Archives March 2019

First house price fall in England since 2012

House prices are lower in England compared with a year ago – the first annual fall in property values since 2012, according to the Nationwide.

In the first three months of the year, prices in England were down 0.7% from the same period in 2018.

But the building society said that annual house price rises in Northern Ireland, Scotland and Wales meant the UK average was still growing.

The typical home was valued at £213,102, the Nationwide said.

Based on its own lending data, the building society said UK house prices in March were up 0.7% from the same month a year earlier.

Robert Gardner, the building society’s chief economist, said that the number of sales and the number of mortgages approved for house purchases had remained “broadly stable”.

However, he said that consumer surveys had suggested buyers and sellers were taking a more cautious approach. This has come as a result of a lack of Brexit clarity.

Sam Mitchell, chief executive of online estate agents Housesimple, said: “The market would have preferred a decision one way or the other. Instead, we are now in this state of short-term limbo leaving many buyers and sellers unsure what to do.

“Normally, we would expect to see a spike in transaction levels around this time as we enter the traditional spring bounce period, but with the extension to the EU leaving date, the bounce is likely to be a little subdued this year.”

Andrew Montlake, director of mortgage broker Coreco, said: “London is particularly sensitive to ongoing political uncertainty but it is also paying for the astronomic house price growth of five or six years ago.”


This was seen in figures comparing house prices in the first three months of this year with the same quarter in 2017.

On this measure, house prices in London had fallen by 3.8% – the biggest fall for a decade, the Nationwide said. However, properties in the capital remained the most expensive in the UK at an average of £455,594.

Prices in the commuter belt around London and the South East of England also fell compared with a year ago, driving the drop in England as a whole.

Over the same period, property values in Wales increased by 0.9%, rose by 2.4% in Scotland, and went up by 3.3% in Northern Ireland.

However, prices in Northern Ireland are still more than 35% below their high in 2007, the Nationwide said.

 

SmartInvest UK


Space for 1 million new homes on derelict ‘brownfield’ land, analysis reveals

‘Building on brownfield land presents a fantastic opportunity to simultaneously remove local eyesores and breathe new life into areas crying out for regeneration.’

More than a million new homes could be built on land currently sitting unused across England, according to new analysis.

Brownfield land”, which has previously been built on but is now derelict, could be transformed into vast swathes of housing within the next few years.

The (CPRE) said such measures would regenerate run-down areas without destroying precious stretches of countryside to meet the UK’s housing needs.

As it stands, the government is committed to building 300,000 new homes each year in England to meet demand, and there have been warnings of severe backlogs.

Meanwhile, local groups and green campaigners are concerned about the impact projects such as the massive Oxford-Cambridge development will have on nature and communities. Analysis performed by CPRE using data from Brownfield Land Registers identified over 18,000 sites on which new houses could be built with minimal impact on the environment.

It said two-thirds of this land was ready to be transformed and could begin contributing to the country’s unmet housing needs within just five years.

However, the campaigners said they were concerned with current definitions of “previously developed land” were not comprehensive enough, meaning there could still be a large number of sites being overlooked.

“Building on brownfield land presents a fantastic opportunity to simultaneously remove local eyesores and breathe new life into areas crying out for regeneration,” said Rebecca Pullinger, planning campaigner at the CPRE.

“Councils have worked hard to identify space suitable for more than 1 million new homes.

“But until we have a brownfield-first approach to development, and all types of previously developed land are considered, a large number of sites that could be transformed into desperately needed new homes will continue to be overlooked.”

Research by the group in Enfield identified space for 37,000 homes on sites they identified as a brownfield, 17 times more than official estimates.

CPRE suggested areas including supermarket carparks and “poorly-used industrial or commercial sites” could be regenerated into housing areas with few repercussions.

“The government, local councils and housebuilders, must work hard to bring these sites forward for development and get building,” said Ms Pullinger.

Local Government Association housing spokesperson Martin Tett said: “Councils are committed to bringing forward appropriate sites and ensuring homes are built where they are needed, are affordable, of high quality and supported by adequate infrastructure and services.

“This timely report highlights the availability of sites across the country to deliver enough homes and infrastructure to begin to address the national housing shortage we face.”

Mr Tett said the government must provide councils with the power to speed up developments and set planning fees locally to ensure they are adequately resourced.

Responding to the new analysis, housing minister Kit Malthouse said: “This government is committed to building the homes our country needs while still leaving the environment in a better state than we found it.

“We’re encouraging planners to prioritise building on brownfield land and working with local authorities to ensure sensible decisions are made on where homes get built.”

 


Spring is in the air for the buy to let market in the UK

Spring is definitely in the air for the buy to let market in the UK with some new found optimism after a long period of backlash against Government tax and regulatory changes.
It seems as if many landlords are embracing a business like attitude and getting on with making their portfolios work for them. Indeed, London, Manchester and Liverpool are the most popular cities for buy to let investment in the UK going into 2019, according to new research.
And most landlords are planning to increase their portfolio, the survey commissioned by Experience Invest has found while Nottingham, Leeds, Birmingham and Newcastle are also regarded as good bets for buy to let going forward.
When looking at the types of property that investors were considering investing in this year, the survey also found that houses were top at 67%, followed by flats at 54%, new build residential for 39% and 24% student accommodation.
Overall, just 11% of those surveyed said that they plan to reduce their portfolios in 2019. Some 39% are planning on increasing the size of their portfolio over the coming 12 months, while 35% have no intention of buying or selling any property in 2019 and 15% will be selling some assets to then reinvest in new properties.
It comes at a time when rents are steady. Official figures from the Office for National Statistics (ONS) show that in the private rented sector rents increased by 1.1% in the 12 months to February 2019, up from 1% in January.
In England and Wales rents were up 1.1%, while in Scotland they increased by 0.7% and in London by 0.2%. But, overall, rental growth has generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period.
Pressure will continue on landlords to raise rents in 2019, according to Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA). She believes that after filing their 2017/2018 tax returns at the end of January, landlords will be more aware that ongoing changes to mortgage interest tax relief are increasing the financial challenges ahead.
It may mean becoming more business-like or adopting new models. The industry is aware that this could mean offering longer tenancies or even shorter tenancies. In this respect a new study has found that short term rents could be worth considering.
The research from short term letting agency Portico Host found that short term let properties in Walton, Liverpool, are achieving the best yields in the North West at 30.68%, compared to landlords of longer term rentals, who can achieve a yield of 7.88%. The Airbnb yield figure is based on an occupancy rate of 60% of the year, which is typical for these types of properties due to seasonal demand.
While this is not the answer for every landlord it is a model that they might want to look at as they seek to improve and grow their business. They should also be buoyed by research showing that buy to let is still a good investment option beating investing in gold, cash and fine art in the last decade in terms of returns.
Investing in the FTSE 100 would have brought the biggest return when considering the annual capital gain and the percentage yield with an increase of 119%, whilst the value of classic cars is up 94% during the same time period.
However, for those that aren’t professional investors a buy to let property is a very good option, according to the research from lettings inventory and property compliance specialists VeriSmart.
The report says that when considering the annual gain in house prices along with the increase in rental yields, an investment in the sector a decade ago would have brought a 92% return today. This is much higher than the 60% return that investing in gold would have brought and a world away from the 16% increase in cash or the 4% drop in fine art.
It also says that the growth in the property market has been by far the most reliable option with the FTSE 100, gold or cash providing a far more volatile option that is also open to a larger degree of impact from political and economic factors as well as influence from other foreign countries.