Thursday, 28 August 2014

UK house price growth exceeding expectations with strong midterm rises predicted

Average UK house price growth has exceeded all expectations over the past year, leaving some markets with reduced capacity for further mid term growth, according to a new report.

As a result international real estate adviser Savills has released a revised five year mainstream market forecasts taking account of growth seen in the first half of 2014.

The firm now expects average annual UK house price growth to settle at 9.5% this year, up from the previous 6.5% forecast. This will be followed by 4% growth in 2015 and 25.7% overall in the five years to the end of 2018, just fractionally higher than the 25.2% originally forecast.

The most notable changes to the published Savills forecasts are for mainstream London and, to a lesser extent, the corresponding markets in the South and East of England.

So far this year, house price growth in London, the South and East of England has significantly exceeded forecast, with all expected to end the year well into double digits.

Price growth in these mortgage-dependent mainstream markets remains high according to the majority of relevant indices, though there are signs that demand is weakening, with lead indicators suggesting a change in sentiment in London.

In London, full year growth is expected to settle at 15% against a previously published forecast of 8.5% despite an anticipated slowing in the second half of the year. While the five year growth forecast for the period 2014/2018 remains almost unchanged, the rate of recent growth will mean affordability will become stretched as and when interest rates rise.

The markets of the South and East of England were all originally forecast to show marginally higher levels of growth than London in 2014 at 7% but have in fact underperformed the capital to date. Nonetheless, they too are now expected to end the year in double digit growth.

These markets are still expected to show the strongest five year growth, outperforming London, as evidence mounts of the flow of buyers and equity out from the capital. The Midlands and the North have the potential to outperform thereafter, as has been seen in previous cycles.

Source: www.propertywire.com

Wednesday, 27 August 2014

Expats now mainly buying UK property for investment

Pure investment opportunity has become the main reason why expatriates now purchase property in the UK, according to a new survey.

Previous surveys by Find UK Property have shown that holiday use was as an important reason as investment for buying properties in Britain. But now pure investment rules the roost according to the latest survey, conducted last month.

“UK nationals living and working overseas form a large proportion of overseas residents buying property in the UK,” said the company.

“Whilst many buy for their own use, an increasing number of expats have also been buying for pure investment and this trend seems to be increasing. Added to this are residents of other countries who may not be UK nationals, but still see the UK as a 'safe haven' when considering long-term investment in property.

“For them, the UK is attractive as UK property buying process and selling laws are well regulated and long-term title ownership is clear cut.”

In a similar survey five years ago, 31 per cent of Find Uk Property clients were looking for property for investment reason. By this year, that figure had increased to 42 per cent. Only 20 per cent said they were looking for holiday use, while 24 per cent were considering buying purely for personal residential use.

Andy Noble, senior consultant at Find UK Property, said that expats working in the Middle and Far East accounted for a large proportion of the increase in investment opportunities.

He said that UK expats were realising that property investment at home offered them better returns than other forms of investment and did not carry some of the risks associated with buying properties abroad.

Mr Noble added that, while many overseas buyers were still attracted to London, expats were increasingly looking to the regions as prices in SE London and, in particular, the capital continued to soar.

He said the trend amongst UK expats was to opt for lower cost properties away from London, which could have rental yields of about eight per cent, double the rate of properties in the SE.

The survey said that many clients were looking at property investments for the long term, intending to keep them to generate pension income. Expats also qualify for the £10,000 UK personal allowance, which means that for many the rental income is effectively tax free.

Source: http://www.relocatemagazine.com/

Rent rises creep up above inflation rate


Rents have risen in real terms for the first time in 14 months, according to the latest Buy-to-Let Index from LSL Property Services plc, which owns the UK's largest lettings agent network, including national chains Your Move and Reeds Rains.

The average residential rent across England and Wales is now two per cent higher than in July 2013, currently standing at £753 per month. This is the same absolute level as in November 2013, and is up from an average of £738 per month in July 2013.

Rents are just 0.1 per cent higher than a year ago after consumer price inflation of 1.9 per cent – the first real-terms increase since September.

David Newnes, director of estate agents Reeds Rains and Your Move, part of LSL Property Services, said: "As the summer turns to early autumn, the rental market is approaching its busiest period – yet rent rises remain modest.

"Tenants looking to rent a new property this month still need to budget the same as they would have in November. At a time when the UK is facing a serious shortage of homes, and with purchase prices rising steadily, that is an immense achievement for the private rented sector.

"Rents have tracked inflation for many years – and as of July remain down 0.2 per cent in real terms since the start of 2010. This is testament to serious improvements in the supply of new homes to let, thanks to investment by landlords. If that investment keeps flowing, and the right incentives for new landlords remain, this positive trend should continue."

Rents in nine out of 10 regions are higher than a year ago. The fastest annual increase is in the South East, where the average monthly rent is now 3.8 per cent higher than in July 2013.

On a monthly basis, eight out of 10 regions have seen rents rise in July.

Taking into account price growth alongside void periods between tenants, total annual returns on an average rental property stand at 10.3 per cent in the 12 months to July. This is up from 6.1 per cent in the year to July 2013, but represents a moderation on a monthly basis, down from 11.3 per cent in the year to June 2014.

In absolute terms this means the average landlord in England and Wales has seen a return, before any mortgage payments or other deductions, of £17,307 in the last twelve months. This is made up of rental income of £8,168 and an average capital gain of £9,140.

Looking ahead, if rental property prices continue to rise at the same pace as over the last three months, the average buy-to-let investor in England and Wales could expect to make a total annual return of 8.5 per cent over the next year, equivalent to £15,050 per property.

