It was the first fall on the mortgage lender’s index since June 2015 and surprised City economists who had forecast a 0.4 per cent increase in prices.

The housing market is expected to come under some pressure in 2017 as household finances are squeezed by a combination of rising inflation and weak wage growth, potentially deterring people from committing to major spending decisions.

However, economists believe a shortage of homes coming on to the market in the UK will bolster the market.

Howard Archer, UK chief at IHS Markit, said: “Markedly weakening consumer fundamentals, likely mounting caution over making major spending decisions, and elevated house price to earnings ratios are likely to weigh down on housing market activity and house prices.

“However, a shortage of supply is likely to put a floor under prices. Consequently, we believe house price gains over 2017 will be limited to around 2.5 per cent.”

Brian Murphy, head of lending at the Mortgage Advice Bureau, said a cooling of the UK housing market might enable more people to get on to the housing ladder.

“A slowing down of prices coupled with the ongoing near record low mortgage rates available may provide a welcome opportunity for those who want to get on to or move up the property ladder to take advantage of the current climate.

“Given that home ownership levels are at their lowest since the mid-80s, then any market conditions which may assist more people to buy their own property could be seen as a positive development, rather than a cause for concern.”

Looking at trends over the past decade, the Nationwide said home ownership in England was at the lowest level since 1985, at 62.9 per cent in 2016. Ownership rates among those aged 35-44 fell sharply to 56 per cent from 74 per cent in 2006.

The housing market is expected to come under some pressure in 2017

Over the first quarter, there was the least variation in regional house price performance in almost 40 years.

At 6.8 percentage points, the gap between the weakest and strongest performing regions was the lowest since 1978.

Robert Gardner, Nationwide’s chief economist said: “The south of England continued to see slightly stronger price growth than the north of England, but there was a further narrowing in the differential.

“Northern Ireland saw a slight pickup in annual house price growth, while conditions remained relatively subdued in Scotland and Wales.”

Manchester Strong Annual Growth Attractive For Investment

POSTED BY: RESIDENT    31/03/2017

Manchester property prices have seen strong annual growth in February 2017, up 8.8 per cent.

Sales volumes in the city have grown by 40 per cent in the past three years in the northern city. However, despite this significant growth, Manchester’s average house price is still £151,800, far below cities in the South of England, making it an attractive choice for investors.

The average house price growth in a UK city currently stands at 6.4 per cent, a decline from 7.8 per cent in 2016. Cities other than Manchester that have seen significant price rises include Portsmouth at 8.1 per cent, as well as Bristol and London at 8.0 per cent and 5.6 per cent respectively.

Director of mortgage services at LSL Financial Services, David Copland, said: ‘Liverpool, Birmingham and Manchester are all experiencing exceptional growth thanks to a booming job market and improved transport links. More people are therefore moving their attention away from the London property market, especially when looking to secure their first home. It will be interesting to see if the northern powerhouses continue to grow at this pace now Article 50 has been triggered; but with investment continuing to flow, I expect this only to continue.’

London and Bristol have seen turnover remain stable or decline slightly over the last few years, however Manchester, Liverpool, Leicester and Birmingham have experienced the opposite.

Insight director at Hometrack, Richard Donnell, has commented: ‘Levels of housing turnover across UK cities are expected to remain broadly flat over 2017.There is some further upside for sales volume in regional cities but much depends upon how would be buyers respond to external factors, not least the impact of lower real wage growth, the potential for higher mortgage rates and whether demand will be impacted by this week’s triggering of Article 50.’

30th March 2017

The UK property market is not set to see any major upheaval with the formal start to the two years of negotiation to leave the European Union, and might even benefit from an expected slowing in the economy.

Experts point out that the market did not see any huge effect from the decision to leave in the referendum last June and prices have been rising steadily with blips in London put down to stamp duty change. While price growth might slow, this could be good news for first time buyers who are seeing affordability getting worse, especially in London, while an economic slowdown should mean that the chance of interest rates rising is kept low which means borrowing costs stay low.

Fionnuala Earley, chief economist of Countrywide, pointed out that expectations before the June vote that house prices would collapse were very wide of the mark. ‘House prices are still rising across the UK and continue to grow in London, which is arguably more sensitive to Brexit.

