Rising house prices harming economic growth say employers

Rising rents and house prices are hitting economic growth by making it difficult to recruit, warn companies.

Nearly four in five employers questioned across England believe that a lack of affordable housing is stalling economic growth in local communities, the National Housing Federation found.

This comes as prices in areas like London soar above pre crash levels - pricing many people out of the market.

Some 79% of more than 1,000 managers surveyed said that building more homes would stimulate the local economy and 72% thought it would encourage more customers into their area.

Around 78% of managers also agreed that house prices are a "problem" in their local area and 58% said building more homes would help staff recruitment and retention.

National Housing Federation director Gill Payne said: "Our economic recovery is being held back because there aren't enough homes in England today, and this lack of homes has pushed up prices and rents beyond people's reach.

"As a result, businesses are finding it tough to attract workers and expand because many people can't buy a home or would struggle to pay high rents. If things don't change, employers will simply move - potentially out of the country - taking away desperately needed jobs."

Average price of home up 0.4% in Msy

Nationwide publish their monthly market report.

• Price of a typical home increased by 0.4% in May and was 1.1% higher than May 2012
• The typical UK home is now worth £167,912

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:

“House prices edged up by 0.4% in May, providing further support for the view that the housing market is gradually gaining momentum. The three month on three month measure of house prices, which is a smoother measure of the underlying trend, has been in positive territory since October last year. The annual rate of house price growth also ticked up to 1.1% in May - the fastest pace since November 2011.

“It’s not just prices - a number of measures of housing market activity have also started to move higher. In the first four months of 2013 the number of property transactions was running at around 5% above the monthly average prevailing in 2012. The number of mortgage approvals for house purchase in the first quarter of 2013 was also around 4% above last year’s monthly average.

“A number of factors are likely to be contributing to the pick up in activity. There has been an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme. Indeed, mortgage rates have fallen back towards all time lows in recent months.

“With the UK returning to growth in the first quarter of 2013, the improvement in wider economic conditions may also be playing a role in boosting sentiment.”

For more information please see the full report: http://www.nationwide.co.uk/mediacentre/housepriceindex/default.htm

Rural property increases in price by 9.9% in 2012

Rural property delivered another year of strong growth for investors, even outpacing London.

Rural property just missing out on a second year of double-digit returns, according to Carter Jonas and Smiths Gore, sponsors of the IPD Rural Property Index 2012.

Total returns of 9.9% in 2012 outpaced those of commercial and residential property. 

The main driver of growth has been from capital value increases, which was 8.2% during 2012 – higher than residential property which had 5.9% capital growth, and prime commercial property, which saw capital values fall 2.2% over the same period.

 "Rural property has continued to stand out as an attractive capital hold since the downturn. While values for commercial property almost halved in some areas and the volatility of equities deterred risk-averse investors, rural property values only dropped 0.4 per cent in 2008 and have risen by an average of 7 per cent per year since the start of the recession in 2008," comments Richard Liddiard, head of Rural Agency at Carter Jonas.

Over the last five years, rural property has returned 8.9 per cent per annum, against 0.7 per cent from commercial property, 4.6 per cent from residential, 2.1 per cent from equities and 8.8 per cent from bonds. (IPD UK Annual Property Index, IPD UK Annual Residential Index, MSCI UK and JP Morgan UK 7-10 year).
Many also seek to take advantage of the beneficial tax status afforded to rural holdings.

Reasons for growth

Iprovements in the economic drives of the UK’s agricultural sector have underpinnsoed this growth, as well as the increasing potential for alternative use.

Common Agricultural Policy (CAP) reform, which had led to fears about the reduction of financial assistance to farmers, will be more benign than originally thought. It continues to support the financial viability of UK farms, while growth in demand for UK farm commodities and food has similarly helped.

The horse meat scandal and other domestic issues have increased the demand for UK-grown and reared produce, while long-term fears about global food supplies continue to support UK food production.

Potential alternative use of land for renewable energy production is also an incentive. Although wind farms have proven divisive and planning permission can be tricky to obtain, solar farms and hydro-power are alternatives that are more accepted by the general public and are growing fast. And with long-term government-backed financial support and growing pressure from the EU to meet strict green targets, the potential to produce renewable energy is huge.

Phil Tily, Managing Director of IPD for the UK and Ireland, said: "A growing awareness of rural land has emerged in the last five years, as large and small investors are increasingly thinking outside the box to diversify their returns. For its diversification potential and capital hold characteristics the sector is hard to beat, and with improvements in the economic fundamentals underpinning the sector, rural land will continue to look attractive as an asset."

UK lagging behind in self build market

At present, the UK self-build market lags behind other European countries; with around 12,000 self-build homes delivered per year it accounts for 7.6% of the new housing supply. This compares to Hungary (52%), France (38%), and the Netherlands (10%).  The Government's stated aim is to double the output of self-build housing from 100,000 to 200,000 over the next decade.

The self-build market requires significant further structural and cultural change if it is to become a conventional housing option within the next decade, according to the Build-it-yourself Report from Lloyds Banking Group in partnership with the Centre for Housing Policy at the University of York.

The key findings were

• There is potential for growth in the self-build sector, but it is too early to conclude that the sector is yet on a growth trajectory or the likely extent of any growth.
• If private sector organisations and housing providers are to be convinced of the demand and cost-effectiveness of self-build the Government must signal its ongoing support for the key initiatives beyond 2015.
• The role of local authorities is pivotal in delivering a change in volume, but they continue to operate in isolation, do not always see self-build as a priority, and there is little sharing of experience.
• Self-builders are primarily older and affluent, enabling them to draw on equity, savings, and mortgage loans to fund the build costs. As such easing access to finance for less affluent and younger households is fundamental if a step-change in volume is to be achieved.