David Newnes said: "Steadier price growth is good news for landlords aiming to minimise volatility in the value of their properties, while hoping for gradual and sustainable rises. Such capital accumulation will vary alongside the purchase market.

"Most encouraging for landlords considering future investments will be the stability of rental yields over the last six months.

"Looking ahead, the biggest risk for the health of the private rented sector is unconstructive government regulation. If this successful industry becomes a political football in the run-up to a general election then landlords will be frightened away from the market, and tenants would be worse off. However if political ideals can work in tandem with practical considerations, then the future is bright."

Tenant finances have improved on the previous month. The proportion of late rent is down from 7.8 per cent in June to the current level of 7.3 per cent in July. In absolute terms this represents a drop of £14 million owed in late rent within the space of one month.

Tenants' finances are also healthier on an annual basis in July. The total amount of late rent across England and Wales now stands at £252 million as of July 2014, down from £273 million in July 2013.

Source: Leciester Mercury

East of England leads UK for industrial construction deals



The East of England accounted for nearly half the total value of industrial construction contracts across the UK in July.

This dominance was helped greatly by the 240-acre Gateway Park Distribution Park in Peterborough – set to bring more than 8,000 jobs to the local area.

The news from construction intel specialist Barbour ABI comes 24 hours after it was revealed that science & technology were driving a similar boom locally in the office market.

Barbour ABI, which supplies construction data to the Office for National Statistics, Cabinet Office and Treasury, says the value of industrial construction contracts across the East of England totalled more than £180 million in July.

This accounts for 44.4 per cent of the overall contracts awarded for the sector UK-wide – an increase of 40.2 per cent on July 2013.

The report also shows that the region accounted for 11 per cent of the total value of construction contracts awarded across all sectors in July, hot on the heels of London and the South East with 15 per cent each and the North West with 12 per cent.



Michael Dall, lead economist at Barbour ABI, said: “Industrial construction activity in July was at its highest since Christmas and the East of England was right at the forefront of this growth. This is largely down to the award of a £140 million contract for the 240-acre Gateway Park Distribution Park in Peterborough, which is set to bring more than 8,000 jobs to the local area.

“Warehouse and storage projects were the most predominant in the industrial sector last month, accounting for 58 per cent of contract value in July, and this doesn’t look set to change as long as sites such as the one in Peterborough are still ripe for development.”

Source: http://www.businessweekly.co.uk/

Tuesday, 26 August 2014

UK house price rises for 2014 almost twice as high as predicted



UK house prices will end the year 9.5% higher than they started it, but the strength of increases this year means that in London the market could flatline in 2016, property firm Savills said on Tuesday, as it revised its forecasts for the next five years.

The firm had predicted a 6.5% increase in prices across the country in 2014, but said that growth had “exceeded all expectations”. As a result it has revised up its forecast for the current year, and its prediction of total growth by the end of 2018 to 25.7% from 25.2%. Its five-year forecast assumes mortgage rates will have risen to an average of 5% by 2018.

The firm said over the five years to the end of 2018 it still expected prices to rise more quickly in the south-east and east of England than in the capital “as evidence mounts of the flow of buyers and equity out from the capital”. It added: “The midlands and the north have the potential to outperform thereafter, as has been seen in previous cycles.”

Savills UK head of residential research, Lucian Cook, said house prices had been underpinned by record low interest rates, rising loan-to-income lending and pent up demand from buyers re-entering the market as the economy and consumer sentiment have improved.

Separate figures from researchers at Knight Frank show that the value of land suitable for development in England and Wales increased by 2% in the first half of 2014.

In London, where pressure on land is at its greatest, Knight Frank said the cost of land had recorded double-digit growth since the second quarter of 2013. In prime parts of London, development land went up by 18.9% while across Greater London prices rose by 14.2%.

Source: The Guardian

Small dip in July mortgage approvals offset by increase in average value




The number of mortgages approved by high street banks for house purchases dropped slightly in July, but remained higher than in the months immediately following the introduction of new lending rules in the spring.

Seasonally adjusted figures from the British Bankers’ Association (BBA) showed 42,792 homebuyer


loans were approved during the month, worth a total of £7bn. The figure was down from the 43,180 approvals in June and below the previous six-month average of 44,536.

However, an increase in the average value of newly approved loans, from £163,800 in June to £167,600 in July, meant the total amount agreed was up month on month, and approval numbers were 12% higher than in July 2013.

Non-seasonally adjusted figures showed an increase of just over 300 to 48,621 house purchase approvals – the highest number since October 2013.

In April, the mortgage market review introduced new rules on lending which forced banks and building societies to carry out tougher affordability checks on borrowers and to stress-test their finances to ensure they could keep up repayments even if interest rates rise.

Having declined during the early months of 2014 as lenders prepared for and introduced the new rules, lending to homebuyers seems to have picked up as the summer began.

“Mortgage approval processes have now settled after the introduction of the mortgage market review, to a typical level of around 40,000 mortgages approved a month for house purchase, some 12% more than at the same time a year ago,” the BBA said.

The BBA’s figures showed gross mortgage lending of £10.9bn in July, down on June’s figure of £11.1bn but 16% higher than in the previous July.

Figures published last Wednesday by the Council of Mortgage Lenders showed a 7% increase in gross lending in July.

Earlier data from the CML showed remortgage figures were down in June. The BBA said its members had seen an increase in approvals for borrowers switching lender, with 19,784 remortgages approved over the month compared with 18,972.

However, despite growing expectations of an interest rate rise before the election and mortgage rates remaining close to a record low, approvals were down 8% on July 2013’s figure. This could indicate that remortgagers are struggling more with the new affordability tests, or have been deterred from applying in case they are turned down.

