22nd March 2014
More first time buyers
entering the UK housing market

First time buyers in the UK have
increased their dominance of the housing market but other buyers have fallen in
number, according to estate agents.
The
latest Housing Market Report from the National Association of Estate Agents
(NAEA) also reveals that the supply of homes has reached a near decade low.
The
average number of properties available per member branch in February fell from
45 in January to 43 in February, the fifth consecutive drop experienced in
supply of properties coming on to the market.
The
NAEA says that the supply of properties are now at similar levels seen in May
2004 but despite the lack of properties in the market, the average number
of sales agreed per branch continued to improve, up from an average of eight
sales per branch in January to nine in February.
The
number of first time buyers entering the market has also continued to improve
with 29% of all homes sold by NAEA member agents being sold to them in
February. However, these figures were recorded alongside a decrease in the in
the total number of house hunters, with the average number registering with
member agents down 6.2%.
This
resulted in the average number of buyers per property remaining the same at
eight, as both supply and house hunter numbers contract.
NAEA
agents also reported that the percentage of properties sold to people
purchasing a house using the Help to Buy equity loan scheme remained the same
month on month at an average 4%.
The
most popular group buying was those aged 31 to 40 years old, making up half of
the buyers seen in February. NAEA agents also reported 22% home buyers were
looking to re-locate, while the average length of time it takes to buy a
property in the UK is 11 weeks from sale agreed through to completion.
‘The
housing market remained strong in February with first time buyers continuing to
turn out in force. As confidence in the housing market continues to rise, NAEA
agents expect the number of first time buyers to remain strong,’ said NAEA
president Jan Hÿtch.
‘This
confidence may be increasing, but the lack of properties entering the market has
slowed considerably and is a real concern that needs to be addressed now,
particularly for those already on the housing ladder who want to move onwards.
With Help to Buy making it easier for new purchasers with low deposits to buy a
home, the appetite for buying in this price range, combined with the
diminishing supply of first time buyer properties, could drive property prices
up further in this sector,’ Hÿtch added.
Lending for homes in UK up
43% compared to a year ago, latest figures show

Gross mortgage lending in the UK was
£15.2 billion in February, down some 6% compared with January but still 43%
higher than the £10.6 billion lent in February last year, the latest data from
the Council of Mortgage Lenders shows.
The
CML also pointed out that it is the highest total for a February since 2008.
CML chief economist Bob Pannell said that housing market indicators have
continued to be strong over recent months, once seasonal factors have been
taken into account.
‘First
time buyers have benefitted most from the government’s Help to Buy initiatives,
with the more recent mortgage guarantee scheme now starting to push typical
loan to value levels higher,’ he explained.
‘The
housing market got a further boost from this week’s Budget. This, together with
benign developments in the economy more widely, should bolster short term
sentiment and activity,’ he added.
Experts
believe that more new homes are needed to help the property market continue its
recovery as lack of supply is holding it back. Duncan Kreeger, director of West
One Loans, a privately funded short term lender, comments, believes that the
market can only go so far without a sustainable supply of new homes.
‘While
mortgages might be catching up with pre-recession levels, house building in the
UK still falls considerably below these peaks,’ he said but added that building
may have got a boost in yesterday’s Budget.
‘However,
there are still many questions left unanswered. Some 200,000 new homes looks
good on paper but we still don’t know where these will be placed. It’s all very
well to build a garden city in Ebbsfleet, but if demand is greatest in urban
areas, it’s unclear how this will help,’ he explained.
‘The
hard truth is that to really increase the supply of homes where they are most
needed requires complex property conversions and refurbishments and it’s still
almost impossible to get mainstream funding for these types of projects,’ he
added.
According
to Ian McGrail, managing director, FirstMortgage, the data supports the level
of growth that his firm as seen at a company level year on year, as demand for
mortgages from first time buyers and home movers remains consistently strong.
‘The results, showing the highest total for a February since 2008, pair well
with our in house monthly figures, where similarly we have seen record levels
of production. This growth looks set to continue steadily into the year,
although we would expect activity to slow down temporarily at the end of April
when the Mortgage Market Review comes into effect, as lenders get to grips with
the reality of the reforms imposed,’ he added.
