Number of million pound properties in UK expected to triple by 2030

House moneyThe number of million pound properties in the UK will more than triple by 2030 and one in four London homes will cost £1 million or more by 2030, new research shows.

Yet less than 1% of properties in the North East, Yorkshire and Humber, the North West, Scotland and the East Midlands will be in this price bracket, according to the study from Santander Mortgages.

Also, by 2030 the average property price in the UK expected to double, surpassing the half a million pound mark with prices set to soar to as much as 16.5 times average incomes.

Today, less than half a million homes in the UK are valued at £1 million or more, says the research done partnership with economist and London School of Economics professor of economic geography Paul Cheshire.

It says that 25% of housing stock in London is expected to be valued at £1 million or more, rising to 70% in two London boroughs, highlighting a stark geographical divide.

Overall, the average UK property price, which currently stands at £283,565 is expected to increase 23% by 2020 to £349,3000. Fifteen years from now in 2030, the average UK property price will have almost doubled with a 97% increase, surpassing the half a million pound mark at £557,444.

While property prices are expected to soar, predictions suggest that incomes will not keep pace, resulting in an overall decline in affordability. At present in the UK, the average property price is 7.9 times the average income, but by 2030, this is expected to hit a multiple of 9.7. Again, this trend is elevated in London, where prices are currently 11.5 times incomes and predicted to rise to an eye-watering 16.5 by 2030.

‘Property price inflation will tip many existing home owners into the million pound price bracket but could also price some aspiring buyers out of the market if they don’t have the right support. The current property market is buoyant and the deals available to new and existing owners are extremely competitive, so those wishing to buy or move shouldn’t be put off,’ said Miguel Sard, managing director of mortgages, Santander UK.

‘Regardless of the price point a buyer is considering, our advice remains the same; do your research, find a mortgage provider that offers competitive rates and a range of products to ensure that the right deal is secured, and above all, ensure the repayments are affordable,’ he added.

Cheshire pointed out that by 2030 the divide between housing haves at the top and the have nots at the bottom will be even wider than it is now. ‘More owners will enjoy millionaire status, as homes that many would consider modest fetch seven figure prices in the most sought after areas,’ he said.

‘Property price inflation is beneficial for existing owners who will see their net-wealth increase, but it will make entering the market more difficult still for new buyers, further highlighting the importance of the right timing, advice, support and financial planning; and not just having a mum and dad who bought a house but a grandparent too,’ he added.

Source: Property Wire


UK property asking prices up almost 3% month on month

Boards smlThe price of property coming to the market in the UK increases by a substantial 2.9% or £8,324 in January, hitting a new record of £299,287 and surpassing the record set in October 2015 by over £2,700.

Housing demand is higher than ever as the latest Rightmove report records that traffic to the property portal hits record levels, with visits up nearly 20% year on year in January.

It says that there has been an encouraging 5% uplift in new properties coming to the market compared to same time last year resulting in the highest total number of newly listed properties at this time of year since the 2008 credit crunch.

The firm is also predicting that 2016 will be the year of the first time buyer as Government initiatives and a low interest rate outlook are now aligning when there is more property choice for first time buyers, with a 10% year on year jump in the number of two beds or fewer coming to the market.

‘The new year’s market has hit the ground running in many locations, continuing last year’s momentum and resulting in the price of property coming to the market hitting a new high. Many agents reported high numbers of sales in November and December and properties selling more quickly, so it’s encouraging to see signs of replenishment of property, especially in the first time buyer sector,’ said Miles Shipside, Rightmove director and housing market analyst.

‘However, in spite of the apparent veneer of market buoyancy, those thinking of putting their property up for sale need to avoid being too optimistic with their initial asking price, as most buyers are still understandably being very selective about their future home,’ he added.

The previous record price high was set in October 2015 but this has now been exceeded by £2,738, pushing the average new seller asking price to £299,287.

Shipside pointed out that a continuing feature of the recovering market over the past few years has been the supply of property coming to market failing to keep pace with demand. There are now signs of fresh supply increasing with the volume of new properties coming to the market is at the highest level since the credit crunch of 2008.

