Average house prices hit £300k

nationalstatslogoThe latest data to emerge from the Office for National Statistics (ONS) house price index has highlighted that over the year to October 2015, the average price of a house in the UK rose by 7% to £300,000 – a rise of 0.9% in the year to September 2015.

On a seasonally adjusted basis, average house prices increased by 0.8% between September and October 2015, compared with a decrease of 0.1% in average prices during the same period a year earlier.

During the year to October 2015, average house prices increased 7.4% in England (up from 6.4% in the year to September 2015), 1.0% in Wales (down from 1.1%), 0.9% in Scotland (down from 1.1%) and 10.3% in Northern Ireland (up from 10.2%).

In October 2015, prices paid by first-time buyers were 5.9% higher on average than in October 2014. For existing owners, prices increased by 7.4% for the same period.

Average mix-adjusted house prices in October reached £300,000 in England and stood at £174,000 in Wales, £196,000 in Scotland and £158,000 in Northern Ireland.

Annual house price increases in England were driven by an annual increase in the East (10.4%) and the South East (9.5%). The North East had the lowest annual growth of the 9 regions, with prices increasing 2.9% in the year to October 2015 (up from 1.8% in the year to September). London prices increased by 7.7% over the year to October 2015 (up from 7.2% in the year to September 2015).

Source: Property Reporter

Housing supply drops to 11 year low

National-Association-of-Estate-Agents-NAEAAccording to the latest data from the National Association of Estate Agents, the number of properties available to buy per estate agent branch fell to an eleven year low this month.

Supply of available housing fell by a third in the last month, with 38 houses available per branch in August, compared to 55 in July. This is the lowest level of supply seen since January 2004, when 38 properties were also available.

August saw a dip in house hunters, with an average of 408 house-hunters registered per member branch, compared to 462 in July – a 12% drop.

The number of sales completed in August rose by one to an average ten properties per branch in August; however sales made to first time buyers (FTBs) fell to the lowest level since July 2014. One in five sales (20%) were made to FTBs in August, compared to 23% in July and 24% in June, indicating movement in the market is taking place higher up the ladder and it’s second and third steppers pushing through sales.

Mark Hayward, managing director, National Association of Estate Agents said: “We’ve been banging the drum about the dwindling supply of housing for a while and this month’s report reiterates what we’ve been saying – there simply aren’t enough houses to match demand and we’re reaching crisis point. There are now eleven house hunters fighting after every available house which isn’t sustainable. First time buyers are finding themselves being squeezed out of the competition, which of course means it’s taking young buyers longer to get their foot on the first step of the ladder, which will in turn increase pressure on the rental market.”

Source: Property Reporter

Young investors set to fuel buy-to-let boom

Couple browsingMany young people may be struggling to get a foot on the housing ladder, but that does not mean that they do not recognise the potential benefits of investing in residential property.

Fresh research provided by letting agent Rentify shows that nearly half (49 per cent) of 18-39 year olds believe that acquiring buy-to-let property represents the best investment option in the UK today, with almost 4 million people in this age group actively seeking to buy an investment property.

With buy-to-let landlords having benefited from a booming property market earning returns of up to almost 1,400 per cent since 1996 – capital growth and returns combined – it is easy to understand why it is an investment type that appeals to many people across all age groups, not just the young.

George Spencer, CEO at Rentify said, “The fact that 49 per cent of first-time buyers would consider investing in buy-to-lets is fantastic and shows that there are more options out there and more people who want to get on the ladder.”

But-to-let continues to beat returns on all other mainstream investments, including commercial property, UK government bonds, shares and cash, and that trend looks set to continue, on the back of soaring demand from tenants.

The latest HomeLet Rental Index revealed that overall rent price increases were running ahead of inflation and house price growth to hit an all-time high of £977 per month in July, up 11.8 per cent year-on-year, helping to ensure that many investors are continuing to rent out their homes at a healthy profit.

The latest buy-to-let index from Your Move and Reeds Rains shows that the gross yield on a typical rental property in England and Wales increased to 5.2 per cent in July, up from 5.1 per cent the preceding month and 5 per cent in July 2014.

The data also revealed that a typical landlord achieved overall returns of 8.7 per cent, on average, over the year ending July 2015. Although this marks a significant drop from the 10 per cent recorded in June and 12.5 per cent in the year ending July 2014, it remains considerably higher than all other investment assets in today’s market.

With attractive rental returns still achievable, the reality is that an increasing number of people will continue to enter the private rental sector, as buy-to-let consolidates itself as the investment of choice, partly due to the dismal returns savers are currently receiving from banks and building societies.

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said: “With high rents and poor savings rates, it’s little wonder that the buy-to-let market is booming.”

