Paper Summary – 26th January 2015

David Newnes, director of Reeds Rains and Your Move estate agents, owned by LSL Property Services plc, comments: “The UK housing market is roaring further back to life in 2014 as the recovery weighs in across the board. Prices are now up 5.2% annually, driving the price tag for the average home to a new high. Mostly this is due to much increased activity, with increased demand for property buoyed by low interest rates and Help to Buy, combined with hot competition for homes. This boost in sales has seen an air of optimism encapsulate the market. While 2013 was a turning point in the recovery, 2014 is set to be a watershed year if the next few months continue in the same vein.

“Last month saw the largest rise in sales over the past year, up 67% annually, with transaction levels crucially only 4% below the January average seen in the decade before the credit crunch. This astounding turnaround can largely be pinned down to the resurgence of the first-time buyer. The wide range of attractive mortgage deals on offer, cheaper rates and wider product choice has been pivotal. Such rises in new buyers has spurred on activity further up the ladder and inspired movement among second steppers, which will prove vital in sustaining a healthy rate of sales activity.

“The recovery has now been rolled out far and wide, with the good news coming in from more and more Your Move and Reeds Rains branches up and down the country. Price rises have now spread to 90% of unitary local authorities – the greatest number since August 2010. With mortgages still historically cheap and interest rates set to remain stable for the time being, we’ll continue to see new buyers will rush to the market nationwide. However, even so, price growth and sales levels are still behind their pre-crisis peaks so we’re still some way from the ill-fated ‘bubble zone’.

“Regionally, we’re seeing a ripple effect emerging from London. Heat from the capital is emanating out further with traditional hotspots being the first to reap the benefits of recovery; particularly southern England and East Anglia before moving north through the Midlands. Although we’re still seeing a North-South divide, this is gradually being eroded. The West Midlands has this month broken the mould as growth has surged past the rate seen in the South West region, with Reeds Rains branches across the region reporting a large jump in prices in January compared to the preceding month.

“With greater economic prosperity, confidence between banks and lenders has been cemented further which will no doubt fuel the engine of recovery in the months ahead. While similarly first-time buyers are set to swim further across the sea of adversity to secure a home. But it is crucial both aren’t scuppered and that the Government’s housing plans come to fore with a continued focus on supply. This will ensure the recovery reaches the finish line and a generation doesn’t get priced out of the market”.

Buying beats renting in Aberdeen, but it pays to rent in London

Posted on 11/02/2014 by wriglesworth

Buyers in Aberdeen will be £99,000 better off compared to renters after 7 years
Dundee, Glasgow, Cambridge and Edinburgh also compelling to buy vs. rent
Buying in London with a 10% deposit takes 18 years to become more cost effective than renting
Bournemouth, Huddersfield, Bedford and Swansea also make sense to rent not buy

Aberdeen is the most cost-effective town in Britain for buying property compared to renting. Over a typical seven year period, the average property owner in the Scottish town can expect to be £99,040 better off compared to the equivalent renter, according to research from property website Zoopla.co.uk.

The latest Rent vs. Buy analysis from Zoopla shows that it takes buyers in Aberdeen with a 10% just one year of ownership for buying to become more cost effective than renting. The average property price in Aberdeen is currently £206,060 with average monthly rents at £1,275.

London is currently the most renter-friendly location in Britain. After seven years, a typical London renter would be £82,412 better off than a buyer with a 10% deposit of an equivalent property. It would take 18 years for a London buyer with a 10% deposit to begin to be financially better off compared to the equivalent renter. These calculations are based on a conservative estimate of 4% annual house price growth in the capital.

Bournemouth is the second most renter-friendly town in Britain. With average asking prices of £380,206 and average rents of £1,024 it would take twenty two years for a buyer with a 10% deposit to be better off compared to a renter in an equivalent property. After a seven-year period, a typical renter in Bournemouth would be £30,719 better off than a typical buyer with a 10% deposit.

Lawrence Hall of Zoopla.co.uk said: “Despite taking longer to be better off financially, London remains the holy-grail in terms of property investment. It is much more buyer-friendly outside the capital but with rising average prices and low savings rates, accumulating a deposit has become increasingly difficult. It is important to remember that whilst renters may be better off in the short to medium term in some areas of the country, buyers are making a long-term investment. With most buyers opting for mortgage terms of 25 years, over the long term, buyers are likely to be better off compared to those who choose to rent.”