Self-build remains a highly bespoke activity, with considerable variety in the way it occurs. It can often take up to two years to access land and, with numerous design, construction, and funding methods available, it can take a further two or more years to complete a build.

The average self-build project costs (including land) £255,543, and the self-build market is currently worth around £3.6bn per year.

The report shows that self-builders tend to have higher incomes and/or higher housing wealth and that younger, lower income households are infrequent builders.

Current initiatives making a difference

Led by developers, local authorities, and housing associations there is currently some impetus in the market, with new models of group self-build delivery and multi-plot individual schemes emerging.

There is evidence of their success in helping self-builders overcome problems such as limited experience and access to land, and also in the provision of project management support and help with securing planning permission.  However, many are ‘pilot initiatives’ and it is unclear as yet which approaches have the capacity to deliver volume.

Stephen Noakes, Mortgage Director, at Lloyds Banking Group, says: "The recent Government-led initiatives have been encouraging, but they need time to work and if the outcomes are to be successful then these activities need long-term support.

"If the sector is to grow and become part of the mainstream market then more work needs to be done in terms of sharing information and standardising practices. We need to see more coordination between both national and local government and the lending industry if we are to achieve this.

"On top of this, a finance industry-wide working group would help generate a greater understanding of the risks and could encourage more lenders to enter the market. This would then increase the supply of accessible products which can be tailored to the needs of self-builders and the different models of self-building, boosting financial support for the sector."

China's house prices tipped to rise 8%

China's house prices are tipped to rise 8% this year.

China's loose monetary policy and strong pentup housing demand will drive up home prices in 2013, but government cooling measures, including a wider trial programme to tax property owners, will keep the market from running away.

A Reuters latest poll of 11 economists and property market analysts, conducted this month predicts an 8% rise in China's house prices this year, followed by a 3% increase in 2014. The forecasts were roughly in line with a previous poll five months ago which showed an increase of 7% in 2013 and 5% in 2014.

This comes as the  S&P/Case Shiller composite index  in the US yesterday reported an annual house price increase of 11% while UK prices are also rising, mainly in the back of big spikes in London.

“Sales performance has been pretty good this year, which will drive up prices. And there is also a lot of liquidity in the property market this year,” said Luo Yu, an analyst with CEBM in Shanghai.

On a scale of 1 to 10 for house prices, where 1 is seen as extremely undervalued and 10 is extremely overvalued, the median forecast of the respondents was 8.

“China's current home prices have far exceeded a sustainable level that the country's economic fundamentals can support,” said Jianguang Shen, chief China economist with Mizuho Securities Asia.

The country's largest real estate developer, China Vanke, reported a 67.6% rise in contracted sales in April from a year earlier. Even as signs emerged that the broader economy was losing some steam, housing inflation nationwide accelerated to its fastest pace in April in two years and new home prices in Beijing rose 10.3% last month from a year earlier.
But warnings have been issued over the potential of a housing market crash in Asia as personal debt rises. http://housepriceuk9.blogspot.com/2013/05/could-asia-be-headed-for-uk-style.html

US house prices rise 11% in a year

US homes rose in March, racking up their best annual gain in nearly seven years.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 1.1 percent in March on a seasonally adjusted basis, topping economists' forecasts for a 1 percent rise.

Prices in the 20 cities jumped 10.9 per cent year over year, beating expectations for 10.2 per cent. This was the biggest increase since April 2006, just before prices peaked in the summer of that year. This could be good news for house owners in the UK where rises often lag the US market.

All 20 cities covered by the US index saw yearly gains for the third month in a row. Average prices in March were back at their late-2003 levels.

Annual prices rose in Phoenix by 22.5%, the biggest gain among the 20 cities. It was followed by San Francisco (22.2%) and Las Vegas (20.6%).

New York City had the smallest annual increase at 2.6%, followed by Cleveland at 4.8%.

The Case-Shiller index adds to recent data suggesting that the US housing market is steadily recovering, buoyed by solid employment gains and near-record low mortgage rates.

Sales of new homes rose in April to nearly a five-year high. And sales of previously-occupied homes rose in April to the highest level in three and a half years.

Welsh lead way on wanting to buy their own home

More adults in Wales aspire to be home-owners in the next 10 years than in Great Britain overall, according to findings released today by the Council of Mortgage Lenders based on a survey undertaken by YouGov¹.

84% of adults in Wales wish to be home-owners in the next 10 years according to research by YouGov, compared to 79% in Great Britain.

In the shorter term, 47% of adults surveyed in Wales indicated they would like to buy a home (either their first or subsequent home) in the next 2-3 years.

Separate data released by the CML in Wales showed an increase in lending to first-time buyers in the first quarter, while lending to home movers and those remortgaging eased.

First-time buyers

A total of 2,000 loans were advanced to first-time buyers in the first quarter, a 5% increase on the first quarter of 2012, but reflecting the normal seasonal factors, down by 20% on the last three months of last year.

By value, lending to first-time buyers increased by 6% (£190 million) compared to the same period last year.

First-time buyers accounted for 44% of all house purchase loans in Wales, up from 41% in the fourth quarter of last year, and 39% in the first quarter of 2012.

