Tag Archives: news
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
Most UK landlords are part time with just one property
Most landlords in the UK still consider renting out a property to be a part time activity and the majority own just one property and manage their portfolio as private individuals, new research show. However, there is an apparent trend towards larger portfolios even although rents make up less than half of a landlord’s total income, according to the report from the Council of Mortgage Lenders (CML). But the research, carried out with BDRC and the London School of Economics, does show there is evidence that rent is increasingly becoming a significant income stream for part time landlords. In 2016 some 87% of landlords sampled manage their portfolio as an individual or as a couple, roughly unchanged from the 89% reported in 2010. The proportion operating as a company or other group comprises 14%, roughly on par with the 11% reported in 2010. Likewise, the vast majority of respondents in 2010 and 2016, 92% and 95% respectively, do not consider letting to be their main business or occupation. While most landlords still own just one property, there is an apparent trend towards larger portfolios. Between 2010 and 2016, the proportion of respondents who manage only one property fell from 78% to 63%. At the same time, the share managing two to four properties rose from 17% to 30%. The report suggests that this could be due to the difference in the samples of the two surveys. However, the sharp contrast between the 2010 and 2016 data is likely to reflect to some degree an underlying increase in average portfolio size. Such a finding would be consistent with CML data on the number of loans for buy to let house purchases, which has increased by about 19% a year since 2010. Generally, rental receipts make up less than half of a landlord’s total income. However, evidence suggests that rent is increasingly becoming a significant income stream. For about 90% of landlords, rental income is less than half of their total income, virtually unchanged since the 2010 survey. However, the share receiving no rent, typically due to a property being unoccupied, has dropped substantially from 21% to 5% over the past six years. At the same time, the share receiving up to one quarter of their income from rent has risen by about seven percentage points, and the share claiming between one quarter to one half of the income from rent has grown by 10 percentage points. The report suggests that this apparent shift may be attributable to differences in sample sizes. However, if it reflects an underlying trend, this would be consistent with the apparent increase in portfolio sizes, as it is easy to see how owning a larger portfolio would allow a landlord to draw a bigger chunk of their income from rent. Overall the report says that while it looks like the typical landlord is still an individual running a rental business on the side, there appears to have been a gradual expansion of… Continue reading
No signs yet of Brexit creating a UK housing recession says new analysis
Since the European Union Referendum the number of residential properties advertised for sale in the UK has increased and average asking prices have reduced by 0.2%, new research shows. While the number of properties with a reduced asking price has increased from 29.3% to 34.5%, mortgage availability remains broadly unchanged, according to the analysis report from global investment banking firm. The early conclusion from the industry note from the firm’s UK Building and Residential Services team of analysts is that UK households have the confidence to try and move house and accept that prices may need to soften to make it happen since the decision to leave the EU while there is no sign of a property recession. The research says that listings volumes, for example, do not suggest a slowdown and an analysis of residential property listings on major UK property portals and have found that since the EU referendum the number of listings has increased by 3.6%. It also points out that in the two previous UK recessions housing transactions were, with hindsight, a lead indicator, falling for more than 18 months ahead of the recession. In the absence of current transaction data we view listings activity as an early look towards housing transactions. With listings increasing, it appears UK households are prepared and ready to move. Before the vote there were headlines suggesting that Brexit would result in a steep fall in house prices but according to the analysis the trend in asking prices is only just downwards. On average asking prices have reduced by 0.2% since the EU referendum, somewhat less than the movement in the prices of the shares of the companies which service the UK housing market. ‘Perhaps more interesting is the movement in the number of properties which have reduced their asking prices. Before the EU referendum 29.3% of listings had reduced their initial asking price, this figure has now increased to 34.5%, overall a move of 520bp or 18%. This suggests to us that UK households remain keen to move and are adjusting their price expectations,’ the report explains. In the two previous recessions London house prices were the first to fall and the first to rise but the research show that so far 76% of London postcodes have seen an increase of listings, 22% a reduction and 1% unchanged. With respect to asking prices 70% of London postcodes have seen a reduction in asking prices and 30% an increase. A breakdown of the figures show that in East London 35% of postcodes have seen asking prices rise and 65% fall, in the North of the city 30% have risen and 70% fallen, in South London the split is 27% up and 73% down and in West London 25% up and 75% down. ‘London has the largest rental market in the UK and we believe that asking rents provide the most cutting edge data point with respect to the health of the underlying… Continue reading
