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Sales to first time buyers increased in UK in March
Sales to first time buyers in the UK were up in March and real estate agents expect to see further increases in sales to the group following the buy to let stamp duty changes. Some 28% of total sales in March went to people buying their first home, an increase of 4% compared to February, according to the latest housing market report from the National Association of Estate Agents (NAEA). The report also says that 39% of estate agents expect the stamp duty change which saw the introduction of 3% rate on buy to let properties and second homes to increase availability for first time buyers as interest from investors slows. More than a third of estate agents, some 36%, argue sales to first time buyers will pick up further, due to less competition for properties. Overall, the supply of houses available to buyers soared by54% in March from 35 properties available to buy per branch in February to 54 in March. On the other hand, demand decreased last month, when agents reported an average 417 house hunters registered per member branch, down from 463 in February when demand for housing was at the highest level in 12 years. In March, estate agents also reported a decrease in the number of properties selling for more than asking price. Only 7% of agents saw this happen in March compared to 11% in February. ‘The last few months first time buyers have had to compete with landlords for the same properties and those landlords have really pushed hard to complete ahead of the rise in stamp duty,’ said Mark Hayward, NAEA managing director,. ‘Now, in theory things should get easier for first time buyers as we have seen with a slight increase in sales this month and as those seeking to buy to let will tail off,’ he explained. ‘However in reality, it’s unlikely in the long term that first time buyers will notice a huge difference, as prices remain high and housing is in short supply. The Government needs to significantly increase the number of homes that are being built in this country to really make a difference to those that are struggling to get on the housing ladder,’ he added. Continue reading
North West of England worse hit by negative equity values in UK
Hundreds of thousands of home owners in the UK who bought property in 2007 are still likely to be stuck in negative equity despite the current strong growth in the residential market. Almost 1.5 million property transactions were completed in 2007 when property prices reached peak levels, just before the financial markets imploded in 2008 and according to research from online estate agent HouseSimple, average property prices 53% of towns and cities are still below average prices in 2007. While average London prices have risen by 56% since 2007, that is not the case across large parts of the country, particularly in the North of England where 17 of the 20 towns and cities worst hit by negative equity are located. The research, which looked at 75 major towns and cities in England and Wales, also shows that it is the North West that has been worst hit by post-recession negative equity with 40% of the top 20 negative equity towns and cities in the region. The worst affected towns are Blackpool and Middlesbrough, where house prices are still almost 30% lower than pre-crash highs. Along with Blackpool, Blackburn and Liverpool are both in the top five worst affected towns and cities, with average house prices still 25% and 23% lower respectively than before the crash. Yorkshire and the Humber has also been hit hard, with a quarter of towns in the top 20 list in that region. Average prices in Middlesbrough are still 28% below pre-2008 levels, while in Bradford and Hull, house prices are 20% and 19% lower than 2007 averages. House price recovery in the South has been much stronger than the north. As you might expect, London’s house prices have more than recovered, and average prices today are almost £200,000 higher than 2007 levels. Property prices in Winchester also seem to be recession proof, up 44% to £447,046, compared to average 2007 prices. Meanwhile, average prices in the commuter town of Stevenage are 39% higher than pre-recession values. Sale and Stockport in the North West, where house prices now average £252,203 and £206,368 respectively at 25% and 22% more than 2007, buck the trend in the region. They are the only towns outside the South of England in the top 20 towns and cities where house prices have more than recovered to pre-recession levels. ‘London home owners have watched as their properties have risen in value substantially since 2008 but, thousands of people around the country have had to put their lives on hold, unable to move because they are trapped in negative equity,’ said HouseSimple chief executive officer Alex Gosling. ‘Unfortunately, the North of England has been slower to recover losses suffered during and after 2008. And anyone wanting to relocate for work or family reasons faces a less than appealing choice, either making a loss on the sale of their property or staying put and waiting until the price of their house at least recovers to… Continue reading
Rents up by an average of 3% across England and Wales year on year
Rents in England and Wales have increased by an average of 3% over the last year to £791 per month, according to the latest buy to let index. Record rents were recorded in the Midlands while rents fell in Wales and the North East, the data from the Your Move and Reeds Rains index also shows. On a monthly basis March was a relatively subdued month, with the level of average rents the same as was seen in February. Month on month rent growth has dipped marginally from 0.1% between January and February 2016 to a flat 0% between February and March 2016. Leading the whole of England & Wales, rents in the East Midlands now stand 8.5% higher than in March last year, at an all-time record high of £613 per month. This is followed closely by the West Midlands with 6.7% annual rent rises, taking the average rent in the West Midlands region to a separate all-time record of £597 per month. London is in third place in terms of annual rent rises, up 4.6% from the same point last year. However at £1,231 the capital’s average monthly rent remains below the all-time record of £1,301 set six months ago in September 2015. At the other end of the spectrum Wales and the North East are host to annual rent falls, both dropping by 2.2% since March last year. This takes rents in Wales to £551 per month and rents in the North East to £507 per month in March 2016. On a monthly basis the East Midlands matches the South East with a 0.7% month-on-month rise in rents, followed by the East of England where rents have risen by 0.6% between February and March. Meanwhile, taking into account both rental income and capital growth, but before property specific costs such as maintenance, the average existing landlord in England and Wales has seen total returns rise to 12.2% over the 12 months to March. The index points out that this is a clear jump from 10.7% seen a month before, over the 12 months to February, and is also the fastest annual rate of return for existing landlords seen since November 2014, when the same measure last reached 12.3%. In absolute terms this means that the average landlord in England and Wales has seen a return of £22,135 over the last year before any deductions such as property maintenance and mortgage payments. Of this, the average capital gain contributed £13,494 while rental income made up £8,641 over the 12 months to March. While a recent surge in capital values has boosted total returns for existing landlords, the same trend has suppressed rental yields for those aspiring to become landlords, or looking to grow their property portfolio,’ the report points out. As rents rise alongside property prices, rental yields are proving relatively resistant to rising purchase prices. However the gross yield on a typical rental property in England and Wales, before taking into account factors… Continue reading