Other indicators also suggested more favourable affordability for first-time buyers in Wales. First-time buyers borrowed an average of 3.07 times their income and spent 18.3% of their income in initial mortgage payments in the first quarter, compared to a loan-to-income ratio of 3.23 in the UK and payments consuming 19.5% of a borrowers income.

The loan-to-value ratio in Wales for first-time buyers remained at 85% in the first quarter, higher than the 80% LTV seen in the UK overall.

Peter Hughes, chair of CML Cymru commented:

"The desire to move into home-ownership in Wales is strong but there are still a number of barriers in the housing market stopping people from buying or moving, which is why we are working with key stakeholders on initiatives aimed at boosting the housing market in Wales."

Could Asia be headed for UK style housing crash

Everyone knows the role played by housing bubbles in the pre-crisis booms that ended in spectacular crashes in the United States in 2008, as well as in other countries like the UK and Ireland, and then Spain. But many commentators still persist in seeing this as more of a developed economy problem, which is less likely to become a concern in developing countries where excess demand for housing remains an issue.

In fact, however, it is just as possible for debt-driven private consumption bubbles to burst in developing countries – and several developing country financial crises have resulted from precisely that in the past. The experience of the Asian financial crisis in 1997-98, in which excess private indebtedness played a big role in causing the crisis in South Korea and Thailand, had provided a salutary lesson to most of developing Asia in the subsequent decade.

So it could have been expected that allowing excessive private credit expansion, especially for private retail credit for housing, automobiles and other consumption, is something that would be anathema to Asian countries, especially those that had already gone through one round of devastating financial crises. Yet, in the aftermath of the Great Recession of 2008, many Asian developing countries actually encouraged the growth of consumer credit bubbles as a means to more rapid recovery, accentuating a process that had already been eased by financial liberalisation from 1999 onwards.

The result has been an explosion in heavily leveraged consumption as well as in residential real estate activity, even in economies where wage incomes have not increased that much, such as the Republic of Korea. And the impact has been most strongly felt in the housing market. From early 2009, residential prices in several Asian economies soared dramatically for at least two years.

This has been most evident in Hong Kong, where house prices have more than doubled since early 2009. In 2012, when global residential real estate prices increased by around 4 per cent, prices in Hong Kong rose by 24 per cent. It is now the most expensive place on earth, with property prices significantly higher than in New York, London or Shanghai. By contrast, the authorities in China have been working to quell the frothy housing market ever since early 2010, and to some extent they seem to have succeeded, as average house prices have remained largely flat for the past two years.

In some other countries in East Asia, house prices have tapered off or even started declining, independent of any policy nudging, but simply because the bubble has finally burst. This is clearly evident for Taipei itChina and Malaysia but even in South Korea and Indonesia, the rate of increase has come down significantly. Elsewhere, even in places where the prices continued to increase, they did so at a slower rate, including in India's Mumbai, where the rate of increase was still quite high.

But while the rapid increase in residential real estate prices clearly suggested housing bubbles in many Asian countries, the bursting of the bubble need not be good news, and can have painful consequences. As in the US housing market before 2007, most of the increase in real estate prices in these Asian economies was debt-driven, resulting from the rapid expansion of retail credit to households, which in turn dominated in total personal debt.

The most substantial increase has been in Hong Kong, which is also home to the frothiest property market of them all. The household sector is already facing personal debt crises in several countries, credit to the private sector increased dramatically in many of these economies most notably South Korea, Malaysia and Thailand. And this is turn is already acting as a drag on the economy, as households that increasingly find it difficult to service their debts are forced to deleverage and cut consumption.

So this is a bubble – or rather, a set of bubbles – waiting to burst. Indeed, some are already in the process of bursting.As these factors cause consumer spending to slow down, this is already affecting companies, and causing their debt to become more difficult to service. The corporate bond market, which had become incredibly buoyant in emerging Asia in the recent past, is also becoming a cause for worry.

All this makes the East Asian region's economies ever more vulnerable to external shocks. But with these levels of indebtedness, the shocks that cause the next round of damage may even come from within.

Full article: http://www.thehindubusinessline.com/opinion/columns/c-p-chandrasekhar/the-asian-housing-bubbleburst/article4756617.ece

Stamp duty choking UK housing market

The UK housing market is being choked by stamp duty, say the Homeowners Alliance(HOA) in a special report released today.

Stamp duty as risen by more than seven times the rate of inflation since the mid-1990s, taking the typical bill faced by buyers to almost £6,000, a report by the homeowners' campaigning group has said.

HOA said the government's stated policy of encouraging home ownership was being undermined by the duty, which it claimed has had "a downward impact" on the market.

In a report entitled Stamping on Aspiration, it said that while house prices had risen fivefold between 1995-96 and 2011-12, the amount of tax paid on property purchases had increased 11-fold.

The HOA said the average homebuyer now paid stamp duty of £5,957, or 3.7% of their house purchase price. In London, where house prices have continued to post big rises, the average stamp duty attracted by each transaction was put at £17,529.

While the average stamp duty bill was equal to eight days' earnings in 1995-96, by 2011-12 it would take 11 weeks' work to pay it off.

Stamp duty rates

Until 1997, there was one stamp duty band, with homebuyers paying 1% on all property purchases above £60,000. The new Labour government introduced two new thresholds of £250,000 and £500,000, and since then successive governments have introduced new bands and rates.

