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


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

Demand for 2 bed homes rises amid new price high

rightmove-logo200New analysis from Rightmove shows the biggest gap between demand and supply is in the first-time buyer sector, with the number of enquiries per property for two bedrooms or fewer 24% higher than for larger properties of three bedrooms or more.

The price of property coming to market has hit a new record high for the second consecutive month, albeit only a small 0.1% (+£191) increase on the month before.

The average new seller asking price is now £294,542, though given the sharp drop in the number of properties put up for sale it is somewhat surprising that the increase is so modest.

Likely influences are the onset of the seasonal summer slowdown, and buyers’ constraints in affording record prices.

The latter underlines the need for more new build homes – affordable, of the right type and in the right locations – and emphasises the importance of the recent government announcement on speeding up residential planning permissions aimed at boosting supply.

The shortage is most acute for smaller homes with two bedrooms or fewer, where Rightmove sees the biggest demand in excess of supply.

Miles Shipside, Rightmove director and housing market analyst comments: “Another month, and another record high in the price of property coming to market. While the monthly increase is very modest, the same period a year ago saw a monthly fall of 0.6% which is more the norm given the onset of the summer holiday season.

“However, given the widely acknowledged supply crisis and a sharp drop in new seller numbers this month compared to this time last year, it is somewhat surprising that the rate of increase has slowed to such an extent. Recent government announcements including relaxing residential planning requirements on brownfield land are an important part of the mix in improving affordability if they follow through to cheaper land prices.”

Source: Property Reporter

Asking prices reach record high for March

rightmove-logo200Asking prices for residential properties new to the market rose in March to reach an all-time high, fuelled by greater activity among buy-to-let investors looking to take advantage of attractive rental returns.

Rightmove reports that the average new asking price is £239,710, up 1.7% month-on-month, and slightly higher than the previous record set in March 2008 of £239,655.

Asking prices are now 1.2% higher compared to March 2012 and 10% higher than the post-credit-crunch low asking price of £218,081 recorded in March 2009.

Miles Shipside, Rightmove Director and housing market analyst, said: “In today’s turbulent world where economic crises seem more likely to re-appear than disappear, any market upturn will take longer to build home-mover confidence to the point that it starts to feed through to actual transactions.

“Even those who truly believe that the market has turned a corner may be unable to do anything about it due to lenders’ cautious risk profiling, a significant factor limiting the speed and strength of the recovery.

“However, with new sellers asking more than ever before as we enter the traditionally busy spring market and an expectation among home-movers of price stability or growth, there is now a bedrock upon which confidence and momentum appear to be building.”

Source: PropertyInvestorToday

Buy-to-let offering “blindingly good returns”

Telegraph logoBritain’s biggest property listings website today said investors were piling into buy-to-let for “blindingly good returns” after the government’s efforts to bolster lending had created an “arbitrage of immediate return”.

In a report in today’s Telegraph newspaper, Rightmove said its research showed that rents were now delivering average gross yields of 5.9 per cent but as mortgages were available from as little as 2pc for a two-year fixed-rate and 2.7pc for a five-year deal, there was “the possibility of a straight arbitrage of immediate return on money borrowed against your main residence”.

The Government’s Funding for Lending Scheme (FLS), launched last summer, has offered £80bn of loans to banks at rates as low as 0.25pc. This has helped pushed down mortgage – and savings – best buy deals.

Miles Shipside, a director at Rightmove, said: “There are blindingly good returns on the right buy-to-let investment, with the Funding for Lending Scheme giving the possibility of an immediate and enticing profit gap between borrowing costs and available rental returns.

“With the prospect of capital growth in future years if you buy the right property, you can see why investors are piling in to the rental market – why wouldn’t they when it can offer a much better return than money in the bank?”

Lenders normally require borrowers to have a buy-let-mortgages, which comes with higher rates than residential mortgages.

The number of Britons with buy-to-let mortgages has soared in recent years, to nearly 1.5 million, with savers facing record low interest rates turning to alternative assets for income.

Rightmove also said sellers had lifted asking prices on homes by 1.7pc in the past month, in a further sign of confidence for the property market in 2013.

The rise, to an average £239,710, exceeded the previous record high for March, in 2008.

Homes are also shifting more quickly with the average time on the market now 80 days compared to 90 this time last year.