However, Peter Williams, executive director of the Intermediary Mortgage
Lenders Association (IMLA), warned that growth could slow this year partly
because regulatory changes on 26 April will act as a temporary buffer and also
because the bar was significantly raised in the second half of last year.
'But
the recovery is well underway and should continue to strengthen as the wider
economic outlook improves. Budget measures to boost the construction of new
homes will help to balance supply and demand in the property market, while the
extension of Help to Buy equity loans also reduces fears of a drop off in
activity after 2016,' he said.
'The
government continues to call on extraordinary measures and new stimuli to
progress the housing and mortgage market recovery. Its commitment is paying
off, but we need to stay focused and monitor the consequences so we are left
with a self sustaining market when such schemes are eventually phased out,' he
added.
Neighbourhood plans take up
edging towards maintaining status quo, research finds

The take up of neighbourhood plans, a
cornerstone of the UK government’s Localism agenda, is concentrated in the
south of England, according to new research.
They
are generally in more affluent areas within Conservative led authorities, with
a mixed picture of providing for or resisting development, says the research
published by planning consultancy Turley.
To
date, over 980 applications have been made by neighbourhood organisations for
formal approval to draw up a neighbourhood plan. Of these, over 750 areas have
been approved by local authorities to proceed.
The research also shows that 75 neighbourhood plans have been published for
consultation, but only six Neighbourhood Plans were formally in place at the
end of February 2014.
Of
those plans published, 73% have been produced in areas with Conservative led
councils, with just 9% having been produced in areas which are Labour
controlled and 75% of all published plans have been produced in the south of
England.
The Turley research also highlights that areas of below average affluence have
so far been less involved in the neighbourhood planning processes, with just
nine plans published in areas categorised as ‘most deprived’.
‘We
have reviewed over 4,000 pages of draft neighbourhood plans and a clear picture
is emerging. The preparation of neighbourhood plans is popular but is being
recognised more by communities in the south of England compared to the North.
It also appears that less affluent communities are not yet engaging fully in
the neighbourhood planning process,’ said Rob Peters, executive director in
Turley’s Bristol office who led the research.
The
research found that, of the plans published so far, the smallest population of
a neighbourhood plan area is Walton in Wakefield in West Yorkshire,
representing just 225 people. The largest is Winsford in Cheshire representing
over 30,000 people, highlighting the difference in size, scale and geography of
the plans.
Some
67% of all published plans cover rural neighbourhoods and one third relate to
urban areas while 55% of all neighbourhood plans seek primarily to resist new
development, with that number increasing to 63% in rural areas.
‘I
am not yet convinced that neighbourhood planning is an emphatic success or that
the plans are making satisfactory provision for development, as the government
has suggested, when so few plans have been made (i.e. adopted),’ said Peters.
He
pointed out that neighbourhood plans have been stalling in their progress to
adoption with adjourned examinations in Winslow, Aylesbury Vale, rejections by
Examiners in Slaugham, and legal challenges in Tattenhall, Cheshire.
‘The
picture that emerges from the published neighbourhood plans is one of the
majority seeking to maintain the status quo and restricting new development,
with a smaller minority of plans encouraging growth. This suggests a potential
for conflict between localism delivered through neighbourhood planning and the
positive presumptions and growth that underpin Government policy,’ he added.
The
Turley research recognises that neighbourhood forums can provide a useful route
to achieve meaningful engagement, but in some cases the views of land owners
and developers are given insufficient weight. This means that increasingly
developers will need to factor this into their monitoring and actions for
promotional activity through the development plan process.
‘Residential
developers in particular are aware of the potential of neighbourhood plans to
influence the timescale for advancing their development proposals. Where
possible they are trying to move ahead of emerging neighbourhood plans to limit
the effects of possible new local policy constraints,’ Peters pointed out.
‘Our
report also suggests that neighbourhood planning processes are starting to
become important to the business community. There are 11 Business Neighbourhood
Plans under preparation. These can extend to trading estates, business parks or
town centres where there is no Parish Council. In such areas the benefits are a
streamlined route for applications, with the potential to boost job creation
and regeneration whilst working collaboratively with local communities. The
mixed referendums of businesses and residents is however yet to be tested and
there are signs of conflicting interests,’ he explained.
