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Prime property prices in UK set to vary in 2016 according to location
The rate of overall house price growth in the UK prime property market is expected to continue at much the same pace in 2016 as in 2015, with the regional variations remaining too. Average UK house prices rose 4.5% in 2015, according to the latest residential market update from real estate firm Knight Frank. Average values in prime central London rose by 1% last year on average, but the rate of growth varied across the capital while prime country house prices rose by 3.1% in 2015. The report says that the Bank of England’s decision to keep interest rates on hold in January, coupled with the continued fall in oil prices has prompted some economists to push back the date on which the first UK rate rise is expected to 2017. ‘A longer period of low mortgage rates, alongside firmer wage growth and a continued lack of new and second-hand housing stock, should continue to underpin overall pricing during 2016. Activity has been gradually picking up in recent years, but this trend is likely to be hampered by the continued lack of supply of homes coming to the market across the country,’ said Grainne Gilmore, head of residential research at Knight Frank. She also pointed out that the Government has announced a raft of new policies to boost the supply of housing, a recognition that housing is now one of the key areas of focus for the electorate. A breakdown of the figures in the report show that in prime central London the biggest rise in prices has been in Islington with growth of 6.4%, followed by City and Fringe at 5.7%, Marylebone at 4.7%, Mayfair at 3%, and Kensington at 2.5%. In St John’s Woods prices were unchanged and south of the river Southbank saw prices rise by 1.7% and Riverside growth of 4% but elsewhere prices fell, most notably a decline of 6.1% in Knightsbridge. Prices were down 3.8% in Notting Hill, by 3.7% in South Kensington, by 2.7% in Chelsea, by 1.8% in Hyde Park and by 0.2% Belgravia. Average rents across the country rose by 2.7% in the year to September, with the strongest rental growth across Greater London at 4.1% but rental growth in prime central London eased in the second half of last year, and now stands at 0.7%. This comes after prime central London rents peaked at 4.2% growth in May. ‘This market is quite seasonal, and closely linked to the financial services sector. As a result, rents have been affected by restructuring plans announced by major European banks,’ explained Gilmore. Prime rents increased by 2.7% in the South East and the East of England, by 2.1% in the East Midlands, by 1.9% in the West Midlands, by 1.8% in the South West, by 1.6% in Scotland, by 0.9% in Yorkshire and the Humber, by 0.7% in the North West and by 0.5% in Wales and the North East. The report points out that certain sections… Continue reading
Total value of housing in Britain moves past £6 trillion for first time
The total value of Britain’s housing stock has passed the £6 trillion mark for the first time after gains of £385 billion in 2015, according to new research. Housing wealth stands at £4.84 trillion, net of mortgage debt, or 2.7 times GDP and for owner occupiers with no mortgage total property wealth exceeded £2 trillion for the first time, the analysis from real estate adviser Savills shows. It also reveals that the private rented sector’s total value is now £1.29 trillion, up 55% in five years with number of homes in the sector up 28%. Net wealth passed £1 trillion in 2015, overtaking that held by mortgaged owner occupiers for the first time. The total value of homes in London exceeded £1.5 trillion for the first time at £1.612 trillion, accounting for more than a quarter of the total value of housing stock in the UK and having risen by £589 billion in five years. The South of England saw total value growth of £179 billion, exceeding London growth for the first time in five years while Bristol saw the biggest increase in total housing stock value outside of London, up £4.5 billion to £44 billion. The report points out that residential property has become an increasingly important store of wealth. Total equity now stands at around £4.8 trillion net of borrowing, equivalent to over 2.7 times the GDP of the UK. Over the past 10 years the total value of the UK’s homes has risen by over £1.6 trillion, but the biggest growth, almost £1.2 trillion, was seen in the past three years. This means the UK’s 28.2 million homes of all tenure now have an average value of £218,474, up 18.9% in five years. ‘Value and gains vary sharply according to location and ownership. Gains have been concentrated in equity rich markets, notably London and the south east, particularly benefitting those who own their homes outright. In 2015, for the first time, the total value of owner occupied homes without a mortgage exceeded the total value of those with a mortgage,’ said Lucian Cook, head of residential research at Savills. ‘While the difficulties faced in getting on and trading up the housing ladder and the consequential rise in private renting is well documented, these figures show the scale of the change and challenges faced by Government,’ he added. London and the South East accounted for 57% of total value gains at £218 billion in 2015 and now have a total value of almost £2.8 trillion. This means that 26% of the UK’s homes now account for 45% of the total value, and takes the average value of a home in London to £430,436 and £284,805 in the South East. At the other end of the spectrum, the total value of homes in the North East equates to less than a tenth of London’s value, having risen just 2.2% in 2015. At a total of £135 billion, the region’s… Continue reading
Home sales fell in Canada in December, latest index data shows
Home sales in Canada fell slightly month on month in December but are still above where they were a year ago, according to the latest data from the Canadian Real Estate Association. Transactions were down 0.6% overall and fell in slightly more than half of all local markets, led by declines in Calgary, Edmonton, the York Region of the Greater Toronto Area (GTA) and Hamilton Burlington which offset monthly activity gains recorded elsewhere. Year on year price growth continued to range widely among housing markets tracked by the index. The actual, not seasonally adjusted, national average price for homes sold in December 2015 was $454,342, up 12% year on year, but it continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. If these two housing markets are excluded from calculations, the average is a more modest $336,994 and the year on year gain is reduced to 5.4%. Even then, the gain reflects a tug of war between strong average price gains in housing markets around the GTA and the Lower Mainland of British Columbia versus flat or declining average prices elsewhere in Canada, the report points out. It adds that if British Columbia and Ontario are excluded from calculations, the average price slips even lower to $294,363, representing a year in year decline of 2.2%. Greater Vancouver with a rise of 18.87% and the Fraser Valley up 14.35% posted the largest gains, followed closely by Greater Toronto up 10.01%. Victoria and Vancouver Island prices increased between 6% and 8% and prices were up by 0.62% in Ottawa, by 1.81% in Greater Montreal and by 3.88% in Greater Moncton. Prices fell by 2% in Calgary and Saskatoon and by 4% in Regina. While the home price declines in Calgary and Saskatoon are a fairly recent trend, prices in Regina have been trending lower since early 2014, the index report points out. An increasingly short supply of listings in Vancouver and Toronto blunted the impact of changes to mortgage regulations announced in December that were aimed at cooling these housing markets, according to CREA president Pauline Aunger. ‘Buyers there had been expected to bring forward their purchase decisions before new regulations take effect in February 2016, but they faced a growing shortage of supply. Meanwhile, supply is ample in many other major urban markets, particularly those where buyers have become cautious amid economic uncertainty,’ she explained. Indeed, December mirrored the main themes of 2015, with strong sales activity and price growth across much of British Columbia and Ontario offsetting declines in activity among oil producing regions, said Gregory Klump, CREA’s chief economist. ‘The recent decline and uncertain outlook for oil prices means that housing market prospects are unlikely to improve in the near term in regions where job market prospects are tied to oil production,’ he added. A breakdown of the figures show that actual, not seasonally adjusted,… Continue reading