See full Telegraph article here

House price growth outstrips expectations

nationalstatslogoThe latest data released by the Office for National Statistics (ONS) shows that the price of a typical home in the UK rose by 3.3% over the 12 months to December 2012.

This acceleration of house price growth outstripped consensus expectations of a 2.0% year-on-year increase.

Prices continue to rise much faster in London than elsewhere in the UK, with growth of 6.4% over the year to December, while the average increase across the rest of the country was a more sedate 2.4%.

Katie Evans, Economist, Centre for Economics and Business Research said: “London house prices have been driven by strong population growth in the region – the fastest in the UK according to the 2011 census – while housing supply growth has been sluggish.

“By contrast, population growth has been slowest in North East England, meaning housing demand is weaker. House prices in this region fell by 0.6% in the year to December.

“Bank of England data suggest that the Funding for Lending Scheme (FLS) has succeeded in reducing mortgage rates. The average two-year fixed rate on a 75% loan-to-value mortgage fell from 3.7% in August to 3.1% in January, while rates on a similar 90% loan-to-value mortgage fell by 1.2 percentage points from August to January – from 5.9% to 4.7%.

“The population of London continues to grow faster than the UK as a whole, while the housing supply growth fails to keep pace. House prices in this region are thus likely to continue to outstrip the rest of the UK, although as the international economy stabilises, ‘hot money’ flows from emerging markets are likely to be less prevalent this year, which may mean price growth  is slightly slower here in 2013.

“Across the country as a whole, continued improved mortgage availability and lower mortgage rates as a result of FLS mean prices should continue to grow, although we do not expect them to surpass the pre-crisis peak until 2014.”

Source: PropertytalkLive!

Average house prices second highest ever recorded for February

rightmove-logo200There are signs of continued improvement in the health of the property market according to the latest Rightmove House Price Index.

At £235,741 the average price of newly marketed property is the second highest ever seen in the month of February, just £2,115 shy of the February record set in 2008 prior to the collapse of Lehman Brothers.

There are also encouraging signs of life among home-movers too as the Rightmove website recorded its busiest ever month in January. However, Rightmove research indicates that those most likely to buy and sell in 2013 are the ‘old hands’ with greater access to equity and finance, who have the confidence and the will to move.

Miles Shipside, director and housing market analyst at Rightmove comments: “There has been a sprightly start to 2013 and, while market activity remains patchy across locations and property type, some agents are reporting their busiest new year since the onset of the credit-crunch. While encouraging, it’s far too early to pop the champagne corks as certain sectors will remain on ice until the return of wider-spread mortgage availability. However, our research suggests that with age comes experience and, more importantly, equity, and it these old hands that seem most confident to plan a
move this year.”

New sellers increased their asking prices by 2.8% (+£6,312) this month, pushing the national average up to £235,741. Whilst it is usual to see asking prices increase between January and February, this is the highest average price recorded at this time of year since 2008. This illustrates the slow but steady recovery in prices, which has taken five years, though it must be noted that the national average can mask the divide in the market between those with access to equity and finance and those without.

Whilst all regions have recorded a rise this month, some of the more dramatic increases reported in the northern regions are effectively ‘rebounds’ from substantial falls measured on the low levels of new listings in November and December.

The start of a new year, combined with more new stock coming to market after the Christmas lull, traditionally boosts activity, though in recent years this has been tempered by the economic backdrop. However, this year Rightmove has recorded its busiest ever month in January with those planning a move searching in record numbers and contacting agents with more follow-up enquiries than ever before.

Shipside observes: “Interest in property has hit such a peak that Rightmove is now the sixth busiest website in the UK. Pages viewed on the Rightmove website reached a new record high in January, up by over 20% year-on-year and, importantly, resulted in more enquiries to agents and developers than ever before. While the journey between expressing interest and closing the deal has many more twists and turns than before the credit-crunch, it is a sign of increased confidence and helps build a momentum that has been sadly lacking in many local markets over the last five years.”

Source: propertytalklive!

UK property price growth in 2012 hit three-year high

Despite a slowdown in the UK housing market in the final quarter of 2012, residential property prices still ended the year up 3.4%.

This was due to strong growth in the opening six months of the year, according to Assetz House Price Watch, an analysis of house price data from ONS, LSL Acadametrics, Halifax, Nationwide and Rightmove, which claims to give a comprehensive overview of the UK property market.

