Tag Archives: united-states
UK house prices fall ahead of EU referendum, latest index shows
More evidence is emerging that the run up to the referendum on the UK’s future in the European Union is affecting residential property prices. Property values in England and Wales fell by 0.4% in May, the steepest fall since November 2011, according to the data from the lastest index from Your Move and Reeds Rains. This takes the average house price to %293,599 and year on year values are still up 6.8% but 5.4% if London and the South East are excluded from the calculation. However, London’s house prices fell by 0.3% or £1,769 month on month and it was the weakest May for home sales in five years, after stamp duty surcharge caused a rush of buy to let sales in March. But house prices in Slough defied the trend, jumping 23.3% year on year, with values lifted by Crossrail and new tech jobs, according to the index report. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, May’s correction in property values also follows on from a surge in activity earlier in the year, when second home buyers and landlords brought forward their purchases to avoid the stamp duty surcharge. ‘That tax hike and the Government’s anti-landlord policies are weighing down the market, but the main factor is short term confidence ahead of the 23rd June referendum,’ he said. The year on year growth in house prices has also slowed, down to 6.8% in May, from 7.7% in April. ‘With the Chancellor predicting that a Brexit from the EU would reduce property values by at least 10%, many buyers are holding off until after the uncertainly surrounding the referendum has been resolved,’ Gill explained. The fall in prices in London has pushed average property values in the capital city back under the £600,000 mark, with the value of a typical home in the city falling to £598,421. However, this decline in property values has not spread across the entire capital. While house prices in the most expensive eleven boroughs have declined by an average of £4,000 or 0.5% from the previous month, values in the cheapest eleven boroughs continue to rise, jumping £3,000 or 0.8% month on month. But despite maintaining property values well above the rest of the UK, the demand for homes in London continues to grow. In the three months between February and April, sales of homes in London increased by 15%, compared to the same period last year. ‘The majority of this upswing in sales came from flats. As landlords often prefer to provide flats to rent, these properties were a popular choice before the stamp duty surcharge came into force in April,’ said Gill. He also pointed out that with so much uncertainty in the UK economy, home sales have been subdued. While the total number of property sales did increase from the previous month, this month has seen the fewest May property sales since 2011,… Continue reading
Apartment rent growth slows in the United States
Apartment rent growth in the United States has slowed nationwide over the past year, with the higher end of the market most affected, new research shows. After growing at a blistering pace for much of 2015, apartment rents across the county are growing at a slower pace thus far in 2016, according to the data from real estate firm Zillow. Overall, apartment rents nationwide grew by 3.6% for the year ending in April 2016, almost 2% points slower than the 5.4% pace reported for the year ending in April 2015. And in 23 of the nation’s 35 largest housing markets, the slowdown in rent appreciation has been more acute in luxury ZIP codes area than metro-wide. In four additional markets of Washington D.C., Sacramento, Miami-Fort Lauderdale, and Kansas City broader apartment rent growth has accelerated from 2015, but it has accelerated less in luxury ZIP codes than in the metro as a whole. Aaron Terrazas, a senior economist at Zillow, said that substantial investment in new construction, particularly at the high end of the market, has contributed to some of this pattern, although in some areas weak labour markets may also be a contributing factor. The research also shows that in the Houston metro, essentially all ZIP codes where the median rent per square foot is above $1.10 have experienced a deceleration in apartment rents. In the New York metro, the natural cut off appears to be closer to $2.30 per square foot and in the San Francisco metro, it appears to be around $3.80. The exception is the Seattle metro, where higher apartment rent growth continues to accelerate in luxury ZIP codes, although the acceleration has perhaps not been as dramatic as lower priced ZIP codes. Terrazas explained that part of this is due to rapidly rising rents in neighbourhoods north of Seattle’s Lake Washington Ship Canal. Meanwhile, the latest national index produced by Florida Atlantic University and Florida International University shows that housing market as a whole is moving deeper into buy territory, suggesting that, on average, residential housing markets around the country are sound. The Beracha, Hardin & Johnson Buy versus Rent (BH&J) Index measures the relationship between purchasing property and building wealth through a build-up in equity compared renting a comparable property and investing in a portfolio of stocks and bonds. It says that in terms of wealth creation the US housing market, when considered as a whole, has swung marginally more in favour of home ownership over renting a comparable property and investing monthly rent savings in a portfolio of stocks and bonds. Overall, 16 of the 23 metropolitan markets investigated moved in the direction of buy territory. The metro areas of Boston, Chicago, Cincinnati, Cleveland, Detroit, Milwaukee, Minneapolis, New York, Philadelphia and St. Louis remain solidly in buy territory. ‘These cities should have room for price growth without much worry of overheating,’ said Eli Beracha, co-author of the index and assistant professor in the T&S Hollo School of… Continue reading
EU referendum causing uncertainty in UK property market with prices set to fall
Increasing uncertainty is weighing on the UK residential property market which could result in prices falling, according to the latest monthly housing report from the Royal Institution of Chartered Surveyors. The report paves out a scenario where prices could experience a short term drop due to uncertainty surrounding the referendum later this month on the future of the UK in the European Union. It would be the first such fall since 2012. The most recent polls are putting the Leave campaign marginally ahead of the Remain campaign and in many areas of business and economic life in the UK this is causing a wait and see attitude. This is already affecting the property market according to the RICS report which says that prices across the UK saw only modest growth in May while prices in central London fell. On top of this demand from buyers is falling at the fastest rate in eight years. RICS predicts that house prices nationally are set to dip over the coming months, while rents increase while in central London some 35% more property professionals are reporting that prices had fallen rather than risen over the past month. While prices are continuing to climb modestly across the rest of the UK, this trend looks set to fade, with 10% more respondents predicting that prices would fall rather than rise over the coming three months. This is the first time that a fall in prices has been predicted since 2012. London and East Anglia are expected to be worst hit with 43% and 33% of respondents saying that prices will fall over the next quarter. ‘Sadly, for the many young people looking to enter the property market, it is unlikely that we are seeing the emergence of a more affordable market. Instead, it appears to me that what we are looking at is a short term drop caused by the uncertainty resulting from the forthcoming EU referendum coupled by a slowdown following the rush to get into the market ahead of the tax change on the purchase of investment properties,’ said Simon Rubinsohn, RICS chief economist. ‘Certainly, that’s the story we are hearing from our members. There is not at this point a sense that a fundamental shift is taking place in the market,’ he added. Buyer demand fell across the UK for the second consecutive month and at the fastest pace since 2008, with 33% more property professionals saying that demand decreased last month. The survey revealed that in the longer term, while house prices are thought likely to regain momentum, rents look set to outpace them, with UK rents predicted to increase by 4.7% year on year for the next five years, compared to house price increases of 4.1%. The number of agreed sales also fell for the second consecutive month with a net balance of 22% of respondents reporting a fall rather than a rise in activity. However, Thomas van Straubenzee of prime London property agents VanHan, believes that… Continue reading