‘We
are seeing developers adopt strategies to either work with or around
neighbourhood plans by seeking greater engagement with higher tier policies,
preparing early planning applications and/or trying to engage effectively with
the Neighbourhood Plan process,’ he concluded.
24th March 2014
Rising prices and bad
weather hit home sales in the US in February say agents

Home prices in the US continued to show
solid growth in most of the country due to limited inventory conditions, but
rising prices and severe winter weather caused existing home sales to slip in
February.
According
to the latest existing home sales index report from the National Association of
Realtors, completed transactions fell 0.4% to a seasonally adjusted annual rate
of 4.60 million in February from 4.62 million in January.
Sales
were 7.1% below the 4.95 million unit level recorded in February 2013 and the
month’s pace of sales was the lowest since July 2012, when it stood at 4.59
million.
‘We
had ongoing unusual weather disruptions across much of the country last month,
with the continuing frictions of constrained inventory, restrictive mortgage
lending standards and housing affordability less favourable than a year ago,’
said Lawrence Yun, NAR chief economist.
‘Some
transactions are simply being delayed, so there should be some improvement in
the months ahead. With an expected pickup in job creation, home sales should
trend up modestly over the course of the year,’ he added.
The
median existing home price for all housing types in February was $189,000,
which is 9.1% above February 2013. ‘Price gains have translated into an
additional $4 trillion of housing wealth recovery over the past three years,’
Yun explained.
The
NAR data also shows that distressed homes sales, that is foreclosures and short
sales, accounted for 16% of February sales, compared with 15% in January and
25% on February 2013. Some 11% of February sales were foreclosures and 5% were
short sales. Foreclosures sold for an average discount of 16% below market
value in February, while short sales were discounted 11%.
Total
housing inventory at the end of February rose 6.4% to two million homes
available for sale, which represents a 5.2 month supply at the current sales
pace, up from 4.9 months in January. Unsold inventory is 5.3% above a year ago,
when there was a 4.6 month supply.
The
median time on market for all homes was 62 days in February, down from 67 days
in January and 74 days on market in February 2013. Short sales were on the
market for a median of 94 days in February, while foreclosures typically sold
in 60 days and non-distressed homes took 61 days. Some 34% of homes sold in
February were on the market for less than a month.
First
time buyers accounted for 28% of purchases in February, up from 26% in January,
but down from 30% in February 2013.
NAR
president Steve Brown believes that student debt appears to be a factor in the
weak level of first time buyers. ‘The biggest problems for first time buyers
are tight credit and limited inventory in the lower price ranges. However, 20%
of buyers under the age of 33, the prime group of first time buyers, delayed
their purchase because of outstanding debt,’ he said.
‘In
our recent consumer survey, some 56% of younger buyers who took longer to save
for a down payment identified student debt as the biggest obstacle. It is also
clear there are other people who would like to buy a home that are not in the
market because of debt issues, so we can expect a lingering impact of delayed home
buying,’ Brown added.
All
cash sales comprised 35% of transactions in February, up from 33% in January
and 32% in February 2013. Individual investors, who account for many cash
sales, purchased 21% of homes in February, compared with 20% in January and 22%
in February 2013. Overall 73% of investors paid cash in February.
Single
family home sales edged down 0.2% to a seasonally adjusted annual rate of 4.04
million in February from 4.05 million in January, and are 6.9% below the 4.34
million unit level in February 2013. The median existing single family home
price was $189,200 in February, up 9% from a year ago.
Existing
condominium and co-op sales declined 1.8% to an annual rate of 560,000 units in
February from 570,000 in January, and are 8.2% below a year ago. The median
existing condo price was $187,900 in February, which is 9.8% above February
2013.
Regionally,
existing home sales in the Northeast fell 11.3% to an annual rate of 550,000 in
February, and are 12.7% below February 2013. The median price in the Northeast
was $237,800, up 1.5% from a year ago.
Existing
home sales in the Midwest declined 3.8% in February to a pace of one million,
and are 12.3% below a year ago. The median price in the Midwest was $140,900,
which is 8.6% higher than February 2013.