In light of this increasing demand, buy-to-let mortgage product numbers have soared to more than 1,000, up from 460 products available just two years ago, according to data from Moneyfacts.co.uk.

“The boom in deals has undoubtedly been boosted by providers taking advantage of the new demand from thousands of pensioners making the most of the new pension freedoms,” Nelson added.

Source: Property Drum

Property transactions up 3.2% year-on-year

Sold signsThe latest HMRC Property Transactions figures show that the number of residential property transactions increased by 4.7% between May 2015 and June 2015 – 3.2% higher compared with the same month last year.

For June, the number of non-adjusted residential transactions was 15.7% higher compared with May 2015, and 5.8% higher than in May 2014.

Duncan Kreeger, director of West One Loans, said: “It’s not just the housing market that is enjoying a post-election bounce, with non-residential transactions enjoying almost double the monthly improvement. On an annual level the contrast is even more marked, with an increase almost three times larger than the mainstream residential market.

This shows that is not just homeowners wanting to take advantage of the current favourable economic climate and low interest rates on offer, but businesses and developers too. With Bank of England Governor Mark Carney suggesting last week that interest rates could rise around the turn of the year, it makes sense for individuals – and commercial ventures – to act soon if they want to capitalise on the current situation.”

Peter Rollings, CEO of Marsh & Parsons, added: “Property sales jumped to it in June, as the UK housing market gets back into the swing of things after some recent disruptions to the tempo. This has started to make up for any shortfall in the months preceding the general election – and we’re seeing growth on an annual basis once again.

In London, supply of properties for sale and buyer demand are head-to-head, squaring up for steady price growth over the rest of the summer. Confidence is returning to the capital once again, particularly below £1million, and buyer registrations are building as aspiring homeowners seize hold of low mortgage rates and other incentive schemes currently available to them.”

Source: Property Reporter

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

Mortgage market waking up as summer bounce beckons

Lending for house buying is still down compared to this time last year but there are signs that the market is at last awakening in time for a modest summer bounce, according to the Council of Mortgage Lenders.

It says home owners took out 49,000 loans in May, the highest number since December. That compares with 48,300 loans taken out in April.

“House purchase lending in May was slightly up on the previous month, suggesting the market might be waking up after a subdued first quarter. Activity has broadly been down on last year but we expect it to rise in the summer months as, with historically low interest rates and a competitive lending environment, borrowing conditions are relatively favourable” says Paul Smee, director general of the CML.

“But we cannot ignore the continuing affordability constraints caused by high house prices relative to earnings which will work in a contrary direction” he adds.

First-time buyers saw a decline in lending volumes compared to last year, but up slightly on the previous month. Home mover lending saw a similar trend with volumes up slightly on April but down year-on-year.

Home-owner remortgage activity declined compared to the previous month and compared to the same period last year.

Buy-to-let continues to grow year-on-year, mainly driven by remortgage activity, but also saw a slight month-on-month increase due to higher buy-to-let house purchase lending activity.

Source: Estate Agent Today

House sales hit four-year high – RICS

rics_logo-300x150The number of homes sold in the UK hit an almost four-year high last month as the housing market recovery continues to gather pace, says the September RICS Residential Market Survey.

The average amount of properties sold per chartered surveyor in the three months to September reached 18.7*. Although still historically low, this is the highest figure since November 2009 and demonstrates the extent to which the market is now picking up across the country.

In tandem with increasing numbers of sales, prices continued to grow with 54% more respondents reporting rises rather than falls. Prices have now steadily increased since Easter and, significantly, this growth was seen right across the UK. Last month, every part of the country saw prices go up, with the exception of the North East where prices fell modestly for the second successive month.

Unsurprisingly, with government schemes such as Help to Buy enabling more buyers to access the market, demand rose steadily during September as a net balance of 49% more surveyors reported rises in new buyer enquiries. While the amount of homes coming onto the market also rose, it was not enough to keep pace with the burgeoning level of demand.

Looking ahead, predictions for future growth are equally upbeat. A net balance of 56% more respondents expect the number of transactions to increase further over the coming three months, while 48% more predict prices to continue their push upwards.

Peter Bolton King, RICS Global Residential Director, commented: “It’s encouraging that the market is starting to improve in all parts of the country with more buyers looking to make a move and more sales going through.

“Even so, it’s a big concern that the supply of property coming to the market is lagging so far behind demand. This imbalance is likely to result in further upward pressure in prices over the coming months, particularly in the nation’s hotspots.”

Source: RICS
 

Steady rise in UK house prices – Halifax

halifax-logoHouse prices continue to rise steadily, according to the latest Halifax House Price Index.

