Property Asking Prices Continue to Rise in Most of the UK

This article by Property Wire on October 17th, 2013 tells us that UK's residential property asking prices continue to rise according to the latest sector index.

Residential property asking prices in the UK are continuing to rise, up another 2% on last month and now 12% higher than a year ago, according to the latest sector index.
 
The prices in England and Wales are now up 5.5% on last year and the North East, North West and Scotland were the only parts of the UK not to record price rises in the last month.

The Asking Price Index from Home.co.uk also shows that the supply of property for sale across England and Wales is down 18% on last year.

On a monthly basis prices in England and Wales have risen 1%, the largest monthly rise since May 2011. London and the South East still continue to show strong growth and more areas of the UK are contributing to the recovery.

Scotland is now the only area of the UK that is still recording house price deflation, down 1.4% over the last 12 months.

The index  report says that the imbalance between demand and supply continues to dominate the market dynamic. The supply of fresh property stock across England and Wales has contracted by a further 18%, and in London new stock is down by 31% compared to last year.

Growing demand from buyers chasing ever fewer properties has driven down the typical time on market by an average of 8% over the last 12 months.

However, the recent price rises being recorded across the majority of the UK still conceal the bipolar nature of the market. Over the last five years, prices across England and Wales have risen 3.4%, whereas four out of nine English regions, plus Scotland and Wales, have shown price falls over the same time period.

Annual price growth is largely driven by London with a rise of 11.7% with prices in the South East up7%. The South West is vying to become another high performance region, with price rises of 4.6% over the last 12 months. Annual house price rises of 4% in the East Midlands and 3.5% in the West Midlands means that capital invested in those regions is now keeping up with inflation.

A growing concern is that regional house price bubbles are beginning to emerge where demand for housing continues to far outstrip supply. A lack of attractive non-property investment opportunities coupled with the widely reported surge in home prices is making potential vendors hold back, the report suggests.

As a consequence, the flow of new property stock across England and Wales is down 18% on this time last year. Three of the nine English regions are recording even tighter supply figures. Sales stock entering the market is now down 21% in the East and South East, and may well approach the 31% drop seen in Greater London. The flow of new supply in Wales and Yorkshire is relatively strong, with only a 5% fall in stock. Subsequently, average prices in these regions are being kept in check, with rises of 1.5% and 0.6% respectively over the last 12 months.

According to Doug Shephard, the firm’s director, London's property investment bubble continues to expand at an alarming rate. He describes the 2% jump in average prices in the last month alone as ‘simply astonishing’, and pointed out that the increasingly severe shortage of new stock is fuelling the accelerating rate of growth.

The average price of a house in London has broken through the £400,000 barrier for the first time and is 15.3% higher than five years ago. The growth is not showing any signs of slowing down and even the South East, with annual price growth of 7%, doesn't come close the capital's performance. Currently, only 60% of the properties for sale within a 10 mile radius of the centre of London are priced below the Help to Buy scheme threshold of £600,000.

‘House price growth is now sweeping north and west from the capital. Welcome news for home owners, but troubling for potential buyers whose salaries are not increasing anywhere near as fast,’ said Shephard.

‘Price rises in London and its surrounding regions have now established a solid two year trend, and one may well conclude that these property markets have fully recovered.

However, a true recovery cannot be complete without considerable improvement in the underlying economy, which is currently looking like a one horse race. Until real wage growth matches house price inflation, housing affordability will become increasingly difficult and a distant dream for many,’ he explained.

‘The ongoing availability of government backed cheap lending is already encouraging overall price rises over and above inflation. A key concern is that the impending Help to Buy scheme will only exacerbate affordability problems. Further market stimulus may be justified in selected areas such as the North, but certainly not across the whole UK, as that would significantly raise the risk of another property crash,’ he added.

