The number of people who own propery worth £1m and more has rocketed during the course of the last decade.
Data compiled by Santander Mortgages (formerly Abbey) shows that the UK is now home to 393% more property millionaires than it was at the start of the century.
It calculates that there are currently 131,996 homes worth over £1m in this country, almost a five-fold increase on the 26,776 that existed in the year 2000.
When property prices fell following the onset of the credit crunch, 43,000 properties lost their £1m+ status. However, since 2009 the market for top-end properties has recovered strongly. Over the past year, the number of £1m+ properties has risen by around 29,000, returning the number of property millionaires close to its early 2008 peak when there were 147,000 of them.
The recovery at the top-end of the market has been largely attributed to overseas buyers looking for a good home for their capital and some bankers continuing to enjoy large bonuses.
Around 78% of £1m+ homes are located in London, with the capital's SW post code holding 29%. London's SE postcode area has also showed a staggering 23-fold increase in its number of property millionaires in the past decade.
Phil Cliff, director of mortgages at Santander, said:
"For many of us our ‘home is our castle' and in recent years we've often viewed our home as a key investment too. Whether you're a property millionaire or not, prospective buyers and those remortgaging need to ensure they get a fair deal on their house and mortgage.
Nigel Lewis, analyst at property website PrimeLocation.com, commented:
"It's amazing how fast £1m+ property prices have recovered since the dark days of mid-2008 when the market experienced significant price reductions.
"Our research shows that the number of million pound homes for sale has risen considerably over the past year and the number of people looking to buy them has also jumped by 20% - so it's no wonder that the prime property market is recovering so fast."
Monday 19 July 2010
Buy-to-let confidence rises
Confidence in the private sector is on the up, with nearly a third of landlords reporting rising tenant demand and one in five planning to invest in the next quarter, according to Paragon Mortgages.
Paragon's survey revealed that 29% of landlords saw tenant demand increase in the second quarter of the year, compared to 10% who reported a fall.
This is up on the first quarter of the year when 24% of landlords saw rising demand and 8% saw a decrease.
The majority of landlords (54%) said that tenant demand was stable during the second quarter, while 7% said they were unsure which direction demand was heading.
Paragon's figures showed that landlords are confident that tenant demand will continue to strengthen, with 35% expecting demand to be higher in 12 months, while 8% forecast a decline.
This confidence is also reflected in that 21% of landlords surveyed intend to invest in further property during the third quarter, compared to just 12% in the last quarter.
However, securing buy-to-let mortgage funding continues to be a problem, with over half finding it more difficult, while just 13% said it was easier.
Nigel Terrington, chief executive of Paragon Group, said:
"Strong tenant demand is great news for landlords, but will lead to rental inflation for tenants unless the private rented sector is able to expand to meet this demand. Pressure is building on the finite number of properties in the sector because the lack of buy-to-let mortgage availability has prevented landlords from growing their property portfolios."
He added: "There is obviously a dislocation between landlords' intention to purchase and their actual ability to do so given the continued scarcity of buy-to-let mortgage finance.
"However, our survey confirms that landlords still value residential property as an investment vehicle."
Paragon's survey revealed that 29% of landlords saw tenant demand increase in the second quarter of the year, compared to 10% who reported a fall.
This is up on the first quarter of the year when 24% of landlords saw rising demand and 8% saw a decrease.
The majority of landlords (54%) said that tenant demand was stable during the second quarter, while 7% said they were unsure which direction demand was heading.
Paragon's figures showed that landlords are confident that tenant demand will continue to strengthen, with 35% expecting demand to be higher in 12 months, while 8% forecast a decline.
This confidence is also reflected in that 21% of landlords surveyed intend to invest in further property during the third quarter, compared to just 12% in the last quarter.
However, securing buy-to-let mortgage funding continues to be a problem, with over half finding it more difficult, while just 13% said it was easier.
