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


86% rise in volume of valuations for purchases of buy to let units

mortgage applicationThe number of valuations conducted for buy-to-let properties soared by 86 per cent between December 2014 and December 2015, according to Estate Agency and Valuation firm Connells.

“In an environment of competitive mortgage rates and strong demand for rental property from tenants, the buy-to-let sector is always going to be a popular option for investors with the time to devote to being a landlord. However, the added factor of the April 1 stamp duty increase has spurred many investors who might have been sitting on the fence to take the plunge and enter the buy-to-let market before its profitability takes a hit” according to John Bagshaw, corporate services director for the agency.

The buy to let increase came despite a one per cent dip in BTL valuations in the single month of December 2015 – a fall described as a typical seasonal variation by the firm.

The BTL increase over the past year far outstrips the rise in valuations conducted for remortgaging purposes – up 34 per cent over the 12 months.

“The remortgaging market has typically been a strong performer over the last year. A Bank of England rate rise now looks very likely at some point in 2016 – especially considering the US Federal Reserve has already raised their base rate. Many remortgagors realised this and, like buy to let investors, opted to take advantage of favourable borrowing costs while they lasted” says Bagshaw.

Across the whole market, valuations – for whatever purpose – were 29 per cent higher in December 2015 than in December 2014; the rate of annual growth of all valuations over the past year was nine per cent.

“There is a steady confidence in the market that wasn’t present in 2013, or even 2014. December’s results are also a reflection of the ever-increasing demand for homes as investment opportunities, as buy to let landlords join home movers seeking to make some sort of profit from their property” according to Bagshaw.

Source: Letting Agent Today

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

Accord announce new short-term fixed rates for BTL

accord-BTLAccord Buy to Let has announced a range of short-term fixed rate mortgages for landlords looking to expand their portfolio, with the added incentive of £300 cashback on completion and free standard valuation.

The intermediary-only lender, which is part of the Yorkshire Building Society Group, is now offering a selection of competitive two-year fixes for landlords with a 25%, 35% and 40% deposit.

Highlights of the two-year fixed house purchase range include:

  • a 2.14% mortgage at 60% LTV with a £2,495 fee, £300 cashback on completion and free standard valuation.
  • a 2.29% mortgage at 65% LTV with a £2,495 fee, £300 cashback on completion and free standard valuation.
  • a 2.39% mortgage at 75% LTV with a £2,495 fee, £300 cashback on completion and free standard valuation.

In addition Accord is offering a three-year fixed rate mortgage at 75% loan-to-value (LTV) with a £2,495 fee, £300 cashback on completion and free standard valuation, which is available to landlords investing a new property.

Chris Maggs, Accord’s Buy to Let Commercial Manager, said: “Landlords have received a number of blows from government reforms this year, most recently an additional 3% of stamp duty levied on the purchase of second homes. We hope our new two and three-year fixes will prove popular with landlords looking to invest in a new property before some of the changes come into effect in April.

The added incentives of £300 cashback on completion and free standard valuation should help to reduce the upfront costs for landlords expanding their portfolio, and the competitive rates will help brokers looking for the best deal for their clients.”

Scotland announces extra tax on second homes

ScotlandFlag400x310Private rented sector landlords in Scotland and second home owners face an extra 3% stamp duty tax from next year which will bring them into line with changes in England and Wales.

It was only a matter of time before the change came about after the UK Chancellor George Osborne announced the additional tax for England and Wales in his recent Autumn Statement.

Scottish Finance Minister John Swinney said that he would bring forward legislation on the new second home charge soon so that it could be in force by April 2016. ‘I am conscious of the issue of second homes. We need to ensure that the opportunities for first time buyers to enter the market in Scotland are as strong as they possibly can be and we need to make certain that tax changes elsewhere in the UK do not make it harder for people to get on the property ladder,’ he explained.

It means that an extra 3% rate will apply to the purchase of additional properties, such as buy to let and second homes from 01 April 2016 and be levied on the total price of the property for all sales above £40,000 on top of the current LBTT rates.

The Scottish Government has forecast that it will raise overall LBTT receipts in 2016/2017 by between £17 million and £29 million, rising to a possible £66 million by 2020/2021. Overall the Government expects LBTT will raise £295 million in 2016/2017.

John Blackwood, chief executive of the Scottish Association of Landlords, said that landlords will be disappointed and frustrated by the decision which will effectively ‘punish’ those who choose to invest in the private rented sector (PRS) Scotland.

‘The supplementary tax on the purchase of second homes will have a huge impact on the buy to let market and exacerbate an already serious shortage of properties in many areas. We firmly believe that the biggest losers from today’s statement will be tenants who will now find it even harder to get the accommodation they want at a price they can afford,’ he added.

Oliver Knight, a senior analyst in Knight Frank’s residential research department, said that sales will be brought forward as landlords and others seek to minimise their property tax burden.