Martin Ellis, housing economist, said: “Prices in the three months to June were 2.1% higher than in the previous quarter, edging above the 1-2% range recorded throughout the first five months of the year. The annual rate is at its highest for nearly three years with prices in the three months to June 3.7% higher than in the same three months last year.

“Activity has also improved in recent months. Both home sales and mortgage approvals for house purchase – a leading indicator of sales – increased in May.

“Improved confidence in both the housing market and the economy, combined with a shortage of properties available for sale, appear to be pushing up house prices. The Funding for Lending Scheme is also likely to be boosting the market by helping to reduce mortgage rates.

“There are also early indications that the Help to Buy: equity loan scheme may be stimulating demand. Despite these signs of improvement in the market, the still subdued economic background and weak income growth are expected to remain significant constraints on housing demand and activity during the second half of 2013.”

Key facts House prices in the second quarter of 2013 (April-June) were 2.1% higher than in the first quarter of the year (January-March).

As a result, house price growth between the latest three months and the preceding three months edged above the 1-2% range that it had been in throughout the preceding five months. This was the biggest increase on this measure since January 2010 (2.9%). Prices in the three months to June were 3.7% higher than in the same three months a year earlier. This was the biggest increase in this annual measure since August 2010 (4.6%). House prices increased by 0.6% in June. This was the fifth consecutive monthly rise.

Activity is also picking up. The number of mortgage approvals for house purchases – a leading indicator of completed house sales – increased by 7% between April and May to 58,200; the highest monthly level since December 2009. Approvals in the three months to May were 2% higher than in the previous three months.

Source: Halifax

 

Strongest annual UK house price rise since 2010

halifax-logoResidential property prices in the UK appreciated by 0.4% in May, as more buyers piled into the market, fuelled by improving conditions and government schemes such as Help to Buy, according to Halifax.

“House prices continue to pick up gradually,” said Martin Ellis, Halifax housing economist.

For the three months to May, UK home prices rose by 2.6% compared to the same period last year – the biggest rise since September 2010.

Ellis added: “Market activity has also improved slightly in recent months although home sales remain low by historical standards. Despite these recent signs of improvement in the housing market, the subdued economic background and the accompanying weak income growth continue to be a significant constraint on housing demand and activity.”

Moving forward, many property commentators expect to see property prices rise further, supported by Help to Buy.

The scheme currently allows buyers to acquire a new build property up to the value of £600,000 with a minimum 5% deposit. The initiative will be opened up to resale homes next January, potentially helping to push property prices higher in the process.

But there are fears among some that this could lead to a housing bubble.

A report issued by the International Monetary Fund (IMF) two weeks ago stated: “This measure (Help to Buy) may temporarily help boost confidence in the housing market, but there is a risk that, in the absence of an adequate [housing] supply response, the result would ultimately be mostly house price increases that would work against the aim of boosting access to housing.”

Source: propertyinvestortoday.co.uk
 

Investors urged to snap up property

Telegraph logoA report in today’s Telegraph newspaper suggests now is the time to invest in property.

The report states that according to a growing number of professional investors, among them Henderson’s multi-asset manager James de Bunsen, who is a believer in bricks and mortar for the first time, now is the time to invest in bricks and mortar.

“It’s a valuation story – if you look at the cost compared to the income you can get, property looks compelling,” he said. “Property funds are yielding 4.5pc, compared to gilts at around 2pc and corporate bonds at not much higher.”

Mr de Bunsen said property also added diversification, and while he would never hold more than 4pc of a portfolio in property, having an alternative source of steady income was invaluable.

Trevor Greetham, portfolio manager of Fidelity’s multi-asset funds, is also keen.

“Property’s income is attractive, borrowing costs are falling and exposure is primarily to economies in the US and Asia, where credit is flowing freely,” he said.

Property investments also offer some protection from inflation. As anyone who has been a tenant knows, rent does not stay the same year after year – it tends to rise in line with other price increases. It is the same for commercial property.

Many investors are concerned that the Government’s attempt to kick-start growth through quantitative easing will create greater future inflation. The trick is to find assets that grow in value enough to offset this or pay income that exceeds inflation.

According to George Shaw, manager of the Ignis Property fund, commercial property is attractive because of the high and stable income it pays. Between 2001 and 2012, for example, income accounted for 6.2pc of the 6.4pc annual return.

Mr Shaw forecast a total return of around 6pc for 2013 and 7.2pc a year for the next three years – with commercial property demonstrating less volatility than shares, cash and bonds.

The report continues: The London market keeps rising with the arrival of more foreign buyers, but better income yields can be found elsewhere. A combination of low property prices and a strong local rental market – often driven by student demand – means that Southampton, Blackpool, Slough, Coventry and Portsmouth provide some of the best rental yields in the country.

See the full Telegraph report here.