Tax is now paid at 1% on homes bought for more than £125,000, at 3% between £250,000 and £500,000 and at up to 7% above that. The £250,000 and £500,000 thresholds have remained unchanged since their introduction, despite a 140% rise in house prices, and the tax rates on them have been increased.

The HOA said freezing those thresholds had led to a "very marked 'fiscal drag' effect", where rising prices automatically pushed houses into the higher brackets. It cited the example of a property bought for £240,000 and later sold for £270,000, moving it from the 1% bracket to the 3% bracket. In this example a 13% increase in the house price results in a 238% increase in stamp duty, from £2,400 to £8,100.

Despite the collapse in stamp duty revenues since the housing market started to falter in 2007, the HOA said the government expected to collect about £7bn in the current tax year and £11.7bn in 2017-18, more than it makes from taxing tobacco.

The HOA wants to see thresholds increased annually in line with house prices, and for the first threshold to be above the average house price. It said buy-to-let investors and second-home buyers should pay more than those buying a home to live in, and the government should consider charging sellers, not buyers.

It also called for first time buyers o be permanently exempted from the tax.

Biggest rise in UK house prices for six years

House prices saw their biggest monthly increase for six years in May, caused by a shortage of homes for sale and rising demand - largely in the capital, a report found today.

From April prices rose 0.4 per cent, the strongest uplift since May 2007, with the drive coming 'almost exclusively from London and the South East', property analyst Hometrack said.

Prices rose 0.9 per cent in the capital, where the gap between supply and demand was at its largest since spring 2009 - while demand has grown 15 per cent in six months, supply has dwindled by 0.6 per cent. 

In the South East prices bumped up 0.5 per cent, while across the rest of the country they rose at a more serene 0.1 per cent.

Across England and Wales, the volume of homes coming onto the market grew by 2.8 per cent in May, but this was outstripped by an 8.2 per cent increase in sales being agreed.

Prices edged up month-on-month by 0.3 per cent in East Anglia, by 0.2 per cent in the South West and by 0.1 per cent in the Midlagnds. 

They were flat month-on-month in the North East, the North West, Yorkshire and Humberside and Wales.

Peter Rollings, CEO of Marsh & Parsons, commented: 'We find at least 98 per cent of the asking price is generally achieved on prime London properties, and in excess of the asking price in very high-demand areas such as South and South West London. There is a general feel of optimism in the air with wider signs of economic recovery showing strong indicators of future growth prospects.

'Today’s figures show the London property market continuing to operate in its own microclimate, driving growth in UK house prices overall. The figures demonstrate the huge demand for London property with properties are selling at twice the speed of the rest of the UK. We expect this to increase even further as both overseas and domestic buyers strive in competition for the best properties.'

Young professionals want to live in South West London

The latest research from Lloyds TSB reveals that Wandsworth in south-west London is the leading property hotspot favoured by aspiring young professionals. 

This area of London is within easy access of the City and the West End, making it very convenient for young working adults. Wandsworth has a mix of Victorian and Edwardian properties as well as new riverside flats and conversions that many young professionals find attractive.

Fulham, Battersea and Wimbledon – which, like Wandsworth, are in the SW postal area – are the next most popular areas with this segment of the population. 18 of the 20 property hotspots favoured by young professionals are in the capital, including Paddington, Kilburn and Hampstead. Hove and central Brighton are the only areas outside London in the top 20.

Didsbury most popular among young professionals outside London and the south east

Outside the capital and the south east, the area most favoured by young professionals in England and Wales is Didsbury in south Manchester. Other regional hotspots for young professionals include Clifton in Bristol, central Cambridge, West Bridgford in Nottingham, and Broomhill and Fulwood in Sheffield.

Premium prices for areas favoured by young professionals

Properties in areas popular with young professionals tend to come with a large price tag. Those in the 20 most popular areas in London pay around 32 per cent (£619,000) above the average price for their local authority. In the SW6 area of Fulham, for example, the average price of £847,620 is 23% above that for the wider Fulham area. In the SW11 area of Battersea, residents would need to pay a 19% premium on an average priced house compared with houses in the surrounding area.

Similarly, areas outside the capital popular with young professionals typically have relatively higher property prices. In Didsbury, young professionals pay on average £236,844 compared with £142,041 in the rest of Manchester: a premium of 67 per cent. In West Bridgford, the average property value (£229,456) is 53 per cent above that for Nottingham as a whole (£150,175). The area of Harbourne in Birmingham, where the average house price is £251,015, comes at the greatest premium (72%) above the average for the city of £146,201. The most popular area in Wales – Cardiff Central – has property prices at a 52 per cent premium compared with the city average.

Flats and terraced homes typically most popular property types

Flats are the most popular property type in many of the areas most favoured by young professionals. For example, flats account for four fifths (80%) of all properties in Hove (BN3 postal area) and Clifton in Bristol.

Terraced houses account for the majority of property sales in central Cardiff (81%), as well as in Broomhill and Fulwood (58%) in Sheffield.

Detached properties account for a much smaller proportion of homes purchased in the most popular areas in England and Wales with young professionals. West Bridgford in Nottingham (13%) had the highest proportion of detached properties sales in an area popular with young professionals.

Nitesh Patel, Housing Economist at Lloyds TSB, said:"Aspiring young professionals are typically well-qualified and in well-paid jobs. They tend to live in areas that are not far from the city centre, but are also places where they can enjoy open green space and a café style environment. Buyers typically pay a significant premium to live in areas popular with young professionals."

