| Rent Demand Increases |
31-Aug 10 @ 10.16 AM |
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The lettings market remains buoyant, as increased tenant demand and a shortage of properties pushes rents higher.
26 per cent more chartered surveyors reported a rise in demand for property rather than a fall, which was the second consecutive quarter that lettings demand has risen at a pace above the long run average.
In the latest RICS Residential Lettings Survey tenant demand increased across all regions, but was strongest in London and the East of England. Continued difficulty in securing mortgage finance, worries over a double dip in housing and large deposits required by lenders are leading to higher numbers seeking to rent rather than buy.
As a result, rents increased for the second consecutive quarter, with 27 per cent more surveyors reporting a rise in rents than a fall. Just a year ago the picture was very different, as over supply pushed rents down and 29 per cent more surveyors reported falling not rising rents.
Although interest rates are at a record low - making property a potentially attractive option for investors - difficulty in securing buy-to-let mortgages is contributing to the lack of supply. New supply of property to the market remains low and has now fallen for four consecutive quarters, although at a slightly slower pace. In the run up to July the net balance of surveyors reporting a fall in landlord instructions was -6, in comparison to a net balance of -12 in the previous quarter.
However, existing landlords do not appear to be in any rush to dispose of their property; just 4.1 per cent of landlords said they intended to sell their properties at the end of a tenancy agreement.
Looking ahead, the outlook for rents remains positive. 33 per cent more surveyors expect rents to increase over the next quarter rather than fall. Rents for houses are expected to marginally outperform flats, with the net balances for this forward looking indicator moving to +34 and +31 respectively.
RICS spokesperson James Scott-Lee said:
"Supply of lettings property continued to fall in the three months to July although at the slowest pace in a year which amid rising tenant demand has helped propel rents higher for the second consecutive quarter. Existing landlords keen to expand their portfolio may still be struggling to access the necessary finance despite improved market conditions.
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| House Prices Up |
31-Aug 10 @ 10.08 AM |
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The July data from Land Registry's flagship House Price Index shows an annual price increase of 6.7 per cent which takes the average property value in England and Wales to £166,798.
The monthly change from June to July is an increase of 0.4 per cent.
Nine regions in England and Wales experienced increases in their average property values over the last 12 months. The region with the highest annual price change is London with an increase of 12.1 per cent.
The region with the greatest annual price fall is the North East with a movement of -1.4 per cent. The South West experienced the greatest monthly rise with a movement of 2.2 per cent. Wales experienced the most significant monthly price fall with a movement of -1.1 per cent.
The most up-to-date figures available show that during May 2010, the number of completed house sales in England and Wales rose by eight per cent to 49,412 from 45,814 in May 2009. The number of properties sold in England and Wales for over £1 million increased by 67 per cent between May 2009 and May 2010, from 255 to 426.
Robert Bartlett, Chesterton Humberts’ CEO said
“The Land Registry figures released today reflect sales through May 2010, before the Emergency Budget and prior to the removal of the requirement for HIPs. They reflect an increase in property prices which has now begun to level off largely due to continuing restrictions on bank lending and to some extent concerns over effects of public spending cuts.
“However, continuing low interest rates and the unrelenting shortage of homes in the UK will keep a floor under property prices and while there may be some regional variances resulting in a small drop in values on a localized basis we still believe that prices are likely to be relatively stable for the foreseeable future. We still anticipate that average house values will have grown in 2010 by the 2-3% that we predicted in January.
“The Land Registry index is useful because it gives a detailed breakdown of property prices by local authority and is generally considered to be the most comprehensive index, however it takes place only when the sale is complete, which means the data will lag where the RICS, Halifax, Nationwide and Rightmove indices are.
“Moreover, figures are subject to revision due to the increased number of transactions that are processed after the first estimate of the index is published.
“The Chesterton Humberts/CEBR House Price Poll of Polls has proven to be a very reliable indicator of the current market and it is the most comprehensive index because it takes into account the timeliness, accuracy and coverage of all of the other polls.
“The Land Registry showed a 0.4% increase in house prices in July, the strongest pace of growth since January 2010. The annual change now stands at 6.7% over the year to July. The Chesterton Humberts/CEBR House Price Poll of Polls showed a 0.7% increase in house prices in July, the strongest pace of growth since January 2010 with the annual change now standing at 6.8% over the year to July.”
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