July saw the introduction of the new £15,000 limit on tax-efficient Isas and changes to the rules around how much could be held in cash deposits. The BBA said £4.9bn had flowed into savings accounts during the month. Once withdrawals were taken into account, the net amount paid into accounts was £2.4bn, the same as in June.

The BBA’s chief economist, Richard Woolhouse, said: “The banks have been working with the government to help rebuild Britain’s savings culture. So it’s really encouraging to see evidence of savers taking advantage of the new cash Isa regime in the latest figures.

“Savings were a little low during the first half of 2014, but it seems people were just waiting until the new rules came into effect to invest their money.

“Initiatives like Nisa are steps in the right direction but today’s household savings ratio is half that of our parents’ generation. More still needs to be done.”

Source: The Guardian

Monday, 25 August 2014

New mortgage rules help to boost bridging loans in UK




New mortgage rules introduced in the UK in April have contributed to an acceleration in bridging lending in the 12 months to the end of June, it is suggested.

Growth in bridging lending has increased to 24% per year, up from 18% before the new MMR rules and annual gross lending has reached a record £2.17 billion, with £470 million lent in just last two months.

The data from the latest West One bridging index also shows that loan volumes are up 28% year on year and borrowers see interest rates close to historic lows, averaging 1.14% over the last two months.

‘Bridging is firing on all cylinders. And this is down to a number of positive factors all coming into alignment over the past few months. Thanks to the constructive approach of the financial regulators, the new MMR affordability assessments don’t apply to most bridging loans. Due to the nature of short term secured finance, the loan term is almost always less than a year and interest is often rolled up,’ said Duncan Kreeger, director of West One Loans.

‘By contrast, post-MMR delays in the mainstream market have crept into many areas of buy to let and commercial lending. So many property investors are now more actively choosing to bypass the usual lenders from the start as the high street is forced to focus its attention on simpler cases,’ he explained.

‘This is combining with a growing awareness about what bridging finance can get done, thanks in no small part to the growing expertise of specialist brokers. As the variety of borrowers grows in line with the sheer numbers of inquiries, we don’t expect this acceleration to reverse any time soon,’ he added.

The index report suggests that the most recent spurt of growth in the bridging market is being driven by progress in both the size and number of loans being written. The average loan size now averages £475,500 over the 12 months to 01 July, a 14.8% improvement on the previous twelve months, when the average loan was for £414,000.

Greater loan volumes have been even more significant, with a 28.2% improvement over the last 12 months. This is driven in particular by a 13.5% increase in loan volumes on a bimonthly basis, the two months from 01 May to 01 July, compared to the two months before the Mortgage Market Review.

‘Property prices are rising, creating both an opportunity for investors and a challenge for those in need of affordable homes or workplaces. Bridging lenders are responding with the finance that can help ease the squeeze on supply, in loan sizes that are more than keeping up with the property market and in volumes that will make a real difference,’ said Kreeger.

He pointed out that average loan to value ratios have increased to a 12 month average of 47.3%, up considerably from the low of 46.5% witnessed over the previous 12 months, ending 01 July 2013.

‘It’s encouraging for the industry’s future growth prospects that even as volumes and loan sizes are both growing rapidly, loan to value ratios remain restrained. Lenders, with help from expert brokers, are lending only to credit worthy borrowers,’ he said.

‘And even after the current acceleration, amongst all the industry players there is a sense that lenders have even more capacity. But maintaining a note of caution is sensible, and bridging lenders and borrowers alike will be able to keep making extraordinary progress without resorting to higher LTVs,’ he added.

The index also shows that bridging interest rates have averaged 1.17%, over the year to 01 July 2014. This is down by ten basis points from the previous 12 month period, when this stood at 1.27%. Most recently, on a bi-monthly basis rates have fallen to just 1.14% over the two months ending 01 July compared to 1.19% over the two months to 01 May, and is only three basis points above the record low of 1.11% set in the final two months of 2013.

Despite these recent falls in market rates, bridging loans also remain an attractive proposition to investors, with a current monthly spread of 0.93% from 10 year government bonds, which currently offer a yield of just 0.24% per month.

‘Bridging loans are not just helping in greater numbers of cases, they are doing so more cheaply and efficiently. Meanwhile, when you consider the fact that bridging LTVs remain far more modest than those extended by most large banks, it’s plain to see why the soundness of the bridging industry is still of increasing interest to private investors,’ Kreeger concluded.

Source: www.propertywire.com

Sunday, 24 August 2014

Sales to first time buyers in England and Wales reach seven year high


The number of first time buyer sales in England and Wales rose to a seven year high in July and they are paying smaller deposits, new research shows.

There were 30,000 first time buyer sales last month, a quarter more than 24,100 a year before, according to the latest First Time Buyer Tracker from Your Move and Reeds Rains, part of LSL Property Services.

It was the highest number of monthly first time buyers since August 2007 and data from estate agency chains also reveals the average first time buyer deposit fell 10% year on year from £29,609 a year ago to £26,642 in June 2014, a drop of almost £3,000 in a year.

The average deposit fell as a proportion of average first time buyer income as a result. Twelve months ago, the average deposit represented 82.6% of a first time buyer’s income. In July 2014, that had fallen to 72%. The average first time buyer income stood at £37,000 in July compared to £35,843 a year ago.

Over the same period, the average first-time buyer LTV has risen from 79.5% to 82.9%, helped by the increase in higher LTV lending facilitated by Help to Buy.

