UK Residential Sales Summary
Early Start to Spring Buying Season. Following on from strong activity since the beginning of the year, sales rates surged in March. We have seen the number of houses on our books increase by 16 percent over the year, with the number of new buyers nearing a 12-month high.
UK Residential Lettings Summary
London is Driving Rental Market Growth. The lettings market remains very active across London and the South of England. Demand continues to support rents and has ensured a quick turnover for vacant properties.
Research
Budget - All About Managing Expectations. The March 23rd budget provided very few surprises for the UK’s troubled residential market. With Government austerity measures now in full swing, there is little left in the kitty for spending surprises. HM Treasury also made sure that most of the key points had been leaked in advanced, leaving very little left to be publicised on the day. However, the key highlights were:
- First-time buyers were handed further support with the introduction of the £250 million First Buy Scheme to provide a nointerest loan for up to 80 percent of the deposit, provided the property is new-build.
- Conversion of obsolete commercial property to residential may be made easier and will go out for further consultation. Town centre regeneration could be given a boost as blighted properties are replaced with new residents and activity.
- Additional measures to streamline the planning process and improve the availability of surplus public land for residential development.
In addition, the new Stamp Duty Land Tax of five percent for £1 million plus homes came into force on April 6th, affecting 8,500 homes per anum across the UK and between 4,600 and 4,900 in London. Our research shows that nearly 1,000 homes were affected by the ‘margin shift’; properties previously priced just above the threshold that have been adjusted down in order to attract buyers.
Mortgages
Lending is Gaining Traction.
Net mortgage lending continues to fluctuate but remains fundamentally subdued. We remain cautious about any significant increases this year as lenders are constrained by repayments to the Special Liquidity Scheme, which are due in March 2012. Until these debts to Government are dealt with, significant volumes of new mortgage lending will remain elusive.
However, as we noted last month lending terms continue to improve, with a number of new
products at higher loan-to-value ratios being introduced. Although good news, prospective mortgagees are continually frustrated by the tight lending terms that are limiting access to some of these products. This is particularly true for anything beyond ‘plain vanilla’ lending, including first-time buyers, the selfemployed and interest-only requirements.
Recognising this opportunity, Hamptons International is excited by the recent acquisition of Mortgage Intelligence by our parent company Countrywide, a business that strengthens the direct link between Hamptons International and the UK’s marketleading mortgage brokerage. This provides extra firepower in a market where scale has a significant influence on the ability to source the best deals with lenders for our clients.
View the latest Mortgage Best Buy rates
In Focus: Research
The Pension (Chimney) Pot. It is often said that the British people have a particular fascination with property ownership; currently 68 percent of all properties in the UK are owner occupied. This is similar to the US level and sits broadly in the middle of a range of ownership levels across developed nations.
Read the full In Focus: Residential Development Update
View the Hamptons market update publication - 'Inside Access'