The Zoopla Rent vs. Buy methodology compares all of the costs associated with buying or renting as well as increases in asset or savings value over time. The analysis forecasts the amount of time it will take for buying to become more cost effective than renting across the largest towns and cities in Britain and compares how much buyers or renters are financially better off after the average tenure of a house.

BEST LOCATIONS FOR BUYING

Location	Av. Asking Price	Av. Monthly Rent	Amount buyers are better off after 7 years (10% deposit)
Aberdeen	£206,060	£1,275	£99,040
Dundee	£96,103	£653	£54,378
Glasgow	£139,841	£722	£40,971
Cambridge	£337,586	£1,334	£28,878
Edinburgh	£224,000	£948	£32,725
Coventry	£191,833	£849	£33,730
Newcastle	£180,516	£812	£33,726
Manchester	£178,069	£781	£29,751
Milton Keynes	£264,038	£1,066	£25,345
Birmingham	£163,594	£719	£27,171

Source: Zoopla.co.uk (February 2014)

BEST LOCATIONS FOR RENTING

Location	Av. Asking Price	Av. Monthly Rent	Amount renters are better off after 7 Years (10% deposit)
London	£896,124	£2,619	£82,412
Bournemouth	£380,206	£1,024	£49,082
Huddersfield	£177,119	£561	£7,680
Bedford	£288,598	£959	£7,306
Swansea	£185,373	£631	£204

Source: Zoopla.co.uk (February 2014)

Wriglesworth Vlog: Paper Summary for 11th February 2014

Posted on 11/02/2014 by wriglesworth

The key macro-economic, personal finance, property and recruitment stories from today’s papers, read by Wriglesworth Junior Account Executive Victoria Heslop.

Monday’s headlines 10.02.14

Posted on 10/02/2014 by wriglesworth

Economics
The eurozone’s new chief banking regulator says that weak banks should be allowed to fail. It has said that some of the region’s lenders have no future and should be allowed to die, heralding a far tougher approach to supervision across the currency bloc. (Cover of the FT)

The Bank of England is going to give guidance on Wednesday on how quickly interest rates will rise in Britain’s rapidly growing economy. After Mark Carney, bank governor, signalled that the BoE would move away from linking rate rises to unemployment, its Monetary Policy Committee has been considering how to provide clarity to markets without jeopardising growth. Many economists think the bank will use its scheduled quarterly Inflation Report to build on recent utterances indicating there is “no immediate need” to raise rates and that monetary policy will be tightened “gradually”. They also believe the bank will broaden its analysis to include other economic data beyond unemployment, probably including wages and underemployment. (p.2 of FT)

New research from the Business Trends survey, produced by accountancy firm BDO suggests that interest rates could rise in the “very near future”. The report states that business optimism reached record levels in January, signalling rapid economic growth over the next two quarters (p.B4 of The Daily Telegraph)

The Chairmen of Britain’s leading retailers have become significantly more optimistic about the prospects for the economy and have performed a dramatic U-turn on the performance of the government. According to the fourth annual survey of chairmen by headhunter Korn Ferry, 73% of chairmen are optimistic about the outlook for the economy, compared with just 15% last year. (p.B1 of The Daily Telegraph)

Personal Finance
Young people are bearing the burden of increasing levels of debt, according to a poll that shows how the older generation are escaping the squeeze in incomes. People in their 20s and 30s face a stark choice between “putting their lives on hold or racking up substantial debt”, according to the Demos thinktank that commissed the poll. The Populus poll of 1,775 adults found that more than half (55%) of those aged 18 to 24 – and 48% of those aged 25 to 34 – say their debts have increased over the past five years. This compares with a 13% rise for those aged over 65. (p.10 of The Guardian)

Property
Four in every 10 London homes sold for more than £1m last year were bou8ght by foreign buyers, according to new research. The number of homes being sold for more than £1m in Greater London rose to 6,145, up 20% on 2012. The research, from aviation firm Beechcraft Corporation, claims non-British buyers spent a combined £5.1bn on London properties (p.14 of The Independent)

Wriglesworth Vlog: Paper Summary for 7th February 2014

Posted on 07/02/2014 by wriglesworth

The key macro-economic, personal finance, property and recruitment stories from today’s papers, read by Wriglesworth Senior Account Manager Andy Lane

Marsh & Parsons:

Posted on 07/02/2014 by wriglesworth

Record January for the Prime London Property Market

Almost half (48%) of Prime London property sold for, or in excess of, the asking price
Over a third (34%) of property in January sold within two weeks of being put on the market
Ratio of supply and demand rose to a four-year high with 23 registered buyers for each available property
Strong demand is pushing prices higher, with the average price of two-bedroom properties in Outer Prime London increasing by 17% in 2013, an increase of almost £100,000

The Prime London market experienced a bumper January in 2014, with properties selling in record time and for closer to the asking price than ever before, according to new data from estate agent Marsh & Parsons.