‘The first time buyer market is still active, even as the wider property market is starting to show signs of cooling down. As the economic recovery gathers momentum, more buyers are finding themselves in a position where they can afford to own their own home,’ said David Brown, commercial director of LSL Property Services.

‘A whole generation of young buyers were trapped on the side lines of the property market as the economy recovered from the recession, struggling to save for a deposit whilst inflation remained stubbornly high, savings rates were stuck at a historic low, and real wages fell. But the recent increase in high LTV lending options, enabled by Help to Buy, has allowed them a shot at getting on the ladder at long last, and the number of first time buyers has climbed to a seven year high,’ he explained.

‘Any stalling of the mortgage market caused by the introduction of the new mortgage rules has mostly worked its way through the system. Lending is operating on full steam ahead once again, although the end to end process has tightened and elongated,’ he added.

The latest e.surv Mortgage Monitor found that more borrowers are taking out high loan to value loans as the stock of affordable properties is falling. There were 13,256 approvals on properties worth £125,000 or less in July 2014, some 13% fewer than 15,244 a year ago.

The index also shows that the average first time buyer purchase price has risen 8% over the last year and 6.5% over the last three months to £155,844 in July. Simultaneously, average first-time buyer mortgage rates climbed for the fourth consecutive month in July, up from 3.99% in March to 4.19% in July. In the last three months they have climbed 0.14 percentage points.

As a consequence, first time buyer mortgage repayments are rising as a proportion of income. Over the last three months they have climbed from 21% of a first time buyer’s income to 22.6%. A year ago, they represented just 20.2% of a first time buyer’s annual income.

Brown pointed out that the urgency among first timers to lock into cheap fixes is propelling activity at the bottom of the market. Fixed deals have already started getting more expensive, as banks raise rates in anticipation of a potential interest rate rise and the Bank of England’s to-ing and fro-ing over the date of the base rate rises have added confusion into the economic equation and thus encouraging more buyers to act now, while the last of the cheap deals remain.

A regional breakdown of the figures reveal that the average first time buyer purchase price topped £150,000 in five UK regions in the three months to July. In London it reached £251,061, in the South East £194,955, in the East of England £173,550, in the South West £155,484 and in Wales £152,970.

First time buyers in the North East had the smallest deposits on average. The average first time buyer deposit in the North East was £10,710 in the three months to July. The second cheapest region in terms of deposits was Scotland, with an average deposit of £15,005, followed by Yorkshire and Humber at £16,760.

In the capital, the average first time buyer deposit was £62,253, twice the size of the average deposit in the South West which was £31,424 and the South East at £30,133. While in London the average first time buyer deposit was approximately 25% of the value of the property they were purchasing, in the South West it was just 20% and in the South East that figure fell further to £15%.

‘Even though house prices are more expensive in the capital and South West, borrowers are able to put down proportionally larger deposits. It’s reflective of typically higher incomes, with people able to save more before getting onto the housing ladder,’ said Brown.

Thursday, 21 August 2014

New home building up 18% in England in second quarter of 2014


More homes are being built in England with housing starts up 18% in the second quarter of 2014 compared to a year ago, the latest construction data shows.

Housing and Planning Minister Brandon Lewis announced that there were 36,230 new housing starts between April and June, bringing the total number of starts over the last 12 months to 137,780, a 22% increase on the previous year and the highest level of house building since 2007.

He pointed out that government efforts to help people onto the housing market are working with almost 40,000 households have bought a home through Help to Buy, with over 80% of sales going to first time buyers purchasing new build homes.

He said that the direct result is a new generation of home owners and a 34% increase in private house building during the first year of the scheme.

At the same time the construction sector has been growing for 15 consecutive months, and is currently experiencing the sharpest rise in house building orders since 2003, while companies are taking on new workers at the fastest rate since 1997.

He also pointed out that a growing pipeline of new projects is also emerging from the reformed planning system. Last year successful applications for major housing schemes were up 23%, and planning permissions were granted for 216,000 new homes.


However, some property industry experts are pointing out that this is still nowhere near the number of new homes that are needed. ‘The tide is gradually moving in the right direction but the UK property industry can’t forever compare itself against the benchmark of its deepest troughs. We still need to provide twice as many homes again every year,’ said Duncan Kreeger, director of lender West One Loans.

He pointed out that while planning changes and getting projects flowing are welcome policies, a bigger problem is that house builders are completing current projects first before starting on new sites.

‘For the required numbers of homes we’ve got to get started right away, as soon as sites become available. Greater resourcefulness is critical too. Converting and refurbishing is often easier and more profitable than the painstaking work of ground-up development,’ he explained.

Source: www.propertywire.com

Cambridgeshire house prices recover from recession more strongly than anywhere else apart from London


House prices have recovered from the recession more strongly in Cambridgeshire than anywhere else in the country apart from London, according to new figures.

Data released today by the Rightmove property website put the average property value in the county at £311,933, up 22 per cent on the pre-downturn peak in May 2008.

This is in sharp contrast to many other areas of England and Wales, particularly in the north, where prices are still well down on their peak before the slump.

The economic powerhouse of Cambridge drives the boom, with house prices in the city itself now standing at an average of £419,187, according to figures released by Nationwide last month.

The Rightmove figures emerged amid claims some overseas buyers were content to buy a property and let it stand empty because it gained so much value as an investment.

Cameron Ewer, head of residential agency at Hills Road-based estate agents Strutt & Parker, said: “You can’t bury your head in the sand and say Cambridge wasn’t hit by the recession, it was, but it was far more resilient and was in a better place to bounce back when the recovery started.

