Property news roundup
Relentlessly rising London property prices tend to skew most roundups of home values around the UK so it was interesting to see in Rightmove’s latest update that new sellers in the capital were reducing asking prices by 0.5% (-£2,663) last month and that the annual rate of increase had dropped from 9% in March to 6.2% this month. New seller numbers are also down, by 4%, this April compared with last year.
Miles Shipside, Rightmove director and housing market analyst comments: “From the perspective of both the weather and property price rises, spring appears to have been put on hold in the capital. The traditional spring-time boost to prices has failed to materialise in April, though with a track record of heady rises over the last 12 months it is perhaps not surprising that London is pausing for breath.”
Rise in confidence
Sentiment Indexes – what people think about the property market rather than necessarily what is actually happening – are perhaps of mixed value but it’s still worth getting a range of opinions. The latest Knight Frank/Markit House index for April suggests that householders feel that their property’s value has risen over the last month (for the first time in nearly three years) and that it will continue to rise in 2013. The biggest rise in confidence was in the North East.
Gráinne Gilmore, head of UK residential research at Knight Frank, said: “April’s sentiment survey suggests that the multi-billion pound “Help to Buy” mortgage scheme has injected a much-needed dose of confidence into the housing market, especially among young people. The Help to Buy scheme is designed to free up the mortgage market, and this is reflected in the surge in optimism over house prices seen among the generation of aspiring homeowners, aged between 25 and 34.”
Alternative finance update
A followup to our piece last week about buy-to-let investors making record use of alternative finance. Bridging lender West One Loans asked 350 mortgage brokers for the Independent property blog whether they thought bridging loans were a good way to get stalled developments off the ground, to which 91% said yes and 9% no. We also asked them if they thought alternative finance in general: 5% thought that the rise of alternative finance is nothing but a symptom of recession; 59% that in the current economic recovery, developing new forms of finance can play a role; and 36% that in 20 years, alternative products will be mainstream since High-street finance is in long-term decline.
UK rents rise four times quicker than tenant income
The March 2013 HomeLet Rental Index shows the average cost of renting a home in the UK rose by 3.3% during the first three months of 2013 to £776 per month. In contrast, the average amount a tenant earns every year rose by 0.8% over the same period to £27,300.] Andy Richards, HomeLet’s Business Development Director, said: “Although rents haven’t increased at such a high rate in the first quarters of 2011 and 2012, tenants appear to have less disposable income as their salary has only increased by a minimal amount. With less money to save for a mortgage, this could increase tenancy lengths as tenants may not have the funds to purchase their own home – which may then decrease the number of available rental properties.”
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