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Residential asking prices up 5% across Ireland in second quarter of 2016
Asking prices for newly listed properties in Ireland increased by 5% nationally and by 3.6% in Dublin in the second quarter of 2016, the latest figures show. As housing supply continues to decline, average time to sale agreed has fallen to just four months, according to the property report from MyHome in association with Davy. The report says that Brexit may dampen medium term expectations but the UK’s decision to leave the European Union is not expected to have material impact on the Irish housing market in 2016. It also says that while the sharp gains in asking prices mainly reflect the recovery in house prices across the country with newly listed properties in Dublin rising by a more modest amount this is still four times the 0.9% increase recorded in the capital in the first quarter of the year. The mix adjusted asking price for new sales nationally is now €231,000 and €326,000 in Dublin, an increase of €11,000 for both markets compared with the first quarter of the year. For the entire stock of properties listed for sale on the MyHome website the national mix adjusted figure is €213,000, up 2.5%, the biggest quarterly increase since the third quarter of 2006. In Dublin the figure is €296,000, up 2%, which brings it back above the level seen in the second quarter of 2011. The author of the report, Conall MacCoille, chief economist at Davy, said the supply shortage and wage inflation were the key factors underpinning the latest price surge and pointed out that the number of homes for sale is down 6.7% on last year to 23,520, which is close to historical lows. ‘Not surprisingly properties are selling increasingly quickly with the average ‘sale agreed’ time falling to just four months, a new low. Outside of Dublin it has fallen to 4.8 months, the first time it has fallen below five since the financial crisis of 2008. While the government has outlined ambitious housing plans, there is no prospect of the shortage of housing supply being alleviated by new construction in the near term,’ he explained. ‘At the same time, home buyers are feeling the heat and reacting to the lack of supply by taking out ever higher mortgage debts, helped by rising wages and growing consumer confidence. In May the average mortgage approval for house purchase rose to €208,000, the first time that the average mortgage approval has exceeded €200,000 since the series began in 2011,’ he added. MacCoille believes that overall the data points to sharp gains in Irish house prices through the remainder of 2016. ‘While the potential impact of Brexit remains something of a wild card, its overall impact on the Irish economy and broader fears regarding the health of the European economy could help to temper medium term expectations for house price growth,’ he said. ‘However that probably won’t emerge until… Continue reading
Number of rental sector tenant evictions up in England and Wales
The number of households evicted from rental accommodation in England and Wales rose by 5% in the first three months of the year, while the repossession rate for home owners fell to a record low. Seasonally adjusted figures from the Ministry of Justice show there were 10,732 repossessions of rented homes by bailiffs between January and March 2016, up from 10,253 in the final three months of 2015. The number of tenants evicted from their homes by bailiffs reached a record high in 2015, according to official figures for England and Wales, which shows that 42,728 households in rented accommodation were forcibly removed. Housing campaigners blamed welfare cuts and the shortage of affordable homes for the rise in repossessions over the year and more than half the evictions are thought to have been by private landlords. These figures are echoed by a new report from online letting agent PropertyLetByUs which shows that a quarter of landlords have served an eviction notice to tenants over the last 12 months and 5% have pursued an eviction through the courts. Furthermore, almost half of landlords have also experienced rent arrears over the last 12 months. ‘Landlords are increasingly facing rent arrears, as rent escalation continues to outstrip gross income. They are also facing a financial squeeze due to restrictions on their tax breaks and some may be raising rents to supplement their income. Pushing up rent rises further will put huge pressure on those tenants who are already struggling to pay their rent. We may well see evictions continuing to rise over the next few months,’ said Jane Morris, managing director of PropertyLetByUs. She pointed out that the statistics highlight the need for landlords to protect their rental income and ensure they carry out thorough references with all new tenants. ‘Times are very tough for many tenants and demand for rental accommodation is soaring in many parts of the UK. Landlords need to extra vigilant when they take on a new tenant. But a few simple checks will help identify if a tenant is in a good financial position or not,’ she added. Meanwhile, changes to the process of accelerated possession through applying to use High Court Enforcement Officers (HCEOs) to evict a tenant has brought an end the so called seven day eviction which were misleading for landlords as well as increased costs, according to legal experts, Landlord Action. The majority of residential possession claims are dealt with in the county court and enforced by county court bailiffs. However, with a backlog of cases and a reduction of bailiffs leading to longer waiting times in some courts, it can take several weeks for bailiffs to carry out an eviction, which is longer than most landlords wish to wait when suffering further loss of rent. In some cases, landlords can apply for their case to be transferred to the High Court once a possession order has been made, so that… Continue reading
Planning permission for new homes in England up 4% in first quarter
The number of planning permissions granted for new homes in the first quarter of 2016 in England remained high, according to the latest housing pipeline report. Permissions for 66,102 homes were granted in the first three months of the year, up 4% on the previous year, the data from the report from the House Builders Federation and Glenigan shows. This means that the moving annual total has now recovered to just short of the pre-crash peak in the 12 months to March 2008, and is ahead of the levels in 2006 and 2007, suggesting house building can continue increasing to meet the very high level of demand for new homes. Whilst many of these permissions still have some way to go before builders can start building them, the figures are a strong indicator of future supply. Permissions have risen steadily every year since 2009, with actual housing supply also increasing markedly over the past two years as more of the permissions have progressed to the point where builders can begin building. Indeed, the report shows that the last 12 months have seen a 66% increase in permissions granted on the nadir of the recession in 2009. Numbers are now only 0.3% below where they were at the highest point in early 2008. Demand for new homes remains extremely strong. The HBF estimates there is a shortfall of well over one million homes in England. Almost a third of young people, some 3.35 million, are living at home with their parents and 1.24 million people are on housing waiting lists. The Help to Buy equity loan scheme continues to drive demand for new homes and interest rates remain historically low at the same time over 180,000 new homes were added to the housing stock in 2014/2015, up 22% on the previous year, as house builders increased output in response to the rise in demand for new homes. ‘Planning permissions are a strong indicator of future levels of supply. The past two years have seen huge increases in building levels, with housing supply in England surpassing 180,000 homes per year in 2014/2015, up 22% on the previous year,’ said Peter Andrew, deputy chairman of the HBF. But he warned that the country still faces an acute housing shortage in this country. ‘Millions of young people remain at home with their parents and we estimate we are over a million homes short of what the country needs,’ he explained. Help to Buy equity loan is driving demand and helping thousands of first time buyers a week purchase a new build home and with interest rates remaining at historically low levels, demand remains strong,’ he pointed out. Allan Wilén, economics director and head of Business Market Intelligence at Glenigan, pointed out that the level of planning approvals remains strong, driven by an increase in the number of private housing units approved. ‘The firm development pipeline demonstrates that house builders are well placed to meet any strengthening in demand from… Continue reading