“Cambridge has got good employment levels, good education, good links to London, and an international airport around the corner at Stansted, so it will always be a highly desirable area and will attract high net worth individuals.”

Mr Ewer said he expected the increase in property values in Cambridge to slow, mirroring the picture in London, but suggested now was a good time for people to move from the city to the surrounding villages, where strong growth is expected in coming months.

Source: http://www.cambridge-news.co.uk/

House prices to keep rising in the West Midlands


Average house prices in the West Midlands are on course to break the £200,000 barrier by the end of next year, says a new report.

Officials say it is a sign of the increasing strength in the region's economy, with growth expected to almost double this year.

Experts at leading accountancy firm PwC – formerly PricewaterhouseCoopers – say the recovery in the wider UK economy could see interest rates starting to rise as early as the end of this year.

While that might cause a slight slowdown in the housing market, as some families shy away from the prospect of higher mortgage repayments, PwC is still predicting average house prices in the West Midlands could hit £210,000 by the end of next year.

And they could rise as high as £256,000 by 2020

It is a reflection of how the UK housing market has leapt back into life over the past 12-18 months, with prices rising across the country.

At the moment house prices are expected to rise eight per cent in the West Midlands this year, up from £184,000 at the end of 2013.

Mark Smith, regional chairman at PwC in the Midlands, said: “House prices in the West Midlands are accelerating but we do expect this to moderate over the next two to three years, slowing to six per cent in 2015 and an average rate of around 4.2 per cent per anum between 2016 and 2020.”

Meanwhile the region's economy is well on the road to recovery

Growth in the West Midlands is expected to pick up from 1.6 per cent in 2013 to around 3.1 per cent in 2014, in line with the rest of the UK.

Mr Smith, added: “These latest figures show the West Midlands economy is now gathering real momentum as business investment starts to pick up. The unemployment rate in the region has also fallen faster in 2014 than any other UK region, falling by 57,000 over the past year.

“In addition, inflation has fallen faster than expected recently, and we expect it to remain at or slightly below target in 2014-15. As a result, we expect the Monetary Policy Committee (the interest rate setting body of the Bank of England) to keep interest rates on hold in the short term but then to increase them gradually from late 2014 or early 2015 onwards, perhaps returning to around four per cent by 2020.


Source: http://www.expressandstar.com/

Wednesday, 20 August 2014

UK gross mortgage lending up 7% month on month


Gross mortgage lending in the UK reached £19.1 billion in July, some 7% higher than the previous month, according to the latest figures from the Council of Mortgage Lenders.

The amount is also 15% higher than July last year when it was £16.7 billion and the highest monthly figure since August 2008 when it was £19.3 billion.

‘Mortgage activity seems to have remained robust following the regulatory changes but the eventual impact of these remains uncertain,’ said CML market and data analyst Caroline Offord.

‘Property transactions in the first half of the year showed a 25% increase compared to the same period a year ago but, as set out in our recent market forecast update, we expect that intensifying affordability pressures could start to dampen this upwards trend,’ she explained.

‘Economic conditions have strengthened but while the Bank of England has signalled an improved economic outlook since May, headwinds remain and the message about future rate rises being measured and gradual remains unchanged,’ she added.
Source: www.propertywire.com

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First-time buyers pay £22,000 more than last year

Typical prices paid by first-time buyers in the UK increase by 12 per cent in a year, amid strong rises across the country 


First-time buyers are having to find £22,000 more for their homes than they needed a year ago, according to official figures. 

The Office for National Statistics (ONS) said the average price paid by people buying their first property reached £204,000 in June - up from £182,000 in 2013. 

The rise came amid a 10 per cent increase in the typical value of a home in the UK, which is now a record £265,000. 

The monthly figures for June, released on Tuesday, show that property values in London are increasing at more than five times the rate of those in some other parts of the country. 

However, the figures indicated that the housing market in the capital and elsewhere has started to cool. London saw a 19.3 per cent increase in prices in the 12 months to June, less than the record jump of 20.1 per cent in the year to May. The average house price in London was £499,000 in June. 

Across the UK there was a 10.2 per cent rise in the average property price in the year to June - down slightly from 10.4 per cent in the 12 months to May. 

However the ONS said that “house prices are increasing strongly across most parts of the UK”. 

Its figures show that a typical first-time buyer is paying 12 per cent more for their home than would have needed a year ago - the highest annual increase since April 2010. 

House prices increased across the UK by 0.5 per cent between May and June. 

London and the South East are continuing to record the strongest annual price increases. The ONS said that if these regions were taken out of the figures, UK house prices would have increased at a slower pace of 6.3 per cent in the 12 months to June, amounting to £201,000 on average. 

The North East remains the English region with the lowest average house prices, at around £150,000. However, prices in the North East have lifted by 4.4 per cent over the past year. 

Wales has seen the smallest annual price growth out of all the UK nations and regions, with a 3.5 per cent year-on-year increase taking average prices there to £167,000. 

England remains the only UK country where property prices are higher than their pre-financial crisis peak.

Source: The Telegraph

Tuesday, 19 August 2014

Fosse Park in Leicester set to expand after £345.5m takeover





The £345.5 million acquisition of Fosse Park by the Queen’s property firm and Chinese government opens up the possibility of the shopping centre’s expansion, writes Business Editor Ian Griffin.

The retail park, between Leicester and junction 21 of the M1, was jointly purchased by The Crown Estate and Chinese state-owned Gingko Tree Investment last week. The Crown Estate will manage the park.



They acquired the 560,000 sq ft site, one of the UK’s largest out-of-town shopping centres, from northern Irish business Foyleside, which paid £360m for it in 2006.

