Marijana No Comments

Average price paid for a house rose to the highest level in over a decade during third quarter

THE north hit the highest average price paid for properties on the open market for more than a decade, new research from Ulster University has shown.

The average price of home bought here rose to £171,763 between July and September .

House prices were up by five per cent in the third quarter of 2019 compared with the same period last year and 5.7 per cent up on the second quarter of 2019.

The University’s quarterly house price index, produced with the Progressive Building Society and the Northern Ireland Housing Executive (NIHE), recorded 2,339 transactions in the three months to the end of September.

The number of properties sold for under £100,000 fell by six per cent during the third quarter, accounting for 18 per cent of all deals done. The number of homes sold at below £150,000 was also down slightly to 55 per cent.

While the overall number of transactions were done on the last quarter, the number of higher value deals were up.

But the research found that Brexit and the associated economic uncertainty continued to curtail purchaser confidence and transaction levels.

Some estate agents did report an increase in house buying the first-time-buyer sector of the market over the course of the third quarter.

Head of research of the NIHE, Kathy Greene said: “These figures reflect the highest average price of properties sold on the open market in Northern Ireland for more than a decade, with a strong level of transactions reflecting ongoing demand, especially for affordable dwellings.

“There is reason to expect that the market will remain relatively healthy in the immediate future, while 2020 may bring a greater degree of clarity about some of the factors influencing the longer-term outlook.”

Lead researcher, Dr Martin Hinch from Ulster University said the third quarter reflected an element of “buoyancy” in the north’s housing market, following a prolonged period of relatively passive house price performance.

“This growth suggests robust market sustainability and displays a level of resilience through what has been an unprecedented and continued period of uncertainty,” he said.

“The ongoing Brexit situation together with the outcome of the upcoming general election will undoubtedly exert a significant short term influence upon the political and economic direction of the UK and Northern Ireland over the coming months.”

Progressive Building Society’s finance director Michael Boyd said the north remains one of the most affordable housing markets in the UK. Nevertheless, he said the rise in prices represented a welcome stimulus to the local market.

“However, there is still a reticence amongst some buyers and a requirement of a positive Brexit outcome will be crucial to supporting economic prosperity and the continuation of strong levels of transactions in the housing market.”

By Ryan McAleer

Source: Irish News

Marijana No Comments

UK house prices show signs of recovery

UK house prices are showing signs of recovery amidst ongoing political uncertainty, with several factors supporting the property market, including a slight increase in mortgage approvals and modest wage rises.

As the latest Halifax House Price Index figures show, UK house prices have grown by 0.9 per cent between October 2018 and October 2019, with the average house price now standing at £232,249. While house prices fell by a small 0.1 per cent over the past month, they do show a quarterly rise of 0.2 per cent.

The even better news for both home owners and those intending to sell is the increased number of property transactions in September – up by 5 per cent, which is the highest level of transactions since August 2017.

However, the figures are also showing that fewer and fewer houses are being put up for sale – likely the consequence of Brexit, the election and, of course the time of year. In fact, the level of new instructions for sale is now the lowest since June 2016, with seller anxiety matching that of the immediate post-Brexit months. Buyer demand is also declining, although not as fast as the supply of housing (15 per cent vs. 37 per cent).

Russell Galley, Managing Director of Halifax, says, ‘Average house prices continued to slow in October, with a modest rise of 0.9 per cent over the past year. While this is the lowest growth seen in 2019, it again extends the largely flat trend which has taken hold over recent months.

‘A number of underlying factors such as mortgage affordability and wage growth continue to support prices, however there is evidence of consumers erring on the side of caution.

‘We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates political and economic uncertainty.’

BY ANNA COTTRELL

Source: Real Homes

Marijana No Comments

Halifax says annual house price inflation slows to lowest growth so far this year

Average house prices were £232,249 in October, Halifax has reported.

The lender said this brought annual inflation to 0.9%.

Halifax managing director Russell Galley said: “Average house prices continued to slow in October, with a modest rise of 0.9% over the past year. While this is the lowest growth seen in 2019, it again extends the largely flat trend which has taken hold over recent months.

