2016 Q3 PROPERTY MARKET REPORT

Transcription

1 2016 Q3 PROPERTY MARKET REPORT

2 OVERVIEW After a tumultuous few months following the Brexit vote on 23 June, the UK economy seems to have rebounded and fallen into a more stable economic environment. Supply and demand levels in the UK property market remained broadly unchanged in Q3, showing that both buyers and sellers are still active. According to the latest Bank of England figures, total mortgage approvals so far this year have reached 534,000, an increase of 2.1% over the same period last year. First-time buyers showed a strong desire to get onto the property ladder in Q3, boosted by cheaper mortgage rates making buying more affordable than renting. Buyer enquiries picked up again at the end of the quarter, highlighting buyers confidence in the UK property market. On the lettings side, performance within the market in Q3 was influenced by the usual summer slowdown but demand remained high throughout the UK. New rental supply has held up despite concerns that the stamp duty changes would lead to less stock on the UK property market. This clearly shows that, despite the impact of Brexit and additional Stamp Duty charges, buyers appetite remained strong in Q3 Foreign investors remained highly active throughout Q3, a positive sign that they have not been discouraged by the Brexit news. The true impact of the Brexit decision will only become apparent in around autumn, once we have navigated through the usually quieter summer months Associate Director of Kingsley Hamilton Estates, Stan Tonchev, comments: UK house prices made a small seasonal rebound in September after falling for the previous two months. The average asking price of properties coming to market rose by 0.7 per cent towards the end of Q3, meeting expectations of an early-autumn rebound in prices. Whilst buyer enquiries picked up in Q3, the number of homes on the market remained close to all-time lows, in part due to low rates of construction activity across the UK. What happens during the next quarter on the demand side will be determined, to some extent, by the outlook for the labour market as well as confidence amongst prospective buyers. With the summer holidays now coming to an end, we can reasonably expect to see the UK housing market pick up as we head into October. 2 Kingsley Hamilton Estates

3 SALES Property values have increased by 0.7% across the UK in the end of Q3, recovering from the fall of 2.0% seen in July and August. Overall, this quarter s data has been broadly positive with seven out of ten regions in the UK recording either a monthly rise in new seller asking prices or a standstill, as reported by Rightmove. Sales Valuer at Kingsley Hamilton Estates, Daniel Probyn comments: In many large regional cities, sales appear to have held up in Q3 thanks to a combination of much better housing affordability, improving economic growth and record low mortgage rates stimulating demand. Despite the ongoing uncertainty over Brexit, people are keen to get on with their homemoving plans and the Autumn season will provide them with a great opportunity to do so. Previous market uncertainty following the referendum results certainly showed clear signs of having subsided in Q3. We re starting to see the market settle and confidence returning. While the housing market has weakened slightly following the Brexit result, we usually see a slowdown in activity over the summer and the recent figures suggest we are yet to see a property crisis. National average asking prices Month Avg. asking price Monthly change Annual change Index September , % +4.0% August , % +4.1% July , % +4.5% *Figures from Rightmove National average asking prices by market sector (excluding Inner London) Sector September 2016 August 2016 July 2016 First-time buyers 194, , ,183 Second-steppers 258, , ,511 Top of the ladder 545, , ,678 *Figures from Rightmove 3 Kingsley Hamilton Estates

4 England (Q regional trends*) Average house price 206,346 Annual percentage change 5.4% Quarterly change 1.3% Most expensive region Least expensive region Strongest annual price change Weakest annual price change London North Outer Metropolitan Wales *Figures from Nationwide KEY FACTS The price of property coming to market rose by 0.7% towards the end of Q3. Rightmove Seven out of ten regions saw their asking price rise or standstill in September. Rightmove New seller asking prices were 10.5% higher in Q3 than the same time a year ago. Rightmove London remained the most expensive place to buy a home in Q3. Nationwide Reese Ye, Head of China Desk at Kingsley Hamilton Estates, comments: Interest among Chinese buyers in buying UK property surged in Q3 as the pound s drop has created opportunities to buy UK properties at a discount. Contrary to expectations, investors from Hong Kong and China are stepping up their exposure to properties in the United Kingdom, which is still seen as a safe haven that offers stable cash-flow returns. With the strengthening of the northern powerhouse economy, many foreign investors are also directing their capital out of London, to the northern cities. 4 Kingsley Hamilton Estates

