Tag Archives: real estate
Brexit having more of an effect on Greater London property than rest of UK
Asking prices in the Greater London property market fell by 1.2% between July and August with analysis suggesting Brexit is having more of an impact on the city than other parts of the UK. This is the third monthly fall in a row, with Greater London's average asking prices falling by 1.1% between June and July and by 0.4% the previous month, according to the date from Home.co.uk. The annual rate of price inflation for Greater London property now stands at just 2.5% and falling. The firm is predicting this will fall to 0% within a mere two months, highlighting the very real danger that negative equity is just around the corner. Foreign buyers who purchased a property in London within the last 12 months are probably already in negative equity, the analysis suggests and it points out that in terms of Euros, Greater London home prices have shown a dismal performance over the last year, with values in the region dropping 11% since May and 17% since November last year. However, there is a potential upside that European buyers may be attracted back to the market but house prices and sterling will need to stabilise for that to occur. Housing supply figures from Home.co.uk strongly suggest further price falls are inevitable in the capital as Greater London vendors overload the property market in the aftermath of June's Brexit vote. Between July 2016 and July 2015 new listings in London increased by 27%, compared to a year on year rise of 6% the month before. The typical time on the market has also risen sharply from 68 days in July to 73 days in August, forcing vendors to further cut prices in a property market that was already in a precarious position through buy to let taxation changes and warnings about overvaluation. The South East of England, where in August asking prices fell by 0.2% for the second month in a row, is showing signs of becoming the next property price slump hot spot, as panic selling in the capital spreads out into the capital's commuter belt and beyond, the report also suggests. Between July 2015 and July 2016 the supply of property for sale in this region rose by 19% and the firm is predicting that the South East's typical time on the market of 63 days is likely to rise markedly due to the boost in supply in this region. ‘It is clear that the referendum result certainly unnerved many investors. We will be keeping a particularly close eye on the London market over the next month, watching whether or not the surge in new listings becomes a stampede,’ said Doug Shephard, director at Home.co.uk. ‘This would inevitably lead to a home price crash in the region and stress mortgage lenders to the limit or beyond. Property investors would be well advised to weather the storm and not join a rush to market,’ he added. Continue reading
Majority of UK buyers and renters would pay more for ideal home
Millions of buyers in the UK would pay more than they intended for the right home with 62% willing to go over their budget by 10%. Overall 43 million, 78%, would pay more and 62% would spend up to 10% more for their ideal property with those in London, Scotland and Northern Ireland most willing to do so. The 31 million willing to go over budget by up to 10% would find themselves paying some £28,000 more for a home or £912 more per year if renting, according to the research from Ocean Finance. Only one in four would not go over budget at all and 2% of people would be willing to go more than 20% over budget, adding a minimum of £56,000 onto the original purchase budget or £156 per month, £1,872 annually, onto rental payments. A breakdown of the figures show that 34% are willing to go up to 5% over budget, 28% 6% to 10%, some 7% would go 11% to 15% over their initial budget, 4% 16% to 20% and 1% 21% to 25% over. In Scotland and Northern Ireland some 79% are willing to pay more for their ideal home while 77% in London are also willing to do so. The research also shows that it is buyers under the age of 34 who are most willing to stretch their finances with 80% of young people saying they would increase their budget for the right home. ‘Whether we are renting or buying a property most of us have a budget that we can afford in mind. But three quarters of us are happy to ignore the budget and stretch our finances to get the home that ticks all our boxes,’ said Ian Williams, Ocean Finance spokesperson. Continue reading
Housing associations organisation criticises lack of affordable homes in UK
More British landlords now rent to people on housing benefit with amounts increasing from £4.6 billion in 2006 to £9.3 billion last year, new research shows. According to the study from the National Housing Federation the reason are twofold. Firstly a 42% rise in the overall number of private renters receiving housing benefit since 2008 and secondly the fact that claims in the private rented sector (PRS) are much higher than in the non-profit housing association sector. The research says that it costs £21 a week more to house a family in a PRS home than in a social home at £110 overall in comparison to £89 and points out that over a year this is an additional £1,000 per family being spent at £5,705 in the PRS compared to £4,638 in the social rented sector. In London, the contrast is even starker with PRS payments at £64 per week more than to those in social homes, adding up to £3,300 more each year, according to the NHF which represents independent non-profit housing associations. It says that the lack of affordable housing available means that a wider group of people need housing benefit. Nearly half, 47%, of all families claim housing benefit in the PRS sector are in work, almost double the proportion it was six years ago at 26%. Housing benefit recipients renting privately now earned an average £4,000 more than on six years ago. The NHF believes that the increase in taxpayer’s money being spent on housing benefit would have been better allocated to building more affordable homes. ‘It is madness to spend £9 billion of taxpayers’ money lining the pockets of private landlords, rather than investing in affordable homes,’ said David Orr, NHF chief executive. ‘Housing associations want to build the homes nation needs. By loosening restrictions on existing funding, the Government can free up housing associations to build more affordable housing at better value to the taxpayer and directly address the housing crisis,’ he added. But the National Landlords Association (NLA) said it should not criticise PRS landlords and pointed out that the number letting homes to housing benefit recipients is now falling. ‘Housing benefit is not a subsidy to landlords; it’s a support for tenants to ensure they can pay for their housing. However, the proportion of landlords who let to tenants in receipt of housing benefit has halved over the last five years as benefit levels have not kept up with rents,’ said , Richard Lambert, NLA chief executive officer. ‘The private rented sector has grown as the market responds to the increasing demand for homes, particularly from a growing proportion of tenants whom the social sector and housing associations simply are not able to support in the current circumstances,’ he explained. ‘The private rented sector plays a significant role in providing much needed homes for tenants. What we should all be talking about is the failure of successive governments to adequately allocate its housing budget and to incentivise… Continue reading