“A number of underlying factors such as mortgage affordability and wage growth continue to support prices, however there is evidence of consumers erring on the side of caution.

“We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates economic uncertainty.”

The Halifax, which has recently changed how it calculates prices after criticism that its indices were out of sync with others, is still at odds with Nationwide, which also bases its numbers on mortgage approvals.

Nationwide puts the average house price in October at £215,368, saying that annual house price inflation was 0.4%.

By ROSALIND RENSHAW

Source: Property Industry Eye

Marijana No Comments

Brexit turmoil drags UK property price growth to lowest this year

UK property price growth has slowed to its lowest this year, with experts blaming Brexit turmoil for killing off the typical autumn bounce.

New figures from Halifax show 0.9% growth in average prices in October compared to a year earlier, the weakest year-on-year growth of any month in 2019 so far.

Russell Galley, managing director of Halifax, said sales and price growth will remain “subdued’ for as long as political and economic uncertainty continues.

News of the sluggish growth compared to trends over the past few decades came as Britain teetered on the brink of crashing out of the EU without a deal on 31 October.

Many businesses and analysts have warned a no-deal Brexit would be catastrophic for UK firms, jobs, consumers, and homeowners, rupturing decades of increased trade ties overnight with the EU, Britain’s biggest trading partner.

The Brexit deadline was pushed back after parliament forced prime minister Boris Johnson to delay Brexit and an election was called for 12 December.

“Perhaps a tad predictable that as we receive yet another Brexit-based encore from Westminster, the UK housing market also delivers the lowest rate of house price growth so far this year,” said Marc von Grundherr, director of London letting and sales agent Benham and Reeves.

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “Although the market remains fairly subdued, which may actually be a good thing in view of wider political and other concerns, we are finding it continues to be supported by fewer but more serious buyers.”

Adrian Anderson, director of mortgage broker Anderson Harris, said it was “not all doom and gloom” as mortgage rates are cheap.

“Lenders have to be more competitive than ever to attract business, resulting in a price war with mortgage rates falling significantly this year, benefiting borrowers,” he said.

The Halifax data showed a 0.1% month-on-month drop in prices in October, with the average price in the UK now just over £232,000.

By Tom Belger

Source: Yahoo Finance UK

Marijana No Comments

UK house prices: Growth slows in October

Annual UK house price growth slowed last month due to ongoing political and economic uncertainty.

House prices were up just 0.9 per cent in October – the lowest growth seen so far this year – as the new uncertainty of a general election and the impending Brexit deadline hit consumer confidence.

Analysts said activity in the housing market picked up over the summer, after the date for the UK to leave the European Union was pushed back to 31 October, but growth has since slowed as potential buyers hold off making purchases.

On a monthly basis, house prices fell by 0.1 per cent, while house prices grew 0.2 per cent between August and October compared to the previous quarter.

The average house price in the UK last month was £232,249, according to the latest Halifax House Price Index.

Halifax managing director Russell Galley said: “A number of underlying factors such as mortgage affordability and wage growth continue to support prices, however there is evidence of consumers erring on the side of caution.

“We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates political and economic uncertainty.”

Mike Scott, chief property analyst and estate agent Yopa, added: “We expect a resumption of more normal levels of housing market activity once the Brexit outcome is more settled, which may then give a short-term boost to house prices, since the stock of houses for sale is quite low, and demand can react more quickly than supply once the uncertainty is lifted.

“However, affordability continues to be stretched, especially in the south and east of the country, and we do not expect any sustained above-inflation increase in house prices. But neither do we expect a house price crash, with a no-deal Brexit now looking unlikely and the economic fundamentals remaining strong.”

By Jessica Clark

Source: City AM

Marijana No Comments

Rise in number of homes let by international landlords

There has been a rise in the number of homes across Britain being let by international landlords, new research has found.