However, he added that it should be noted that this is patchy by region with only four regions above the 5% year on year average uplift, namely London, South East, South West and Yorkshire and the Humber. In the West Midlands new stock is actually down by 0.3% and Wales and the North West have seen an uplift of 1% or less, restricting fresh choice for buyers in these regions.

‘While more properties are coming to market there is little anecdotal evidence of tax shy landlords selling up. It is more likely made up of additional first-time sellers who are either hoping to bag a buy to let investor before the April stamp duty hike, or joining others who are deciding that 2016 is their year to trade up. Those trading up are no doubt encouraged by the stable interest rate outlook reassuringly communicated straight from the Governor’s mouth,’ Shipside explained.

The sector seeing the highest volume of new properties coming to the market is the typical first time buyer property with two bedrooms or fewer, up by 10% this month compared to the same month last year. It is suggested 2016 could be the year of the first-time buyer encouraged by low interest rates, initiatives such as Help to Buy, and buy to let investors facing increasingly adverse taxes.

‘For the second month running the highest increase in supply of homes coming to market is properties with two bedrooms or fewer, typically the target purchase of first time buyers or buy to let investors,’ said Shipside.

‘There is a 10% uplift in new supply compared to the same period in 2015, meaning all regions have more fresh choice in this sector than at this time last year. Regions outperforming the national average with over 10% more newly-marketed homes with two bedrooms or fewer are London, East, South East, South West, West Midlands, and Yorkshire and the Humber, and if this trend continues the increased competition among new sellers may help to temper price rises,’ he pointed out.

‘More and more agents are reporting a healthy return in first time buyer numbers, and with the cards increasingly stacked in their favour 2016 could prove to be the year of the first time buyer,’ he added.

Source: Property Wire

9.5% price rise in 2015 takes average home to over £208,000 says Halifax

halifax-logoPrices in the three months to the end of 2015 were 9.5 per cent higher than in the same three month period a year earlier – and the average price of a UK home is now £208,286 according to the Halifax index.

“There remains a substantial gap between demand and supply with the latest figures showing a further decline in the number of properties available for sale. This situation is unlikely to change significantly in the short-term, resulting in continuing upward pressure on prices” says Halifax housing economist Martin Ellis.

Homes are also becoming less affordable, as the house price to earnings ratio rose to 5.58 in December from 5.49 in November and 5.10 at the end of 2014, taking it to its highest level since January 2008, according to the data.

However, price growth in the final quarter of last year was slightly lower than in the preceding three months.

Source: Estate Agent Today

UK housing market is on solid ground, although price rises to slow in 2016

ReutersBritish house prices will rise more slowly next year than in 2015, according to a Reuters poll of analysts that also found interest rates would have to reach 3 percent before seriously affecting the market.

The bedrock of consumer wealth in Britain, house prices will rise 5 percent this year and 4 percent in the next two years, according to a poll of 22 property market experts taken in the past week, similar to forecasts published three months ago.

Wages will pick up faster than inflation – pegged at 0.2 percent this year, 1.6 percent in 2016 and 2 percent in 2017 – but will not match house prices rises until 2017, another Reuters poll found.

“An acute shortage of homes for sale, coupled with a recovery in housing demand as the labour market continues to strengthen, is putting upwards pressure on house prices,” Capital Economics’ Matthew Pointon said.

“However, with interest rates set to rise gradually from next year, and house prices already at very high levels, gains in 2016 and 2017 will be far more modest.”

Interest rates have sat at a record low of 0.5 percent since early 2009 and a Reuters poll this month suggested they will not rise until early next year and that even then, increases will be gradual.

Sixteen of 19 participants in the poll said the housing market was strong enough to withstand higher interest rates and the median said the lending rate would need to reach 3 percent before having a serious effect, something the rates poll predicted would not happen until 2018 at least.

“Small, gradual and anticipated interest rate rises, alongside decent GDP growth, are unlikely in themselves to derail the housing market,” the Council of Mortgage Lenders’ Bob Pannell said.

In a further sign Britain’s housing market is on solid ground, mortgage approvals rose in July to their highest level in 17 months.

