Tag Archives: economy
Price growth in the UK’s prime country house market slowed in 2015
The annual change in prime property values in the UK over the year to September was 2.7% on average, down from a high of 5.2% last year, according to a new analysis report. Stamp duty reform, announced in December 2014, continues to weigh on activity and price growth at the top end of the market in England and Wales while in Scotland the new Land and Buildings Transaction Tax (LBTT) is also affecting the market. Indeed, the level of LBTT for sales between £750,000 and £2 million is on average 55% higher than the equivalent Stamp Duty payable across the rest of the UK, the Prime Country Winter Review from real estate firm Knight Frank says. Meanwhile, price growth in prime town and city markets including Oxford, Bath and Bristol has been relatively robust and farmland values remained steady in the third quarter of 2015 as the market enters a period of equilibrium. According to Knight Frank indices, prime property values for homes located in town and city markets have risen by 26% since 2005 and are now 3% above their 2007 peak. In comparison, more rural properties have risen in value by 7% since 2005 and remain 13% below peak levels. Over the past year this outperformance has continued. This has been particularly evident in prime cities with strong commuting links to London, notably locations such as Oxford, Bath, Bristol and Winchester, the report explains. ‘In recent years, a return to economic growth has given a number of these towns and cities an additional lift with an improving business environment helping contribute towards higher demand for housing as people relocate to an area for work, or look to move up the ladder locally,’ said senior analysts Oliver Knight. He pointed out that a recent report from the British Bankers’ Association noted that banking jobs are shifting from London to some smaller regional locations, with particularly strong growth in Tunbridge Wells, South Gloucestershire, Chelmsford and North Tyneside, all of which outperformed London in terms of employment growth over the last year. The report explains how in 2005 there was quite an equal distribution of prime sales across the country, but by 2014 there had been changes across the Midlands, North West and Yorkshire as transactions clustered more around urban centres. A closer look at the data shows that while the volume of sales fell by 13% across the country between 2005 and 2014, in key town and city markets sales volumes at the top end of the market increased by an average of 25%. Looking ahead, the trend for urban living is expected to continue. ‘As the economy continues to recover and house prices outside of London show further growth, the trend for more London buyers to move will gain more traction and this will boost the ripple effect of house price growth from the capital,’ said Knight. ‘Infrastructure improvements, such as faster road or rail connections or the creation of new transport hubs will enhance… Continue reading
UK rents not showing signs of seasonal slowdown, says latest monthly index
UK rents increased by 0.7% month on month in October to £1,294, showing no signs of the seasonal slowdown that normally hits the UK rental market in the autumn, according to the latest index. Rents increased across most of the county with the only exception being Scotland which saw a marginal monthly fall of 0.1% to £696, the data from the Landbay Rental Index shows. The report suggest that the latest rises indicate that the UK’s housing shortage combined with growing pay for many and unemployment levels hitting their lowest level since 2008 have put an end, at least for the time being, to the usual seasonal fall in rents that starts in the autumn. In fact the last time there was a sustained period of falling rents was in the winter of 2012/2013, when rents saw monthly falls from August 2012 to April 2013. Rents increased every month in 2014 and have been strong this year, seeing only small month on month decreases between June and August before increasing again in September and October. Typically an autumn seasonal slowdown in the rental market is caused by lower tenant demand after heightened demand in the summer from students, first jobbers moving for work, and the expiry of annual contracts that originated in previous summer rental rushes. The fact that it did not happen last year and shows no signs of arriving this year demonstrates that the UK private rental sector is seeing a period of consistently high demand and insufficient supply of properties. October’s rent increases were fastest for three bed properties, which are often rented by families moving for work, up 4.7% year on year and one beds that are most popular with first jobbers and young professionals, up 4.4%. Increases in the UK are being driven by London and the southeast. In October London rents increased by 4.1% to an average of £2,063, whilst rents in the southeast rose by 3.4% to £1,033. The impact of London on the national private rental sector is becoming increasingly evident by the surge in rents among commuter hotspots. Southend on Sea, historically not well known for its commuter town status, has seen consistently faster growth in rents than the national average. The seaside town’s one hour direct train into London and recent gentrification have played their parts in an annual rental increase of 9.7%, to an average of £759 per calendar month. Out of the top 20 areas of the UK outside of London to see the fastest rent increases, just Aberdeen, Edinburgh and Bath were outside of the southeast. ‘Seasonality has always been a strong feature of the UK’s rental market so the fact that it appears to be declining in influence is a powerful sign of the increasing strain the private rental sector is under to house the UK population,’ said John Goodall, chief… Continue reading
Asking prices down 1.3% in England and Wales, but seasonal dip lower than usual
Asking prices in England and Wales fell 1.3% month on month but are still up 6.2% year on year, taking the average to £292,572, according to the latest index data. It is the smallest drop in new seller asking prices during the seasonal November slowdown since 2011, according to the Rightmove report and the online portal says that it is indicative of even higher prices next year. Prices fell in all regions with Wales seeing the biggest monthly fall of 3.7%, taking the average asking price to £196,471 and both the South West and the North East saw a fall of 2.3% taking the averages to £279,643 and £142,917 respectively. Yorkshire and Humber saw a monthly fall of 2.2% to an average of £167,343, in the North West there was a fall of 1.9% to £171,709, while the South East and the West Midlands recorded a decline of 1.1% to £384,001 and £196,471 respectively. There was a 1.6% fall in asking prices in Greater London taking the average to £619,866, a fall of 0.6% in the East Midlands to £187,148 and a decline of 0.3% in the East of England to £315,568. The report points out that sellers who come to market in the run-up to Christmas typically set lower asking prices as buyers are harder to attract at this time of year. However, this November’s price dip of 1.3% or £3,977 is much less marked than usual, and is the smallest seen at this time of year since 2011. According to Rightmove director and housing market analyst Miles Shipside this indicates a positive underlying outlook for the year ahead among home owners, with research by Rightmove showing them to be in a confident mood and largely unfazed by the risk of higher interest rates in 2016. Given these findings, and the likelihood that demand will continue to outstrip supply, prices look set to increase again in many locations in 2016. Shipside expects it to be a short lived dip in asking prices. High home owner confidence is demonstrated by Rightmove research, with a sample size of over 23,000, which reveals that the majority, 85%, don’t think their financial situation will worsen in the next year. Despite the possibility of a 2016 rate rise that could increase mortgage repayments for many, 41% of home owners said they thought their household’s financial situation would get better over the next 12 months. Another 44% said things would stay the same, with only 15% forecasting they would get worse. Some 69% were also of the opinion that property would continue to rise in price over the next 12 months, with only 7% expecting prices to be lower. ‘Home owners have had a smooth ride over the past six or so years with a 0.5% base rate, so you would think that more might have concerns about the extra drain on their financial resources when the base rate inevitably goes up. Whether in 2016 or early… Continue reading
