Finance Matters

Posts Tagged ‘Rics’

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.

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.

Difficulty in securing mortgage finance and a slump in house sales is bumping up demand in the market for rented accommodation, but a new report warns that lettings agents’ fees are also soaring.

Tenants may have to pay £2,000 upfront to move house according to independent thinktank the Resolution Foundation.

As well as a deposit and rent in advance, a range of other fees are being charged including administration, deposit administration, credit reference, check in and check out, and tenancy renewal fees.

These fees are often not advertised in advance, leaving tenants having to pay significantly more than they anticipated.

Prospective tenants in London are particularly badly-affected by high fees and in its ‘Renting In The Dark’ report, Resolution Foundation suggests that total upfront costs to rent a one-bed property in London could amount to nearly £2,200.

In contrast, the fees to rent a similar property in Gloucester would be around £1,100.

The Resolution Foundation is calling for the private rental market to be more tightly regulated, bringing it up to the same standard as estate agents.

Vidhya Alakeson, the foundation’s director of research, said: “We need more transparency so tenants at least know what fees they are facing and to help create a more competitive market”.

The foundation also wants lettings agents to be required to sign up to an ombudsman service in order to protect tenants.

Christopher Hamer, The Property Ombudsman, said: “The Government does not see regulation of the sector as a priority and I, therefore, welcome the recommendation of this report that all letting agents should be required to be registered with an ombudsman scheme so that, at least, landlords or tenants can gain redress where they have been disadvantaged by an agent.”

According to the latest residential lettings survey from the Royal Institution of Chartered Surveyors (Rics), rents rose for the seventh consecutive quarter in the three months to October, with rents in London increasing at the fastest pace.

The Royal Institution of Chartered Surveyors (Rics) has today reported that the UK housing market remained weak in August with house prices falling further.

According to the Institution, homeowners remain reluctant to put their properties up for sale, while buyers continue to struggle to secure a mortgage and remain uncertain about the economic climate.

The Rics report said 23% of surveyors reported house prices fell rather than rose – this reading has been in negative territory for more than a year.

Furthermore, the Rics said the number of completed home sales fell to an average of 14 in the three months to August – the lowest level for over two years.

Commenting on the survey, Alan Collett of the Royal Institution of Chartered Surveyors said: “The risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers, even where mortgage finance is available.”

Meanwhile, surveyors remain negative about the direction of future house prices with 23% more surveyors expecting prices to fall rather than gain over the next quarter.

New buyer enquiries, which signal buyer demand, declined in August with 3% more surveyors reporting a fall than a rise, while new instructions moved from a net balance of -8% to 0%.

Yesterday, the Council of Mortgage Lenders (CML) said first-time buyers have to put down an average deposit of 20% in order to secure a mortgage.

With house prices edging higher for the year to date, the average new mortgage has gone back up to £120,000, the CML said, meaning affordability remains a major issue for first-time buyers.

However, the Council did reveal that the number of loans for house purchase rose in July.

According to the Council, there were 48,400 loans advanced for house purchase in the month – up by 1,000 from June’s figure but almost 7,000 lower when compared with July 2010.

The Council of Mortgage Lenders (CML) has reported the number of loans for house purchase rose in July.

According to the Council, there were 48,400 loans advanced for house purchase in the month – up by 1,000 from June’s figure but almost 7,000 lower when compared with July 2010.

Commenting on today’s figures, Paul Smee, director-general of the CML, said: “August saw global financial turmoil and unrest closer to home and recent Bank of England approvals figures do not necessarily suggest a continuing upturn in lending in coming months.”

Meanwhile, of the 48,400 loans, 18,200 were provided to first-time buyers – a fall of 1,300 lower when compared to the same month a year ago.

First-time buyers have to put down an average deposit of 20% in order to secure a mortgage, according to the Council.

With house prices edging higher for the year to date, the average new mortgage has gone back up to £120,000, the CML said, meaning affordability remains a major issue for first-time buyers.

Meanwhile, remortgaging also edged higher in July, with 31,500 loans worth £4 billion – up 1% on June’s figure.

Remortgaging has remained subdued during the historically low interest rate environment but soaring inflation over the last few months has led to speculation that interest rates will be lifted.

The British Bankers’ Association (BBA) recently announced house purchase approvals came in at 33,417 for July, activity having gathered pace since June (32,123) and exceeded the previous six-month average (30,695).

However, while the CML said the UK mortgage market is holding steady, many still believe that activity and mortgage lending is expected to remain subdued throughout the remainder of the year as a result of uncertainty surrounding the economy and rising unemployment.

In other news today, the Royal Institution of Chartered Surveyors (Rics) said just 14 homes were sold per estate agent in the three months to August – the lowest level for over two years.

Furthermore, more surveyors reported price falls than price rises in August, the Rics said.