Reeds Rains Property Blog

Property News from Reeds Rains

House Price Index - April 2015

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House price growth in South East and East Anglia overtakes London

  • For the first time in four and a half years, London no longer leads the regions – beaten by South East and East Anglia, which are experiencing stronger year-on-year price rises than the capital
  • Across England and Wales, house price growth picks up on a monthly basis in April, climbing 0.2%
  • But the annual rate of property price growth has halved since last summer, down to 5.3% in April
  • Q1 sales down 10% before the General Election, but new certainty likely to reset the balance

Adrian Gill, director of Reeds Rains estate agents, comments: “House price growth has jolted awake again in April, climbing 0.2% (£600) in the past month, following what was a more lethargic period for property values. This has lifted the average house price across England and Wales to a new high this year, at £275,961. Annual price growth is still cooling, but mainly due to some recent negative monthly price rises. The direction of travel is clear and accelerating – and most importantly, momentum is picking up where it was lacking before.

“By contrast, annual price rises in London have fallen sharply. As a result, the capital has been knocked off its perch by the South East and East Anglia, who have now edged ahead of London with the strongest year-on-year increase in property values of all regions across the country, at 7.1% and 6.9% respectively. In contrast, annual growth in London has shrunk from 9.0% in February to just 6.8% in March 2015.

“This is the first time for nearly four and a half years that London has not been leading the pack in terms of regional house price growth, as higher stamp duty rates take some of the shine off high-end properties in prime central areas. In the City of Westminster, where the average property is now worth £1,382,965, prices dropped 5.2% during the month of March, as pre-election speculation of a Mansion Tax put a dampener on enthusiasm for the most exclusive London homes. London also saw the sharpest decline in completed home sales between Q1 2015 and the same period a year ago, falling 16.5%.

“Election uncertainty has now vanished, so arguably London’s unique property market could see a fresh boost. But this mansion tax effect is one for the very top of the market. Away from the prime hotspots, affordability is still the biggest factor holding back further price rises – owning a London home is still more of a dream than even an aspiration for millions.

“While property values in the capital have dipped 0.6% month-on-month, prices have still risen steadily in other areas – reaching new records in the South East, East Anglia, and East and West Midlands in March. The head start that the housing market in London has traditionally exercised over the rest of the UK is retreating, and more of an even playing field is emerging instead. Average property values also hit new highs in Greater Manchester and Birmingham, as demand in other large cities continues to thrive away from the south-eastern extremities of the UK.

“Across the wider market, home sale completions made healthy headway with a 5% uplift in the month to April – in face of what was thought to be a looming political impasse. However, there was a slowdown when we look at the first quarter of 2015 as a whole, with Q1 witnessing a 10% year-on-year drop in the number of homes sold. Activity was certainly more restrained in the months running up to the General Election.

“Yet any past gloom only improves the prospects of a rebound in momentum. Now a clear majority government has been established, confidence has returned to the market with abandon, and buyers across the country can seize the golden opportunities on offer. With the election done and dusted, and demand certainly bolstered by extensions to schemes like Right to Buy, the only major snag in the fabric of the housing market remains the fundamental flaw of a lack of new homes.”

Full details can be found here

 

Mortgage Monitor - May 2015

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Higher LTV lending supporting the wider mortgage market in April

  • April sees over 10,000 house purchase approvals to higher LTV borrowers, up 7.3% year-on-year
  • Lending to borrowers with small deposits represents 16.3% of house purchase approvals in April, up 1.4 percentage points from 14.9% a year ago
  • Small deposit borrowing concentrated in Yorkshire and North West – a quarter of all loans in Yorkshire were higher LTV

Loans to borrowers with small deposits saw a year-on-year increase in April, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.

In April there were 10,112 house purchase loan approvals for borrowers with deposits worth 15% or less of their property’s total value – typically first-time buyers.

This is 7.3% more than April last year, when there were 9,422 approvals, and 6.4% more than the 9,508 borrowers seen in March. 

However, the number of house purchase approvals fell year-on-year, suggesting that higher LTV lending is helping to support total mortgage approval figures.

