Tag Archives: election
UK property prices set to rise by over 4% next year
Overall UK house prices are expected to tie by 4.1% in 2016 and by 20.3% cumulatively in the five years to the end of 2020, according to new research. However, as always national average performance disguises large regional variations that still characterise the UK market, the analysis report from international real estate firm Knight Frank shows. In the prime London and prime country markets higher transaction costs will continue to weigh on activity and price growth in 2016 as the market absorbs stamp duty, it points out and prime central London prices are forecast to rise by 2% in 2016 and by 20.5% cumulatively by 2020. Overall, values are growing more strongly in the South of England, particularly London and the South East, compared to slower growth in the North of England, Scotland and Wales. ‘These regional differences are unlikely to unwind significantly in 2016, although the improving economic and employment picture, especially in the regions, will underpin pricing,’ the report says. It also explains that interest rates continue to play a key role in the market. ‘While capital values will continue to be supported by ultra-low interest rates, the discussion has now turned to when, not if, the Bank of England will start to raise rates and markets are pricing in a rise in the second half of 2016,’ it adds. The report also points out that current ultra-low base rate, alongside an increased appetite for lending among banks, has led to record low mortgage rates, and mortgage lending has risen during 2015. The flip-side of this trend however, is that the best mortgage rates are generally only available to those who have access to sizeable deposits or equity. ‘While there are now more mortgage deals available to those with only a 5% deposit, a trend which will continue into 2016, the MMR mortgage rules mean that clinching a mortgage deal will continue to be challenging for some, especially for first time buyers,’ the report says. ‘Activity in the market has stabilised at around 100,000 transactions a month, although it is interesting to note that the cut in stamp duty for homes worth less than £1.1 million in December last year and the definitive general election result failed to produce an increase in activity. This was closely linked to a lack of stock on the market, particularly second hand stock,’ it adds. The analysis also looks at supply and demand and says that a lack of available homes to buy will likely continue to put a floor under pricing in 2016. ‘There is now even more emphasis on the delivery of new homes, and while levels of house building have picked up in recent years, the supply of new build dwellings is still far below Government targets,’ it points out. It also points out that the prime London property market faced a number of headwinds in 2015, led by the increase in stamp duty and higher transaction costs will continue to… Continue reading
UK mortgage approvals for homes reaches 18 month high
The number of mortgage approvals for house purchases in the UK has risen to an 18 month high, as the end of summer saw a surge in mortgage lending, according to the latest data from chartered surveyors. There were 69,220 house purchase mortgage approvals in August, some 9.3% higher than the 63,340 approved in August last year, and the highest monthly number since 70,239 in February 2014, the figures from the Mortgage Monitor report from e.surv shows. Compared with July, the number of house purchase approvals has risen 0.7%, from 68,764 approvals. It marks the third consecutive monthly rise in approvals, with mortgage lending steadily improving every month since the General Election in May. The firm says that this improvement also comes despite growing certainty over the likely course of interest rates in the UK, with the Governor of the Bank of England, Mark Carney, reporting that global economic uncertainty, in particular the slowdown in China’s economy, is likely to have little impact on when the bank's Monetary Policy Committee chooses to raise the base rate from 0.5%. 'Weak inflation and recovering wages mean that more British workers are able to meet the stringent affordability requirements demanded by the new MMR rules and obtain the mortgage they want,' said Richard Sexton, a director of e.surv chartered surveyors. 'This latest resurgence of demand is pushing up prices. What’s more, banks are supporting those borrowers that need finance, and many record low rates remain. It‘s a good time for many potential new buyers to get a mortgage and think about taking a first step on the ladder,' he explained. 'Concerns over an interest rate rise may have helped push some borrowers into acting quickly. However, this is now the third consecutive month of growth, and home lending has been strong since May, now that the uncertainty that surrounded the election has evaporated. Healthier mortgage lending reflects a stronger UK economy and an upturn in fortunes for British buyers,' he added. The data also shows that August saw the number of small deposit borrowers, that is those with a deposit worth 15% or less of their properties’ total value, rise in absolute terms to reach a post-recession high. There were 11,975 small deposit house purchase loans approved in August, up 7.5% compared with 11,140 in July and 6.2% up on August 2014. It was the best month for small deposit house purchase lending since April 2008. Small deposit borrowers now represent 17.3% of all house purchase mortgage approvals, the highest proportion since September 2014 and significantly higher than in July 2015, up 16.2% month on month. Sexton pointed out that the latest First Time Buyer Tracker from Your Move and Reeds Rains reported that July saw 29,700 first time buyer sales, the highest number since August 2007. 'First time buyers have… Continue reading
Property sales fell back in UK in July, latest transaction data shows
Property sales in the UK fell back between June and July by 4.4%, according to the latest seasonally adjusted estimate from HMRC. There were a total of 100,720 residential transactions and 10,100 others in July, the data shows, some 0.2% higher compared with the same month last year. Peter Rollings, chief executive officer of agents Marsh & Parsons, pointed out that it is the first rise on an annual basis for this measure for seven successive months. ‘In July, sales may have slipped back slightly month on month, but we need to remember that the market was working overtime in June to regain ground lost before the election,’ he said. He explained that ever since the changes to stamp duty at the end of 2014 property taxation has become more of a sticking point in London, and here buyer demand has slowed somewhat at the top-end. ‘It will take a while for these changes to fully bed in, and in the meantime house price rises and property sales in the capital may be outshone by other UK regions for the months to come,’ he said. ‘But that’s not to say they’ve fallen out of line and with an average 12 buyers chasing every available property on the market, the strength of the demand for homes in London will continue to push growth up a gear,’ he added. Doug Crawford, chief executive officer of conveyancing services provider myhomemove, also believes that the general election has been a factor affecting the property market in recent months. ‘The general election’s outcome assured buyers and sellers that the housing market was likely to remain stable, leading to a spike in the number of property transactions in June. Today’s HMRC figures show that the number of transactions has barely changed over the last year and this begs the question about why a year’s steady improvement in the economy hasn’t led to an increase in home purchases, particularly when mortgage availability and rates have been so favourable,’ he said. ‘The main impediment has been a serious shortage in supply. There is a lot of appetite from buyers but not enough homes for sale to meet demand. This mismatch is stoking price rises. In some areas we have even seen instances of gazumping, as sellers look to make the most of competition between buyers by accepting higher offers,’ he explained. He believes that the big question looming in the background is the timing of an interest rate rise from the Bank of England. Many would be buyers are keen to purchase while mortgage rates are so low. Increased anticipation of rate rises is putting greater pressure on buyers and competition for homes for sale could drive up prices further in the short term,’ he added. Continue reading
