A succinct weekly take on the London property market and a roundup of headlines from the PropertyBrain team. Subscribe to the Friday Roundup here: http://pbra.in/pb-signup
Here’s a roundup of what we think are the big news stories this week:
* According to the latest Royal Institution of Chartered Surveyors’ monthly survey of the residential housing market, the optimism shown by surveyors and estate agents has fallen on multiple measures to its lowest level since the eurozone crisis. 20% more RICS members reporting a fall in new buyers last month, and the average time needed to complete a sale had increased from 16.6 weeks in February this year to 18.5 weeks. Although price falls over recent months were concentrated in London, surveyors were more optimistic on future prices outside the capital.
Prices were under most pressure at the top end of the market, with most respondents saying that agreed prices were at least 5% lower than asking prices for properties worth over £500,000.
* Interestingly, Halifax has released contrasting figures showing that growth still remains strong. In the three months to October house prices picked up 4.5 % from the same period a year earlier — in line with expectations — up from the 4% annual growth figure in September and the quickest pace since February. However, Pantheon Macroeconomics point out that the comparable figure from Nationwide to Halifax’s quarter-on-quarter growth of 2.3% is just 0.8%. Pantheon’s seasonally adjusted version of Rightmove’s online asking price index is even lower, with Halifax the outlier in reporting that house price growth has strengthened in recent months.
* Data from UK Finance, the industry body, show that growth in outstanding buy-to-let mortgages is failing to keep pace with new mortgages being granted, in a reversal of the broad relationship between the two over the past decade. This is in line with PropertyBrain’s analysis that more buy-to-let mortgages are being redeemed as investors sell rental properties. BTL investors have been under pressure since the beginning of a phased withdrawal of higher rate tax relief on mortgage interest. BTL lending rules have also tightened, with a stress test introduced this year and new rules for lending to portfolio landlords from September 2017.
* Shares in Persimmon plunged 3.6% on Wednesday as the UK’s second largest housebuilder reported sales had stalled in the three months to the end of September. The housebuilder said that, while total sales outlet numbers were 10% lower over the autumn period to date, customer activity had strengthened in line with traditional seasonality and consumer confidence was resilient. The trading update was light on details, marking a possibility that Persimmon’s performance is actually down from a year earlier.
* Malaysian developer EcoWorld International has agreed to purchase a 70% interest in Willmott Dixon’s residential development business, Be Living. EcoWorld said the partnership would enable it to build more affordable housing in line with UK government initiatives such as Help to Buy as well as developing housing for the domestic mainstream market and for build-to-rent. The deal will operate outside of EcoWorld International’s joint venture with Ballymore Group, which is mostly exposed to the higher-end prime central London market.
* Facebook has announced an update of the Marketplace section of the social network, allowing users in the US to sort through house and apartment listings for rent. After the update, the site will include hundreds of thousands of listings from brokers, agents and property managers.