Tag Archives: election
House price growth optimism slows in the UK
The majority of households in the UK perceive that the value of their home rose in February but this level of optimisim is moderating, according to the latest house price sentiment index. Some 19% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 6% reported a fall, the data from the Knight Frank and Markit Economics report shows. This gave the HPSI a reading of 56.5, the twenty third consecutive month that the reading has been above 50 but February’s index represents the lowest perceived rate of price growth since August 2013. Households in 10 of the 11 regions covered by the index report that prices rose in February, with Scotland at 49.4 the only exception. This is the first time any region within Great Britain has reported a price fall in 18 months. The future HPSI, which measures what households think will happen to the value of their property over the next year, fell again in February to 68.2, down from 69.5 in January. This is the third consecutive monthly fall in house price expectations across the UK and the lowest reading since August 2013. The future HPSI stands well below its record high of 75.1, which was seen in May 2014. Households in the South East at 73.8 expect the strongest price rises over the next 12 months, followed by those in the East of England at 72.9 and London also at 72.9. However, households in Scotland still expect average prices to rise over the coming 12 months with a level of 61, despite a perception that prices fell in February. ‘The easing in house price sentiment indicates that the market is in for a steadier year than 2013 or 2014. While buying intentions are relatively high, there is less conviction that prices will rise strongly this year. Just 43% of households expect the value of their home to rise over the next 12 months, compared to 55% in February last year,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘The moderation in sentiment comes despite the prospect of a prolonged period of ultra-low rate inflation and low unemployment. However new mortgage rules and affordability constraints in some parts of the country are likely to weigh on price growth. In the shorter-term, many households are focussing on the election, the outcome of which could change some household finances if taxes or benefits are reformed,’ she added. According Tim Moore, senior economist at Markit, despite a sustained retreat in recent months, the latest survey indicates that overall house price sentiment remains at an elevated level by historical standards. ‘Around six times as many UK households forecast a rise in their property value during the year ahead as those that expect a decline. Improving mortgage availability, rising consumer confidence and a reduced likelihood of impending interest rate rises all look set to support UK property prices over the course… Continue reading
Prime property buyers in London down by 30%, new data suggests
London’s residential prime property market is seeing fewer buyers than a year ago and stock levels are up by 60%, according to new data. The December market barometer from Douglas & Gordon shows that buyers are down by 30% but prices are holding up with values down only 15% year on year. The firm says that this is an indication that the appetite to move amongst prospective vendors is still there but there is clear evidence to suggest that political uncertainty ahead of next May’s general election is playing on buyers’ minds. It also says that vendors are waiting until after the election to put their house on the market in the hope of greater stability and records a resurgence of gazundering for the first time since 2009. ‘Significantly, the fall through rate is down, so buyers are showing tenacity in securing their property. It’s unlikely to become a common trend however, as most sellers are happy to wait for the return of market stability post-election, although the broadly beneficial Stamp Duty reforms could signal a return of confidence even earlier, said George Franks, sales director. ‘In this new paradigm, when the world economy wobbles, London smiles and, given international deflationary pressures and interest rates remaining low long term, we anticipate next year as being very good for both the prime and emerging prime markets,’ he added. The lettings market is proving to be the polar opposite of sales with applicants up 33% and stock down 30%, indicating that 2015 will sustain the recovery of rental values that has been so eroded in recent years. An uncertain sales market has helped to bolster activity with 26% fewer tenancies ending compared to this time last year, signalling that tenant are staying put, according to lettings director Virginia Skilbeck. She pointed out that at the beginning of December the first phase of the ‘right to rent’ scheme came into force in the West Midlands, whereby landlords will face fines of up to £3,000 if they fail to check on the immigration status of their new tenants. The Home Office says it expects to continue with the phased introduction of the scheme across the UK next year, but she does not expect a decision on whether it will be extended throughout Britain until after the general election in May. ‘Seasonally, the beginning of January is a very busy time in the lettings calendar and with some of our offices having half as many properties available to let compared to this time last year, combined with a surge of applicants registering in the New Year, we can expect to see increased competition for fewer available properties,’ she said. Continue reading
New UK property tax measures set to boost buy to let
The UK’s new property tax rules are set to provide a boost to both the sales market and buy to let market, it is claimed. The new rates will give the biggest savings to buyers at the lower and middle end of the market and according to Stephen Ludlow, chairman of lettings age Ludlow Thompson, as buy to let landlords usually invest in properties below £937,500 the changes will give almost all investors in this market a boost. ‘The changes in stamp duty will see the biggest increase in net returns for more modestly investments such as smaller properties in Zone three of London, city centre apartments, flats above shops, ex-local authority property and property in secondary locations,’ he said. ‘The reforms could encourage those who may have been delaying their purchase until after the election to reconsider. The new rates should also provide a boost to the sales market and result in an increased number of purchases in this usually quiet time for residential property deals,’ he added. Graham Davidson, managing director of Sequre Property Investment, also believes the change is a positive one for the buy to let market. For example, a buyer of a high end two bedroom Manchester city centre apartment at a price of £150,000 will now pay just £500 stamp duty, a saving of £1,000. ‘However the impacts on the £925,000 plus market will certainly be felt throughout the industry, in particular by the higher end London property market. We would expect to see this contribute to a further slowing of the market there,’ he added. Alison Platt, group chief executive of Countrywide, said the change is likely to attract more home buyers to the market. ‘So for those who are thinking of selling their property, there has never been a better time. Equally for buyers, a stable interest rate environment and the availability of a range of attractive mortgage products, means that now is an ideal time to purchase a home,’ she explained. But Jamie Lester, head of Haus Properties, thinks it send shockwaves through the London market, particularly in the £1.5 million to £2 million price range. ‘This market has been especially active with buyers sticking below the 7% stamp duty and proposed mansion tax thresholds. These buyers will now have to pay a significantly higher amount,’ he said. ‘For example, someone purchasing a £1.9 million property would have paid £95,000 under the old stamp duty rules, whereas under the reforms they will be paying almost £50,000 more at £141,750. However, those buying just above £2 million won't be quite so heavily hit, for example, someone purchasing at £2.1 million will now be paying £165,750, an increase of £18,750,’ he explained. Camilla Dell, managing partner of independent property buying agency, Black Brick, said there is no question that the old stamp duty bands were in desperate need of reform and overhaul. ‘For 98% of the UK population these changes are therefore clearly good news. But… Continue reading