Article Source: http://www.propertywire.com/news/europe/uk-property-asking-prices-201310178359.html

House Prices Rising at Quickest Rate in Three Years

According to Halifax the rise for eight consecutive months brings annual growth above 6%, making it the highest annual rate since June 2010 as revealed on this article by Harriet Meyer of theguardian on October 3rd, 2013.

House prices are rising at their fastest annual pace for more than three years, according to figures from the UK's largest lender.

Halifax said prices rose by 0.3% in September, the eighth consecutive monthly increase, resulting in an average figure of £170,733. The lender's annual growth figure, which compares quarterly averages year-on-year, showed a 6.2% rise – the highest annual rate since June 2010.

Prices remain some way off the peak of £199,612 recorded by the index in August 2007, but a background of low interest rates, improving consumer confidence and government schemes such as Help to Buy and Funding for Lending, are stoking demand.

The lack of available homes has also contributed to the upward march in house prices, with demand outstripping supply in recent months.

However, Halifax's housing economist, Martin Ellis, said the lack of supply should ease as more people are encouraged to put their homes on the market. He said: "There are signs that supply is beginning to respond to the pick-up in demand, which if continued should help to constrain the upward pressure on prices. The recent strengthening in house prices is increasing the amount of equity that many homeowners have in their home, enabling more to put their property on the market for sale. Levels of house building are also increasing, albeit from a very low base."

Halifax's report follows similar findings from Nationwide that the housing market revival is gathering pace. It showed UK house prices rose 0.9% in September, with the annual rate of growth running at 5% nationally and 10% in London – in both cases the strongest figures since 2010. As recently as May, the UK annual rate was just 1%.

Fears have been growing that stronger than expected price rises this year could lead to a bubble, with borrowers over-stretching themselves. The government has brought forward the launch of the new phase of its flagship Help to Buy scheme from January to next week, and concerns have been raised about the further upward pressure this will place on house prices as demand is stoked further.

Howard Archer, UK economist at IHS Global Insight, said: "There is a mounting danger that house prices could really take off over the coming months, especially if already significantly improving housing market activity and rising buyer interest is lifted appreciably further by the Help to Buy mortgage guarantee scheme now starting in October."

The Help to Buy scheme will offer state-backed mortgages to people with deposits as low as 5% who want to buy a new-build or an existing home.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Bringing forward the launch date of the second phase of Help to Buy has revealed just how much pent-up demand there is from buyers, with brokers already receiving plenty of inquiries about how the scheme will work and where they can get a mortgage. Lenders will have to work hard now to catch-up, ensuring they launch 95% LTV products that are competitive."

Article Source: http://www.theguardian.com/money/2013/oct/03/house-prices-quickest-rise-halifax

House Prices Up 5% as Boom Goes Nationwide

This article by Giles Sheldrick of Express on September 28th, 2013 reveals the recovery in the housing market has finally spread across the whole of the UK.

All regions saw year-on-year price rises this month - the first time this has happened since 2007. In a further sign of economic revival, prices are now rising at their fastest rate for five years, according to the Nationwide building society.

The value of the average property has jumped by five per cent in the past year - equivalent to £8,163 or about £680 a month or £22 a day.

It means the average house is now worth £172,127 - its highest level since 2008. Economist Howard Archer said last night: "The hugely encouraging thing about these figures is that we are starting to see price increases across all areas of the country, not just London and the South-east.

"It's very good news and boosts hopes of an overall improvement in economic activity across all regions.

"We are at a very early stage but the economy is now genuinely looking a lot healthier and there are signs we are seeing a proper recovery after several false dawns."

The price rises reported by Nationwide are largely driven by southern regions of England but all regions recorded growth in the third quarter of the year. Northern Ireland, for example, recorded its first increase in prices since 2007.

Manchester saw a 10 per cent increase in prices and Newcastle-upon-Tyne eight per cent. But the gap between average property values in the North and the South has widened to a new high, topping £100,000 for the first time.

