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House prices increase more than average earnings in over 25% of UK districts
Average house prices have increased by more than the average employees net earnings in more than a quarter of local authority districts across the UK, according to new research. The number of areas where house prices are outpacing earnings over the last two years has increased significantly over the past 12 months from 73 or 19% out of 384 to 108 of 28% out of 380. The Halifax research also shows that the vast majority of these areas are in London, the south east, and east of England with these three regions representing 97 or 90% of the 108, with the biggest gap between rising property values and earnings in Three Rivers in Hertfordshire, where house prices increased by an average of £147,990 over the last two years, exceeding average take home earnings in the area by £97,992. Seven London boroughs appear in the top 10 districts while the top performers outside southern England were Warwick in the West Midlands and South Northamptonshire in the East Midlands, with house price gains in excess of earnings of £24,723 and £14,837 respectively during 2014 and 2015. ‘The housing market recovery over the last few years has led to substantial price rises in some areas of the country, particularly in London, the south east and the east of England. This has resulted in homes increasing in value by more than total take-home earnings for the average home owner in many areas of the country,’ said Martin Ellis, housing economist at the Halifax. ‘Clearly, this is good news for some home owners. However, it does make conditions tougher for those looking to buy their first home in such areas, with prices being pushed increasingly out of range for many young people,’ he added. Over the past five years, 35 local areas in the UK or 9% of the total have seen average house prices increase by more than total average pay, up from 23 districts or 6% in 2015. The biggest differential was in Hammersmith and Fulham, where average property prices have increased by £248,971, surpassing average take home pay during the period by £108,653. The top 10 performers are all in London. All 35 areas are in London, the South East and the East. Over the past decade, house prices have increased by more than total pay in four areas across the UK led by Brent up £11,760, Haringey up £8,255, Hammersmith and Fulham up £4,438 and Cambridge up £1,767. Continue reading
Latest survey shows decline in home ownership in England has halted
A decade long decline in home ownership in England has been halted with the latest figures showing that more than 14 million people owned their home in 2015. The data from the English Housing Survey reveals that out of the 22.5 million households in England in 2014 to 2015, the number of people owning their own home in the past year has remained static the first time this has happened since 2003. It also shows that more than half of local authority tenants and a third of housing association tenants expect to buy their current home and there has been an increase in better homes with the number of properties failing to meet the government’s Decent Homes Standard continuing to fall and down by 3.1 million on 2006. ‘In 2010 there was a housing market where buyers couldn’t buy, builders couldn’t build and lenders couldn’t lend. Our efforts are turning that around with more than 270,000 families helped into home ownership through government backed schemes since 2010, while the number of new homes is up 25% over the last year,’ said Housing Minister Brandon Lewis. ‘And we’ve set out the boldest ambition for housing in a generation, doubling the budget so we can help a million more people into home ownership, while delivering a bigger, and better private rental sector,’ he added. Lewis said that the survey also provides evidence that the government’s decision to reinvigorate and extend its flagship Right to Buy scheme has boosted the aspiration of social housing tenants with those expecting to buy their current home rising from 35% in 2010/2011 to 42% in 2014/2015. More than 46,000 people have taken up the chance to buy their home through the reinvigorated scheme since 2012 with councils delivering replacement properties on a one to one basis ahead of schedule. Lewis added that house building is at the heart of the government’s long term economic plan with more than £20 billion committed over the next five years to help meet its ambition to deliver one million new homes. Details from the survey show that among owner occupiers, the proportion of households who owned outright remained larger than the proportion buying with a mortgage, although not in London. In 2014/2015, there were more outright owners at 33% than ‘mortgagors’ at 30%, a continuation of the trend first identified in 2013/2014. This was not the case in London where there were more mortgagors at 27% than outright owners at 23%, which the report says is most likely as a result of the younger age profile of the population in London. The private rented sector remained larger than the social rented sector. In 2014/2015 some 19% or 4.3 million of households were renting privately, while 17% or 3.9 million of households lived in the social rented sector. There was no change in the size of either sector between 2013/2014 and 2014/2015. There has been an increase in the number of families with dependent children… Continue reading
Average prices in England and Wales up over 6% year on year
Average property prices in England and Wales increased year on year by 6.4% in December, taking the average property value to £188,270, the latest index shows. Month on month house prices rose by 1.2% since November 2015, according to the monthly index report from the Land Registry. London recorded the greatest increase in its average property values with annual growth of 12.4% and the biggest month on month rise at 2.1%, taking the average price to £514,097. The North East saw the lowest annual price growth with an increase of 0.8%, taking the average price to £99,069, a considerable difference to the average price in London. Wales saw the most significant monthly price fall with a decrease of 0.8% to take the average price to £121,780. The most up to date figures available, show that the number of completed house sales in England and Wales fell by 8% to 79,960 compared with 86,452 in in October 2014 while the number of properties sold for more than £1 million fell by 2% to 1,231 from 1,258 a year earlier. Repossessions in England and Wales fell by 51% to 431 compared with 888 in October 2014 and the region with the greatest fall in the number of repossession sales was London with a fall of 71% from October 2014. Mark Posniak, managing director at Dragonfly Property Finance, pointed out that with demand strong and supply weak, prices in December defied the usual seasonal slowdown, adding that this is even more pronounced in London. He believes that the construction lag is having a significant impact on the market. ‘On a more positive note, we are seeing noticeably more construction activity at the moment, particularly by smaller developers. But this will take time to trickle through into the market,’ he said. ‘Looking into 2016, it's hard to see anything other than a continuation of the current trend of steadily rising prices, especially with interest rates unlikely to rise in the near future and a robust jobs market,’ he added. According to John Eastgate, sales and marketing director of OneSavings Bank, prolific buyer demand is fanning the house price growth. ‘A strengthening labour market, robust consumer sentiment and a supportive mortgage market all played their part, despite the obstacles provided by the festive period. This strength of demand has been compounded by the record low levels of property on the market at present,’ he said. ‘Uncertainty around economic growth in 2016 provides a reason for caution. The good news however, is that house building starts appear to be at their highest level since 2007. It is not yet strong enough to counterbalance demand. However if this trend of improvement is maintained, it should lead to a healthier property market for investors and buyers alike,’ he added. The lack of supply is also the explanation of what is currently happening with unseasonal growth in the market, said Jonathan Hopper, managing director of the buying agents Garrington Property Finders. ‘Even… Continue reading
