Tag Archives: european
Latest RICS survey confirms UK price growth slowdown
UK house price growth, especially in London, is slowing after the historic vote to leave the European Union, according to the latest data from the Royal Institution of Chartered Surveyors. The monthly report from RICS posted the lowest survey reading in three years in July. Just 5% more respondents nationally saw a rise rather than fall in prices, down from 15% the previous month. This downward trend that is evident across the UK and the London price indicator remains more downbeat with net balance of -33% which is broadly consistent with an outright drop in prices in the capital but not quite as sharp as that reported in June. The report also says that as price growth slows for now, near term price expectations across the UK were negative for the third month in succession with 12% more respondents predicting a decline in house prices over the next three months. It is the longest stretch of negative readings since 2012. As activity falters, interest from new buyers in the UK also continues to wane, with the results showing a fourth consecutive month of falling demand to a net balance of -27. Notwithstanding the potential for near term weakness, respondents are slightly more optimistic about the 12 month outlook, upgrading their estimates for price growth relative to June. The latest data shows the net balance of those expecting prices to increase over the year ahead rising from zero to 23% but this still represents a significant softening compared to six months ago, when 66% more surveyors anticipated rising prices. For the second month running, the regional breakdown shows London and East Anglia are the only areas in which prices are expected to fall over the year ahead. Nonetheless, London exhibits amongst the strongest projections over the medium term three month average, with respondents pencilling in around 4% growth, per annum, over the next five years. On the same basis, prices are expected to rise by close to 3% nationally. The report also points out that the acute shortage of property for sale appears to be providing some underpinning for prices at present. Indeed, after staging a mild recovery through the early months of 2016, average stock levels on agents’ books have since started to fall again. In fact, the flow of new sales listings coming to the market has contracted at the fastest monthly pace on record in each of the last three reports. With supply at or around record lows in most parts of the UK, lack of choice may weigh further on activity going forward. New buyer enquiries declined markedly at the headline level during July, the fourth consecutive month of falling demand. This weakness was widespread, with virtually all areas of the UK experiencing a dip in demand during July. In keeping with the deteriorating demand backdrop, sales volumes declined sharply and at the national level, a net balance of 34% more respondents reported a fall in sales… Continue reading
More affordable houses to be built at key London regeneration site
The Mayor of London has approved plans for the first major housing development at the Old Oak regeneration site in West London, after intervening to boost the number of affordable homes in the scheme. The Oaklands development will see 605 new homes built, together with a nursery, health centre and commercial space. A target of 50% affordable housing has been agreed for the development, following an intervention by the Mayor Sadiq Khan to boost the number of affordable homes through investment and a profit-sharing mechanism. Old Oak and Park Royal has the potential to deliver 25,500 new homes and 65,000 jobs over the next 30 to 40 years, as well as becoming the key transport interchange for Crossrail and HS2. ‘The development marks a significant step in realising the huge potential of this part of the capital. I am pleased that we have been able to increase the proportion of genuinely affordable homes as part of our ongoing efforts to fix the capital's housing crisis,’ said Khan. ‘The scale and ambition for this development shows London is very much open for business. Despite the uncertainty caused by the UK's vote to leave the European Union, it remains clear that developers and investors see long term potential in our city,’ he added. According to Neil Hadden, chief executive at Genesis Housing Association, the redevelopment at Oaklands in one of Hammersmith and Fulham's most important regeneration sites. ‘We will now be able to provide hundreds more affordable homes for Londoners on a once derelict site. Partnerships such as the one we have with Queens Park Rangers Football Club (QPR) enable us to invest, not only in building new homes, but in developing new communities. We will now be able to provide hundreds more affordable homes for Londoners on a once derelict site,’ he added. QPR co-chairman Tony Fernandes said the firm is committed to bringing forward other development sites in Old Oak as soon as possible to create the homes that London desperately needs. Of the 242 affordable homes, half will be for social and affordable rent, with the other half being for shared ownership. The application was approved by the Old Oak and Park Royal Development Corporation, the organisation that has planning control over the Old Oak regeneration site, on July 13, 2016. The project will also include a new link road into Old Oak which could unlock further development north of the Grand Union Canal. The initial application from Queens Park Rangers Football Club and their development partner Genesis Housing Association proposed 200 affordable homes or 33% of the total. The scheme has now attracted GLA Affordable Housing Grant Funding to raise the number of affordable homes to 242, some 40% of the total with a review mechanism to ensure that any surplus profit as the scheme is implemented will be used to provide more affordable units up to 50%. Continue reading
Rents still rising across most of UK but growth is slowing
Average residential rents in the UK continued to rise in July with demand still more than supply but the rate of growth is slowing, the latest index data shows. Excluding Greater London the average rent agreed is now £779 per month, some 2.3% higher than a year ago while the average rent in London is now £1,599 per month, up 4% over the year. The growth has continued since the beginning of the year and the outlook remains strong despite the growth slowing, says the rental index report from HomeLet. The data suggests that landlords have been able to continue securing higher rents on new tenancies despite the economic uncertainties created by the UK’s vote to leave the European Union in June. It mirrors data from the housing market, with mortgage lenders also reporting modest growth in house prices in the month following the Brexit vote although many agree that is still too early to measure what affect Brexit sentiment has had on the market. Looking forward, the fundamental forces in the private rental sector remain unchanged, the report suggests with Britain’s growing population, the relative unaffordability of house prices, and the lack of new homes being built combined with the reduction in social housing suggest that the private rental sector will continue to be an ever important source of homes in the years and decades to come. A breakdown of the figures show that there is considerable regional variation recorded by the index. Month on month rents increased the most in East Anglia with a rise of 3.7% and the region also topped the annual growth with a year on year rise of 9.7%, taking the average to £897. But rents fell by 3.7% month on month in Scotland but are up 1.4% year on year to an average of £676. The only other region to see a month on month fall was the North East with a decline of 0.4% to £537 and a year on year fall of 5%. Year on year rents have fallen in the South West by 2.1% but are up by 0.7% month on month to £894 and by 0.5% in the North West to £660 but the region has seen month on month growth of 0.5%. Ultimately, rents will be determined by supply and demand in the private rental sector, according to Martin Totty, chief executive officer of HomeLet’s parent company Barbon Insurance Group. ‘Population growth will continue to increase demand, and that the housing stock isn’t growing quickly enough to meet that demand. However, with rents ultimately limited to a tenant’s ability to pay, rents are likely to continue to climb, albeit at the slowing pace noted most recently,’ he said. ‘We won’t know exactly how Brexit is impacting the private rental sector and it will be several months yet until we see some clearly established trends in the marketplace. It seems likely that with lenders concerned about the prospect… Continue reading