He added that buy to let property investors will also be able to continue offsetting all stamp duty against capital gains tax when they sell their property.

Bob Cherry, partner at property consultants CKD Galbraith, also believes that there will be a flurry of activity before the end of March 2016. ‘This new levy will have implications for current landlords looking to sell as well as act as yet  another deterrent to would be landlords thinking about the market as an investment opportunity,’ he said.

‘This measure, like the LBTT rises introduced earlier this year, is also a wealth tax on owners as buyers of buy to lets will seek to pass on the extra purchase costs by reducing the price they are prepared to pay,’ he added.

Source: Property Wire

House prices to rise by 25 per cent in next five years

rics_logo-300x150UK House prices are expected to rise by 4.5 per cent for each of the next five years – a cumulative increase of around 25 per cent according to the RICS.

The culprit over the long term – as it has been in the short term – is a shortage of stock. RICS says demand continues to considerably outpace supply and the number of new instructions decreased in October for the ninth month in succession.

In fact the institution says the supply of new stock to the UK market has been in decline since the middle of 2014, with the number of new instructions only increasing in one of the months since then.

Demand, meanwhile, is strong. Following a small pick-up in agreed sales in September, activity was little changed this month across the UK. This chimes with HMRC transactions data, which continues to see the number of sales rising consistently over the year.

“It’s hard to get away from the issue of supply when it comes to the current state of the housing market. The legacy of the drop in new build homes following the onset of the global financial crisis is now really hitting home, with both the sales and letting markets continuing to show demand outstripping supply on a month-by-month basis” says Simon Rubinsohn, RICS chief economist.

“If the five year projections regarding the outlook for both prices and rents is anything to go by, property is set to become even more unaffordable going forward making the Government’s focus of boosting the delivery of new-build homes absolutely critical.”

Source: Estate Agent Today

London rental market bounces back

Continuing last quarter’s surprising turnaround, the London rental market has bounced back to see rental values rise by more than 4% across most of central and east London with healthy gains seen across most of the rest of the capital.

Analysts at Benham & Reeves Residential Lettings which conducted the independent research, cite the crippling effect of the new stamp duty rates on the sales market for the strong rental market as tenants eschew homeownership in favour of long term tenancies.

Prime Central London (PCL) saw strong gains last quarter after several quarters of stagnation, and continued to see strong growth this quarter. Many of the tenants are overseas professionals who are opting to rent long term as the cost of renting often represents a saving compared to purchasing a home in high value areas thanks to the 12% top rate of stamp duty.

The rental market in east London is also very strong but for different reasons. The tenant demographic is typically younger and more likely to be British.  However, many of these tenants are deliberately choosing to rent rather than own a property as a lifestyle choice. Many of the Millennial Generation do not view homeownership as a goal and recognise that they can often afford to rent a much better property than they can afford to buy.  Millennials are also a more mobile workforce who change jobs more frequently than previous generations.

North London was one of the few areas to see rental values fall. A number of new developments in north London have seen the property supply increase.  Locations on the Northern Underground Line have also fallen as the Central Line interchange at Tottenham Court Road has been suspended for several months while the station is rebuilt for Crossrail.

Marc von Grundherr, lettings director at Benham & Reeves Residential Lettings, said: “From an investors’ perspective, it is very interesting to observe demographic changes.  One of the reasons the rental market tends to remain so strong in areas such as east London is because these areas attract Millennials who are content to rent long term. They’re simply not willing to scrimp and save for years to afford a deposit but prefer to ‘live for the moment’. This concept even extends to where they choose to rent: they’d much rather live somewhere central close to good bars and restaurants than commute in from more affordable areas.  For as long as East London remains hip and trendy, it will continue to attract good quality tenants.”

Source: Property Reporter

Manchester predicted to boom in the next ten years

Axis Tower, Manchester

New research reveals the top 10 locations where property prices are likely to boom in the next decade, with Manchester taking pole position, while London fails to make the grade.

The research, conducted by online estate agents HouseSimple, reveals ten locations in the UK where property prices are likely to increase substantially – with Rotherham, Leicester and parts of Surrey making the top ten.

The locations – a mixture of cities and commuter towns – are all in England, and have a huge variation in house prices – from terraced homes selling for less than £90,000, to executive detached properties in excess of half a million.  The predictions for the hot spots were made using key indicators, including trendy eateries, good transport links, a young population – and the occasional celeb.

The Top Ten Hot Spots

1.   Manchester
2.   Rotherham
3.   Harborne, Birmingham
4.   Leicester
5.   Hythe, Kent
6.   Norwich
7.   Hove
8.   Ipswich
9.   Ilkley, Bradford
10.  Woking, Surrey

Peter Armistead of Armistead Property commented: “It’s no surprise that Manchester has come out on top thanks to the expansion of the MetroLink tram system, the trendy Northern Quarter and the BBC Media City.  Manchester has been voted, for a second year running, the best place in the UK to live.  It has an amazingly vibrant restaurant, bar, club and music scene, not to mention its galleries and museums.