It has been reported Foyleside sold the park as part of a major refinancing.

Earlier this year, it was revealed Fosse Park could expand by a third after three companies, including the owners of the out-of-the-town shopping centre, made bids to buy a key plot of land next to it.

Opened in 1989, Fosse Park has 40 stores and attracts eight million customers a year.

Current tenants include Marks & Spencer, GAP, New Look, Clarks, Boots, Next, River Island, Argos, DFS, Thorntons and Costa Coffee.

It was revealed by the Mercury last month that a Primark store was to open at the centre, replacing the current BHS outlet.

Mr Herbert said an expanded Fosse Park would be able to quickly fill the new space because of the huge demand from retailers looking for premier locations.

“The fact Fosse Park demands such high rents is an indication there’s strong demand,” he said.

“It is one of the top two or three retail parks in the UK.”

Rents are thought to be as high as £85 per square foot for a 10,000 sq ft unit.

The Crown Estate and Gingko Tree Investment will each take a 50 per cent stake in Fosse Park.


Source: Leicester Mercury

UK house prices in June reach new record high




The Office for National Statistics data showed the annual growth rate had fallen from 10.4% in May, but prices rose by 0.5% on the month to a record £265,000 for the average property.

The amount paid by first-time buyers was 12% higher than in June 2013, at an average of £204,000 – the biggest rise since 2010.

Although recent figures from the Council of Mortgage Lenders suggest first-time buyers have been re-entering the market, campaign groups warned that homes were getting further out of reach for those forced to rent.

Alex Hilton, director of Generation Rent, said: "The average private renter effectively spends two days every week working to pay off their landlord's mortgage, and with prices rising at this rate, fewer renters will ever escape this trap.

"We need to build many more homes to bring supply back in line with demand, and those of us who are stuck with the insecure private rented sector for the foreseeable future need better rights and the ability to call the place we live a home."



In recent days, estate agents and surveyors have reported that the market has started to cool in some areas, as more properties have come up for sale and the balance of supply and demand has tipped in favour of buyers.

Rightmove's latest report said asking prices dropped for the second month running in August, while in London they were down for the third consecutive month.

The ONS index, which is based on completed mortgages, and so lags this data, showed prices had risen in all regions of the UK since June 2013. The biggest increases were in England, where the average price reached £276,000 and the index was higher than its pre-crisis peak in 2008. This has been driven by growth in London, the south-east and east of England, where prices have reached record levels.
In London, the average price reached £499,000 in June, just shy of the 4% stamp duty threshold of £500,000. The index is now 35.6% higher in the capital than in January 2008, the peak before the financial crisis. The south-east is 9.2% above 2008 levels, while in the east of England prices are 6.5% higher.

"House prices are increasing strongly across most parts of the UK, with prices in London again showing the highest growth," the ONS said.

In Wales the average price was £167,000, in Northern Ireland it was £137,000 and in Scotland it reached £193,000. Excluding London and the south-east, the average UK house price was £201,000.

The housing charity Shelter said the increases were another blow for people stuck in rented accommodation. Its chief executive, Campbell Robb, said: "From a new generation of part-rent part-buy homes, to encouraging smaller builders back into the market, there are ways to fix this country's housing crisis. If we don't see radical action soon, more and more people will be left without a hope of ever building a stable future in a home of their own."

Brian Murphy, head of lending at the Mortgage Advice Bureau, said: "Tighter lending regulations and the summer slowdown have started to inject a double dose of reality into the housing market, with the rate of price rises outside London and the south-east far lower than the UK average.

"Nevertheless, the slowing of growth between May and June has been modest at best. The latest ONS figures suggest we have passed the point of seeing a higher rate of increase every month – temporarily at least – but demand for home ownership remains strong and will help to uphold prices for the foreseeable future."

Source: The Guardian

Monday, 18 August 2014

Property Investment & Pensions







As life expectancy within the UK is rising yearly, this has resulted in some retirees’ pension plans not providing the income expected, making later retirement financially very difficult. After the 2014 budget was announced, the government spoke of their plans to change the way in which the UK’s pension scheme works. Changes have already taken place back in 2012 when the Workplace Pensions scheme was introduced for the government, and also for employers, to contribute towards state pensions. From April 2015, new government schemes will be introduced to allow more freedom when it comes to how savers withdraw their pension funds, meaning that more money can be taken out without the restrictions previously in place.

This new development and change to the system has resulted in many savers looking for alternative forms of investment to fund their retirement. Residential property is the UK’s largest investment asset class, and has been the best performing asset over the past thirty years.¹ With life expectancy at an all-time high this has led,  in recent years, to some pension pots running out prematurely. However, property investment has provided many retirees with a secure source of regular income and has removed the risk of funds running out during retirement.

Investing savings into residential property has proven to be an incredibly fruitful venture. In terms of investment, the sooner you buy the better. The longer you hold on to your investment for, the greater return you will see from your initial investment. This means that investing your money into an asset like residential property will provide you with a much stronger, more secure income over the course of your retirement.

For instance; withdrawing small amounts of money from of your pension pot will provide you with a set amount of income over the course of your retirement. This has been the case for many years, however, with increasing life expectancy many have found this to be unsustainable. If you choose to take a lump sum out of your pot instead and invest that into residential property, you will now receive regular income from your investment – in a sense refilling your pension pot indefinitely.

Another option for freeing money up during retirement is through an equity release. This method allows older people to get cash out of an asset with capital value - the majority of people take this out of their property without the need to move home. This loan can be taken out as one lump sum or as a few smaller sums, and you have the freedom of being able to spend the money on whatever you want.

