Tag: House Prices in the UK

Posted on

Government urged to consider changes to NPPF or risk missing housebuilding target

Government urged to consider changes to NPPF or risk missing housebuilding target

Proposed reforms to the National Policy Planning Framework and other changes to the planning system in response to a Ministry of Housing, Communities and Local Government consultation on this issue has gained support from Propertymark. 

The professional body backs implementing changes to the planning system and is keen to see a system which represents the needs of residents and supports the building of necessary houses to keep pace with demand.  

Propertymark believes it is vital the ministry initiate changes which will assist the UK government with their aim of constructing near 2 million new homes during this parliamentary term.  

Lat month, Propertymark led a roundtable with members of their sales division to hear opinions about what is working with the planning system and what needs improving.  

Responses highlighted a lack of local knowledge and consistency among local council planning officers and stated that planning requirements should be tailored to each area. Properties, therefore, need to be built for the specific needs of local neighbourhoods, as one area may need more housing for older residents than others, for example.  

Members stressed that construction remains expensive, so councils would either have to build more affordable homes themselves or subsidise developers to meet precise demand.  

To make matters more difficult, members said that there is a lack of incentives for landowners to sell to develop.  

They also warned that without a long-term housing strategy from successive governments, there can be no way for politicians to ensure that there are housing options across all tenures to meet the needs of local communities on an individual basis.  

There was also strong feeling that new homes should also be built on brownfield sites first, be more energy efficient, and not compromise any natural landscapes. 

Commenting on members’ feedback, Rose Forman, policy and campaigns officer at Propertymark, said: “Focusing on planning reform is an important step for the UK government to deliver the magnitude of new homes it has promised. Propertymark consulted with our members who said there is a greater need for planning requirements to be more area specific, and for greater local knowledge and consistency in the decisions made by local authority planning officers. 

“Our members want to see homes built for the demographics who will need them and in the precise locations for which there is demand. The type and cost of construction must be taken into consideration and the UK Government must have a long-term strategy which future-proofs our towns, villages and cities for generations to come. New homes must be energy efficient and built around robust supporting infrastructure, such as upgrades to road and public transport setups, as well as wide ranging health and education provision.”  

See below: Knight Frank graph from recent Telegraph story questioning Labour’s 1.5m housing target shows 0% believe they will and 2% of respondents believed they will exceed the target.

Knight Frank graph from recent Telegraph story questioning Labour’s 1.5m housing target shows 0% believe they will and 2% of respondents believed they will exceed the target.

Original Post: https://propertyindustryeye.com

Posted on

Capital gains tax speculation leads to ‘significant increase in market appraisal’

Rachel Reeves

There are growing that potential tax changes in the Autumn Budget next month may curb demand and increase downwards pressure on prices in higher-value markets

Rachel Reeves has not yet delivered her Budget but it is already having repercussions in the property market.

The government has said private schools will be charged VAT from January, but other announcements on 30 October may focus on capital gains tax (CGT), non doms, pension tax relief and inheritance tax.

By Tom Bill, head of UK residential research at Knight Frank, commented: “While there was a 34% increase in the number of sales in London in July and August compared to the five-year average, there was a 16% decline above £2 million, Knight Frank data shows.

“When you consider that £2 million-plus sales accounted for 22% of the £11.7 billion raised in stamp duty last year, it highlights the risk of tax rises having unintended consequences.

“The other way in which the Budget is impacting the property market relates to CGT and speculation that it may increase from its current level of 24%.

“Supply looks set to rise this autumn, which will be driven in part by owners attempting to sell before any changes are introduced.”

In an indication that more sellers are planning to list their property, the number of market valuation appraisals in August was 25% above the five-year average in London, Knight Frank data shows. Any future rise in supply would increase downwards pressure on prices.

“We are seeing a significant increase in market appraisals and listings from clients who have residential lettings portfolios,” said Andrew Groocock, chief operating officer of Knight Frank’s estate agency business.

“There is a feeling among many owners that they are better off bringing their properties to the market now and perhaps accepting a price that is 5%-10% lower, rather than running the risk of a CGT increase after the Budget.”

Average prices in prime central London (PCL) continued to edge down on a monthly basis in August. A fall of 0.2% took the annual change to -2.3%, which was the 16th month in a row the annual change was negative.

In fact, annual price growth in PCL has not been above 3% since March 2015 and prices remain 18% down on their last peak in August 2015.

Prices in prime outer London were flat in the 12 months to August as lower-value, needs-driven property markets perform more strongly. By comparison, prices in POL are 8% below their last peak in July 2016.

As far as lettings is concerned, rental value growth continued its return to earth in August as supply climbed and demand fell. Overall, rents rose 2.1% in prime central London (PCL) and 2.2% in prime outer London (POL).