The data, which Assetz claim offers a more accurate picture of house price trends, shows that the average price of a home is now £202,824, an increase of £6,634 since December 2011.

The annualised average rate of growth for December was -8.6% while the three, six and 12 month annualised rates of growth are -1.4%, -3.4% and 3.4% respectively.

Stuart Law, chief executive of Assetz, said: “In spite of some downbeat forecasts, 2012 saw the strongest calendar price growth for three years, comfortably achieving our predicted 3%. Following a healthy first six months, there was an inevitable price correction in the second half.

“The UK housing market in 2012 was buoyed by an influx of buy-to-let investors from home and abroad which has increased competition for the best properties in areas where there is strong employment prospects, transport connections and amenities. For this reason, the market remains two tiered with London and the commuter heartlands of the South East and regional cities such as Manchester, Leeds and Liverpool seeing stronger prices rises than elsewhere in the UK.”

With the base rate set to enter a fifth year at its historic low of 0.5%, Mr Law believes that more people will divert capital from low interest savings accounts to high yield property investments. This coupled with the greater availability of mortgage finance as part of the Funding for Lending Scheme (FLS) will support growth.

He added: “We are confident of price growth of as much as 5% this year which would leave prices just shy of the 2007 peak in nominal terms and their highest since February 2008. The property market is well advanced on its slow road to recovery.”


London rents to continue rising in 2013

Rental price growth in the capital will continue to outstrip the national average next year despite the fact that a rising number of tenants are falling behind with rent payments due to affordability constraints.

A Rightmove report, released earlier this week, found that more landlords are expected to introduce a rent freeze in 2013, as rents increasingly look like they may have peaked.

But some property market experts believe that the huge gulf between supply and demand in the capital will only act to push rental values even higher.

Peter Rollings, CEO of Marsh & Parsons, said: “The more buoyant sub £1,000 a week market has seen a strong performance, with annual rises of up to 15% in many areas where would-be buyers are forced into the rental market by a historically low supply of both mortgage finance and property to purchase.

“Based on current trends, Marsh & Parsons expect rents in this segment of the market to rise by a further 8-10 per cent in 2013.”

Virginia Ewart-James, head of residential lettings at EA Shaw, a central London specialist based in Covent Garden, said: “Generally rents will continue to increase with a rate of 5% estimated during 2013. This follows an impressive increase of 4% in rent up to November 2012 over the previous year.

“There is still good demand for rental properties which will continue to strengthen as London grows further as a hub and a popular place to live and work. London is still seen to have the best education in the world and remains an attractive option for studying. Students in particularly, are bringing in good budgets; often paying six months in advance, and proving to be valuable and lucrative tenants within residential lettings.”

Source: PropertyInvestorToday

Buy-To-Let mortgage specialist ups its lending threshold

Keystone Buy to Let Mortgages has improved its lending criteria and is now offering loans up to £500,000 per property transaction to existing landlords. This represents an increase of £150,000 on its previous limit.

The amount was raised after feedback from brokers revealed that many customer inquiries were for higher-value HMOs and multi-unit freehold blocks.

The change will help investors to continue growing their portfolios with Keystone which, unlike some lenders, does not impose a limit on the number of loans that can be held with the brand.

David Whittaker, managing director of Keystone Buy to Let Mortgages and Mortgages for Business, said: “One of the reasons for launching Keystone earlier this year was to meet the needs of professional landlords who have been under-served by the mainstream buy-to-let lenders in recent years.

“Upping the maximum loan amount clearly demonstrates that we are able to respond quickly to investors’ ongoing requirements in order that they can expand their portfolios at a time when housing is in desperately short supply.”

At the other end of the lending scale, a minimum loan amount of £50,000 has also been introduced, although for particularly strong or worthy applications exceptions can be considered.

Keystone Buy to Let Mortgages, which was launched in April, is fully funded by Aldermore Bank and offered exclusively through Mortgages for Business.

Rob Lankey, managing director of commercial mortgages at Aldermore, said: “In a short space of time, the brand has cemented its position as one of the main go-to lenders for professional landlords.

“It has already produced in excess of £20m of mortgage offers and this criteria change, and the fact that our five-year fixed rates are now only 0.25% more than our three-year rates, will encourage more brokers to recommend our products to their customers.”

Source: LandlordToday 
Click here for Keystone website