In the total market, there were 1.9% fewer approvals for house purchase loans in April than there were last year: 62,035 loans, down from 63,236 in April 2014.

As a proportion of total approvals, higher LTV lending now stands at 16.3%, compared to 15.5% in March and 14.9% in April last year. These gains come despite a poor start to the year. 

The most recent First Time Buyer Tracker from Reeds Rains found that Q1 2015 was the worst opening quarter for first-time buyers in two years, with just 60,900 transactions recorded. 

Richard Sexton, director of e.surv chartered surveyors, comments: “Borrowers with smaller deposits are making a welcome comeback, thanks to increased accessibility in lending, improving wages and highly attractive mortgage rates.

This revival of the bottom of the market is becoming ever more crucial – and this showed in the recent election struggle, with all the main parties placing helping first-time-buyers as one of the crucial components of their campaigns.

“However, before concerns are raised regarding the increase in higher LTV lending, it’s worth putting these numbers in context. The number of higher LTV house purchase approvals is still only a quarter of what it was in 2007. This is a healthy upturn in higher LTV lending, not a symptom of any malady in the mortgage market.

“David Cameron has outlined a plan to provide 200,000 cut-price starter homes, alongside a commitment to unlocking brownfield land for building new homes. This is the kind of clear planning the property market needs – it is to be hoped that the proposals crystallise into real policies.”

First Time Buyer Tracker - April 2015

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Worst quarter for first-time buyers in two years

  • First-time buyer (FTB) transactions drop to 60,900 in the first quarter – lowest since Q1 2013 (51,000)
  • March 2015 sees 23,300 first-time buyers, up since winter drop-off, but still 3.7% lower than March 2014
  • Comes despite FTBs paying the lowest mortgage rates in over four years – averaging 3.64% in March
  • Average first-time deposit now under £25,000, as LTVs reach 83.5% – the second-highest in four years

The first quarter of 2015 has seen the lowest number of first-time buyers complete property transactions for two years, according to the latest First Time Buyer Tracker from Reeds Rains.

The total number of first-time buyer (FTB) transactions for the first quarter of 2015 stood at 60,900, a sharp fall from 79,900 in 2014 Q4 and the lowest quarterly total since Q1 2013 – when 51,000 new buyers joined the property ladder.

In the latest figures for March 2015, the monthly total for UK first-time buyer transactions now stands at 23,300. While higher than the often quiet months of January and February (up 24.6% on February’s total) this still represents fewer new buyers than the same month a year ago – down 3.7% since March 2014.

The news comes despite a 3.64% average mortgage rate for first-time buyers in March – the lowest in over five years – and an average loan to value ratio (LTV) for March’s first-time buyers of 83.5%, the highest in a year (since April 2014).

Cheaper mortgage rates have also supported lower monthly mortgage repayments as a proportion of first-time buyers’ income. In March the average FTB dispensed 19.9% of their gross income on repayments against their new mortgage, compared to 20.1% in February and 21.9% of income in March 2014.

Adrian Gill, director of estate agent Reeds Rains, comments: “Cheaper mortgages and a steadier property market should be boosting first-time buyers. Enthusiasm for the idea of homeownership is as strong as ever and it’s a great time to get on the ladder according to these headline fundamentals.  Yet for many thousands of would-be new buyers there is still a very real difficulty in matching their personal finances to a home they can afford.

“Some might also point to election uncertainty and that could be a partial brake.  However, the real bottle-neck is a much more serious and longer-term problem.  First-time buyer numbers have flat-lined for two years because a lack of new homes is catching up with the property market.  It’s not the election itself that matters most – it’s the next five years and the decades after that which will count. Even now, with the extra support of record low mortgage rates and Help to Buy, the property ladder seems to be missing several rungs. Politicians need to get serious about building more homes.”

Full details of the First Time Buyers Tracker can be found here

Cracking Community Spirit

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 Jan Johnson - Halifax branch manager

Branches across Reeds Rains are enjoying Easter by supporting their local primary schools through a very special Easter competition.

Halifax, Morley and Bamber Bridge provided Easter packs for the pupils which included a blank Easter egg template the students were asked to design along with an invitation to valuation flyer for the parents.

