Tag Archives: london
UK property sales fell considerably in April, latest data shows
Residential property sales in the UK fell by 45.2% between March and April and was probably due to a boost in the previous weeks to beat the stamp duty surcharge for additional homes. The provisional seasonally adjusted UK property transaction figures from HMRC for April 2016 was 84,280 residential and 10,090 non-residential sales. April’s seasonally adjusted figure is 14.5% lower compared with the same month last year and the report says that the large increase in sales for March 2016 followed by the substantial reduction in April is likely to be associated with the stamp duty surcharge of 3% for buy to let properties and second homes. However, the report points out that whilst April 2016 is lower than April 2015, it should be noted that the total for March and April 2016 is still substantially higher than the corresponding period last year. The additional property rates were announced in the Autumn Statement 2015 for England, Wales and Northern Ireland, and in the Scottish Government's draft 2016/2017 budget for Scotland. The HMRC report also says that additional non-tax factors may have played a role as well, for example the Bank of England's plans to curb buy to let mortgages resulting in a rush to purchase. For April 2016 the number of non-adjusted residential sales was about 59.2% lower compared with March 2016. The number of non-adjusted residential transactions was 18.7% lower than in April 2015. Greg Bryce, managing director at SearchFlow, said it was inevitable that there would be a significant fall in April and he pointed out that if you take into account the total for March and April, activity levels are still substantially higher than the corresponding period last year. ‘The activity levels are widely recognised to be attributed to the additional surcharge and unreflective of any market malaise. Our latest conveyancing sentiment survey reveals that a third of conveyancers are expecting activity levels to increase by 1% to 10% over the next three months,’ said Bryce. ‘However, as expected, uncertainty surrounding the referendum is setting in, with 40% unsure how the market will perform over the next three months. But with the economy strong, employment level high, interest rates low and the economic and housing policies unlikely to change very much, the clear majority believe that regardless of the referendum result, activity levels will remain buoyant for the second half of the year,’ he added. The fall in sales was in line with industry expectations, according to Doug Crawford, chief executive officer of My Home Move. ‘With thousands of pounds potentially at stake there was a clear incentive for landlords to complete ahead of the 01 April deadline, and the falling off of transaction volumes confirms the vast majority did so,’ he said. He pointed out that the drop follows data published by the Council of Mortgage Lenders (CML) last week, which highlighted that mortgage lending fell 29% between March and April and he… Continue reading
Demand from buyers in UK falls to two year low
Demand for housing in the UK is at its lowest level in two years with the number of house hunters making enquiries down by a fifth in April, new research shows. Estate agents also reported that the number of sales made to first time buyers fell in April. The April Housing Market report from the National Association of Estate Agents (NAEA) shows there were 325 house hunters registered per member branch on average last month. This was the lowest number recorded since March 2014, when there were 313 house buyers recorded at each estate agent branch. This means demand has decreased by 22% from 417 in March. Last month, the supply of houses available for buyers also decreased by 35% from 54 properties available in March to 35 in April. Some 26% of the total sales made in April were to first time buyers, a decrease of 2% compared to March. However, some 33% of estate agents expect sales to this group to increase following the buy to let stamp duty changes as buy to let landlords exit the market, potentially freeing up properties for first time buyers. The monthly research also found that 24% of estate agents expect house prices to decrease and a further 23% expect demand to decrease if Britain votes to leave the European Union in the referendum on 23 June. Indeed, a recent Brexit report from the NAEA and that Association of Residential Letting Agents (ARLA) revealed that by 2018, a Brexit would reduce the average UK house price by £2,300 to £300,900. However, if Britain remains in the EU, the average UK home could cost £303,000 by 2018. ‘It’s no surprise that demand dropped significantly in April. Some 80% of agents saw an increase in purchasers trying to beat the buy to let stamp duty changes before the 01 April deadline, so we expected to see a slow down immediately following the deadline,’ said NEA managing director Mark Hayward. ‘Whilst the number of house hunters registered per branch dropped in April, the supply of available housing to buy also fell quite sharply, so supply and demand are still moving in the opposite direction, rather than balancing out,’ he explained. ‘Additionally, the upcoming EU Referendum means we’ve entered a period of uncertainty, as buyers put off their hunt in anticipation of the result, and what might happen to prices as a result,’ he added. Continue reading
House prices up year on year in all key cities in UK apart from Aberdeen
House prices in key cities in the UK increased by 3.8% in the three months to April 2016 and were up 10.4% year on year, according to the latest index. But there is considerable variation with Cambridge leading the annual growth with prices up 15.8% whereas in Aberdeen prices fell by 6.1% year on year, the data from the Hometrack cities index shows. The report says that this time last year growth was slowing in the run up to the UK’s general election and looking ahead growth could slow again in the run up to June’s referendum on the future of the UK in the European Union. It also points out that a surge in sales ahead of the new 3% stamp duty surcharge for additional homes resulted in most cities registering a spike in the monthly rate of house price growth in March with slower growth recorded in April. Aberdeen remains the city bucking the national trend with prices falling by 6.1% in the last year where the lower oil price continues to impact the economy and demand for housing. Across the remaining cities, the annual growth rate is higher than 12 months ago in 15 out of the 20 cities covered by the index, led by Cambridge with growth of 15.8%, then London up 14.4% and Bristol up 13.8%. Portsmouth and Southampton both saw prices rise by 9% year on year while in Bournemouth prices were up 8.6%, in Birmingham 8.3%, in Manchester 7.8%, in Leicester 7.4%, in Oxford 7.1%, Leeds 6.7%, in Cardiff 6.3%, in Nottingham 5.9%, in Liverpool 5.5%, in Sheffield 4.7%, in Belfast 4.1%, in Edinburgh 4%, in Glasgow 3.5%, and in Newcastle 2.5%. Aberdeen was the only city to see prices fall with a decline of 6.1%. The report says that the implication of the referendum result for businesses operating in housing is the key unknown. ‘The economic impact of Brexit and consequences for interest rates, investment and incomes has direct implications for housing. The consensus appears to be a short economic shock accompanied by a period of uncertainty for consumers and business,’ it explains. It has an analysis of city level house price growth and transactions over the last 20 years which shows that external shocks tend to have a greater impact on market volumes than house prices, especially where there is no accompanying economic downturn. From 1996 to 2007 house prices posted consistent positive year on year growth but this was not the case for sales volumes which were influenced by a mix of external shocks to sentiment and changing domestic factors such as short periods of rising interest rates. In the decade before 2007, sales volumes fell on four occasions in London by as much as 15% highlighting how London is more prone to the impact of external factors from the crisis in emerging economies and collapse of the Long Term Capital Management hedge fund in 1998 to the bursting of the dot… Continue reading