The proportion of homes let by overseas-based landlords rose to 11% during the first ten months of 2019, up from 7% during the same period last year. Hamptons International Monthly Lettings Index showed that the East of England (+8%), London (+8%), South East (+7%) and North West (+7%) has seen the biggest increase in the proportion of homes let by non-UK based investors.

In total, 18% of London’s private rental properties are let by overseas-based landlords – the highest proportion of any region across Great Britain.

Hamptons International stated that the depreciation of sterling had been a major factor in driving up the number of international investors buying UK properties. For example, for buyers using the US dollar, the average home in Great Britain now costs £53,065, or 23%, less than it did in 2014.

“The proportion of homes let by overseas based landlords rose for the first time in more than nine years,” said Aneisha Beveridge, Head of Research at Hamptons International.

“Sterling’s depreciation has made investment property in Great Britain more attractive to international investors. The average home cost 23% or £53,065 less than in 2014 for a US dollar buyer, solely due to the currency changes.”

Source: Property Wire

Marijana No Comments

How can tax-efficient schemes support property developers?

Looking at the skylines of the UK’s main cities, one cannot help but be amazed by the volume of residential and commercial construction currently under way.

Rising population and demand have led to an increase in the construction of new-build developments, which are being marketed towards either first-time homebuyers, property investors seeking attractive rental yields or homeowners aiming to move up the property ladder.

As someone who works closely with small and medium-sized property developers, I have witnessed first hand the challenges they can face when taking on new projects. Moreover, with the persistent imbalance between housing demand and supply, there’s no denying the vital role SME developers are playing in a bid to address the housing crisis.

That’s why I believe it is imperative for the government to support property developers. Thankfully, it has already taken steps in this direction. Earlier in the year, the British Business Bank launched the ENABLE programme – a £1bn scheme to fund homebuilding developers.

Given the huge strain that the property market is currently under, however, more creative reforms are needed, thereby ensuring developers are able to carry out the task of delivering enough suitable housing.

The housing crisis

Estimates have put the number of new homes needed in England at between 240,000 and 340,000, accounting for new household formation and a backlog of existing need for suitable housing. Despite this, in 2017-18, the total housing stock increased by around 220,000.

Not only do these figures demonstrate the scale of imbalance between supply and demand, they also indicate the pressures developers face to deliver housebuilding. But despite playing a central role in achieving these ambitious targets, the number of SME developers is in decline; in 1988, small builders were responsible for four in 10 new-build homes, compared with just 12% today.

Challenges facing developers

Among the barriers standing in the way of SME developers today is access to finance – or, rather, a lack thereof. A survey prominently revealed that the majority of small developers (57%) identified this issue as the biggest obstacle they faced when attempting to take on a new project.

This can largely be explained in terms of an industry-wide shift in the culture of lending since the 2008 financial crisis – traditional lenders have become more risk averse. But this statistic should also serve as a wake-up call to the government. They need to improve both the availability and terms of financing for residential development.

For the country’s smaller developers, a lack of funding means they are often forced to take on huge risks. For instance, most SMEs building fewer than 100 to 150 homes per year are currently reliant on project finance, which is agreed on a site-by-site basis. Not only is this approach extremely inefficient (for both lender and borrower), but it also involves significant additional fees for entry, exit and legal agreements.

Can tax schemes help?

The challenge lies in ensuring that developers have access to the funding they require to purchase sites and commence building projects. So, I pose the question: can we take inspiration from some successful tax schemes that have funnelled private capital into different sectors of the economy?

Let’s use the Enterprise Investment Scheme (EIS) as an example. Since being launched in 1993-94, it has played a crucial role in supporting the country’s start-ups and SMEs – and, in turn, the growth of the wider UK economy. In short, the scheme provides tax incentives to investors that invest in small and medium-sized companies, helping those that might otherwise struggle to raise finance. Nearly 30,000 companies have received investment through EIS and more than £20bn worth of funds have been raised.

Replicating such a scheme within the housing sector would incentivise private investors to invest part of their capital into SME developers. In turn, this would widen their access to finance and ensure developers can confidently get projects off the ground.

