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Housing market activity in the UK striding forward, latest research suggests
A surge in remortgaging has driven the UK housing market to make great strides forward on a long term basis, according to new research. This has mitigated the historic steadying that occurs in the month of April and the total number of valuations carried out increased 24% year on year, the figures from Connells Survey & Valuation show. The firm points out that this counteracts the 22% short term downturn that occurred in the market as a whole between March and April. Every year since 2013, April has seen a decline in valuation volumes on a monthly basis. For example, between March and April 2015, overall valuation activity declined by 32%, some 10% greater than the fall experienced over the same period in 2016. According to John Bagshaw, the firm’s corporate services director the property market is experiencing some vibrant long term growth regardless of any short term indicators. ‘The monthly downturn the valuation sector has experienced overall is a reflection of an historic trend which sees housing activity typically sink somewhat after a New Year surge,’ he said. ‘However, this year’s dip has not been as protracted as that of previous years’, a sign the property market is becoming robust enough to endure these cyclical market forces. The longer term picture is even more positive. As house prices continue to rise and interest rates remain at record lows, ever more people will be drawn to the property ladder,’ he added. The monthly report also shows that activity in the remortgaging and first time buyer sectors has been the key driver of annual growth in April’s valuation market. The remortgaging sector saw the strongest annual uplift of 50% between April 2015 and April 2016, while valuations carried out for first time buyers grew by 46% on a yearly basis. However, remortgaging valuation volumes in April also contracted by a quarter on a monthly basis. Similarly, valuations carried out for first time buyers fell by 15% month on month. But Bagshaw pointed out that while the remortgage and first time buyer sectors have still been somewhat affected by the seasonal slowdown, this has been more than counterbalanced by their performances over a 12 months basis. ‘Remortgagors continue to take courage from the rock bottom interest rate, a rate which has spurred many home owners to either switch mortgages for a cheaper rate or release the capital on their home,’ he said. ‘Equally, the political and economic momentum seems to be firmly with first time buyers. They are currently basking in a range of government assistance packages, including a recently extended Help to Buy scheme, as well as enjoying a confident lending market as evidenced by new Barclays 0% deposit mortgage,’ he explained. ‘The sum total of these schemes has transformed a once cautious sector into one of the most vibrant in the property market and there are few signs of that changing… Continue reading
UK housing market grew at an accelerated rate, latest housing market bulletin shows
Average house prices are continuing to grow in the UK and at an accelerating rate with the South East, the East of England and London seeing the strongest growth, according to the latest Housing Market Bulletin. The report, published by the Homes and Communities Agency using data from house prices indices, lenders and construction companies, shows that residential sales surged forward strongly in March. It also shows that gross mortgage lending continues to see robust growth with levels over one third higher than a year ago and private sector house building investment continues to increase, but public sector investment has stalled. The value of Greenfield residential development land is slipping, but urban land is increasing. A breakdown of the figures shows that there were 141,310 residential property transactions in England in March 2016, which is 80.6% higher than one year earlier. It says that this sharp uptick could have been the result of by buy to let buyers having brought forward purchases in order to avoid increased Stamp Duty tax liabilities from April. There were a total of 1,135,830 transactions in England in the year to the end of March 2016. This is 9.9% higher than in the previous 12 months. Aside from this the spike in the data in March, the seasonally adjusted monthly total has been moving strongly upwards for the past year. The total stock of property for sale remains historically low. In England and Wales overall, the number of properties entering the market was down 6% in March compared to a year before and the supply shortage is most keenly felt in the West Midlands and the South West regions where, respectively, 12% and 11% less stock was registered for sale with estate agents compared to March 2015. Greater London was the only English region with increased numbers of homes coming to the market, up 6% on the same month in 2015. Gross mortgage lending reached an estimated £25.7 billion in March. This is 59% higher than March 2015 and gross mortgage lending for the first quarter of this year was an estimated £62.1bn, which is 39% higher than the first three months of 2015. There were a total of over 23.5 million dwellings in England in 2015, which is 704,000 or 3.1% more than in 2010. The number of private sector homes had increased by 649,000 or 3.5%, and there were over 209,000 or 9.3% more private registered provider homes. But the number of Local Authority owned homes fell by nearly 143,000 or 8% over the same period. The Output in the Construction Industry indices show the total value of new housing development in Great Britain is unchanged in the fourth quarter of 2015 compared to the same quarter in 2014. The trend in the private sector has been of sustained steady increase over at least three years. The public new housing sector enjoyed expansion during 2013 and most of 2014 but then had four quarters of shrinking… Continue reading
Edinburgh property market seeing strong demand and steady price growth
The residential property market in Edinburgh is experiencing high demand, especially at the middle to high end of the market, new reports show. The long term picture is one of steady growth. A comparison of property prices by agents Strutt & Parker shows that in March 2015, the month leading up to the introduction of the new Land and Buildings Transaction Tax (LBTT), and March 2016 reveals a 26% fall in average value. In March 2015 prices averaged £320,466 but in March 2016 this was down to £237,226, much of which has been put down to the distortion caused in the market by LBTT last year. However, the average value in March 2016 is significantly up on the average price in March 2014 which was £209, 624 and March 2013 when it was £200,744, indicating a steady upward trajectory in property prices. ‘The drop in average value simply serves to underline the huge spike in sales before the introduction of LBTT in April last year and it highlights the importance of experience when interpreting housing market trends,’ said Blair Stewart, head of Edinburgh City Residential Sales at Strutt & Parker. ‘It is not surprising that the 2016 average property price is less in comparison. It is more important to look back over the last three years during which time, taking 2015 out of the equation, we can see a steady rise in the city's average property price,’ he pointed out. In March, there were 247 sales in Edinburgh of which 225 were £300,000 to £750,000, 13 in the £750,000 to £1 million range and nine at over £1 million, up from 159 in February and 146 in January but down from 363 in March 2015, again underlining the surge in sales before the introduction of LBTT. ‘The high volumes and associated lower values in Edinburgh are partly reflective of a surge in the purchases of investment properties before the LBTT surcharge was introduced at the start of April. In general, additional and investment properties are lower in value, which is illustrated by both the jump in transactions and drop in average value,’ Stewart explained. ‘Correspondingly, we have noticed an adjustment in the average sale prices of the properties we are selling in Edinburgh change from around £780,000 in 2015 to approximately £600,000 in 2016. However, these figures also show a strong performance in the market in the first months of 2016 and I am confident we will see that continue into the summer,’ he added. He also pointed out that behavioural changes following two tax regime changes in a year are still playing out so a true picture of the market will become clearer over the next six months once there can be an analysis of figures which have not been distorted by either LBTT or the additional 3% surcharge on additional homes introduced this April. Agents CKD Galbraith is also reporting that demand for middle to high end residential property in Edinburgh city… Continue reading