But, over the medium term, it’s the effect of the outcome of negotiations on the UK’s economic performance, particularly jobs that will determine the effect on housing market prices and activity,’ she said. Lucian Cook, head of residential research at Savills believes it may well make the Bank of England reluctant to increase interest rates despite the recent increase in inflation. ‘This will preserve affordability and points to a low turnover market, with little upward or downward pressure on prices,’ he explained. The current demand for homes and lack of supply will outweigh the effects of any Brexit negotiation uncertainty, according to Russell Quirk, chief executive officer of eMoov, adding that it will be business as usual for the property market.

‘The London market remains impervious and, with such a shortage of stock, the overwhelming level of housing demand will plug any gaps of depleted buyer interest from further afield. Despite the high levels of uncertainty in the market, property values have continued to show signs of positive growth in 2017 and this will only strengthen as time goes on,’ he said. ‘Brexangst around leaving the EU has caused uncertainty in the market but the cooling rate of price growth over the end of last year has without a doubt been influenced more by the increases to stamp duty and second home tax, with both playing considerable roles in impacting the market,’ he pointed out.

‘With the initial Brexit fears now starting to subside and property values continuing to increase on both a monthly and annual basis, UK home owners should rest assured that the market remains one of the most resilient in the world,’ he added. Indeed, in one sense the triggering of Article 50 which has started the formal process of leaving is beneficial as it removes the uncertainty around when the withdrawal was going to start, according to Mark Lawrinson, regional sales director of Portico London estate agents. But he also pointed out that economic uncertainty is likely to continue as we still don’t know what Brexit actually means. ‘I think we will see a continued slowdown or lethargic London market when it comes to sales volumes, and as we reported toward the end of last year, transaction volumes across London are already more than half of what they were before the 2008 crash,’ he explained. ‘London has a significant part to play in businesses who trade and operate across Europe and the world, and a buoyant property market relies on the UK’s economic health. If Brexit negotiations go well this could cause further price growth as the economy grows. But if a good deal isn’t reached then the international companies who operate here or look to relocate here might change their minds, reducing the number of residents who live in the capital and again further reducing the transaction levels, which could ultimately lead to price decreases,’ he pointed out. However, Portico’s managing director Robert Nichols, added that as the negotiations progress there is likely to be stability into the housing market as people realise that the effects of Brexit are not catastrophic.

‘We’ll hopefully see transaction levels increase as a result, which are currently dangerously low and affecting price growth across the capital,’ he said. He also pointed out that if the Pound weakens this could fuel demand from overseas buyers and investors and the Bank of England could be hesitant to increase their interest rates and this will it will remain cheaper than ever to borrow and get on to the property ladder,’ he concluded.

By LIZZIE RIVERA

We ask property experts how leaving the EU could affect the capital’s housing market. Here’s what they predict…

Theresa May triggered Article 50 on Wednesday, kick-starting the Brexit process.

Two years of negotiations will follow this unprecedented move, and the economic impact remains far from certain.

The impact on Britain’s housing market will largely depend on the speed and success of the negotiations.

While last year’s vote to leave the EU contributed to significant uncertainty in the London property market, causing house price growth to slow and the number of transactions to fall, some experts expect activity to pick up once negotiations are underway.

1. The property market will become more stable
As every new landmark is ticked off the Brexit timeline – and the triggering of Article 50 is a major one – the property market gets another little boost of stability, encouraging people to get on with their lives. Years of low transactions are almost always followed by years of increased activity. With confidence returning, sellers are already demanding higher prices.
James Evans, CEO, Douglas & Gordon

2. Number of house sales will rise across the UK
The triggering of Article 50 should come as a sigh of relief to the residential property market, as the Government finally provides certainty that its plan for leaving the EU cannot be derailed. The UK property market is heavily reliant on confidence – something evident through transaction levels that have been suffering since the Brexit vote, especially in London where, according to our latest data, house sales are still down 20 per cent year-on-year.
Paul Smith, CEO, haart 

3. Interest rates won’t rise
It may well make the Bank of England reluctant to increase interest rates, despite the recent increase in inflation. This will preserve affordability and points to a low turnover market, with little upward or downward pressure on prices.
Lucian Cook, Head of Residential Research, Savills

