House prices up and down, and…down
BBC is reporting that, according to the Nationwide building society, house prices are now rising at 6.5% a year, up from 5.8% a month ago. An annual house price inflation increase of 3.1% is also reported by Land Registry, but the monthly figures seem to have dropped for the first time in eight months: they have fallen by 0.2% in England and Wales between October and November.
Whilst for the casual observer the spike in property prices across London seems to have no end, to some prominent commentators the situation appears different. According to this Financial Times article house prices in prime areas of central London have been stagnating in November, “raising the possibility that the capital’s property boom is diminishing”.
Whether these market tremors are caused by the government’s intention to impose heavier taxation on wealthy foreigners purchasing London property remains to be seen. The everyday British homebuyers, who are already paying the highest property taxes in the developed world, can only see the government’s decision as a very sensible initiative.
Various reports on the evolution of house prices rarely agree, so Roambi and Agent Analytics team up to help users discern the realities of the property market in the form of a very useful and free iPad app. According to their analysis, property prices in England and Wales are very much at the same level as September 2010.
More houses to be built
Sigma Capital, an Edinburgh-based property developer, and Gatehouse, a Kuwaiti-backed investment bank, team up under direct blessing from the Prime Minister in order to deliver thousands of houses. In the first phase, about 2,000 rental properties will be built in Liverpool and Greater Manchester over a period of 24 months.
Housing seems to be at the top of this government’s agenda, with Nick Boles, the planning minister, determined to ramp up new developments by minimising delays caused by local councils. This is expected to be achieved in part by lowering the standard for sustainable development, potentially making way for new developments in 53% of England’s local authority areas. At the same time, this raises valid concerns about the viability of new housing for long term.
In view of the current housing crisis, it is expected that private renting will increase, amidst steady demand for buy-to-let mortgages observed in October. Savills are forecasting that an extra one million homes will join the private rented sector (PRS) by 2018.