As the age of retirement increases, it is not surprising that a growing number of people are choosing to turn to investment property to fund their retirement. A hands off property investment with a steady source of income may provide financial security in your retirement as well as providing loved ones with stability for their future.

Source: www.bdaily.co.uk

Sunday, 17 August 2014

'Real' cost of renting rises for first time in a year


Private sector rents are back on the increase in real terms for the first time in more than a year, a major lettings network has reported.



The average monthly rent across England and Wales increased by 2pc in the 12 months to July, edging higher than the 1.9pc rate of Consumer Price Index (CPI) inflation, according to LSL Property Services,       which owns national chains Your Move and Reeds Rains.

Rents first dipped below inflation in June 2013 and continued on a trend of below-inflation increases up until last month, LSL said. The average monthly rent now stands at £753.

The fastest annual increase was recorded in the South East, where rents typically stand at £775, showing a 3.8pc uplift on a year ago. This is followed by a 3pc annual increase in the North West, where average rents are £594, and a 2.3pc year-on-year rise in London, where the typical monthly rent is £1,143.

In Wales, rents are up by 1.2pc year to reach £562 on average. The North East is the only region where rents have fallen over the last 12 months, edging down by 3.8pc to reach £507 typically, LSL said.
David Newnes, director of LSL, said rent rises are still "modest" when it is borne in mind that this is usually a busy time of year as the market gears up for the rush of students in the autumn.

The findings also coincide with several recent reports into the housing market which have pointed to the pace of activity cooling off slightly.

A shortage of properties to choose from has been blamed for pushing up both rents and house prices in recent years.

LSL's figures are based on rents achieved on around 20,000 properties across England and Wales.



Source: The Telegraph

Thursday, 14 August 2014

Prime markets in the East Midlands are set to benefit from an improvement in buyer sentiment (Savills UK)


The prime housing markets across the UK all saw positive annual price growth in the year to June 2014, rising by 5.7% on average. While price growth in the East Midlands was slightly more subdued at 4.3%, this is the strongest year-on-year growth since mid 2010.

The market reached a turning point last summer and positive quarterly price growth has been seen every quarter since. Over the longer term, average values still remain -14.8% behind their 2007 peak, in line with the average seen for prime property across the midlands and the north. However, the average masks a divergence in performance as urban locations have seen stronger recovery since peak compared to more rural locations.

The city market in Nottingham, in particular, has been boosted by strong demand from investors who are attracted to 1 and 2 bedroom flats which provide a stable income stream and achieve gross yields of 5-6%. In suburban markets such as Mapperley Park, Nottingham and commuter villages including Repton, South Derbyshire, local wealth from owner occupiers has been a key driver of demand.

The prime housing markets in the East Midlands are largely dependent on demand from wealth generated in the local economy. 
 With the economic recovery, initiated in London and the south east, gaining a strong foothold, we believe 
that the prime East Midlands housing market should begin to benefit from an improvement in buyer sentiment over the next 12 – 24 months.

Positive employment growth is expected across the majority of sectors, with professional and administrative service sectors, especially in Nottingham, expected to see the largest increase. As these high value employment markets become increasingly important, local wealth will continue to strengthen the demand for housing in commuter locations to the main cities and towns.

While the ripple effect from London has been slow to arrive thus far, we expect the number of buyers moving from London to increase, as they take advantage of the comparatively affordable prices. Since the downturn, the value gap between London and the rest of the country has widened to an all time high.

However, by 2016 we expect the house price growth in the 
East Midlands to outperform London as the market moves in 
to the next stage of the cycle.


Wednesday, 13 August 2014

First time buyers boosting property growth in UK, according to surveyors


First time buyers have boosted annual growth in the UK’s housing market activity despite a seasonally quiet month of July, according to the latest research from chartered surveyors.


The total number of valuations carried out in July 2014 is 14% higher than in July 2013, according to the latest monthly report from Connells Survey & Valuation.

This is despite a seasonal slowdown of 21% compared to June and in line with an average 22% dip between each June and July since 2007.
 

Annual increases are led by first time buyer activity which is up 23% since July 2013, and with first time buyers showing the smallest seasonal drop off, at 17% from June to July.

According to John Bagshaw, corporate services director of Connells Survey & Valuation, a motoring economy is bringing with it renewed consumer confidence and emphasis on first time buyers from lenders, partly due to government schemes, appears to be getting people on to the property ladder.

‘We’re not on an open road to prosperity yet. After the summer slowdown, there will be more clarification on the long term impact of various potential speed bumps. The limiter could be interest rate rises or the fundamental squeeze on affordability for many would be buyers. But with consistent double digit annual growth in activity, there is now a growing sense that the housing market is running more smoothly,’ he explained.

‘Buy to let activity often sees sharper seasonal dips than the rest of the market. Particularly over the summer, landlords are starting to concentrate on the upcoming busiest time of year for new lettings, rather than buying or selling properties. However, as annual increases attest, buy to let investors are taking advantage of the capital gains they have garnered and are still growing their portfolios on average,’ added Bagshaw.


Source: www.propertywire.com

Tuesday, 12 August 2014

Want To Buy More Properties But Haven’t Got The Deposit?



The Buy To Let market has come back to life; and there are many landlords snapping up properties to secure a healthier return; compared to banks and building societies.

But what if you haven’t got enough cash for a deposit?

You may not realise it but you may already have the deposit you need tied up as equity in your residential home or buy to let property.

Experience shows that landlords who have owned buy to let properties for some time will be sitting in positive equity; which could be remortgaged to release equity to use as your deposit on your next investment. The recent rise in property prices in some areas, means that property that may have been in negative equity may now be in positive equality; meaning you can remortgage against it.