We have an amazing student scene and our Universities and teaching/research facilities are truly world class.  Manchester is home to nearly 100,000 students, making it one of the largest student cities in Europe.  Oh and let’s not forget the amazing sporting scene here and the famously warm and friendly people.

Despite all of its many advantages and attractions, Manchester is actually a very affordable place to live and many students chose to carry on living here after they graduate, as well as graduates from other areas moving to Manchester.  There’s a very important young professional scene in Manchester.  The cost of wages relative to property costs is a very important factor in attracting these people.  House prices in London are about five times what they are in Manchester, but salaries are only 30% higher.

An average residential property in Manchester is just £155,000, while a flat in a good area, costs as little as £120,000.  It’s not surprising that many investors, especially from the South, are targeting Manchester as a great place to invest.  A property in Manchester can provide a 5% minimum cash rental yield and a typical 12% total cash yield, including 7% capital appreciation.  Demand for rental accommodation is strong and by comparison with other regions, housing is cheaper.

Manchester is a great place for investors.  I have built a successful, mid-sized portfolio of buy-to-let properties in South Manchester.  Over the last 12 months I have enjoyed average rental yields of 6% per cent across my 80 properties.”

UKPI have access to some great residential investment deals in Manchester including the iconic Axis Tower with prices starting from just £165,000 and rental yields of between 6% to 8%. Contact us for details. 

Source: Property Reporter

UK property sales up to 16 month high, says RICS report

rics_logo-300x150Property sales in the UK have picked up across the country, reaching a 16 month high, according to the latest index report from the Royal Institution of Chartered Surveyors (RICS).

There were also further price increases nationwide in September, a modest improvement in mortgage availability but no improvement in the supply situation with new buyer demand continuing to outweigh instructions to sell.

Across the UK, agreed sales rose at the quickest pace since May 2014, with 14% more chartered surveyors seeing a rise. This is a 16 month high and the fifth consecutive month that sales have increased.

The North, East Anglia and Scotland posted the sharpest rises in activity over the month with the East Midlands the only region to see a material drop in sales albeit following an increase in the region in August.

The report says that the stronger sales trend in the UK is broadly reflective of an upturn in demand which has been visible in the data since the early spring. Indeed, the number of new buyer enquiries rose for a sixth consecutive month across the country with 18% more chartered surveyors reporting a rise in demand.

The pattern being seen by chartered surveyors echoes recent lending data including that highlighted by the Bank of England, showing mortgage approvals at an 18 month high and up 12% compared to a year ago.

As the availability of mortgage finance appears to be improving, the average ‘perceived’ LTV ratio captured by respondents to our survey edged up to 79.3% with first time buyers seeing credit conditions relax most noticeably over the month, the report also reveals.

Although activity is picking up, the ongoing lack of new instructions and the resulting limited stock on the market continue to be an issue for the sustainability of the market. The number of new instructions has fallen in 13 of the last 14 months.

RICS says that it is significant that 40% of respondents feel the biggest factor behind the negative trend in new instructions is the lack of stock already for sale which is deterring would be movers as they struggle to find a suitable property to move on to. The next most cited influence was economic uncertainty, followed by stretched affordability.

As a result of the persistent supply demand imbalance, the national house price indicator continues to rise strongly which is likely to be reflected in key house price indices over coming months and into the first half of 2016, according to the report.

In the lettings market, tenant demand increased once more continuing the pattern seen by respondents since December 2014, and while new landlord instructions increased slightly for the third month in a row, they were still significantly outstripped by tenant demand.

Indeed, over the next 12 months, chartered surveyors are forecasting rents to rise by 3% at the headline level.

Source: RICS


Price of flats rising faster than houses, says Halifax

halifax-logoOver the last decade the price of flats has risen much faster than the price of houses, according to research for the Halifax.

While flats have risen by 60% in value over that time period, the average house has only gone up by 34%, it said. Detached homes have seen the smallest price rise, at 21%.

At the same time the Halifax said the rise in UK house prices in the year to September slowed to 8.6%, from 9% previously. Between July and September, prices went up by 2% compared with the previous quarter.

On a monthly basis, the Halifax said prices in September dropped by 0.9% compared with August. As a result the value of the average house or flat in the UK has fallen to £202,859.


Last week, rival lender Nationwide said that house prices rose by just 3.8% in the year to September. It also said that the gap between prices in London and the rest of the UK had reached a record high.

The relative popularity of flats has fallen over the past decade, according to the Halifax research. In 2005, 20% of all property sales were flats. Ten years on, that figure has fallen to 17%. Price rises have therefore been driven by flats in the capital.

“The national increase in flat prices has been led by London where flats account for roughly one in two property sales; substantially higher than for the country as a whole,” said Martin Ellis, Halifax’s chief economist.

Source: BBC News