National house prices will rise 17% during the next five years as the economic recovery gets underway, according to CBRE.
The news follows an increase in optimism which has fed through to the national housing market, with mortgage approvals at their highest level since 2008, leading to more than 62,000 requests approved during August 2013.
The market will be boosted by help to buy, low interest rates and improvements in the mortgage market. With most favourable economic conditions in Southern England, CBRE expect house prices in London, the South East and East of England will witness the most significant growth throughout the next five years.
Jennet Siebrits, Head of Residential Research at CBRE, said: “The continued improvement in lending conditions has been a significant factor in the increased demand across the UK property market. Notably, the Funding for Lending and Help-to-Buy equity loan schemes have proven particularly successful.
“The first phase of Help-to-Buy has achieved its objective of stimulating the UK property market, through delivering over 15,000 reservations since April of this year. We expect the second phase of Help-to-Buy to become a ‘game changer’ and therefore anticipate it will help in the region of half a million prospective buyers who are seeking to enter the property market.”
London – The capital continues to witness an inflow of investment from overseas purchases, resulting in land across the region offering ‘easy trade’. While Government backed funding schemes have improved domestic mortgage markets and accessibility for all pricing levels, an emergence of house-builders and registered providers entering the market has made it all the more competitive, leading to an upward pressure on regional land values.
South East – When compared with Q2 2013, activity in the land market throughout the South East of England has continued to increase. While previously unviable land is re-entering the market, coupled with the National Asset Management Agency (NAMA) releasing further land opportunities, competition for target locations has generated a considerable increase in land values.
South Central – The South Central market remains active with house-builders continuing to re-evaluate margins and hurdle rates with the objective of acquiring strategic prime sites for residential development. The continued importance of Return On Capital Employed (ROCE), has affected those larger schemes where the majority of non-stressed vendors have been unable to meet the demands for a reduction in land offer coupled with increasing payment profile.
South West – The house-builders’ appetite to acquire immediate development sites with consent in areas where underlying demographics and sales rates are strong continues to increase. However, due to limited supply, these sites are harder to source, making strategic land and off market sites the key focus.
Midlands – The reformed national planning and policy framework, the Help-to-Buy initiative, and improved sentiment for owner occupation have been the leading factors in contributing to an increase in activity across the Midlands house building sector. When compared to Q2 2013, land values throughout the region have risen 5% for those best sites, with consented land in areas which offer £200psf and above receiving the strongest demand.
North – The housing building sector in the North of England remains fundamentally PLC driven as those regional players remain reluctant to re-enter the market due to ongoing funding restrictions.While government assistance is providing developers with sufficient sales confidence to activate land buying across the sectors, the primary focus for the region remains on first and second time buyer markets.
Scotland – Overall, demand and values have continued to rise with house builders remaining focused on the Central Belt and Aberdeen. Similarly, house-builders are also considering secondary sites on commuter belts, helped by planning authorities actively reviewing historic planning consents and renegotiating the Section 75 agreement.Source: http://propertytalklive.co.uk