Trafalgar New Homes Plc
Links to latest market commentary for London and the South East
Savills Spotlight -
It’s a rare moment when we can say that the prime housing markets beyond the capital have performed better than London. But that has been the case since the middle of 2014.”
Savills Residential Property Focus, 2016, Quarter 4 (Post Brexit)
“Forecasting in the aftermath of the Brexit vote is difficult, but its impact on the property market is considerably less than that of the credit crunch.”
Savills Briefing -
“Properties that are within a city or town centre, close to local amenities such as shops and stations continue to attract strong demand……”
“Looking forward, we expect ongoing demand for prime rental properties in the suburbs and key commuter locations of the capital to continue, especially as we see an increase in those following the traditional relocation routes out of London.”
“… landlords will need to remain competitive on asking rent and flexible on terms, as well as ensuring the property is presented in good condition to ensure they attract tenants in the long term.”
Savills Brexit Briefing -
“Sentiment will determine the impact of the Brexit vote in the short term.” “Ultimately, housing affordability will determine the impact of the vote to leave the EU on house prices.”
“Low levels of house building has resulted in a market that is fundamentally undersupplied.This has not changed.”
Savills Residential Property Focus, 2016, issue 1
“London has seen strong house price growth in recent years and increasingly stretched affordability. Thanks to this and a widening gap compared to prices in the rest of the country, increasing numbers of buyers are either choosing or being forced to look outside London for a home. This has driven stronger price growth and hence led to rising values in the south of England.”
Savills Key Themes for 2016, Residential
“Mortgage regulation seems to have cooled the market, and we expect demand for private rented sector accommodation to rise”
Savills Residential Property Focus, November 2015
… “Interest rates and mortgage regulation will shape the UK housing market in the next five years.”
… Maintaining Balance: “Affordability and accessibility are key to the prospects for the housing market.”
… Market Predictions: “Five-
… A period of adjustment: “The prime regions are poised for the ripple effect once stamp duty changes are absorbed.”
… The problem with averages: “Overall averages disguise significant differences between submarkets across the capital.”
… Swimming against the tide: “Reversing falls in home ownership will present a major challenge for the Government.”
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The residential property market in the UK has been depressed since the global financial crisis and has been severely constrained by the consequent lack of funding for mortgage applications. However, recent research indicates that the market is now showing signs of stability. The Office for National Statistics (ONS) estimates that in the 12 months to March 2013 house prices in the UK rose by 2.7 per cent., buoyed by larger rises in London and the South East. In addition, the Government has launched a number of initiatives, such as The National Planning Policy Framework, NewBuy, Help to Buy and the Bank of England’s Funding for Lending, targeted at stimulating the market:
● Help to Buy – Help to Buy is a £5.4 billion package announced in the March 2013 budget designed to tackle long term problems in the housing market. It consists of two schemes, an “equity loan” where the government will lend a buyer up to 20 per cent. of the value of a new build property and a “mortgage guarantee” where lenders will be incentivised to make more mortgages available to people with small deposits. Now extended to 2020.
The “equity loan” scheme became effective from 1 April 2013 and is available for buyers with a minimum 5 per cent. deposit but only for new build homes with a value of up to £600,000. The loan is interest free for the first five years and from year six a fee of 1.75 per cent. is payable which rises annually by RPI inflation plus 1 per cent.
The “mortgage guarantee” is available on either new build or existing properties but is scheduled to end in December 2016.
● The National Planning Policy Framework (NPPF) – The NPPF was published by the Department for Communities and Local Government in March 2012 and was designed to speed up and simplify the planning approval process. In January 2013 the DCLG also launched the Red Tape Challenge which planned to cut red tape by removing or amending around 100 small housing and construction regulations and make sensible changes to regulatory burdens.
● NewBuy – NewBuy was launched by the Government in March 2012 and is aimed at first time buyers and those who already own a home who only have funds for a 5-
● Funding for Lending (FLS) – The £80bn FLS was set up by the Bank of England in July 2012 to help provide cheaper loans and mortgages to both individuals and businesses. Banks and building societies have been given access to cheap money on the condition that they then lend this on at competitive rates. The scheme will close in January 2018.
● Help to Buy: Starter Home -
In June 2016 a referendum voted to leave the European Union (Brexit). An initial assessment of the implications can be found here.