Welsh seaside town saw prices rise 134%

House prices in the North Wales town of Porthmadog  have skyrocketed 134%  over the  last decade - the fastest rise of  any seaside town in Wales and  England.

The annual Halifax Seaside Town Review tracks house price movements in 136 seaside 

towns in England and Wales.

The average cost of a home in  the Gwynedd town is £162,638 -  in 2003 it was around £54,000, 

 The figures, released by Halifax  show Porthmadog top the poll ahead of  Seaham and Newbiggin-by-the-Sea which  came in  second and third places respectively. 

Both these coastal towns  are in the North East and have  seen house prices more than  double over the last decade.

The only seaside towns in the  south of England to make it on  to the “top 10” fastest rising  house prices list were St Mawes  and Perranporth, which are  both in Cornwall.

The coastal towns at the top  of the list tend to have seen  prices rising sharply from a relatively low base.

The UK 's Most Expensive Streets

The UK 's Most Expensive Streets

Rather unsurprisingly, the most expensive residential streets in England are in the Royal Borough of Kensington and Chelsea, according to latest research from Lloyds TSB.

Close to fashionable shops and top end restaurants, Egerton Crescent (pictured) is the most expensive residential street in England and Wales with an average property value of over £8 million (£8,136,000). Some of the other expensive streets in the Royal Borough include Campden Hill Crescent with an average property price of £4,863,000, Blenheim Crescent (£4,728,000), Lansdowne Road (£4,693,000), Drayton Gardens (£4,428,000) and Eaton Square (£4,391,000).

Parkside in Merton, South West London, is the nation’s second most valuable address with an average house price of £5,161,000. Home Park Road, also in Merton, is the sixth most expensive street with an average property price of £4,685,000.

Here’s a roundup of the rest of the results:

East Anglia
Seven of the 10 most expensive streets in East Anglia are in Cambridge. Most of these streets are close to the main University area (particularly around the Botanic Gardens) in the CB2 postal district. The most expensive streets are Sedley Taylor Road with an average house price of £1,147,000 and Hills Road (£1,012,000).

East Midlands
Valley Road in the Nottingham suburb of West Bridgford is the most expensive street in the East Midlands with an average price of £811,000. Other expensive streets in the region include Golf Lane in Northampton (£810,000), Hazelwood Road in Belper (£791,000), Tinwell Road in Stamford (£759,000) and Belfry Lane in Northampton (£747,000).

North East
Many of the most expensive streets in the North East are in Newcastle, particularly in the areas of Jesmond and Gosforth. Graham Park Road is the most expensive with an average price of £1,124,000, followed by Darras Road (£849,429) and Oakfield Road (£793,000). Other streets include Castlereigh in Billingham (£756,000) and Westhouse Avenue in Durham (£944,000).

North West
The most expensive street outside southern England is Park Lane in Altrincham (£2,109,000); followed by Withinlee Road in Macclesfield (£1,649,000) and Thorsway in West Kirby (£1,584,000). Eight of the 10 most expensive streets in the North West are in areas south of Manchester, such as Macclesfield Road (£1,290,000) in Alderley Edge.

South East
Seven of the 10 most expensive streets in the South East are in Surrey. They include Woodlands Road West in Virginia Water (£3,201,000), Leys Road (£3,018,000) and Moles Hill both in Oxshott (£2,800,000). Outside Surrey, the South East’s most expensive streets are The Ridgeway in Radlett (£2,368,000) and Phillippines Shaw in Sevenoaks (£2,250,000).

South West
A place near the sea attracts many wealthy buyers. These include Brudenell Avenue in Canford Cliffs, which has an average property price of £1,975,000; followed by Mudeford in Chrischurch (£1,665,000), Panorama Road (£1,641,000), Chaddesley Glen both in Sandbanks (£1,599,000) and Restronguet Point in Truro (£1,572,000).

West Midlands
The two most expensive streets in the West Midlands are Church Street in Broadway, often known as the “Jewel of the Cotswolds” with an average property value of £1,117,000 and Quarry Park Road in Stourbridge (£1,015,000). There are two other streets with an average value of over £900,000: Rosemary Hill Road (£990,000) and Lovelace Avenue (£959,000.

Yorkshire and the Humber 
The most expensive streets in Yorkshire and the Humber are all located in the area that makes up the “Golden Triangle” between Harrogate, Wetherby and north Leeds. The region’s most expensive streets are Rutland Drive in the spa town of Harrogate (£1,109,000) and Wigton Lane in North Leeds (£1,035,000). Other exclusive addresses include Queens Parade in Harrogate (£971,000), Bracken Park in Leeds (£934,000) and Gill Bank Road in Ilkley (£874,000).

Wales
The most expensive street in Wales is Druidstone Road in Cardiff with an average house price of £682,000; followed by Gannock Park in the village of Deganwy in Conwy (£636,000), Lake Road West in Cardiff (£636,000) and East Cliff in Pennard in Swansea (£608,000). Seven of the 10 most expensive streets in the Principality are in Cardiff and Swansea; the remaining two are, Llantrithyd Road in Cowbridge (£600,000) and Deganwy Quay in Conwy (£532,000).

Strong demand for 3 bedroom homes. says report

Latest Knight Frank housebuilding report

Help to Buy boosts confidence, but lack of development funding and planning changes pose risk to sector, say UK housebuilders

Knight Frank today releases its annual report on the new-build housing sector, based on a comprehensive survey of senior executives from over 100 housebuilders and developers in the UK.