4. Property price growth will be slow
The expectation, pre-referendum, that house prices would collapse was very wide of the mark. House prices are still rising across the UK and continue to grow in London, which is arguably more sensitive to Brexit. But, over the medium term, it’s the effect of the outcome of negotiations on the UK’s economic performance – particularly jobs that will determine the effect on housing market prices and activity.
Fionnuala Earley, Chief Economist, Countrywide

5. However, demand for homes will outweigh effects of any uncertainty
The London market remains impervious and, with such a shortage of stock, the overwhelming level of housing demand will plug any gaps of depleted buyer interest from further afield.
Founder of eMoov.co.uk, Russell Quirk

6. Londoners are likely to be the most cautious 
Caution is likely to be greatest in London, given the extent to which house prices have risen relative to earnings in the capital in the past 10 years. It means home buying represents a bigger financial commitment relative to the rest of the country against a backdrop of uncertainty.
Lucian Cook, Head of Residential Research, Savills

7. Prime central London property will remained relatively unaffected
With all events like this, a few buyers and investors may sit on their hands to see if anything changes, but the smart money will continue to invest in central London, especially overseas buyers making the most of the weakened pound and the discounts this provides.
Jonathan Hudson, Regional Executive for London – National Association of Estate Agents

8. International buyers will invest in the prime central property market
We feel that the impact has already reached us and the exit has simply weakened the pound, fuelling demand from overseas buyers and investors. It is important, however, to see that the deals that are happening are with sellers who have reduced their asking prices to reflect not just the impact of the referendum but the increase in stamp duty, particularly at the higher level.
Becky Fatemi, Managing Director of Rokstone

23 MAR, 2017 by Paulina Carl

Manchester’s population is currently growing almost 15 times faster than properties are being built, official figures have now revealed.

As Manchester Evening News reported, the extreme situation is a result of stagnating levels of house building and a growing population, meaning the current situation will only get worse over the next five years.

The latest figures showed that between 2015 and 2016 only 290 homes were built in Manchester’s city centre. This means Manchester housing merely grew by 0.13% over the same period of time.

When compared to Manchester’s population growth, the reality of the situation becomes even more clear. Between mid-2014 and mid-2015, the city population increased by more than 10,000 people.

As a result, this means that in 2015 more than 530,000 people were living in the city, a growth of 1.94%.

The high growth rate included both, more births than deaths and immigration, and means that housebuilding in the North’s capital is falling drastically short.

The report went on, revealing that Manchester’s housing shortage is actually one of the biggest one in the whole of England. The situation doesn’t change dramatically when looking outside of Manchester’s city centre. Oldham’s population rose five times faster than the number of dwellings being built, and Salford and Stockport had a population increase three times higher than their build rate.

Across England, house building rates only fell slightly behind population growth, with an increase in dwelling by 0.62% whilst the population grew by .086% – not an awful lot faster.

As average values in the north-west city soar 8.8%, price growth in London falls over 50% in just 12 months.

Summary:

• Property prices in the UK now rise fastest in Manchester
• Average values in the north-west city rose by 8.8% in the 12 months to February 2017
• But price growth in London stood at just 5.6%, down from 12.8% just one year previous

It’s been home to the UK’s highest yields over the last few years, but now Manchester can also boast the fastest property price growth in the country.

Average property values in the north-west city grew by 8.8% in the 12 months to February 2017, according to the latest data from Hometrack’s City House Price Index.

National price growth stood at 6.4%, with the average being brought down by London. The UK capital recorded price growth of 12.8% a year ago, but fell 56% over the last 12 months to just 5.6%.

London’s price growth is now bettered by nine regional cities. In addition to Manchester, these also include Bristol (8%), Glasgow (7.7%) and Birmingham (7.4%).

The report explains that the lack of affordability in cities in the south of England is weighing heavily on price growth, with transaction volumes also falling steadily in these cities over the last one to three years.

But it’s a different story in the regions. Sales volumes in Liverpool and Manchester have risen by more than 40% over the last three years, with greater affordability resulting in stronger buyer and investor demand.

Hometrack believes sales volumes will continue to decrease in cities such as London over the course of 2017. And while it’s also expecting slightly slower transaction volumes in the regions this year, the report does state that cities such as Manchester will continue to be the most popular among the investor community.

