Tag Archives: autumn
Estate agent figures confirm rush of buy to let buyers
Figures from estate agents confirm that there has been a rush from buy to let investors ahead of the new stamp duty deadline for additional homes in the UK. In February some 85% of estate agents reported an increase in the number of buy to let investors flooding the market to beat the stamp duty changes which come into effect on 01 April, according to the latest housing report from the National Association of Estate Agents (NAEA). The Chancellor’s announcement around stamp duty for additional homes made in last year’s Autumn Statement meant that in January and February this year 72% and 85% of agents respectively, saw an increase in interest from those hoping to purchase second homes. This meant that with added pressure from buy to let investors on the market, demand for housing was the highest level for 12 years in February. Indeed, the data shows that there were an average 463 house hunters registered per member branch, the highest since August 2004 when 582 were registered per branch. This is following an increase in January when estate agents reported 453 per branch, the highest since July 2015. The number of properties available per branch increased marginally from 33 in January to 35 in February, as the number of sales agreed per branch in February increased too. There were an average nine sales completed in February, back to the level seen in October 2015 and a rise from eight sales agreed per branch in January. The report also shows that 24% of total sales made in February were to first time buyers, a decrease of 5% points from January, as mounting pressure from buy to let investors increased competition. ‘It is evident from February’s report findings that we’ve seen a real sense of urgency from landlords trying to complete on sales ahead of the stamp duty reforms,’ said Mark Hayward, NAEA managing director. ‘However, the mounting pressure and increased demand for housing has meant that first time buyers have had to compete with landlords for property and as a result they have lost out,’ he pointed out. ‘We would like to say that come April things will look better for first time buyers. Schemes like the Help to Buy ISA, Help-to-Buy scheme and the new Lifetime ISA all sound great on paper, and there’s no doubt that some young people will definitely benefit from them,’ he explained. ‘But the crux of the problem though is that there is still a huge issue with supply and until we build more homes, and crucially the right sort of homes, we cannot fool ourselves into thinking we are doing enough to help people buy their own home,’ he added. Continue reading
Buy to let lending grew in 2015 at expense of first time buyers
The rapid growth of the buy to let market in the UK during 2015 was at the expense of first time buyers despite Government initiatives to encourage home ownership, new research has found. The proportion of buy to let mortgage enquiries grew by 4.4% to 18.2% during 2015 compared with 2014, whereas the proportion of enquiries for first time buyers fell by 3.7% to 23.5%. According to price comparison website comparethemarket.com the inverse correlation indicates that the buy to let market has gained a chokehold over first time buyers, as many struggle to get out of rented accommodation and on to the housing ladder. January showed no signs of a reducing market, as the first month in 2016 showed year on year growth of over 16% and 62% increase compared to December, reinforcing the sentiment that the current buy to let market may be unsustainable. Evidence indicates that if the market continues in its current direction, the number of enquiries for buy to let mortgages will outstrip the number for first time buyer enquiries, which would be a blow to the Government’s home ownership drive. Overall the buy to let market saw growth during of over 23% in enquiries on the website in 2015 and the initial cut on tax relief also did little to reduce the swelling of the buy to let market as enquiries rose by 14% in the three months after the announcement made by the Chancellor at the Summer Budget, compared to the three months before. However, with the new stamp duty on buy-to-let properties, announced at the Autumn Statement, coming into effect this spring, many expect the market will finally dampen. Elsewhere, January proved to be a particularly buoyant month for the mortgage market as the number of enquiries rose by more than 8% compared to 2015. It seems that January is the time that consumers get their respective houses in order with a recent study by comparethemarket.com finding that 44% of consumers used the month to ‘sort out’ their finances. ‘The buy to let market has been subject to both extensive discussion and criticism over the past year with even the Bank of England’s Financial Policy Committee labelling it a risk to the UK’s financial stability,’ said Jody Baker, head of money for comparethemarket. ‘This data only reinforces the view that over the past year, families and others looking to get a foot on the housing ladder are being priced out by landlords. It was great to see the Government take action in the Autumn Statement but time will tell as to what the material impact will be on the market after 01 April,’ Baker added. Continue reading
Property sales in UK set to slowdown when buy to let surge ends
The UK housing market is set to slow down over the next three months following a short term rush on buy to let properties, says the latest report from the Royal Institution of Chartered Surveyors. The monthly survey report from RICS also shows that house price inflation peaked last December ahead of an anticipated rush to beat buy to let tax rises which come into force on 01 April. Once the 3% surcharge on additional homes, which include buy to let and second homes, is in place, RICS predicts that there will be more modest growth in property sales. While 74% of survey respondents expected there to be a rush on buy to let purchases ahead of Stamp Duty increases only 17% (net balance) expected to see an increase in sales over the coming three months. In addition, while house price inflation expectations peaked following the Chancellor’s Autumn Statement, with prices driven by speculation regarding an increase in investor demand, RICS says that this trend is set to soften from March as investor interest dampens. Only 21% of respondents expect prices to increase over the coming months. The survey showed that house prices continued to creep up throughout February. Across the UK, East Anglia continues to show the sharpest price increases, with 91% of respondents reporting that prices had risen over the past month. London and the North East by way of contrast saw very modest gains while the South West has seen the highest rise in sales across the UK for the last three months and 49% of respondents experienced a rise in sales rather than a fall and further increases are expected over the year ahead. New instructions to sell also increased more sharply in the South West than anywhere else in the UK as 34% of surveyors saw an increase in new listings rather than a decrease. New buyer enquiries in the South West rose for the twelfth month in succession with 49% more respondents seeing an increase in demand rather than a fall, the highest in the UK. However, uncertainty weighs on London’s housing market. Price expectations have turned negative in prime central parts of the capital and after sharp periods of inflation, London house prices look set to stabilize. Overall outer London boroughs remain firmly positive and Zone one properties are showing signs of a downturn. ‘Anecdotal evidence has suggested that a combination of exogenous factors is contributing to the overall picture in prime London, with tax changes, foreign market slowdowns and uncertainty over Brexit all being mooted as potential reasons behind the changes in demand,’ said Simon Rubinsohn, RICS chief economist. ‘This is not necessarily indicative of the long term market and the depreciation of the pound could encourage overseas investors back in to the market as could the outcome of the European referendum,’ he explained. He pointed out that the challenges facing the top end of London’s property market are clearly visible in the latest results. ‘However, it is… Continue reading