Well my property is making me money why should I change anything? 


The answer to this question depends on your perception of the market and where you think property prices are going to go. Let’s say that property prices go up 25% by 2020 – would you rather own one property that goes up by 25% or two, or three?

Naturally the equity you had in the first place left you with cash; but cash tied up as equity doesn’t generate you any profit. If you used the equity to buy rental properties you will have an income from the rental, and then also reap the rewards of an increase in capital growth.

The aim being that when you come to retirement, instead of selling one property leaving you with a cash sum;
you have 3 properties to sell and 3 times the income.

Alternatively if you have already got the finance in place and you are looking for properties to buy to let or you don't want to take a mortgage and need a customized payment plan please speak to Prosperity.



Source: Belvoir lettings

Monday, 11 August 2014

June mortgage figures suggest it's full steam ahead for the property market


The number of mortgages taken out to fund house purchases increased in June, according to figures from lenders which suggest that new rules on loans have not dampened the property market.

Data from the Council of Mortgage Lenders showed that 60,500 house purchase loans worth a total of £10bn were taken out during the month, a rise of 5% by number and 6% by value on May's figures. Compared to June 2013, the figures were up by 15% and 23% respectively.

More than half of those loans were taken out by home movers, who accounted for 31,900 of the mortgages advanced, 4% up on May, however the number of first-time buyers showed a bigger month-on-month increase, rising by 7% to 28,600.

The average first-time buyer borrowed 3.47 times their gross income to fund their purchase, compared to 3.46 in May, while the typical loan size increased by more than £2,000 to £123,865. The typical gross income of a first-time buyer household also rose, to £37,000 from £36,500 in May.

Paul Smee, director general of the CML, said: "For the second month running since new FCA rules took effect, lending characteristics remain similar to the market beforehand.

"We now feel confident that, as we would hope, the mortgage market review [MMR] effect is more gentle dampener than hard brake."

Investors' appetite for property continued to grow, with the CML reporting a 23% year-on-year increase in the number of buy-to-let loans. A total of 15,600 landlord mortgages were advanced, worth £2.2bn.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said the figures suggested that the new rules brought in with the MMR had not been detrimental to buyers.


"Buy-to-let continues to grow as investors seek better returns than they can earn on cash and more certainty than the stock market. Lenders have been cutting buy-to-let rates and easing criteria in an effort to ensure lending volumes are not too dented post-MMR because buy-to-let doesn't come under its remit.

"Investors are benefitting from cheap mortgage rates, less strict criteria and plenty of demand from tenants looking for decent property to rent."

The CML figures are for mortgages advanced during the month so reflect sales some weeks or even months before.

Source: The Guardian

Sunday, 10 August 2014

Market making significant strides in recovery

The latest figures from the Council of Mortgage Lenders (CML) show that in April there was a 43% increase in the number of buy-to-let loans originated, compared with April 2013, and a 57% increase in the value of lending.

The latest survey results from Paragon show that landlords are feeling optimistic when it comes to the

prospects for the market and their rental portfolios. Those surveyed reported an increase in the average value of their rental portfolios, from £1.56 million in Q1 2014 to £1.60 million in Q2 2014.

The average annual void period has also fallen in the second quarter, from an average of 2.8 weeks in Q1 to 2.7 weeks. There is a clearly established downward trend in the average length of void period. Since 2011 void periods have remained consistently low, only fluctuating between 2.6 and 3.0 weeks. There are several factors that contribute to short void periods such as high tenant demand and good working relationships between landlords and letting agents.

Gross yields remained much the same in the second quarter with landlords reporting an average of 6.2%, which is not dissimilar to the levels seen throughout 2013. In the next 12 months landlords expect this average gross yield to remain stable.


In terms of property purchasing behaviour, 16% of landlords are planning to buy additional buy-to-let property in the third quarter, and of those looking to buy, more than half (54%) expect to buy terraced houses.

Source: PRS TRENDS report by Paragon Group

Thursday, 7 August 2014

As London gets too hot to handle Derby is a big draw for investors



    Huge amounts of money have been spent grand projects in London but some investors are now looking for potentially greater value in cities such as Derby.

John Forkin, director of Marketing Derby, talks about how cities such as Derby are becoming more attractive to potential investors as London's property market boils over.

The truth is, London's property market is getting too hot, meaning that cities outside the capital are now on the radar, offering potentially greater value and yield uplift especially for UK institutional investors.


Over the past year, we at Marketing Derby have definitely noticed this.

Increasing numbers of UK-based investors have started to peer outside the walls of the M25 and seek options in the regions.


They were in particular evidence at our MIPIM events in March and colleagues in the city's commercial agent community would vouch for this trend as out-of-town inquiries increase.

The 2014 Derby Property Summit (Renaissance in the Regions – How Investment Is Reaching Beyond The Capital) is to be seen in this context.

Today at the iPro Stadium, Derby puts its best foot forward and showcases its ambition to the property
world.

Guests are coming not only from the greater Derby area but also from the wider Midlands and London.

Chaired by BBC business journalist Declan Curry, these delegates will be treated to thought-provoking keynote presentations.

PwC will provide a global perspective, the Centre For Cities think tank will paint the national picture and Derby City Council will outline the local view.

This conference has now gained such a status that Minister of State for Cities Greg Clark has filmed comments especially for screening to delegates at the summit.

As the economy picks up, so will investment increase.

This time, Derby is well-placed to take full advantage, based on our ambition, momentum, confidence and portfolio of development opportunities.

Source: Derby Telegraph