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New report sets out how sensitive the UK housing market is to the economy
There are almost 30 million residential properties in the UK with the market linked to income, wealth and availability of income which makes is sensitive to the overall economic climate, according to a new report. The overview from the Office of National Statistics (ONS) shows that as of 2014 there were 28.1 million properties and as the population continues to grow housing is set to remain an important topic. Since 1980, there has been considerable fluctuation in the UK housing market. Overall, there has been growing demand and relatively limited supply growth. House prices have been increasing, and first time buyers are finding it more difficult to get on the property ladder while home ownership among younger age groups generally has declined. The report points out that on average house prices have increased by 7% per year since 1980 and the year with the greatest annual increase in house prices was 25.6% recorded in 1988 while by 2015, the average price (mix adjusted) of a property in the UK stood at £279,000. There were seven years between 1980 and 2013 where, on average, UK house prices fell, the majority of which occurred during the recession of the early 1990s. The biggest drop, however, was 7.6% in 2009. The economic downturn in 2008 had a considerable impact on the UK housing market. The decline in house prices was accompanied by reduced mortgage availability and stricter lending criteria. The analysis also shows that the number of property sales in the UK almost halved from a peak of 1.67 million in 2006 to 0.85 million in 2009 but since then the number of sales has partially recovered, increasing to 1.23 million in 2015. According to the report rising house prices could partially explain the decline in the number of first time buyers taking out a mortgage, although other economic factors will play a role. From the 1980s until the early 2000s there were typically between 400,000 and 600,000 loans to first time buyers each year. However, in 2003 there was a 31% decline and then in 2008 there was a further 47% decrease, the largest in the series, as the economic downturn affected the housing market. In recent years the number of first time buyers has been recovering, although numbers fell in 2015 and the levels remain below those seen before 2003 and the reduction in the numbers of first time buyers has subsequently had an impact on the age of home owners. In 1991, 67% of the 25 to 34 age group were home owners. By the financial year ending 2014, this had declined to 36%. There were also reductions in home ownership over the same period for the 16 to 24 age group from 36% to 9% and for the 35 to 44 age group from 78% to 59%. By contrast, home ownership has increased among older age groups. Another changing aspect of the housing market is the percentage of purchase price being paid as… Continue reading
Over 200,000 homes lie empty in England, new research shows
There are 203,596 long term empty homes in England valued at £38 billion, but the amount varies depending on location, new research has found. London has the most number of homes empty for six months or more at 21,000 worth almost £12.4 billion while Bradford has more empty homes than any other town or city outside London, with over 4,000 sitting empty, totalling nearly £400 million. One of the most deprived boroughs, Newham, has the worst problem in London with 1,318 unoccupied properties, according to the research from property crowd funding platform Property Partner . But there has been an 84% drop in long-term vacant homes in Manchester over a decade, according to the research which used figures from the Department of Communities and Local Government (DCLG). The analysis looked at long-term vacant dwellings in England between 2005 and 2015, and then estimated the total value of this vacant real estate for towns and cities as well as London. Overall, in the past decade, the number of long-term vacant homes in England has been reducing. In 2005, there were 313,616 but by 2015 that had dropped by around a third to 203,596. Manchester has seen the number of empty homes plummet by more than 84%, from 10,059 long-term vacant dwellings in 2005 to 1,599 a decade later while in Bradford there has been a rise of 7% in the past decade to a total of 4,154 empty homes. On a regional basis West Yorkshire, which includes Bradford, Calderdale, Kirklees, Leeds and Wakefield, has the highest number of long term empty properties at 12,292, an estimated £1.4 billion worth of potential homes that could be occupied. Newham has the most empty properties at 1,318 in all 33 boroughs in London with the total value standing at almost £470 million. Meanwhile, Kensington and Chelsea’s long term vacant housing stock is valued at a £1.7 billion while Harrow in the north west of London has just 97 dwellings which have been unoccupied for over six months and unsurprisingly, the smallest borough the City of London has just 44. Only three boroughs, Kensington and Chelsea, Haringey and Lewisham, have seen increases in the number of vacant dwellings over the decade while Wandsworth has seen a fall of more than 90% from 3,044 in 2005 to just 263 in 2015. ‘These figures reveal a shocking waste of opportunity. Over a decade ago, the law changed giving councils the power to seize empty homes through Compulsory Purchase Orders and rent them back out to tenants, if they lay vacant for more than two years,’ said Dan Gandesha, Property Partner chief executive officer. ‘But we still find not enough being done in many parts of the country. This is nothing short of a scandal. To be fair, some towns and cities are getting to grips with the problem of long-term vacant properties,’ he pointed out. Yet if just half of the current empty homes could be brought to market, it would go a long… Continue reading
Residential rents falling across much of Scotland, latest index shows
Scottish rents increased just 0.6% year on year and were down 0.4% month on month in April, marking the smallest annual rise seen since the start of 2013, the latest index shows. Across Scotland the average rent now stands at £542, but Edinburgh and the Lothians shun the wider slowdown with a record 10.5% jump in rents since last year. The data from the Your Move index also shows that tenant arrears are escalating as the level of late rent climbed for the second consecutive month, up to 11.6%. The annual rise represents a significant downturn in rates of year on year growth from 1.1% recorded in March, and 2.1% in February and average rents are at their lowest since April 2015. Brian Moran, lettings director at Your Move Scotland, pointed out that overall rents haven’t risen at such a leisurely place for three years but the market is seeing many price fluctuations and also isn’t uniform across the country. ‘The lettings market is always at the mercy of local supply and demand, and in Edinburgh and the surrounding areas we’re seeing extraordinarily fast rent rises, as tenant competition shines brightest around the glow of the jobs market. Supply and demand need to strike a lasting equilibrium to prevent rent growth taking off and leaving tenants by the wayside and that’s a tall order in today’s regulatory environment,’ he explained. He also pointed out that landlords are up against a considerable number of hurdles, including a higher rate of stamp duty on property purchases, reductions in tax relief, and the Private Tenancies Bill. ‘While levied at landlords, these measures could soon hurt thousands of tenants too if buy to let investment retreats as a result and there are less houses and flats to rent,’ he added. On a monthly basis, rents were cheaper in all but one region of Scotland in April. The Highlands and Islands had the fastest drop in average rents in April, falling 1.7% on March, reducing typical rents in the region to £537 per month, the lowest level seen since December 2014. Rents in Glasgow and Clyde fell on a monthly basis for the fourth consecutive month, down by 1% in April to £538 while in the East of Scotland rents were 0.6% lower in April than in March, while the South experienced the smallest month on month reduction, down by 0.1%. Edinburgh and the Lothians is the only region to experience an increase in rents since March, up a solid 0.8% month on month following on from rises of 0.2% in March and 0.3% in February. In the longer term, rents also fell across the majority of Scotland year on year in April. Of the three regions to see rents decrease on an annual basis, Glasgow and the Clyde had the steepest drop with average rents 3.9% lower than in April 2015. Rents… Continue reading