A house in the South of England is typically 74 per cent more expensive than one in the North. Prices in southern regions have risen by 6.1 per cent year-on-year - almost double the 3.1 per cent rise seen in the North. Although the figures will be warmly welcomed by millions of homeowners, average prices are still 7.5 per cent below the 2007 level.

Experts last night predicted the housing market would have fully recovered from the credit crunch by the end of next year, with prices increasing a further two per cent this year and then by seven per cent in 2014. In London, property prices are already eight per cent above their 2007 peak.

David Newnes, director of LSL Property Services, said: "The credit bottleneck which pent up demand after the financial crisis is finally starting to be cleared, which is why sales, prices and first-time buyer numbers have improved so rapidly.

"It has been like opening a shaken can of cola. You get the initial fizz of activity, then it flattens. What we're seeing is a relatively normal market correction, not a quick transition from a recession to a boom."

Meanwhile, figures from the Land Registry for August yesterday showed the biggest annual house price rise since November 2010, although this was a comparatively modest 1.3 per cent.

Article Source: http://www.express.co.uk/news/property/432776/House-prices-up-5-as-boom-goes-nationwide

London Property Capital Growth Boost from Growing Population

According to this article by WebWire on September 22th, 2013 the reason that the property capital market in London continue to boosts is because of the population growth.

London population growth boosts the property market. We investigate London areas of high capital growth. Which are good areas for London property investment?

How to make a good property investment by looking at supply and demand? Inward migration.

By the middle of 2012, the London population clicked over 8,308,000 inhabitants according to the office of National Statistics. The probably reason for the steady increase is the positive birth of 134,000 babies in the Capital. By contrast, the mortality rate was markedly lower at 47,570 fatalities in London during the same period.

Net migration added a further 69,000 people which was calculated from 176,000 arrivals from overseas subtracted by 107,000 departures.
 
Additionally, there are U.K residents that move to the Capital for work and some older residents move to the countryside when they retire. More U.K residents are moving to London and the South East in general as The North still struggles with slow growth and high unemployment.

The growth in the London population is not matched by the number of new homes being built. The target of 250,000 new homes has been missed for several years further exhibiting the housing crisis. Even though there was an improvement on the previous years’ new builds with 115,000 new property completions.   

Areas like Hackney and Islington have quite a number of Turkish and afro-Caribbean families that generally have larger families and have contributed to positive population growth rates. Islington is an excellent place for London Investment Property with exceptional rental demand because it is close to both ‘The City’ and West End.   

Wandsworth is another London borough that has benefited from the baby boom as it fits within (what is commonly known as) the ‘Nappy Valley’ where newly-wed city workers are starting their families. It is also in the catchment area of Chelsea, Fulham and the Nine Elms project near Battersea which are all extremely popular with overseas buyers.  Wandsworth experienced year on year Capital growth of 11%. 

Making money from property investment is not rocket science. A large contributor to creating a successful property portfolio is seeking out areas with an imbalance in supply and demand.

It really is quite simple, where there strong demand for rentals and there are few rental properties would result in higher rents and lower vacancy rates. Where there is shortage of properties for sale and large demand for properties results in price rises.

If we take Canterbury for instance there are 149,000 inhabitants and 46,000 student’s means that there is a lot of completion and demand for properties, the rents are high which makes for good investments and therefore demand for properties. It is a small Cathedral City with limited planning which restricts supply resulting in a 60% price rise that we have seen over the past 10 years.

‘Student migration now constitutes the largest category of migration to the UK. The student property market cannot be ignored…it is generating impressive returns; investment rental property in Canterbury has 9% rental income’ says Arran Kerkvliet director of One Touch Property Investment.

 The future looks bright for the student property market because the number of student applications continues to exceed available places. In June 2013, the UCAS figures confirm that the number of applications increased by 3.1% over the previous year.

In fact, the British Council predicts that over 8 Million students will study outside of their country of birth by 2025.

Article Source: http://www.webwire.com/ViewPressRel.asp?aId=180419#.Uj-dWD_tYh8