In
the South, existing home sales rose 1.5% to an annual level of 1.98 million in
January, but are 0.5% below February 2013. The median price in the South was
$163,400, up 8.3% from a year ago.
Existing
home sales in the West rose 5.9% to a pace of 1.07 million in February, but are
10.1% below a year ago. The median price in the West was $279,400, up 18% from
February 2013.
28th March 2014
Strong real estate market
in Miami with properties selling near asking price

The performance of the Miami real
estate market remained strong in February, as prices continue to rise while
properties are selling rapidly and near asking price, according to the latest
report from the Miami Association of Realtors.
Miami
is one of the most popular parts of the United States for foreign property
buyers and attracts enquiries particularly from Europeans and South Americans
seeking to buy property for investment in Florida.
The
data shows that median sale prices again increased significantly for both
single family homes and condominiums in February. The median sales price for
single family homes jumped 17% to $227,000, marking 27 straight months of
growth. The average sale price for single family homes increased 6.7% to
$415,312 last month.
‘Despite
the recent increase in inventory, sales activity remains at historically strong
levels, resulting in rising prices,’ said Liza Mendez, chairman of the
board of the Miami Association of Realtors.
'While
additional inventory is creating a more balanced market, the fact that homes
continue to sell fast and almost at asking price is still indicative of a
seller’s market,’ she added.
The
median sales price for condominiums has increased for 32 consecutive months, up
7.3% to $177,000 compared to February 2013. The average sale price for
condominiums increased 10.8% to $337,382 from a year ago.
The
report points out that Miami real estate continues to sell at a rapid pace and
nearly at asking price, indicating properties are being priced right and buyers
realize they need to be competitive in the current market.
The
median number of days on the market for single family homes sold in February
was just 47 days, a decrease of 2.1% from February 2013. The average percent of
original list price received was 95.2%, up 1.4% from February 2013.
The
median number of days on the market for condominiums sold in February was 57
days, an increase of 18.8% compared to the same period in 2013. The average
sales price was 95% of the asking price, a negligible decrease of 0.8%.
In
February, residential real estate sales in Miami-Dade County decreased a
negligible 1.9% compared to 2,075 in February of last year. Single family home
sales increased 1.3% relative to February 2013. Compared to February 2013,
condominium sales declined 4.1%.
‘The
Miami real estate market also offers great opportunities for buyers. Prices are
still low, comparable to what they were more than 10 years ago,’ said Francisco
Angulo, residential president of the association.
‘And,
interest rates are still at historical lows, making buying a home more
affordable. Consumers considering buying a home should take advantage of all of
the current favourable market conditions,’ Angulo added.
The
data also shows that active listings at the end of February increased 26.8%
compared with a year ago. Inventory of single family homes increased 18.3%
and condominium inventory increased 32.2%.
At
the current sales pace, there is a 5.6 month supply of single family homes, an
increase of 6% from 5.3 months in February 2013, and a 7.5 month supply of
condominiums, up from 5.9 months in February 2013, an increase of 26.2%.
New
listings of single family homes increased 10.6% in February while condominium
listings increased 11.3%.
Sales of distressed properties continue to sharply decline in Miami-Dade
County. In February, only 36% of all closed residential sales in Miami-Dade
County were distressed, including REOs (bank-owned properties) and short sales,
compared to 42.2% in February 2013. Sales of REOs increased 26% while sales of
short sales sharply declined by 51%.
The
median sales price of single-family home and condominium foreclosures in
Miami-Dade increased 20.9% to $163,150 and 13.6% to $110,750 respectively.
The
data also shows that 62.5% of total closed sales in February were all cash
transactions, compared to 66.5% in February 2013. Cash sales in Miami are still
significantly higher than the national average of 35%.
All
cash sales accounted for 49.5% of single family homes and 72% of condominium
closings, compared to a year ago when cash sales were 49.6% of single family
home sales and 78.1% of condominium sales.
Since
nearly 90% of foreign buyers in Florida purchase properties all cash, this
continues to reflect the much stronger presence of international buyers in the
Miami real estate market.
Distressed sales fall in
the US as transaction increase overall, latest index shows

US home sales increased by 8%
year on year in February and 3.8% month on month, according to the latest data
from CoreLogic.