Nigel Terrington, chief executive of Paragon Group, said:
"Strong tenant demand is great news for landlords, but will lead to rental inflation for tenants unless the private rented sector is able to expand to meet this demand. Pressure is building on the finite number of properties in the sector because the lack of buy-to-let mortgage availability has prevented landlords from growing their property portfolios."
He added: "There is obviously a dislocation between landlords' intention to purchase and their actual ability to do so given the continued scarcity of buy-to-let mortgage finance.
"However, our survey confirms that landlords still value residential property as an investment vehicle."
Flat house prices forecast for 2010
Property portal Rightmove predicts that the value of UK residential property will remain largely stable this year, with the average home losing any gains made in the first half of 2010 during the remainder of this year.
Rightmove’s latest monthly House Price Index calculates that the average asking price for a property fell by 0.6% between June and July, to stand at £236,332, as the supply of available homes has increased to such a level that it has outstripped demand for the first time in a year.
The website reports that the number of new property sellers currently outpaces mortgage approvals by 5.2%, creating a buyer’s market in which asking prices are likely to be forced down slightly throughout the rest of the year.
It records that new-to-market sellers dropped their asking prices for the first time this year in June, down by 0.6% (£1,435) this month.
Miles Shipside, commercial director of Rightmove, said:
“The number of new mortgages being approved each month is less than half the number of new sellers, with the imbalance being exacerbated by the increase of nearly 50% in the number of properties coming to market compared to a year ago.
“More aggressive pricing is now the order of the day, which means that conditions are ripe for a strong buyers’ market in the second half of 2010.
“This is likely to see the average price gains of 7% for the first half of the year wiped out by year-end, in line with Rightmove’s original forecast for the year of no net change in house prices”.
Rightmove’s annual forecast in roughly in line with well-regarded house price index compilers and mortgage lenders Halifax and Nationwide both of which foresee little annual change in typical property values.
Rightmove’s latest monthly House Price Index calculates that the average asking price for a property fell by 0.6% between June and July, to stand at £236,332, as the supply of available homes has increased to such a level that it has outstripped demand for the first time in a year.
The website reports that the number of new property sellers currently outpaces mortgage approvals by 5.2%, creating a buyer’s market in which asking prices are likely to be forced down slightly throughout the rest of the year.
It records that new-to-market sellers dropped their asking prices for the first time this year in June, down by 0.6% (£1,435) this month.
Miles Shipside, commercial director of Rightmove, said:
“The number of new mortgages being approved each month is less than half the number of new sellers, with the imbalance being exacerbated by the increase of nearly 50% in the number of properties coming to market compared to a year ago.
“More aggressive pricing is now the order of the day, which means that conditions are ripe for a strong buyers’ market in the second half of 2010.
“This is likely to see the average price gains of 7% for the first half of the year wiped out by year-end, in line with Rightmove’s original forecast for the year of no net change in house prices”.
Rightmove’s annual forecast in roughly in line with well-regarded house price index compilers and mortgage lenders Halifax and Nationwide both of which foresee little annual change in typical property values.
Friday 9 July 2010
House prices stabilizing
Average UK property prices fell by 0.6% in June.
According to the latest Halifax House Price Index, this was the second consecutive monthly decline, following a decrease of 0.5% in May.
However, looking at longer-term trends, prices in the second quarter of this year are just 0.1% lower than the first quarter, indicating stabilization rather than freefall in the housing market.
According to Halifax data, the average UK property is now worth £166,203.
Martin Ellis, housing economist at Halifax, said:
"This continued the slowdown in house price growth since the beginning of the year following the moderate recovery in prices during much of 2009. This pattern is in line with our view that house prices will be broadly unchanged over 2010 as a whole.
"A shortage of properties for sale in 2009 contributed to an imbalance between supply and demand and was a key factor driving up house prices last year. An increase in the number of properties available for sale in recent months has helped to reduce the imbalance, relieving the upward pressure on prices. The low level of interest rates, however, continues to support housing demand."
