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Largest monthly rise for England and Wales house prices for a year
Property prices in England and Wales increased by 4.6% in July year on year, taking the average property value to £183,861, according to the latest data from the Land Registry. Month on month they increased by 1.7% with the East of England seeing the largest monthly rise of 2.8% and the biggest annual price increase with a rise of 8.9%, the data also shows. The North East saw the lowest annual price increase of 0.4% and Wales saw the only monthly price decrease with a fall of 0.3%. But transactions are down. The number of completed house sales in England and Wales decreased by 15% to 65,619 compared with 77,488 in May 2014. From February 2014 to May 2014 there was an average of 70,029 sales per month. In the same months a year later, the figure was 61,283. The Land Registry figures also shows that the number of properties sold in England and Wales for over £1 million decreased by 21% to 878 from 1,113 a year earlier. John Eastgate, sales and marketing director of OneSavings Bank, pointed out that it is the biggest monthly rise in house prices for a year and he believes it is driven by positive sentiment continuing after the general election and also by the lack of houses on the market for sale. ‘The simple fact that demand exceeds supply will continue to push house prices upwards and as long as that is the case, it’s hard to see prices moderating. The mortgage market remains supportive, and low rates aren’t going anywhere,’ he explained. ‘If economic turbulence from China pushes back a base rate rise until late 2016, as it appears to be doing, we may well see even more people capitalise on low mortgage rates to take their first step on the ladder,’ he added. Adrian Gill, director of Your Move and Reeds Rains estate agents, pointed out that there is still a considerable gulf between the rates of growth in the East, South East and London and other regions, but this hasn’t knocked confidence nationwide. What happens in London is being affected by outside factors, according to Peter Rollings, chief executive officer of Marsh & Parsons. ‘As the first port of call for international investors and prime property purchases, the housing market in London is more exposed to regulatory and stock market turbulence than the rest of the country,’ he said. ‘We’re still experiencing tremors from the new Stamp Duty banding, and as demand for million pound homes has eased, the harsher taxes at the top end may continue to rock the boat in London for the coming months. But this all needs to be kept in perspective. London is still achieving significantly above average house price growth, and retains its position at the top table,’ he explained. ‘In addition, the Chinese stock market slump may present more of an opportunity than a threat to the London property market as while it’s made property more… Continue reading
European commercial property investment activity at highest since 2007
Commercial property investment activity in Europe reached its highest level since 2007, totalling €102.5 billion in the first half of 2015, the latest market analysis report shows. The investment volume across the 16 participating countries was 25% up on the same period last year, according to the European Investment Briefing report from international real estate advisor Savills. The firm says that in line with its quarter one forecasts, the European investment market is on track to top €230 billion by the end of this year as commercial property investors continue to favour core markets, with the UK, Germany and France still accounting for 67.8% of the total volume. ‘However, the share of the markets outside of the top three countries is increasing, due to stronger investor interest for non-core countries, which offer attractive pricing and supply of large assets and portfolios,’ said Lydia Brissy, director at Savills’ European research team. ‘Overall, investors are more open to move up the risk curve. They seek future yield compression by targeting secondary or alternative assets in core cities, or prime assets in secondary markets,’ she added. The report shows that the office sector continued to dominate the investment activity in most countries across Europe, capturing about 39% of the transaction volume per country on average. The only exceptions where retail properties accounted for a higher share of property investment deals were Germany at 42%, Finland at 43%, the Netherlands also at 43%, Norway at 62% and Portugal at 83%, which saw the sale of large scale retail portfolios in the past quarter. Savills has also reported that cross border investment increased in nearly all countries across Europe and especially in the peripheral markets, where US investors have been notably active. There has also been growing interest from investors from Asia Pacific and the Middle East. The share of non-domestic investment ranged from 10% in Sweden to over 80% in markets such as Italy, Poland and Portugal. Marcus Lemli, head of European Investment at Savills, explained that international investors have continued to drive up volumes, particularly the equity funds from the US, which have been acquiring retail portfolios or landmark office buildings. This has enabled some of the more peripheral countries to record the strongest rises in investment volumes over the first six months of 2015, notably Portugal at 720%, Norway at 391% and Italy at 154%. In the second quarter of 2015 the share of US money invested out of the cross border volume has been remarkable, according to the report, averaging 40% per country, and accounting for as much as 93% in Portugal, and 66% in Ireland. ‘With healthy investor interest, Europe has seen a shift towards larger transactions. The most significant rises in portfolio deals were noted in Germany and the Nordic markets and consequently, there has been a marked uplift in activity in the regional markets,’ said Lemli. In the first half of this year, the volume of investment in regional markets rose to more than… Continue reading
Property price growth picks up pace across UK cities, latest index shows
Property price growth in key UK cities has picked up pace with annual growth running at 8.5%, up from 7.2%, according to the latest index from real estate analytics firm Hometrack. Growth over the last three months of 4.3% is at the fastest rate for 11 years, the data from the index, which covers 20 main cities, shows. The index report says that growing house price momentum is on the back of a 32% increase in sales volumes since April and a sustained catch-up in prices in cities outside southern England. There remains further upside for house prices in regional cities outside London, it adds, and city level price inflation remains on course to end the year at 10%. All cities with the exception of Aberdeen are registering house growth ahead of growth in average earnings which is currently 2.4%. The highest year on year growth is 10.9% in Cambridge followed by Oxford, London and Bristol. The lowest growth rate is in Aberdeen with a fall of 0.7% and the report suggests that the weakness in the oil price is impacting the local economy and demand for housing. Other cities with below average house price growth are Newcastle, Liverpool and Sheffield where annual growth is running between 2.5% and 4.5%. The report also says that there is room for further catch-up in house prices. Nine of the 20 cities still have average prices that are lower than 2007 levels although this gap is narrowing rapidly. The relative performance of house prices since 2007 remains wide and reflects different economic and demand side drivers of house prices. Average prices in London are 40% higher than in 2007 and 14% higher in Bristol. Cities such as Edinburgh and Glasgow have registered a resurgence in growth more recently post the Scottish referendum although average prices remain 2% and 11% below their peak. Looking ahead, the report says that low mortgage rates, economic growth and rising earnings will continue to stimulate demand and put an upward push on house prices across most cities. As an international city, London is out on its own setting new highs for prices and unaffordability. ‘How long this can be sustained is down to the prospects for the different segments of demand, specifically international buyers, domestic investors and domestic home owners,’ the report explains. ‘Overall we expect city level house price inflation to remain on course to end the year at 10% year on year,’ it concludes. Continue reading