The report includes details on which issues are concerning the industry, reactions to Government policy announcements, levels of buyer demand  (for property type and size) across the country and industry forecasts for activity and prices in 2013.

Knight Frank 2013 Housebuilding Report

Headlines:

 The funding landscape is changing – both for development and for purchasers. More than 75% of respondents expect a rise in the availability of private equity funding to build, including mezzanine and ‘blended’ funding products. But a lack of development funding remains one of the key risks to the sector, the survey showed The level of respondents stating that lack of mortgage finance was a risk factor dropped from 70% to 57% following the Budget in March, when the Chancellor announced the ‘Help to Buy’ scheme.

 The strongest market demand is for three-bedroom houses; however, respondents report a noticeable increase in demand for apartments – 75% said there was moderate or high demand for two-bed flats in the East and West Midlands. This points to potential ‘green shoots’ in the regional city-centre new-build markets.

 65% of those surveyed expected start volumes to increase in 2013 while 59% expect new-build prices to rise. 61% expect land prices to rise in the next year; acquisition of land for development is also expected to increase.

 ‘Planning by appeal’ is seen as a key new trend; more than 40% of respondents say the number of appeals in their market has risen over the last 12 months as the NPPF beds in, and nearly half say the number of schemes granted permission after appeal has increased.

 77% of respondents said that the Community Infrastructure Levy (CiL) poses a risk to the industry in the coming year.

Gráinne Gilmore, head of UK Residential Research at Knight Frank, says:

“Housebuilders are optimistic that development volumes will rise this year, and this view has been supported by their strong start to the year, with many reporting a surge in buyer activity after the start of the Government’s Help to Buy Scheme. Such an uplift in volumes is welcome, but the large demand and supply gap in housing is unlikely to be bridged any time soon.

“Despite signs that buyer activity has risen, housebuilders are still facing strong headwinds; the difficulties in accessing development funding, the new Community Infrastructure Charge as well as the roll-out of new planning rules under the NPPF. Indeed the new planning regime has led to a new dynamic of ‘planning by appeal’, which seems to run against the localism ideas which underpinned the new planning legislation.”

David Fenton, Knight Frank head of Regional Land, says:

“Across the UK we are seeing a resurgence in acquisition activity and construction from the major PLC housebuilders. It is clear that sales rates have improved as a result of Help to Buy and there is an atmosphere of positivity in the market.  Many of the regional builders are now looking at substantial sites to develop as consortia; these schemes in many cases have elements of much-needed infrastructure, and will contribute more than just housing to benefit wider regional communities.”

Brits still biggest investors in Spanish property market

BRITS continue to be the biggest foreign investors in the Spanish housing market - picking up cheap deals as prices continue to fall.

Prices in Spain fell by over 13% in 2012, even further than the declines registered in the years 2011 (-10.5%) and 2010 (-6.6%), and accumulated a drop in their value of around 30% since their peak levels in the first quarter of 2008. The sluggish performance of the Spanish economy means demand from local buyers remains weak.

The College of Property Registrars estimates that house purchases fell by 10.6% last year to 330,750 transactions. They also confirm that the property transactions were distributed almost equally between new housing (49.9%) and used (50.08%).

Approximately 8.12% of the house purchases recorded in Spain in 2012 were for foreign citizens, which is 6% more than in 2011 and the highest result of the last five years, next to that achieved in 2007 (8.2%).

Coastal regions have seen a higher percentage of home purchases by foreigners: the Balearic Islands (24.95%), the Canary Islands (22.11%), Valencia (18.01%), Murcia (11.24%), Catalonia (9.34%) and Andalusia (8.86%).

By nationality, these purchases were divided between British (16.6% of the total), French (9.9%), Russian (9.6%), German (7.9%), Belgian (6.5%), Norwegian (5.7%), Italian (4.9%) and Swedish (4.6%).

But Brits have been warned that new legislation due to come into force this summer could make it harder to rent out second homes. All holiday lets will need to be authorised and have a license granted by the local government, some of which aim to restrict rentals in favour of the local hotel industry.

Irish house prices to fall again in 2013

While we may think we have had it hard in the UK housing market spare a thought for the Irish. 

The country is now facing its sixth year of falling prices since the market peaked in 2007. Problems in Ireland were exacerbated by a glut of supply.

Now the Central Bank has, for the first time, produced an outlook on property prices after surveying 200 economists, property surveyors, stockbrokers and estate agents to get their view on where prices are likely to go. 

Even the estate agents say prices have further to fall nationally this year.

The survey gives no breakdown by region, so it is not clear whether the experts think the Dublin region will escape the latest drops. Prices have been rising in Dublin in recent months, even as they continued to drop elsewhere.

The main reasons the experts surveyed give for predicting further price falls is the difficulty in getting mortgages, the potential impact of an increase in repossessions, the scrapping of the mortgage interest relief tax break and the introduction of the property tax.

By 2015, however, a majority of those surveyed think prices will have increased – though one in six thinks that is too optimistic and many think prices will not have changed from the end of last year.

US house prices on the rise

Upward momentum in US house prices remained strong in the first quarter of this year, rising 1.9% from the previous quarter, according to the Federal Housing Finance Agency House Price Index. 

This is the seventh consecutive quarterly price rise in the purchase-only, seasonally adjusted index.

FHFA principal economist Andrew Leventis said: “The housing market has stabilized in many areas and homebuilding activity has strengthened in recent quarters.

“That said, labour market weakness and still-elevated foreclosure pipelines remain hindrances to a more robust recovery.”

