Tag Archives: sales
House sales failures in UK up 9% quarter on quarter
The number of house sales failing to successfully complete in the UK increased in the second quarter of 2016, with more than one in four sales falling through. A house sale fall through rate of 29% was recorded by the latest research from independent home buyer Quick Move, up 9% from the first quarter of the year. The annual year to date fall through rate ended the second quarter of the year at 25.18%, up 3.56% since the end of the first quarter, the data also shows. According to Danny Luke, business manager at Quick Move, the first half of 2016 has been an interesting time for the UK property market. ‘Strong demand and low supply in many areas has led to a strong financial performance, but the market also faced a great deal of uncertainty with stamp duty changes, more challenging conditions for investors, and most recently the European Union referendum. This uncertainty is reflected in the reasons why sales fell through before completion,’ he said. The top reason was a buyer changing their mind, accounting for 47.37% of failed sales, followed by 15.79% due to the seller renegotiating a better offer with a new buyer, the same amount was due to difficulty securing a mortgage and the buyer or seller pulling out of the sale because they felt it wasn't progressing quickly enough while 5.26% was due to legal issues. ‘It seems the uncertainty that has dominated the property market in the last quarter has led to prospective buyers putting in panic offers. It used to be usual to do at least a second viewing, potentially even a third, before making a formal offer on a property, but shortage of supply in some areas, alongside widespread market uncertainty as we drew closer to the referendum, led to many prospective buyers feeling pressure to make offers on a first viewing, fearing that they may miss out if they delay,’ Like explained. ‘Once the dust has settled and the sales start progressing, the cold feet can start to set in, possibly due to nerves about the size of the financial investment and whether they've selected the right property or when surveys highlight potential issues,’ he pointed out. ‘As we move forward in post-Brexit Britain, I would expect to see the market slow, and potentially see the fall through rate continue to rise, as market uncertainty and instability continue,’ he concluded. Continue reading
French market not affected so far by Brexit vote
The decision by the UK to leave the European Union does not seem to have dented the French real estate sector with mortgage rates still low and currency differences still positive. Indeed, the vote coincided with a further drop for French mortgage rates to all time historic lows. These ultra-low long term fixed rates have in effect nullified the changes in exchange rates for British buyers and offer the opportunity to lock in long term value, according to John Luke Busby, private clients director at French Private Finance. He pointed out that a French repayment mortgage can now be found in the region of 2.15% fixed for 20 years nationally and perhaps down to 1.55% in Paris for some profiles. ‘This means that over a 20 year fixed rate mortgage period British buyers are now still ahead versus the highs of the pound against the euro last year,’ Busby said. ‘It is important to note that we have not had any withdrawals or cancellations on the basis of the referendum result from any of our ongoing applications. Whilst there will clearly be reflection around making new investment decisions in the French market for some UK buyers, investors from around the world are continuing with their purchases in France,’ he explained. ‘This trend is particularly noticeable in Paris where prices are starting to increase again, after a lull, and for investors earning in Dollars the euro is substantially cheaper. US dollar holders can now benefit from the double whammy of a strong currency and ultra-low interest rates,’ he added. Busby believes that overall there seems to be a quiet confidence emerging around the future of the UK economy whatever the result of the negotiations in Brussels or the UK Parliament. ‘There is confidence that, as of today, we remain in the EU so to all intents and purposes it is business as usual,’ he said. He also pointed out that all of the tax treaties relating to property are independent of EU membership for the British, who remain the largest non-resident buyers of French Property. Many regions in France are now starting to see growth in property prices, which herald larger gains once the EU economy can get going again,’ Busby added. ‘The mixture of the romance of French property ownership combined with soft property prices and ultra-low interest rates still conjure a compelling purchase proposition which is hard to ignore over the long term,’ he concluded. Meanwhile, one of the largest sellers of French property to British buyers has reported a 21% rise in sales in the first six months of 2016. Leggett Immobilier also says that since the referendum result enquiries have remained high with over 1,000 enquiries coming into the sales support team in the past seven days. Coupled with this Leggett Immobilier have had 34 offers accepted in the past week, a figure which is well above the weekly average. The firm’s figures show a 21% rise… Continue reading
Pending home sales fall across all regions of the United States
After steadily increasing for three months, pending home sales in the United States let up in May with the first year on year fall for almost two years with all four major regions seeing a decline. The Pending Home Sales Index, a forward looking indicator based on contract signings from the National Association of Realtors fell by 3.7% to 110.8 in May from a downwardly revised 115 in April and is now 0.2% lower than May 2015. But even with last month’s decline, the index reading is still the third highest in the past year, but declined year on year for the first time since August 2014. According to Lawrence Yun, NAR chief economist, pending sales slumped in May across most of the country. ‘With demand holding firm this spring and homes selling even faster than a year ago, the notable increase in closings in recent months took a dent out of what was available for sale in May and ultimately dragged down contract activity,’ he said. ‘Realtors are acknowledging with increasing frequency lately that buyers continue to be frustrated by the tense competition and lack of affordable homes for sale in their market,’ he added. Despite mortgage rates hovering around three year lows for most of the year, Yun explained that scant supply and swiftly rising home prices which surpassed their all-time high last month are creating an availability and affordability crunch that’s preventing what should be a more robust pace of sales. ‘Total housing inventory at the end of each month has remarkably decreased year on year now for an entire year. There are simply not enough homes coming onto the market to catch up with demand and to keep prices more in line with inflation and wage growth,’ Yun pointed out. Looking ahead to the second half of the year, Yun believes that the fallout from the UK’s decision to leave the European Union breeds both immediate opportunity as well as potential headwinds for the US housing market. ‘In the short term, volatility in the financial markets could very likely lead to even lower mortgage rates and increased demand from foreign buyers looking for a safer place to invest their cash,’ he said. ‘On the other hand, any prolonged market angst and further economic uncertainty overseas could negatively impact our economy and end up tempering the overall appetite for home buying,’ he added. In spite of last month’s step back in contract signings, existing home sales this year are still expected to be around 5.44 million, a 3.7% boost from 2015. After accelerating to 6.8% a year ago, national median existing home price growth is forecast to slightly moderate to between 4% and 5%. A regional breakdown of the figures shows that the PHSI in the Northeast dropped 5.3% to 93 in May, and is now unchanged from a year ago. In the Midwest the index slipped 4.2% to 108 in May, and is now 1.8% below May 2015. Pending home sales in… Continue reading