We need proactive policymaking to help developers in their plight to realise housebuilding targets and ultimately solve the housing crisis. Importantly, introducing incentives and reforms to the tax system must come as part of a wider effort to reduce the hurdles SME developers are attempting to overcome.

By Jamie Johnson

Source: Property Week

Marijana No Comments

Scottish housing market has fastest sell time, research says

The time needed to sell homes in Glasgow and Edinburgh is half the average for UK cities, according to a survey.

Zoopla’s UK Cities House Price index for September reveals housing market conditions are strongest north of the border despite Aberdeen being the worst performer.

Glasgow and Edinburgh properties sell within six weeks on average, compared to 12 weeks across the whole of the UK.

Aberdeen was the worst performer, with homes taking more than 15 weeks to sell and sellers discounting their homes by 9.4%.

Richard Donnell, research and insight director at Zoopla, said: “There is a continued polarisation in housing market conditions across the country set by underlying market fundamentals, albeit Brexit uncertainty has been a compounding factor for lower market activity in some areas.

“A general election seems to be a growing possibility ahead of any Brexit resolution; however, once the political outlook becomes clearer, we would expect a modest bounce-back in demand for a six–12-month period.

“Market conditions are set to remain weak in southern cities until pricing levels adjust to what buyers are willing, or can afford, to pay.

“London is three years into a re-pricing process, and we expect sales volumes to slowly improve over 2020, while house price growth remains subdued.

“There are large parts of the country where housing affordability remains attractive, fuelled by continued economic growth that supports demand for homes, resulting in reasonable sales periods and only modest gaps between sales and asking prices.”

Glasgow and Edinburgh are also the only UK cities not to register a discount from asking to selling price.

Homes in the two locations instead command an average premium of 6-7% above the asking price.

In contrast, vendors across the UK now accept offers that are on average of 3.8% or £9,800 lower than the initial asking price.

Source: Herald Scotland

Marijana No Comments

Annual house price inflation stutters at under 1% for 11th month in a row

Annual house growth is just 0.4%, Nationwide has reported.

It puts the average house price at £215,368, only marginally ahead of September’s figure of £215,352.

Nationwide chief economist Robert Gardner said that annual house price inflation has been at under 1% for the 11th month in a row.

On average, house prices have risen by around £800 in the last 12 months, which he said was a “significant” slowing compared with the previous year.

In the same period to October 2016, prices increased by £9,100.

By ROSALIND RENSHAW

Source: Property Industry Eye

Marijana No Comments

London homes take longer to sell than other UK cities

Property owners seeking to sell their homes in London could be forced two wait an extra two weeks compared to other major UK cities, as the capital suffers from weak market conditions.

Residential properties now take 14.5 weeks to sell, more than one month longer than it took to complete a sale in 2016.

Sellers in the London market are accepting offers from buyers that are on average 5.7 per cent below their asking price, up from 1.8 per cent three years ago, according to the latest Cities House Price Index by Zoopla.

The discount to asking prices is even more in inner boroughs, with agreed prices averaging 7.9 per cent below asking prices in central London compared to the 4.7 per cent gap in the suburbs.

Richard Donnell, research and insight director at Zoopla, said: “Market conditions are set to remain weak in southern cities until pricing levels adjust to what buyers are willing, or can afford to pay.

“London is three years into a re-pricing process, and we expect sales volumes to slowly improve over 2020, while house price growth remains subdued.

“There are large parts of the country where housing affordability remains attractive, fuelled by continued economic growth that supports demand for homes, resulting in reasonable sales periods and only modest gaps between sales and asking prices.”

The strongest market conditions were in Scotland, where homes in Glasgow and Edinburgh sell within five to six weeks as a different system is used for sales transactions and more information is provided to buyers up front.

Glasgow and Edinburgh were also the only UK cities not to register a discount.

Donnell added: “There is a continued polarisation in housing market conditions across the country set by underlying market fundamentals, albeit Brexit uncertainty has been a compounding factor for lower market activity.”

By Jessica Clark

Source: City AM