Nigel Lewis, analyst at property website FindaProperty.com, commented:
"It is no surprise that the latest Halifax house price index shows a dip in house prices; our own figures show that there has been an influx of stock over the past few months which has served to drive prices down.
"There are currently 23% more properties for sale on our site than there were a year ago and this imbalance between supply and demand is now affecting pricing.
"We are reverting back to a buyer's market and therefore sellers must vie for their attention with more competitive prices."
According to the latest Halifax House Price Index, this was the second consecutive monthly decline, following a decrease of 0.5% in May.
However, looking at longer-term trends, prices in the second quarter of this year are just 0.1% lower than the first quarter, indicating stabilization rather than freefall in the housing market.
According to Halifax data, the average UK property is now worth £166,203.
Martin Ellis, housing economist at Halifax, said:
"This continued the slowdown in house price growth since the beginning of the year following the moderate recovery in prices during much of 2009. This pattern is in line with our view that house prices will be broadly unchanged over 2010 as a whole.
"A shortage of properties for sale in 2009 contributed to an imbalance between supply and demand and was a key factor driving up house prices last year. An increase in the number of properties available for sale in recent months has helped to reduce the imbalance, relieving the upward pressure on prices. The low level of interest rates, however, continues to support housing demand."
Nigel Lewis, analyst at property website FindaProperty.com, commented:
"It is no surprise that the latest Halifax house price index shows a dip in house prices; our own figures show that there has been an influx of stock over the past few months which has served to drive prices down.
"There are currently 23% more properties for sale on our site than there were a year ago and this imbalance between supply and demand is now affecting pricing.
"We are reverting back to a buyer's market and therefore sellers must vie for their attention with more competitive prices."
Interest rate held at 0.5%
The Bank Base Rate has been maintained at 0.5% for the 15th consecutive month.
The Monetary Policy Committee of the Bank of England voted to maintain the Base Rate at its current level amid ongoing economic uncertainty.
The decision will be welcomed by mortgage borrowers on tracker deals, which are linked to the Bank Base Rate, and also by people sitting on the Standard Variable Rates (SVRs) of those lenders who have promised not to increase the rate by more than a given margin over Base Rate.
Jonathan Samuels, chief executive of Drawbridge Finance, said:
"Interest rates are on hold again but the hawks, led by Andrew Sentance, are beginning to circle. The minutes of this latest MPC meeting due to be published later in the month will offer a strong clue as to when Bank Rate will finally rise.
"Even when rates do rise, we expect the percentage increases to be small and incremental and this, coupled with the fact the market has already begun to price them in, is unlikely to put the property market into reverse.
"Higher rates will naturally add to the headwinds facing borrowers and the property market but at the same time they are a necessary evil, a key step back to a more normal functioning of the economy and lower inflation.
"The important thing is that the up-cycle, when it does commence, is managed smoothly to avoid shocks and enable the economy, markets and borrowers to adjust."
The Monetary Policy Committee of the Bank of England voted to maintain the Base Rate at its current level amid ongoing economic uncertainty.
The decision will be welcomed by mortgage borrowers on tracker deals, which are linked to the Bank Base Rate, and also by people sitting on the Standard Variable Rates (SVRs) of those lenders who have promised not to increase the rate by more than a given margin over Base Rate.
Jonathan Samuels, chief executive of Drawbridge Finance, said:
"Interest rates are on hold again but the hawks, led by Andrew Sentance, are beginning to circle. The minutes of this latest MPC meeting due to be published later in the month will offer a strong clue as to when Bank Rate will finally rise.
"Even when rates do rise, we expect the percentage increases to be small and incremental and this, coupled with the fact the market has already begun to price them in, is unlikely to put the property market into reverse.
"Higher rates will naturally add to the headwinds facing borrowers and the property market but at the same time they are a necessary evil, a key step back to a more normal functioning of the economy and lower inflation.
"The important thing is that the up-cycle, when it does commence, is managed smoothly to avoid shocks and enable the economy, markets and borrowers to adjust."
Subscribe to:
Posts (Atom)