The HPI is calculated using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac. 

Compared to last year, house prices rose 6.7% from the first quarter of 2012 to the first quarter of 2013. 

FHFA’s seasonally-adjusted monthly index for March was up 1.3% from February.

Top 10 global cities for millionaires

Market analysts have calculated the top ten global cities for millionaires, here are the results.

• Tokyo tops the millionaire list

• London tops the multi-millionaire list

• New York tops the billionaire list

Which global cities contain the most US dollar millionaires?

It’s an elusive statistic that cannot be found in the public domain.

WealthInsight, a London based wealth consultancy, has changed this by releasing a comprehensive list of the top 20 cities for millionaires worldwide. 

According the WealthInsight analyst Andrew Amoils:

“Tokyo tops our millionaire list and is surprisingly above New York. This is partly due to the fact that many wealthy New Yorkers live off the Island in cities such as Greenwich”

Global Cities ranked by millionaires, 2012

Rank	City	Number of millionaires (000s)
1	Tokyo	461
2	New York City (Manhattan)	389
3	London	281
4	Paris	219
5	Frankfurt	217
6	Beijing	213
7	Osaka	190
8	Hong Kong	187
9	Shanghai	166
10	Singapore	157

Source: WealthInsight © WealthInsight

IMF warning over Help to Buy scheme

First-time buyers could be shut out of the housing market by a Help to Buy-fuelled house price rise, the International International Monetary Monetary Fund (IN F) has warned.

The scheme, announced in the March Budget, is designed to stimulate activity in the property market. The first part was launched last month, a shared equity scheme where the Government will loan a 20pc deposit to buyers of newbuild homes.

The second part is due to be launched next January and will extend to those remortgaging, although details are yet to be announced.

The IMFs said Help to Buy was aimed at boosting activity in the housing market, but warned: “This measure may temporarily help boost confidence in the housing market, but there is a risk that, in the absence of an adequate supply response, the result would ultimately be mostly house price increases that would work against the aim of boosting access to housing.

“To mitigate this risk and engineer a supply response, the government should consider fiscal disincentives for holding land without development.”

The report echoed warnings from various influential bodies in the UK such as the Office for Budget Responsibility, Treasury select committee and the Bank of England.

Increase in UK mortgage lending

The Council of Mortgage Lenders estimates that total gross mortgage lending increased by 4% on March to £12.1 billion in April, but cautions that meaningful comparisons with last April are difficult.

Commenting on market conditions in this month's Market Commentary, CML chief economist Bob Pannell observes:

"Our forward estimate is that gross lending in April was £12.1 billion. This would have been 4% up on March. The comparison with April last year – 21% higher – is flattered by the temporary dearth of house buying activity immediately following the closure of the stamp duty concession.

"The true underlying position is that April is likely to have been one of the strongest months for lending activity since late 2008, but not as strong as the year-earlier comparison suggests. Gross lending on a seasonally adjusted basis has been running comfortably above £12 billion for several months, but this is still barely half the average level of lending seen in 2003-4."

The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.3 million mortgages in the UK, with loans worth over £1.2 trillion.

Latest house price date from Office of National Statistics

The ONS released their latest house price statistics today with more evidence that the housing market is starting to pick up pace pace in England and Wales, with London leading the way.

Key points from ONS today

• In the 12 months to March 2013 UK house prices increased by 2.7%, up from a 1.9% increase in the 12 months to February 2013.
• House price growth remains stable across most of the UK, although prices in London are increasing and prices in Northern Ireland are falling.
• The year-on-year increase reflected growth of 3.0% in England and 1.2% in Wales, which were offset by declines of 1.7% in Scotland and 2.0% in Northern Ireland.
• Annual house price increases in England were driven by a 7.6% rise in London and a 3.3% increase in the South East. The East saw a 2.8% increase, West Midlands 2%, North East 1.8%, East Midlands 0.3%, North West unchanged, while in the South West prices fell 0.3%.
• Excluding London and the South East, UK house prices increased by 0.6% in the 12 months to March 2013.
• On a seasonally adjusted basis, UK house prices increased by 0.4% between February and March 2013.
• In March 2013, prices paid by first-time buyers were 1.3% higher on average than in March 2012. For owner-occupiers (existing owners) prices increased by 3.2% for the same period.  

Average house prices in countries and regions

Average mix-adjusted house prices in March 2013 stood at £244,000 in England, £157,000 in Wales, £130,000 in Northern Ireland and £178,000 in Scotland.

In March 2013, London continues to be the English region with the highest average house price at £398,000. The North East had the lowest average house price at £144,000. London, the South East and the East of England all had prices higher than the UK average price of £235,000.

House Price Index by type of buyer

The average price for properties bought by first-time buyers increased by 1.3% over the year to March 2013, down from an increase of 1.6% in February 2013. During March 2013 the average price paid for a house by a first-time buyer was £175,000.
The average price for properties bought by former owner-occupiers (existing owners) increased by 3.2% in the year to March 2013, up from an increase of 2.0% in February 2013. In March 2013, the average price paid for a house by a former owner-occupier was £270,000.

House Price Index by new and pre-owned dwellings

During the year to March 2013 prices paid for new dwellings increased by 1.0% on average, compared with a decrease of 0.3% in the year to February 2013. The average UK house price for new dwellings in March 2013 was £230,000.
During the year to March 2013 prices paid for pre-owned dwellings increased by 2.8% on average, compared with an increase of 2.0% in the year to February 2013.