Over a third (34%) of property in January was sold within two weeks of being put on the market – twice as many properties in this timeframe compared to January 2013.

In addition, almost half (48%) of all property in January sold for, or in excess of, the asking price. This meant that, on average across all property sold, 99% of the asking price is currently being achieved – an increase from 98% during the past two years.

Peter Rollings, CEO at Marsh & Parsons, commented: “Now is the time to get a jackpot price on property thanks to a surge of potential buyers entering the market in the New Year. These extraordinary conditions have created a strong seller’s market and one of the best opportunities to sell property in recent years.

“But conditions like this won’t last. Many people believe that the best time to market property is during the busier months of the spring. But these sellers could be missing a trick – the increasing levels of property supply at that time of year will dissipate current levels of demand, and bring about a return to more normal market conditions in the spring.”

Supply and Demand

In January, there were 23 registered buyers competing for each available property on Marsh & Parsons’ books. This was the highest level since 2010, and represents a dramatic increase from the ratio of 14 registered buyers per property in January 2013. Compared to the same point last year, 19% more buyers entered the market in competition for 28% fewer properties – making this a strong seller’s market.

But for the last four years, an average of 10% more property has become available between the months of January and April. This percentage jumped considerably between 2012 and 2013 as the property market recovered, and if this trend continues, 18% more property could hit the market by spring 2014.

Peter Rollings continued: “London’s rising population, together with a perfect combination of low interest rates and competitive mortgage finance has created a surge of potential buyers. But the supply of housing stock has remained more subdued. Our more astute sellers are putting their properties on the market now because they know that the imbalance of supply and demand will help them to get a great price.

“In a seller’s market, property regularly goes for over the asking price, so buyers need to be realistic when viewing property and placing bids. When they find their chosen property, they must not delay. Being decisive is key to successful negotiations.”

Impact on Prices

The average value of two-bedroom properties in Outer Prime London increased by nearly £100,000 during 2013 following a 17% annual growth, according to Marsh & Parsons’ latest London Property Monitor.

The average price of a two-bedroom property in Outer Prime London – comprising non-central areas such as Brook Green, Fulham and Barnes – now stands at £673,812. This is an increase of £98,214 since Q4 2012, when the average price of a two-bed in these areas was £575,597.

Property Type Breakdown

	All Prime London	Prime Central London	Outer Prime London
1 Bed	£ 520,076	£ 599,131	£ 470,668
2 Bed	£ 939,839	£ 1,365,482	£ 673,812
3 Bed	£ 1,577,109	£ 2,362,956	£ 1,004,493
4 Bed	£ 2,024,000	£ 2,979,556	£ 1,426,778

Looking at average values across all property types, growth in Outer Prime London outpaced Prime Central London by 50% during 2013, with annual growth of 15%, compared to annual growth of 10% in the Prime Central areas of Chelsea, Kensington, Notting Hill, Holland Park and Pimlico.

The top five Outer Prime ‘hotspots’, where the highest levels of growth were recorded during 2013 were: Barnes (average annual price growth of 19%), Balham, Clapham, Fulham (all 18% annual growth), and Battersea (15% annual growth).

Peter Rollings continued: “Last year the biggest price increases were to be found in the Outer Prime London ‘villages’. These areas are all popular with UK buyers and are favoured for their community feel and local atmospheres. Slightly lower property prices in these areas also attract those who may have been priced out of more central areas.

“But early indications in January point to a turnaround. While parts of Outer Prime London sped ahead in 2013, our data suggests that Prime Central areas are due for a growth spurt in 2014. This was beginning to happen in the third quarter of last year and looks set to surge forward later this year.”

Prime London Property Price Movements

	Average value	Quarterly Change	Annual Change
Prime London	£ 1,477,699	3.0%	12.3%
*Prime Central* London**	£ 2,108,717	2.3%	10.0%
Outer Prime London	£ 1,083,313	4.0%	15.1%

The Wriglesworth Consultancy

PR agency specialising in corporate communications, research, financial services, property, recruitment, & HR

Paper Summary – 26th January 2015

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Paper Summary – 19th September 2014

Average prices up £1,384 in January, setting a new record high