Tag Archives: investment
Buy to let property investors in UK still positive post Brexit
Confidence in the lending environment remains unchanged for buy to let property investors in the UK after the historic vote to leave the European Union, according to new research. The survey, which explores the views of property professionals in the wake of the UK’s decision to leave the EU, reveals that some 57% of property investors are feeling very confident or fairly confident about the lending environment over the next six months, compared to 59% in January 2016, the latest survey of property professionals from Shawbrook Bank shows. It says that this confidence is reflected in the proportion of investors looking to buy an additional buy to let over the next year at 58% compared with 56% in January 2016, and suggests Brexit has not had an immediate impact on people’s future investment plans and their attitudes towards buy to let investing. However, while Brexit may not have de-railed investor plans, it is still cited as the biggest challenge this group will face over the next year, according to 32% of investors. While 44% remain unsure of what impact Brexit will have and how the subsequent changes to property prices and market competition will impact them, 42% think the result will negatively impact property investors. Only 14% believe the result will have positive implications. Similarly, property investors are feeling a lot less confident about the prospect for the UK economy with 48% of investors fairly concerned or very concerned about the economic outlook, an increase of 19% from six months ago. Some 54% of investors are more negative in their outlook and believe that falling house prices would be the main negative consequence while 23% think it will be decreased competition. In contrast, 37% of those that predict positive outcomes see decreased competition in the market due to uncertainty as the main positive consequence, 24% cited less regulation and red tape while 20% said falling house prices. Property prices are one area which property investors expect to see significant changes over the next six to 12 months. In January 2016 some 67% of property investors predicted a small increase in property values and 6% predicted a small decrease. The latest figures reveal that 42% are anticipating a small decrease in prices and only 21% are predicting a small increase over the next 12 months. ‘As a lender, it is encouraging to see sustained confidence in the lending market since the beginning of the year at a time when the sector has seen a great deal of change,’ said Stephen Johnson, deputy chief executive officer and managing director of property finance at Shawbrook Bank. ‘Seeing this optimism reflected in investors’ plans to acquire new buy to let properties is a promising sign that the specialist market shows no signs of slowing despite uncertainty. At Shawbrook, we have not yet seen any real change in customer behaviour and there is still a great deal of activity across the commercial business,’ he explained. ‘While the aftermath of… Continue reading
UK property prices up 0.2% month on month in July and annual growth slowed
Residential property prices in the UK increased by just 0.2% month on month in July and by 5.5% year on year to £293,318, according to the latest index data to be published. But there has been a gradual decline in annual growth since February when it was running at 8.9%, and excluding London and the South East year on year growth was 4.8%, the figures from the LSL Property Services/Acadata index shows. The index also shows that quarter on quarter sales were down 20% year on year compared with the second quarter of 2015 but the index report says it is too early to say if Brexit is impacting the market. The East of England was the top performing region with annual growth of 9.3%, up from 9.1% the previous month. This was followed by annual price growth of 7.2% in the South East and 6% in Greater London. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, while the vote to leave has definitely resulted in uncertainty, there’s near unanimity among commentators that the impact is yet to show in the figures and for now, we’re left with mixed signals. He explained that on the one hand, house price inflation on an annual basis continues to slow year on year but last month saw the market continue its fight back following price falls in March to May with July recording a modest gain after June’s 0.5% rise, with average prices up 0.2% or £700. However, overall this means prices remain £3,386 below their February peak, but £15,422 above their July 2015 levels. The index report suggests that the fall in sales is less to do with the referendum vote than the surge in activity to beat the 3% stamp duty surcharge introduced in April on second homes and buy to let properties. It points out that the spike in sales in March was followed by a massive decline the following month, from which the market has since been recovering. It also points out that transaction volumes have grown every month since April and are now well above February levels. Moreover, the exceptional sales level in March 2016 more than compensates for the decline since. ‘Overall, for the first six months of each year, we estimate transactions in 2016 at some 4% higher than in 2015. Sales volumes continued to increase in July, but again this still tells us little about the referendum vote, since transactions recorded at the Land Registry for the month mostly relate to offers made by purchasers in June, or even earlier,’ Gill explained. He added that the April stamp duty change may also account for much of the apparent slowdown in prices as prices increased above trend from January to March after the announcement of the change in the Autumn Statement last year. Meanwhile, from April 2016, with the new tax in place, a reduction in the number of higher-valued properties… Continue reading
UK asking prices slowed in August but no more than usual for the summer
The price of property coming onto the market in the UK in August fell by 1.2% but as the summer is often a quieter time it is not necessarily all due to Brexit, according to the latest asking price report. Indeed, the monthly decline is in line with the 1.2% average drop over the last six years at this seasonally subdued time of year and the Rightmove report points out that it is usual for sellers in the summer holiday season to price more cheaply. The monthly fall took the average asking price to £304,222 and prices are still up by 4.1% year in year, the data also shows. A breakdown of the figures shows that while first time buyers are paying 0.5% less month on month at an average of £188,237, it is the top end of the market that has seen asking prices fall the most, down 2.9% month on month to £538,755. The report also points out that larger homes are taking longest time to sell while the number of days to sell increased the most in London and South East in the last two months. It suggests that 2016 on course to be a year of two halves with activity skewed in the first half of year with the buy to let surge boosting property transactions to 12% higher than 2015 but the outcome of the second half of 2016 hangs on the strength of the traditional autumn market rebound How different the two halves will be depends on the strength of the traditional market rebound this autumn, especially at the upper end of the market and within the London commuter belt, which currently appear to be the most subdued, according to Miles Shipside, Rightmove director and housing market analyst. ‘Many prospective buyers take a summer break from home hunting, and those who come to market at this quieter time of year tend to price more aggressively. This summer is also affected by both Brexit uncertainty and the aftermath of the buy to let rush in March to beat the stamp duty deadline,’ he said. ‘The average fall in new seller asking prices at this time of year has been 1.2% over the last six years, so this month’s fall is exactly in line with the long term average. The largest price falls at this time of year were 2% and 1.3% in 2014 and 2010, with the smallest fall being 0.8% after the general election in 2015,’ he pointed out. Shipside explained that the sector that would benefit most from an autumn pick-up is made up of larger homes with four bedrooms or more. They are taking the longest time to sell, with an average of 74 days from being advertised on Rightmove to being marked as sold subject to contract by estate agents. This ‘top of the ladder’ sector is also suffering the largest drop in new seller asking prices this month, with a fall of 2.9%…. Continue reading