Asking price record tumbles

• The national average asking price record has tumbled, almost breaking the £250,000 Mark, according to the Rightmove House Price Index. 
• It was a South-led price surge as London, South East and East Anglia hit all-time highs.
• In London Camden led the 3.3% price surge with prices up 7.2%, going past the £1m mark. 
• Buyers in the capital were facing new sellers’ average asking prices in excess of £500,000 for the first time. 
• The typical property in the capital is now more than twice as expensive as the national average.
• The national average asking price stands at £249,841, as new sellers raise prices by 2.1% (+£5,135) this month. This is the fifth consecutive monthly rise leaves prices 9.1% (+£20,852) higher year-to-date, the strongest price start to a year since 2004
• East Anglia saw 4% increases to an average asking price of £233,000, while the South East was up 1.8%.
• The North saw price rises of 4.2%, while in Wales prices were up 1%. The North West was up 1.7%, Yorkshire and Humberside and the East Midlands 1.2%, West Midlands 0.2% and and the South West 0.6%.
• Miles Shipside, Rightmove director and housing market analyst comments: “The tumbling of records is being driven by the equity-rich generation with a definite southern bias, though agents in most parts of the country are reporting strong demand for well-priced and decent-quality stock. Despite a new national record, it’s not ‘green-shoots of recovery’ across the board, especially for the deposit-strapped mass-market. They must wait patiently until January when the Help to Buy scheme extends to the resale market, unless new homes developers can increase building dramatically this year.”

Record UK house asking prices

The fifth consecutive monthly rise has left the national average just shy of a quarter of a million pounds at £249,841, surpassing the previous high set in June 2012. London, the South East and East Anglia have also hit all-time highs, with buyers in the capital facing an average asking price in excess of £500,000 for the first time.

Miles Shipside, Rightmove director and housing market analyst comments:
“The tumbling of records is being driven by the equity-rich older generation and has a definite southern bias. However, despite a new national record, it’s not ‘green-shoots of recovery’ across the board, especially for those without access to a significant deposit. They must wait patiently until January when the Help to Buy scheme extends to the resale market – unless new homes developers can increase building dramatically in the coming months.”

The average price of property coming to market has risen by 9.1% (+£20,412) so far in 2013, the strongest start to a year since 2004. This is the fifth monthly rise in a row, with all regions in positive territory this month. However, sellers in two northern regions, Yorkshire & Humberside and the East Midlands, are still in negative territory year-on-year. With London sprinting past the £500,000 milestone for the first time with a 3.1% monthly rise, a typical home in the capital is more than twice as expensive as the national average. Outside London and some southern hotspots, agents report that the market remains sensitive to price, with buyers willing to take their time to find their ideal home.

Shipside cautions:
“For those now in a position to buy, the recession appears to have precipitated a change in buyer behaviour which has left them more choosy and less likely to settle for second-best. Not only are they looking for value and being mindful of paying over the odds, prospective buyers are giving thought to ease of resale, a sign that the pain of this financial crisis has left them much more mindful of the future liquidity of their assets.”

Rightmove saw record traffic levels in April, up 35% on 2012. With choosier buyers and a lack of decent property for sale in some areas, those searching for property and researching the market got through a record 1.25 billion pages last month. Nearly 400 million of those pages were viewed on mobile devices, such as smartphones or tablets, a clear sign that home-movers are fully embracing the benefits of being able to search on the move and access listings the minute they are added to Rightmove.

Sir Mervyn King concern over Help to Buy

The outgoing governor of the Bank of England has warned that a government plan to boost the housing market should not become permanent.

Sir Mervyn King said there "was no place in the long run" for Chancellor George Osborne's Help to Buy scheme.

Under the scheme, due to run for three years from January 2014, the government will guarantee up to 15% of a mortgage on properties worth up to £600,000.

The Treasury said it would "support home buyers and home building".

"The mortgage guarantee scheme will provide much needed help for people who can't afford a big deposit to get a mortgage," a spokesman said.

But in an interview with Sky News' Murnaghan programme, Sir Mervyn - who has just over a month left of his decade-long tenure as governor of the Bank of England - publicly questioned the policy.

"I'm sure that there is no place in the long run for a scheme of this kind," he said.

"This scheme is a little too close for comfort to a general scheme to guarantee mortgages. We had a very healthy mortgage market with competing lenders attracting borrowers before the crisis, and we need to get back to that healthy mortgage market.

"We do not want what the United States have, which is a government-guaranteed mortgage market - and they are desperately trying to find a way out of that position."

He went on: "So, we mustn't let this scheme turn into a permanent scheme... When is the right time to terminate it will depend on economic conditions at the time."

The BBC's business correspondent Joe Lynam said Sir Mervyn was concerned that, should the scheme become permanent, it could leave taxpayers exposed to billions of pounds in private mortgage debt for years to come.

Interest-free loans

The outgoing governor's comments about Help to Buy echo those of the Treasury Select Committee, which warned in April that the government would come under "immense" pressure to extend the scheme in three years time.

Any such decision would be made by the bank's incoming governor, Mark Carney - the Canadian who was hand-picked by the chancellor to succeed Sir Mervyn.

Help to Buy consists of two elements - an "equity loan" scheme and the mortgage guarantee.

Under the equity loan, new or existing homeowners will need to raise a deposit of 5% of the value of the property they want to buy, but can borrow up to a further 20% from the government on an interest-free basis. The biggest loan available will be £120,000.

In total the government will be guaranteeing £12bn worth of lending.