Sales
rose to a non-seasonally adjusted annual sales pace of 4.09 million and the
monthly rise was the highest sales pace for the month of February since 2007.
Improvement in February home sales were led by newly constructed homes which
increased by 23%, followed by re-sales which increased by 18%, the data also
shows.
Distressed
sales, which include real estate owned (REO) and short sales, were on the
decline, continuing the trend in the shift towards healthy home sales.
Distressed
sales accounted for 15.6% of total sales in February, a strong improvement from
the same time a year ago when they made up 22.8% of total sales.
REO
sales were down 16% year on year, making up 11.4% of total sales while short
sales were down 44% year on year, at just 4.3% of total sales in February.
At its peak, the distressed sales share totalled 32.7% of all sales in January
2009, with REO sales making up 28.2% if that share. The firms says that the
more recent shift away from REO sales is a driver of improving home prices, as
REOs typically sell at a larger discount compared to healthy sales than do
short sales.
‘There will always be some amount of distress in the housing market, so one
would never expect a 0% distressed sales share, but the pre-crisis share of
distressed sales was traditionally about 2%,’ the report explained.
Michigan
had the largest share of distressed sales of any state at 30.5% in February,
followed by Illinois at 26.6%, Nevada at 26%, Florida at 24.8% and Georgia at
23.5%.
California
saw a 17.8% point drop in the distressed sales share, the largest of any state.
Of the largest 25 Core Based Statistical Areas (CBSAs),
Chicago-Naperville-Arlington Heights had the largest share of distressed sales
at 29.5% followed by Miami-Miami Beach-Kendall at 27.9%, Las
Vegas-Henderson-Paradise at 27.2%, Orlando-Kissimmee-Sanford, at 27% and
Tampa-St. Petersburg-Clearwater at 25.5%.
Sacramento-Roseville-Arden-Arcade
had the largest drop in its distressed share, falling by 21.7% from 41.6% in
February 2013 to 19.9% in February 2014.
Majority of IFAs expect UK
house prices to rise in next three years

Nine out of ten Independent Financial
Advisers expect UK house prices to increase during the next three years.
Some
40% of IFAs would increase their own personal exposure to residential if it
were easier to do so in a tax efficient way and 42% of IFA clients also more
interested in residential property, according to new research.
The
survey from Castle Trust, which offers investment products that track or beat
the Halifax House Price Index, shows that between now and 2019, 86% of advisers
expect house prices to rise with one in 20 anticipating a dramatic increase.
Also,
when looking at the next 10 years, only 6% expect prices to fall and one in 14
think they will rise by over 50%. By 2024, financial advisers on average
think that house prices will increase by around 21%, which would add £37,773 to
the value of a typical home.
According
to the survey, the most common barrier to investing in a buy to let property is
concerns about tenants or lack of tenants with 51% mentioning this followed by
49% saying it is the deposit and 41% thinking it is a hassle.
‘It
is clear that confidence in the entire UK housing market is finally taking hold
and is no longer just confined to London and the South East. This is starkly
apparent from our own results as we have witnessed record flows into our Housa
products, presumably because their returns are tightly pegged to the Halifax House
Price Index,’ said Sean Oldfield, chief executive of Castle Trust.
He explained that the firm’s Housa products provide a simple alternative to buy
to let which has never before existed which opens up the chance for more people
to invest in residential property who previously weren’t able to do so.
Investors across Castle Trust’s range of Housas have seen growth since they
were first launched in October 2012 and its unique Protected Housa investment
product which both protects the capital invested and tracks the Halifax House
Price Index (HHPI), has delivered capital growth of 3.1% in its first month
alone.
Oldfield
described Housas as a low cost and tax efficient way to get exposure to the
housing market. ‘Unlike property funds, there are no upfront or ongoing
management fees. Housas typically qualify for inclusion as an ISA, Junior ISA
or SIPP with a minimum investment of just £1,000. Investors are eligible for
protection by the Financial Services Compensation Scheme of up to £50,000 per
individual,’ he pointed out.
UK
residential property is one of the most stable asset classes. Analysis by
Castle Trust reveals that over the last 30 years, it has historically delivered
annual returns of about 6% per annum, which is comparable with equities, and
superior to commercial property, but with much less volatility than both.