases before April but we should not read… Taylor Scott International
Taylor Scott International, Taylor Scott