The report said: “We expect sales volumes to fall by around 5% in the highest value cities over 2017, as the market and pricing levels start to adjust to price sensitive and affordability constrained demand. We expect slower growth in volumes in regional cities where there remains continued upside for market activity and house prices on more attractive affordability.”

Friday, 24 March 2017 | MYT 5:54 PM

London Spring Place is one of the latest UK purpose built student accommodation projects marketed by Cornerstone International Properties.

 

KUALA LUMPUR: The weak post-Brexit pound and insufficient housing provide a good opportunity for Malaysian investors in the UK real estate market, said Cornerstone International Properties (CSI Properties). 

The Malaysia-based real estate investment consultancy said the UK would continue to face uncertainties once Article 50 of the Lisbon Treaty — the formal process of leaving the European Union (EU) is invoked. 

CSI Properties, in a statement on Friday, said the pound fell to a 31-year low against the US dollar since the EU Referendum, and took yet another beating when UK Parliament passed the Brexit bill this week. 

“Comparatively, the fall of the pound is more drastic than the ringgit. 

 

 

“House prices (in the UK) have taken a dip, particularly in London, and the combination of the two factors presents a good buying opportunity for Malaysian and other foreign investors looking to invest in UK property,” said CSI Properties spokesperson Virata Thaivasigamony. 

However, Virata said the window of opportunity for a favourable exchange rate might be a short one, citing predictions by the Bank of America that it expected the pound to suffer only another plunge, which would be its lowest, when Article 50 is invoke. 

“The UK will be on sale again. This will be the best time to take advantage of the pound as the currency will strengthen once official Brexit negotiations get underway,” he said. 

Virata added that more Malaysian investors were seeing the opportunity that Brexit presented, understanding that while there might be uncertainties ahead, UKs fundamentals were strong enough to ride out the Brexit process. 

CSI Properties saw a 60% increase in sales volumes in 2016 compared with 2015, of which more than half were from UK real estate, an indication that Malaysian investors were taking advantage of the current favourable exchange rate following Brexit. 

Additionally, he said more than 65% of the agency’s UK real estate sales came from UK student property alone. 

Virata said the UK student accommodation sector grew 37% since 2014 from £30.9bil to £42.5bil, making it one of the fastest growing asset classes in the UK property market. 

However, supply is still unable to keep up with demand, as studies showed that the UK needs 250,000 to 300,000 houses every year, but latest figures revealed that this target has consistently not been met, he said. 

He cited Lembaga Tabung Haji and GuocoLand as among Malaysian organisations that had made a significant presence in the UK property market. 

Tabung Haji has allocated RM2bil for real estate investments in the UK and Australia, while GuocoLand has expanded its portfolio for the UK and Australian markets through a strategic 27% stake in Eco World International. – Bernama

POSTED BY: RESIDENT   23/03/2017

Property prices in England and Wales continue to rise with an annual year-on-year increase of 6.2 per cent in January according to the latest figures from the Office for National Statistics (ONS).

House values rose by 0.8 per cent month to month from December, to continue an upward path despite uncertainty surrounding Brexit.

England fared best with an annual rise of 6.5 per cent, taking the average property price to £234,794 according to the ONS research.

Wales also showed an annual rise of 4.2 per cent to reach £145,933 in January. Though property prices fell slightly month to month by 0.6 per cent from December.

The strongest rise was seen in the East of England with an increase of 9.4 per cent over the last twelve months.

London was slightly behind with an annual rise of 7.3 per cent. However, the capital showed strong signs of turning the corner from its recent slump, registering the largest month to month increase of 3 per cent from December.

Lowest annual growth was seen in the North East at just 2.2 per cent, and in Yorkshire and Humberside a large monthly decrease of 2.6 per cent was recorded.

Despite doom and gloom predictions in the run up to the EU referendum, Brexit uncertainty continues to be ignored by the property market as prices continue to rise regardless of the imminent start of the exit process.

CEO of haart estate agents, Paul Smith, commented: ‘With only a week to go until Article 50 is triggered – house prices remain indestructible as the average person is paying £13,000 more to own a home than the same time last year, reflecting the health and buoyancy of the UK economy seen in the last few months.’

Property price growth is slightly below the 7.4 per cent seen in 2016, and with inflation moving past the Bank of England target rate of 2 per cent this week, buyers may become more conservative. But the shortage of available property in the UK compared to demand should strongly underpin the market.

