Welcome to today’s email of news and views.
The latest Home.co.uk figures suggests that asking prices in England and Wales rose 1.5 per cent in January; the biggest monthly rise since May 2007. As ever, you’d expect variations on the average – beware averages! – and London leads the way at 3.1 per cent and 16.7 per cent year-on-year. The supply of property is down 11 per cent year-on-year, 28 per cent in London, and properties are also selling faster. Onwards and upwards!
London, again, is expected to lead the way in 2014 with the business predicting 20 per cent price growth over the year. Properties in London now spend just 67 days on the market, the lowest since February 2007. ‘Home prices are rising unsustainably fast in London and the South East. Rapidly rising house prices precipitate a groundswell of support for current economic policy and makes banks and building societies’ lending books look much more solid.’
‘However, inflating the cost of housing does nothing for the nation’s international competitiveness and will only hasten the current tide of quality jobs heading overseas. Until interest rates return to normal levels and government incentives for buyers cease, we remain in an artificial market subject to the vagaries of government policy and economic tinkering on an unprecedented scale.’ More to come.
Paragon are in the news with their new BTL mortgage product for single unit properties and HMOs and multi-unit blocks. The rate is fixed at an initial 5.49 per cent for a maximum loan to value of 75 per cent with a 2 per cent product fee; crunch the fee.
John Heron of Paragon Mortgages says, ‘The buy-to-let market has been saturated with short-term fixes for the past two years. Whilst there are obvious benefits of two year and three year fixes, these can work out rather costly for landlords in the long-term. This new five year fix is part of an ongoing programme of product development the aim of which is to widen the choices available to landlords and provide them an opportunity to get off the two year treadmill.’ More to follow.
Two deals have just come in from Adam…
Leyton – Freehold house arranged as two flats in need of refurbishment – £400,000 – one flat currently let and one vacant with estimated yield overall of 6 per cent.
Liverpool – 7 bedroom, recently modernized, HMO perfect for students and medical staff. £300,000 fully let and yielding 10.6 per cent.
Email back for fuller details. This will be the only mention.
Based on the number of properties coming to market, the Royal Institution of Chartered Surveyors, RICS, suggests that Scotland’s property market is in recovery. For December, a net balance of 44 per cent more chartered surveyors reported an increase in new instructions. Even so, supply still falls short of supply, which exerts upward pressure on prices.
‘Although the number of houses on the market falls short of demand, the increase reported is certainly a step in the right direction. Growing availability of affordable mortgages has released some pent-up demand from a market that, in recent years, has seen many viable buyers unable to enter the market. On the face of it, this seems like good news but unless we see a marked increase in the number of homes coming up for sale we could well be looking at a price rises becoming unsustainable in some areas. This is a central issue which will be addressed by the Scottish Housing Commission Report, published in April 2014.’ More soon.
All for now. As ever, email back about anything you’ve read in today’s email.