5 LETTINGS According to Rigthmove, all regions except London recorded a rise in asking rents in Q3 2016, with prices up by 0.5%. The North West regions led the way in Q3, followed by Scotland. London continued its downwards trend, with prices down by 1.5% in Q3. National average asking rent (excluding Greater London) Quarter Avg. asking rent per month Quarterly change Annual change Q % +3.2% Q % +4.1% Greater London average asking rent Quarter Avg. asking rent per month Quarterly change Annual change Q , % -1.5% Q , % -0.6% % quarterly change in average asking rents 3.0% +2.7% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% +0.8% +0.5% -1.0% -0.8% -1.5% Q4-15 Q1-16 Q2-16 Q Kingsley Hamilton Estates

6 TOP FIVE MOST IN-DEMAND AREAS IN GREATER LONDON Area Avg. asking rent per month (2 bed) - Q Erith 1,046 Carshalton 1,257 Belvedere 1,083 Snaresbook 1,351 Dagenham 1,243 TOP FIVE MOST IN-DEMAND AREAS OUTSIDE GREATER LONDON Area Avg. asking rent per month (2 bed) - Q Ashton-Under-Lyne, Greater Manchester 524 Wellingborough, Northamptonshire 660 Tamworth, Staffordshire 697 Nuneaton, Warwickshire 590 Oldham, Greater Manchester 537 KEY FACTS Buyer enquiries rose by 30% in Q3 compared to Q2. Rightmove Asking rents fell in London down by 0.7% on the previous quarter. Rightmove The North West saw the highest rental growth in Q3 with a 2% increase. Rightmove The top locations for demand from tenants outside London were Ashton-Under- Lyne in Greater Manchester and Wellingborough in Northamptonshire. Rightmove Lettings Manager of Kingsley Hamilton Estates, Elaine Chan, comments: Demand remained strong in Q3 and national asking rents outside London rose slightly by 0.5%. The London lettings market continued to offer healthy yields for homebuyers while tenants have also benefitted from improved renting opportunities and an increase in properties available to rent. Despite the various economic and political changes, the long term trajectory for the UK property market is onward and upward! 6 Kingsley Hamilton Estates

7 FOCUS ON: LONDON House prices in London picked up the pace in Q3. The capital saw the strongest monthly increase in asking prices in September, up by 1.9 per cent, taking the average price tag on a home there to 630,974. KEY FACTS City of Westminster, Lambeth and Greenwich were amongst the best performing boroughs. Rightmove Overall, property prices in London are heading upwards slowly but surely despite the uncertainty surrounding Brexit. Enfield, Camden and Waltham Forest were amongst the worst performing boroughs. Rightmove Area London average asking prices September 2016 August 2016 July 2016 Inner 804, , ,815 Outer 514, , ,587 The most expensive borough was Kensington and Chelsea, while the most affordable was Barking and Dagenham. Rightmove The price of properties coming to market rose by 1.9% (+ 11,565) in September. Rightmove GREATER LONDON Avg. price September ,974 Avg. price August ,270 Avg. price July ,338 Avg.price Q3 633,860 *Figures from Rightmove Associate Director of Kingsley Hamilton Estates, Stan Tonchev, comments: While the current levels of transactions remained in line with the usual seasonal pattern in Q3, it is reassuring to see that homeowners are still largely confident in the resilience and continued growth of the UK property market. Despite heightened economic and political uncertainty, we believe that London will continue to top the list of the most important European cities after Brexit. The housing market is by no means in crisis, but for it to start picking up again there needs to be a significant increase in supply, and choice for investors. 7 Kingsley Hamilton Estates

8 FOCUS ON: NORTH WEST Overall, house prices continued to hold up well in the North West. According to Rightmove, North West regions are selling at higher levels than in Q Given the immediate postreferendum consequences, those figures higlight that confidence is returning to the UK housing market. NORTH WEST Avg. price September ,035 Avg. price August ,146 Avg. price July ,562 Avg. price Q3 180,914 *Figures from Rightmove KEY FACTS The average value of a home in Salford has increased by 12% in Q3. Zoopla More and more investors are turning their heads to Manchester and Liverpool. Office for National Statistics (ONS) Manchester offers one of the highest rental yields in the UK at up to 6.8% in Q3. Rightmove The average house price in the North West rose to 180,035 in Q3 compared to 176,838 last year. Rightmove Sales Valuer at Kingsley Hamilton Estates, Daniel Probyn comments: There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum. Things are looking very positive for the Northern Powerhouse and, as long as Brexit doesn t have any unexpected economic consequences on the property market, there s every reason to believe this will continue for many years to come. Northern cities like Manchester and Liverpool offer very attractive rental yields and with demand expected to increase significantly over the years, we are confident that this trend will continue. 8 Kingsley Hamilton Estates

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