UK Property Market

Research by the National Association of Estate Agents (NAEA) shows that the number of first-time buyers continued to decrease in May, dropping below ten percent of the market. Only 8.9 percent of the buyers signed their first home purchase contract in May, although sales remained at the levels of the previous month.

At the same time, the number of properties for sale in May went up, with around 16 per cent increases in every region. Per agent, this meant around 72 properties for sale, out of which, on average, only 13 were sold. According to experts, the surge in homes being placed for sale resulted mainly from sellers wanting to avoid the costs incurred by the introduction of Hips (home information packs).

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According to a study by Land Registry, house prices increased by 8.9 per cent since May last year. With an annual rise of over six percent, London Remains the most expensive location for buying a home. The London Average price house of £335,658 stays firm at number one, while the south-east follows in second, with £220,872.

In what property types are concerned, the most significant rises were recorded for flats and maisonettes, with 10.4 per cent since May 2006. Next are terraced homes, with 9.2 per cent, semi-detached properties, with 8.3 per cent, and detached homes, with 7.2 per cent. Only two regions across England And Wales Saw decreases in home prices, the north-west and the north-east, while in the south-east prices remained at the same levels.

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According to a study by Halifax, the best value homes in Britain Are located in the east and south-east regions of the country. More specifically, Buckinghamshire is rated best value for flats, Suffolk For terraced properties, and Sleaford in Lincolnshire For semi-detached homes. Besides property prices, the research looked at employment rate, average salary, housing types, owner occupation, traffic and safety levels, weather, healthiness of people in the region, and educational institutions.

There are several places where both home-movers and first-time buyers can take advantage of really good bargains. The best value for money flats are to be found in Chesham, while the most convenient terraced houses are in Stowmarket. Chesham also ranks sixth in the UK’s top of best places to live. Other reasonably priced flats (below £150,000) are located in Basingstoke, Ayelsbury, and Bracknell, all with high quality of life ratings.

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The new Tesco Property Market website is the first attempt of the supermarket giant to participate in the housing market, allowing both agents and home-owners to market properties online. For a cut-price fee of only £199, those who will chose to sell their home through Tesco’s services will get an online advertising space and a customized Tesco ‘For Sale’ board to place outside their house. Additionally, Tesco offers an online and phone service which will assist customers in managing bookings and offers. In order to provide a list of houses for sale, Tesco has opted to co-operate with another website, Fish4Homes. Other websites and estate agents, however, have declined and even warned Tesco not to include a search of their property listings.

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A recent survey from Zoomf.Com shows that the average price of a London four-bedroom property is £557,608, which is £161,221 more than a three-bed one (£396,387 on average). This price difference is much smaller when it comes to one and two-bed homes, with an average of £89,751. According to the website, on the London Market there are currently 7,916 four-bed homes, 10,636 three-bed, 13,655 two-bed, and only 5,698 one-bed houses.

The lack of one-bed homes is probably going to cause difficulties to first-time buyers, who will not be able to cover the difference of price to buy a two-bedroom apartment. Furthermore, due to the considerable gap between three and four-bed homes, many households will chose to improve their homes over moving.

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After a new rise by the Bank of England, interest rates reached the highest base rate over the last 6 years. Although widely predicted and expected by industry professionals, the recent 0.25 percentage increase, the fifth approved by the Bank of England since August 2006, caused divergence of opinions among experts across the nation.
According to some industry representatives, this rise is likely to bring a home price crash to an already suffering market. First-time buyers especially will face a challenge when borrowing, while monthly payments are likely to see a big rise when households come to the end of fixed-rate deals. Other real estate analysts, however, believe that the market will tighten after this rise, without any damage to its stability.

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According to a study by Halifax, the 0.4 per cent increase in property prices last month stands testimony that house price inflation continues to fall. The average cost for a UK Home went up to the level of £197,461 in June, this being the second month with an increase smaller than 0.5 per cent.

The overall rise in home prices during the second quarter of 2007 is two per cent, which is considerably less than the first quarter’s three per cent rise. It is also well below the fourth quarter of 2006, when the rise was 4.2 per cent, which supports the idea that inflation is slowly going down. Nationwide, however, home prices will continue to go up because of the rises in mortgage rates and negative real earnings.

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According to the Royal Institute of British Architects (RIBA), the standards for new properties must change in the near future. The organization has recently launched a new housing policy titled Better Homes and Neighbourhoods, which points out the need for change as newly built properties in UK Are well behind those in the European Union and Japan When it comes to available space and quality.

RIBA also encourages the government to become more efficient in administering the existing housing stock. Since only one per cent of this housing stock is renewed every year, a more comprehensive approach needs to be carried out. In order to help deal with the situation, RIBA is determined to support communities by delivering higher design standards.

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According to the lettings index by Knight Frank’s London, rents saw increases of 4.2 per cent on average from April until June 2007, which is the most significant rise since 1995, when the records were first registered. Similarly, the average rent in London Went up by 12.2 per cent over the last year, the highest inflation since 1995.

Over the last three months, the largest rises in central London Were recorded in Notting Hill and Kensington, with over 6.1 per cent increases. In the same period of time time, in Wapping and Canary Wharf inflation led to 7.6 per cent rises, adding up to the 14 per cent annual increase. In spite of these considerable rental rises, the gross yields for landlords are only little over four per cent.

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Recent research from Woolwich Mortgages analysed the ratio between household income and mortgage payments in different locations all over the UK. The study revealed that all top five least affordable property areas for first-time buyers are found in London. The continuous rise in UK Home prices over the last years has led to mortgage buyers paying up to 152 per cent more than five years ago.

In three London Locations first-time buyers give up almost half of their income to pay their mortgage – 48 per cent in Brent, 46.7 per cent in Ealing, and 45 per cent in Haringey. The most expensive place to buy outside London Is Brighton, where first-time buyers are paying well over 40 per cent of their household income on mortgage.

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