The average asking price for a home in greater London was £606,826 ($951,078) in August, property website Rightmove said last week, more than double the national level of £292,284.

With the national average annual salary at £27,200 last year, house prices in London – which have surged in recent years – were therefore deemed unaffordable or very unaffordable by all but one respondent in the poll.

If prices rise 5.3 percent this year, 3.5 percent in 2016 and 4.5 percent in 2017 as expected, homes in the capital will be even further out of reach of most people.

Medians from the poll said the average level of London house prices on a scale of one to ten – from very cheap to very expensive – was nine. On a national scale they were rated seven.

“London is now significantly above its previous peak and a large part of a generation is priced out of the market. Across the country, this is markedly less true,” independent consultancy Building Value’s Tony Williams said.

Source: Reuters

House prices to rise 4.7% in 2015

CBER logoNew predictions from leading economic forecaster, the Centre for Economics and Business Research (Cebr), show that house prices are set to increase by more than previously expected in 2015.

Cebr now expects the price of the average home in the UK to rise by 4.7% – up from its March forecast of 1.5% growth.

A chronic lack of properties being put up for sale has pushed up prices in recent months and is one of the reasons behind the upward revision to the forecast.

While the London housing market was a key driver of growth in 2014, this year we expect average prices in the capital to increase by just 3.7% – less than the rate of growth for the UK as a whole. Although the Conservative victory at the general election means that a mansion tax is now off the table, the prime end of the London market has been dragged down by last December’s stamp duty changes, which pushed up the cost of purchasing luxury property.

With housebuilding expected to continue falling short of that needed to keep pace with population growth, UK house prices are expected to rise further over the coming years. Cebr expects house prices inflation to stand at 3.4% in 2016 and 4.4% in 2017. Between 2015 and 2020, the average price of a home is expected to increase from £261,000 to £321,000 – a 23.1% change.

In addition to supply shortages, strengthening earnings growth and continued low interest rates are also expected to support property prices. Although the Bank of England is expected to hike interest rates from early next year, rates are expected to rise only very gradually, with the Bank Rate settling at a “new normal” of 2% – much lower than pre-crisis levels.

Nina Skero, Cebr Economist and main author of the report, said, “With the possibility of higher taxation on prime property and intervention in the rental market less likely, the Conservative Party’s victory in the general election will likely support stronger price growth in the second half of 2015. Prices will also see a boost from the lack of fresh properties coming on the market.

“In London, average house prices are being weighed down by the prime end of the market. A strong pound which makes London property less affordable for foreign buyers and December’s decision to increase stamp duty on properties valued above £1.1 million are both deterring some prospective buyers”.

Source: Centre for Economics and Business Research


UK house prices to grow 24% by 2016 – BNP Paribas

BNP ParibasHouse prices in London will have shot up by 73% between 2010 and 2020.

The prediction comes from a property firm, BNP Paribas Real Estate, mainly known for its commercial activities.

The firm is also forecasting that UK house prices will have grown 24% in the next four years – between now and the end of 2016.

The forecast says that there will be a fall this year in UK house prices of 1.1% but a growth next year of 0.9%. In other words, house prices will have to get motoring from 2014 onwards, if the prediction is correct.

The firm says that last year, house prices in London grew 2.7%. This year, growth will be much the same at 2.65%, but next year, it is forecasting London house price growth of 6.6%, and 7.1% in 2014.

Tim Cann, head of residential at BNP Paribas Real Estate, said: “With some very early tentative signs of some improvements in the housing market, our forecast for 2013 is more upbeat than 2012, with UK house prices forecast to grow 0.9%.

“Whilst this increase won’t offset the falling values experienced in 2011 and 2012, positive growth will certainly be a move in the right direction.

“Beyond 2014 we are expecting the UK growth rate to accelerate, with UK house prices forecast to rise 8.8% in 2015.”

BNP Paribas Real Estate put its house price forecast together with the help of Professor Patrick Minford, former economics adviser to Margaret Thatcher and currently professor of economics at Cardiff Business School.

Source: Estate Agent Today