The students created their own Easter themed picture for the competition and over the Easter holiday, the artwork is being displayed in the branches. The branches are welcoming parents to see for themselves the work which their kids had done.

Prizes are available where the winner will receive a £25 Smyths Toy Voucher and the runners up an Easter egg. (*)

The competition is part of the Reeds Rains drive to support the local community and create greater links with it.

Cairn Morrison, the Morley branch manager for Reeds Rains says: “The pupils really enjoyed the competition and the Easter egg designs look fabulous. There are so many designs to choose from and picking a winner is difficult. We managed to hold the competition with 3 local primary schools who have been very supportive and we have found this a great way to engage with the local community.

If you would like to find out how Reeds Rains can help you buy or sell your property then visit:

Reeds Rains Halifax, 16-18 Bull Green, Halifax, HX1 5AB
Telephone: 01422 348989 (**) 

Reeds Rains Morley, 88 Queen Street, Morley, Leeds, LS27 9EB
Telephone: 0113 252 0181  (**)

Reeds Rains Baddeley Green, Stoke-On-Trent, ST2 7HA
Telephone: 01782 544133 (**) 


(*) Terms and Conditions - The competition will run between Monday 16th March and Thursday 2nd April 2015 and is open to children between the ages of four and eleven. The 1st prize is a £25 Smyths Toy Voucher. Each of five runners up will receive an Easter egg. To enter, simply use this template to design an Easter egg. Only one entry per child. Winner will be decided by Reeds Rains branch staff. Prizes will be awarded in assembly after the Easter holidays. The promoter is Reeds Rains.

(**) Calls may be recorded for training and/or monitoring purposes. 

First Time Buyer Opinion Barometer - March 2015

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First-time buyers demand housing action as half are forced to consider homes with no natural light

  • First-timers increasingly willing to compromise living space to get on the ladder: 51% say natural light isn’t vital in a first home, 63% would go without a bath, 93% happy without an ensuite bathroom
  • First-time buyers want to clamp down on land banking and make it easier to convert buildings to residential use, while one in ten want to build over high streets and golf courses
  • However, February sees 21,000 first-time buyer completions, up 11% from 19,000 in January

The housing crisis is creating growing anger and desperation among would-be first-time buyers, with over half now willing to forgo natural light in their search for an affordable first property, according to the latest First Time Buyer Opinion Barometer from Reeds Rains.

When asked about the requirements that they consider to be ‘vital’ in a first home, only 49% of first-timers cited natural light as essential. Just 54% said a garden as mandatory, and 55% a car parking space.

With the average price of a first-time buyer home now £143,767 as of February, first-timers are more willing to sacrifice spaces including garages, dining rooms and utility rooms in order to save on costs. 

Just 7% of first-time buyers said an ensuite bathroom was an essential requirement to a first-home; while 14% said a garage was mandatory, and just a third (30%) viewed having a dining room as vital. Staggeringly, 11% of first-time buyers said a kitchen wasn’t vital in a new home.

Adrian Gill, director of estate agent Reeds Rains, comments: “First-time buyers are willing to sacrifice space and comfort in their quest to buy a first home. But this shouldn’t be such an arduous task – these findings should send a warning flare out to our politicians that many first-timers are tripping up along the path to homeownership, despite much improved access to finance. 

“There is only a finite stock of housing on the market, and unfortunately, first-time buyers are the least prepared in the current scramble for property. The lion’s share of new housing policy has been stoking demand, rather than supplementing supply, with the Help to Buy ISA the latest in a host of flagship first-timer policies. But building initiatives remain largely untouched, leaving enormous potential to revise and improve housing policy.

“Of course, there is a flipside. Such strong buyer demand means now is a fantastic time for sellers to put property on the market, with affordable properties likely to be snapped up quickly.”

In their bi-monthly survey, Reeds Rains asked first-time buyers what policies they would accept to encourage more housebuilding. Four in ten first-timers (41%) would accept legislation to prevent land banking – when developers buy a plot of land for development but don’t build on it straight away. And over a third (37%) think it should be easier to convert existing buildings to residential use.

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