By Isabelle Fraser

24 MARCH 2017 • 12:01AM

House prices in Manchester have grown by 8.8pc in the last 12 months

Manchester has sped ahead of southern rivals, recording the fastest house price growth of any city in the UK.

Homes in the capital of the Northern Powerhouse increased in value by 8.8pc over the past 12 months, according to Hometrack.

Cities with higher-priced property have seen a slowdown in price growth: in London it slowed to an annual rate of  5.6pc, the lowest since May 2013. This is acting as a drag on the index’s overall level of growth.

By Richard Bradstock, Special to Gulf News

Overseas real estate picks are proving easy

Multiple UK cities figure prominently and Chicago’s got what it takes

Published: 14:01 March 22, 2017

By Richard Bradstock, Special to Gulf News

 

As part of a survey conducted last year, over 500 members of the public shared with us why they would invest in property and the response was typical. Themes of stability, reliability, diversification and low correlation with other major asset classes were raised.

Evidence shows that these attitudes are global. After a shaky 2016, marked by the fallout from Brexit and the US presidential election, we look at the trends that will likely dominate global this year.

The big picture: investors look above the fray of global political and economic risk

The knee-jerk reactions seen in 2016 now appear to be behind us. Major stock exchanges have long bounced back following the shocks and there seems to be a strong sense of business as usual. The recent IMF World Economic Outlook update showcased the broad consensus of forecasts suggesting that 2017 will be a year of “modest growth”.

Yet ongoing global economic and political uncertainty means these broad predictions come with a very clear health warning. Will Chinese rebalancing be managed successfully? Will consumer markets remain resilient?

Is the US about to start shredding its trade agreements? In light of these potential issues, it’s not difficult to imagine situations where investors are left exposed across multiple asset classes.

In our view, it is important to understand that balanced portfolios are fortified with assets that are above the fray. This explains why property, particularly residential property, is expected to remain a key investment theme in 2017. It also helps to understand why markets in the UK, US, Australia and Germany require special focus.

Brexit and beyond

After the UK voted to leave the EU, the British pound tumbled dramatically, causing residential property to become around 20 per cent cheaper for dollar-pegged foreign investors. Because of this, investors from the GCC and Asia are casting an eye over the UK market with renewed enthusiasm, recognising it as “the same old safe haven as ever — but cheaper”.

Investors are well placed to capitalise on this opportunity. Investors from the Middle East have been putting their money in the UK property market for a long time, and the appeal of British brick-and-mortar has become more pronounced after becoming far more affordable for dollar-pegged investors.

In recent years, Manchester and Liverpool have become some of the best cities in the UK for property investment. Manchester is one of the strongest buy-to-let cities in the UK. Not only are 63 per cent of households renting (24 per cent above the UK average), but in the extended city centre four out of five apartments are rented.

Reflecting the strong demand for rental properties- rental growth of 20.5 per cent is expected between 2017-21.

In Liverpool, property demand remains strong, with a 6 per cent price growth seen during June to September 2016. Demand is likely to rise further as the population of Liverpool is predicted to grow from 83,000 to 1.6 million by 2040.

As the UK begins the process of formal departure from the EU, a process likely to take around two years, the fundamentals that have long made UK property investment popular with GCC investors remain firmly in place, providing an attractive opportunity for long term investors to ride out any short term volatility.

Key markets to invest in 2017

Well-known for its striking architecture, Chicago is also one of the largest US cities. A hidden gem in the real estate world, the windy city is expected to be a key US property investment market through 2017. The city has the sixth highest GDP among world cities and is diversified across a variety of markets that include finance, technology, telecommunications and transportation.

Since July 2013, average condo prices have risen 16.2 per cent, while average prices at IP Global’s most recent Chicago project have risen 5-6 per cent since February 2015. These figures are extremely encouraging for potential investors.

Germany is also on our list of top investment destinations for 2017. A joint report from PwC and Urban Land Institute ranked Berlin as the No. 1 city in Europe for investment and development prospects. Strong economic growth and increasing population continue to underpin the German capital’s reputation as one of Europe’s prime destinations for residential property investment.

With a 40 per cent housing supply deficit, 400,000 new residents expected by 2030 and the opening of the Berlin Brandenburg Airport scheduled for 2018, the near term outlook for Berlin’s property market looks extremely promising