In both cases, it was the lowest figure since the summer of 2021 when the long-let market was flooded with short-let properties during the pandemic. Supply subsequently fell sharply, in part thanks to landlords selling up during a stamp duty holiday, which meant rents were growing by more than 20% in the early months of 2022 as demand far exceeded supply.

The chart below shows how the market has rebalanced and put downwards pressure on rents.

The number of new listings in August was 8% below the five-year average, Rightmove data shows. That compares to much steeper declines in recent years.

Meanwhile, the number of new prospective tenants was 11% below the five-year average in August, partly due to a decline in overseas students applying to study in the UK.

The number of students accepted from China, which accounted for the largest proportion of overseas students in 2021/22, dropped 6% to 10,950 this year, according to UCAS data.

UK universities may have reached “peak China”, according to comments last year from the head of the Universities and Colleges Admissions Service, for reasons that include visa and tax changes as well as the fact rents have risen in recent years.

“International students coming to the UK are tending to focus on London more closely than other cities” said John Humphris, head of Relocation & Corporate services at Knight Frank. “With fluctuations in applications from China, but notable increases from Turkey and Canada, London remains an evergreen destination in spite of competition from other global education hubs, notably Australia”

Average rents in PCL are 34% higher than they were before the pandemic in February 2020, while the equivalent rise in POL is 29%.

While rents are normalising, there is a risk that upwards price pressure may intensify as more landlords sell due to possible legislative changes.

First, there is speculation that capital gains tax may increase from its current level of 24% in next month’s Budget.

In an indication that more sellers are planning to list their property ahead of possible changes, the number of market valuation appraisals for sale in August was 25% above the five-year average in London, Knight Frank data shows. Conversely, any future rise in supply would increase downwards pressure on prices.

“We are seeing a significant increase in market appraisals and listings from clients who have residential lettings portfolios,” said Andrew Groocock, Chief Operating Officer of Knight Frank’s estate agency business.

“There is a feeling among many owners that they are better off bringing their properties to the market now and perhaps accepting a price that is 5%-10% lower, rather than running the risk of a CGT increase after the Budget.”

Second, there is uncertainty over the revived Renter’s Reform Bill, as previously explored. Measures could include making it harder to evict tenants and tighter rules around the green credentials of lettings properties, according to recent press reports.

Original Post from https://propertyindustryeye.com

Posted on

Understanding Common House Prices in the UK

Understanding Common House Prices in the UK

Factors Influencing House Prices in the UK

Before delving into specific prices, it’s important to understand the key factors that influence house prices across the UK:

  • Location: The old adage “location, location, location” holds true. Properties in London and the South East typically command higher prices than those in other parts of the UK. Proximity to good schools, transport links, and local amenities also play a significant role in determining prices.
  • Property Type: Detached houses, semi-detached houses, terraced houses, and flats all have different price points. Detached houses are generally the most expensive, while flats are often more affordable, particularly in urban areas.
  • Condition of the Property: Newly built homes or those recently renovated tend to be more expensive than older, less well-maintained properties. The energy efficiency of a home can also impact its price, especially with rising energy costs.
  • Economic Factors: Interest rates, inflation, and the broader economic environment influence house prices. When the economy is strong, house prices tend to rise as demand increases. Conversely, economic downturns can lead to stagnation or even a drop in prices.
  • Supply and Demand: The housing market is highly sensitive to changes in supply and demand. In areas where there is a shortage of properties, prices can rise sharply. Conversely, in areas with a surplus of homes, prices may remain static or fall.

Average House Prices in the UK

As of the latest data, the average house price in the UK is approximately £290,000. However, this figure masks significant regional variations. Below is a breakdown of average prices in different parts of the UK:

  • London: London remains the most expensive place to buy a property in the UK. The average house price in London is around £530,000. However, prices vary significantly across the capital. For example, in more affordable areas like Barking and Dagenham, average prices are around £340,000, while in more affluent areas like Kensington and Chelsea, they can exceed £1.3 million. Homesearch Properties offers specialised services for those looking to navigate this complex market, helping buyers find properties that match their budget and lifestyle.
  • South East England: The South East, which includes counties like Surrey, Hampshire, and Kent, is the second most expensive region after London, with average prices around £370,000. Commuter towns such as Guildford, Reading, and Sevenoaks command particularly high prices due to their proximity to London.
  • East of England: This region, encompassing areas like Cambridge, Essex, and Norfolk, has seen significant price growth in recent years, with average house prices now around £340,000. Cambridge, with its thriving tech industry and prestigious university, is one of the most expensive cities in the region.
  • South West England: Known for its picturesque landscapes and coastal towns, the South West has an average house price of around £320,000. Areas like Bath, Bristol, and the Cotswolds are particularly sought after, with prices often exceeding the regional average.
  • Midlands: The East Midlands and West Midlands offer more affordable options, with average house prices around £240,000. Cities like Birmingham, Nottingham, and Leicester have seen price growth due to regeneration projects and improved transport links, making them attractive options for both buyers and investors.
  • North of England: The North East, North West, and Yorkshire and the Humber regions offer some of the most affordable housing in the UK. Average prices in these areas range from £160,000 to £220,000. Cities like Manchester and Leeds have experienced significant price increases due to strong economic growth, while areas like Sunderland and Hull remain more affordable.
  • Scotland: The average house price in Scotland is around £190,000. Edinburgh and Glasgow are the most expensive cities, with prices in Edinburgh averaging £330,000. Rural areas and smaller towns generally offer more affordable options.
  • Wales: Wales offers relatively affordable housing, with average prices around £220,000. Cardiff, the capital, has the highest prices in the region, averaging around £280,000, while more rural areas offer much lower prices.
  • Northern Ireland: Northern Ireland has the lowest average house prices in the UK, around £170,000. Belfast, the capital, has the highest prices in the region, with averages around £230,000.

Price Trends and Market Outlook

The UK housing market has experienced significant fluctuations in recent years, influenced by factors such as Brexit, the COVID-19 pandemic, and changes in government policy. However, the market has shown resilience, with prices continuing to rise in many areas.

  • Post-Pandemic Recovery: Following the initial shock of the COVID-19 pandemic, the housing market rebounded strongly, driven by pent-up demand, low-interest rates, and government incentives like the Stamp Duty holiday. While the rate of price growth has slowed in 2024, many regions continue to see modest increases.
  • London’s Cooling Market: London has seen slower price growth compared to other regions, with some areas even experiencing slight declines. This is partly due to the high cost of living and changes in buyer preferences, with more people seeking larger homes with outdoor space, often outside of the capital. However, prime central London properties continue to attract high-net-worth buyers, particularly from overseas. Homesearch Properties  London is well-positioned to assist buyers navigating this complex market, offering tailored services to find properties that meet specific needs and budgets.
  • Regional Growth: Regions such as the North West, Midlands, and South West have seen some of the highest price growth in recent years. This trend is expected to continue, driven by economic development, infrastructure projects, and the increasing desirability of cities like Manchester, Birmingham, and Bristol.
  • Affordability Challenges: Despite the overall price growth, affordability remains a significant challenge, particularly for first-time buyers. High prices, coupled with the need for substantial deposits and the ongoing cost-of-living crisis, have made it increasingly difficult for many to get onto the property ladder. However, government schemes like Help to Buy and Shared Ownership continue to provide some assistance.

The Role of Homesearch Properties

In such a complex and competitive market, having expert guidance is invaluable. Homesearch and Homesearch Properties offer a range of services designed to help buyers and sellers navigate the UK housing market with confidence.

  • Property Search: Whether you’re looking for a family home, an investment property, or your first step onto the property ladder, Homesearch provides comprehensive property search services. By leveraging their extensive network and market knowledge, they can help you find the perfect property at the right price.
  • Market Analysis: Understanding market trends is crucial for making informed decisions. Homesearch offers detailed market analysis, providing insights into price trends, regional variations, and future market predictions. This information can help you make strategic decisions, whether you’re buying, selling, or investing.
  • Tailored Services: Homesearch Properties offers tailored services for those looking to buy or sell in the capital. From sourcing prime properties in sought-after areas to negotiating the best deals, their expertise in the Homesearch London market is unparalleled.
  • Investment Advice: For those looking to invest in the UK property market, Homesearch offers specialised advice. They can help you identify high-growth areas, understand rental yields, and navigate the complexities of buy-to-let investments.
  • Personalised Support: Every client has unique needs and circumstances. Homesearch offers personalised support, ensuring that you receive the advice and assistance that is right for you. Whether you’re a first-time buyer or an experienced investor, their team is there to guide you every step of the way.

 Making the Right Move in the UK Housing Market

The UK housing market offers a wealth of opportunities, but navigating it requires careful consideration and expert guidance. With average house prices varying significantly across regions and property types, understanding the market is key to making informed decisions.

Whether you’re drawn to the vibrant and fast-paced market of London or the more affordable and rapidly growing regions like the North West and Midlands,  Homesearch Properties are there to help you every step of the way. Their deep market knowledge, personalised services, and commitment to client satisfaction make them invaluable partners in your property journey.

As you embark on this journey, remember that the right property is out there, waiting to be found. With the expertise of Homesearch at your side, you’ll be well-equipped to find a home that meets your needs, fits your budget, and secures your future. Whether you’re buying, selling, or investing, making the right move in the UK housing market starts with understanding your options and having the right team to guide you.