Finance Matters

Posts Tagged ‘Property News’

Despite record levels of search activity on its website this month, estate agency Rightmove reports that the number of new homes being put up for sale has fallen to the lowest level ever recorded.

More than 44 million property searches were carried out on Rightmove’s site during the first ten days of 2012, a 27% increase compared with the first ten days of 2010.

However difficulties in obtaining a mortgage, the shortage of property on the market and a general lack of consumer confidence is deterring potential sellers from marketing their properties.

Estate agents are, on average, marketing less than one new property per week per branch and there are also fewer properties already on the market than there were in the same period last year.

Miles Shipside, director of Rightmove, said: “The market is stuck in a low transaction volume pit that will be hard to escape from without the mortgage funding to satisfy what appears to be strong pent-up demand.”

Rightmove suggests that first-time buyers with good deposits will fare best in the current market, along with house-owners with enough equity to trade up and people selling properties with a unique selling point.

The ‘losers’ in the current market will be people living in rented accommodation and sellers who are unwilling or unable to reduce the price of their property.

Recent news suggests that house-builders are benefiting from a resilient market for new-build properties.

Bovis Homes expects profits to rise significantly this year, helped by an increase in forward bookings of more than a third.

Overall completions in 2011 are expected to be up 8 per cent to 2,045 homes.

Galliford Try reported a 59 per cent increase in completed sales to 1,352 in the second half of 2011, compared with the previous year.

Although more new houses were put up for sale in December, transactions were hampered by sellers asking too high a price for their properties, according to the Royal Institution of Chartered Surveyors (RICS).

December saw the number of houses put up for sale increase for the third month in a row, especially in London where new instructions reached their highest level since January 2005.

There was also a slight increase in new buyer inquiries but in view of the unrealistically high prices, surveyors’ sales expectations declined in comparison with November and are now flat.

RICS housing spokesman Ian Perry said: “The increasing number of prospective sellers who placed their homes on the market in December is a positive development, as a lack of stock has been a big issue in some parts of the country.

“But with sales expectations remaining flat, it is important that vendors are realistic in their pricing if they wish the sale to go through in good time.”

The recent fall in property prices continued in December, but it slowed to its lowest level since June 2010.

London was the only area where property prices increased.

A lack of mortgage finance is still holding back the market, with many prospective first time buyers unable to raise the high deposits needed to take their first step on the property ladder.

However, house-builder Persimmon reported a more positive outlook for the first-time buyer market.

The company said it expects its 2011 profits to rise by half and the improvement is expected to continue into 2012, helped by an increase in first time buyer interest.

“Whilst the general economic backdrop to the U.K. housing market remains challenging, we have experienced encouraging levels of visitors, resilient sales reservations, low cancellation rates and stable prices,” Persimmon said in the statement.

Mortgage lender the Halifax claims that house prices fell by 1.3 per cent last year to an average of £160,063, their lowest level since July 2009.

According to the Halifax House Price Index, house prices fell 0.9 per cent in December, compared with the previous month.

Although prices rose in the third quarter of 2010, they fell by 0.1 per cent in the fourth quarter, offsetting the earlier quarter’s increase.

The bank expects prices to be stable throughout 2012 unless the economy falls into another recession.

The report contradicts earlier figures from Nationwide, which suggested that house prices rose by 1 per cent in 2011.

Property prices have plummeted since the onset of the credit crunch, with banks and building societies exercising extreme caution over lending, making mortgages very difficult to obtain, especially for first-time buyers.

Recent research by property valuation website Zoopla suggests that some regions have fared significantly better than others when it comes to property prices.

Zoopla recorded an overall fall in UK house prices last year, but an increase of nearly 7 per cent in Scotland, where the average house now costs £164,844.

Zoopla’s research suggests the average house price in Britain is now £221,331, significantly higher than the Halifax’s figure of £160,063.

According to Zoopla the average price in England fell 0.75 per cent in 2011, to £228,926, whilst the average price in Wales fell 0.1 per cent to £153,826, compared with 2010.

Zoopla also reported a widening of the north/south divide in England, with house prices rising in London and the south-east, but falling in the north.

It suggests the average house price in London, where demand for property is high, increased 2.3 per cent last year to £416,890, while prices fell 5.8 per cent in north-east England to £156,659.

LSL Property Services, which includes Your Move and Reeds Rains, announced a 0.4 per cent drop in rent for a ‘typical’ property to £717 in November.

Rents have been rising throughout the year, driven by increased demand from people unable to afford to buy a propert and November’s decline marked the first fall in rent for 10 months.

However, although this represents a fall compared with the previous month, it is still 3.5 per cent higher than a year earlier and rents are expected to start rising again in the New Year.

LSL recorded significant regional variations in November, with rents falling in some regions, particularly the East Midlands where they were 2.2 per cent lower, but continuing to increase in Wales; Yorkshire and the Humber; the West Midlands; and London.

LSL director David Newnes said: “Landlords are looking to avoid having properties vacant over the Christmas period, and can be less aggressive with pricing as tenant activity slows in the run-up to the New Year.”

LSL also announced a reduction in the number of tenants in arrears with their rents.

This was attributed to ‘a changed tenant mix’ with an increasing number of tenants only renting because they are unable to afford a deposit on a house.

Yesterday zoopla.co.uk revealed that it is now cheaper to buy a home than to rent one in 47 out of 50 of the UK’s largest towns.

Zoopla also highlighted soaring demand for rental properties from people who are unable to raise the deposit needed to buy their first property.

Combined with low interest rates, this has made renting a home around 15 per cent more expensive than owning one.

In comparison, at the end of 2010 it was 10 per cent more expensive to rent a property than to buy one in 40 out of 50 of the largest towns.

Although the demand for property increased in November, the ongoing economic downturn is holding back housing activity according to the latest report from the Royal Institution of Chartered Surveyors (Rics)

Rics’ UK Housing Market survey for the three months to the end of November showed a small improvement in both demand from buyers and property sales during the month.

Seven per cent more of the surveyors who took part in the survey reported an increase in new buyer enquiries rather than a fall, in November.

The average number of sales recorded by each surveyor branch increased from 15 in October to 15.4 in November and the majority of surveyors expect sales to continue to increase in the coming months.

For the year as a whole, the housing market has been subdued and the survey found that a growing proportion of surveyors consider economic uncertainty the main reason for this, even more so than difficulties in obtaining a mortgage and fears that house prices may fall.

The survey showed ongoing variation in house prices across the regions and a separate report from Rics suggests that prices will keep rising in London but will either fall or remain steady in other parts of the UK.

Rics’ housing spokesperson Alan Collett said: “It is encouraging that buyer interest has edged upwards in the face of the endless diet of negative news from Europe and the turmoil in financial markets.

“However, a meaningful recovery still seems some way off,” he added.

The latest report from the Halifax also suggested that the weak economy is holding back the housing market.

The bank expects the economic downturn and high unemployment levels to hold down house prices throughout next year although, in line with the Rics report, it expects prices to be stronger in the south east and London.