The Relocation Bureau

Property Market Report (March 2017)

 
Property Market Report (March 2017)

According to research by Chestertons, UK house prices grew by an average 7.7% in 2016, taking the average price to £236,424. Annual price growth was strongest in the East of England (11.3%), followed by the South East (8.5%) and London (7.5%). The lowest growth was seen in the North East, which recorded growth of 4.1%.

London property values rose 7.5% over 2016, taking the average house price to £483,803. London house prices are now nearly 12 times average earnings and private residential property in London is worth £1.27 trillion. Kensington & Chelsea and Westminster remain the most expensive boroughs in London but more affordable locations have seen the strongest growth. Hackney has recorded the steepest rise in prices, increasing by 702% between 1996 and 2016.This compares to the average increase of almost 450% for London and 290% in England and Wales over the same period.

Seven London boroughs recorded double digit annual price growth in 2016, with Barking & Dagenham (14.1%), Waltham Forest (13.6%) and Bexley (13.1%) the boroughs achieving the strongest growth. Only one borough – Hammersmith & Fulham (-2.1%) – recorded a drop in prices over the year.

The number of first-time buyers is estimated to have reached a 10 year high in 2016, according to the Halifax. The average first-time buyer deposit has more than doubled over the past decade to £32,321 in 2016. The average first-time buyer is 30 years old, up from 29 in 2011. The average deposit put down by first-time buyers in London has almost quadrupled in the past decade, from £26,701 to £100,445. The average age of a first-time buyer in London is 32 compared to the national average of 30.

Although price growth in London is still slowing, those people hoping for a price crash will continue to be disappointed given the steady levels of demand, restricted supply and the ready availability of low interest rate mortgages. There was in fact a flurry of activity towards the end of last year but this has now tailed off somewhat and Rightmove report that the number of properties coming to market in January was down by nearly 14% compared to the same period a year ago. After a tough 2016, the year has got off to a good start for the prime London areas, with exchanges up on the same period in 2016 and more available properties on the market. However, buyers remain very price sensitive and are inclined to make very low offers and asking prices are still under downwards pressure.


The Rental Market

Chestertons have advised that rental growth continues to slow and the average rent in London is now just 0.4% higher than the same period last year - £1,497 pcm. The average rent across the UK in January was £888 pcm – just 0.7% higher than Jan 2016.

Buy-to-let mortgage applications made through limited companies are reported to have surged at the end of 2016 as landlords rushed to avoid the changes to tax relief on finance costs due to be introduced in April. 69% of total purchase applications made in the last three months of 2016 were made through limited companies, a rise of 6% compared to the previous quarter.

Demand for privately-rented flats and houses has fallen to a two-year low, while the supply of properties to rent has risen. The Association of Residential Letting Agents (ARLA) reported that there were just 26 prospective tenants registered nationally per estate agency branch in December, the lowest figure recorded since records began in January 2015. The corresponding figure in London was 28.

Sources: Land Registry / ONS / Chestertons / Rightmove

Mar 2017