Londoners spend the shortest amount of time renting a place before they buy their own home. According to new research, the average Londoner expects to spend around 12 years living in a rented home.
Across the whole of the UK, the average time expected to rent before buying is 15 years and two months.
More than 2,000 adults were quizzed by Opinium on behalf of landlord insurer Direct Line for Business.
The research, which revealed that, unsurprisingly, London has the highest proportion of renters of anywhere in the UK, its 2.7 million tenants making up a sixth of all renters in the UK.
Renters revealed that affordability is the main reason they stick with renting – in 2017, the UK’s first-time buyers paid on average £207,693 for their first property, more than twice the average price paid five years earlier of £138,663. That’s an increase of almost £70,000 or around £1,150 a month in five years.
Christina Dimitrov, business manager at Direct Line for Business, said: “The UK housing market continues to change, and we are seeing a major attitudinal shift when it comes to renting.”
Future housing developments in London will have to include a minimum of 35 percent affordable housing to get fast-track planning permission. Sadiq Khan, the capital’s mayor, has announced the proposal as part of a housing strategy designed to provide 65,000 new homes a year across London for the next 10 years.
Mr Khan’s plans include prioritising development on brownfield sites and delivering genuinely affordable homes in London with the criteria that a household’s housing costs should not exceed 40 percent of its income.
The mayor has also provided £1.67 billion in funding for London councils to build 10,000 new council homes over the next four years. Councils will be able to ringfence the money they receive when tenants exercise their right to buy their home and use that money to replace the social housing on a like-for-like basis.
The mayor’s housing strategy aims to build more homes; deliver genuinely affordable homes; provide high-quality homes and inclusive neighbourhoods; provide a fairer deal for private renters and leaseholders; and tackle homelessness and hep rough sleepers.
As part of the strategy, leaseholders in London are to be given better advice and greater support from City Hall when dealing with increases in ground rent and abuse of leasehold tenure. The Government has announced that newbuild houses should no longer be sold as leasehold, but many developments in London are flats and apartments, which will continue to be sold as leasehold.
Estate agent Knight Frank has identified eight property hotspots in London. And the good news for those keen to buy in the capital is that affordability is high among the reasons for those areas being chosen.
In its third Hotspots report, Knight Frank looked at several factors that make an area a target for buyers. They include upgrades to transport infrastructure, regeneration and areas where prices are lower than nearby neighbourhoods.
The eight hotspots are: Southall/Hayes; Camden Town; Wood Green; Lisson Grove; Canada Water; West Ham; Leyton; and Hackney Wick.
According to Knight Frank, London’s development landscape has changed in the two years since its last report, adding: “These changes have been triggered by political, economic and policy events – not least the vote to leave the EU and additional stamp duty.
“The new development hotspots identified feature a wider geographical spread than previous reports.
“In terms of values, the majority are localities where new-build developments are priced at sub-£800 psf [price per square foot] and most are also outside zone 1. This emphasises the changing landscape for development in London, with a greater focus on affordability.”
The timeframe for the areas to become hotspots is 2018-21, which will cover the opening of Crossrail, the high-speed rail link that will improve London’s link with the south-east.
In Southall and Hayes, the current price per square foot is £600, forecast to be £750 psf by 2021. Crossrail trains will be running there by next year and developments are in the pipeline to take advantage of the new rail link.
Wood Green‘s current psf is £650, forecast to be £800 by 2021. More than £3 billion has been set aside for development in the area by Haringey council, including 7,700 new homes.
One of London’s hippest areas, Camden Town‘s current psf of £1,100 reflects its popularity. That psf is forecast to reach £1,500 in three years’ time. Redevelopment plans there include the Camden Lock Village, boosted by investment from the Mayor’s Regeneration Fund and Camden Council.
Lisson Grove‘s proximity to Regent’s Park and St John’s Wood has marked it out as a property hotspot. Currently its psf is £1,400, potentially rising to £1,850 by 2021. Westminster Council is investing £1.2 billion over 20 years as part of its regeneration blueprint.
South of the river, Canada Water will be boosted by the £2 billion Canada Water Masterplan that will include 3,500 new homes. The psf is £900 at the moment, rising to £1,250 in 2021 say Knight Frank.
In West Ham, the psf is present £700, estimated to hit £950 in the next three years. West Ham has been rezoned by Transport for London to Zone 2, saving commuters hundreds of pounds annually on fares. Its transport options include the Underground, Overground and DLR, while Crossrail will run from Stratford from next year.
Nearby Leyton has a psf of £675, forecast to rise to £800 by 2021. Its proximity to areas that have already been regenerated, including Westfield and the Olympic Park, make it the next area to be prioritised for population growth in Waltham Forest.
Also close to the Olympic Park, Hackney Wick is currently being regenerated as part of the London Legacy Development Corporation’s work. Its £700 psf in 2018 is predicted to be £850 in 2021. Its overground train station, connecting the area to Canary Wharf and the West End, will be transformed by a £25 million facelift.
London’s house prices have slowed to their lowest annual growth rate in almost a decade. The capital’s sluggish property market is bucking the upward trend seen across the rest of the UK.
At just 1.0 annual price growth in the year to February 2018, London’s growth rate is the lowest since September 2009 when it was a negative 3.2 percent at the height of the credit crunch.
The latest figures from the UK House Price Index compiled by the Office for National Statistics and the Land Registry showed that average house prices in the UK rose by 4.4 percent in the year to February, down from 4.7 percent on January. The average house now costs £225,000 – £242,000 in England, £153,000 in Wales, £144,000 in Scotland and £130,000 in Northern Ireland.
However, London house prices dropped by 1.0 percent in the year to February, a slowdown that began in mid-2016 and one that means the average home in the capital now costs ££471,986, down more than £16,000 from its July 2017 high of £488,247.
Capital outstripped by other regions
While London house prices are on average much higher than elsewhere in England and indeed the rest of the UK, the fall in its house price growth is in marked contrast to other regions. The West Midlands registered the UK’s highest annual growth, prices rising in the area by 7.3 percent in the 12 months to February 2018. The east Midlands were just behind with house price growth of 6.3 percent.
The Land Registry data examines house prices by property type. In London, flats in particular are falling in value, their average price dropping by 3.4 percent. Detached properties and terraced homes rose in value in the 12 months to February, from £887,959 to £915,162 and £482,631 to £489,639, respectively.
While the slowing rate of growth is disappointing for anyone looking to sell, those keen to buy in London will see this as an opportunity they can use to their advantage.
Talk to the experts in conveyancing for London at Capital Conveyancing today on 0207 406 5880 to see how we can help with your purchase or sale.
More homeowners are quitting London for towns within commuting distance of the capital. Estate agent Savills has revealed the commuting hotspots that are attracting those for whom the city is increasingly unaffordable along with those who want to take advantage of the value of their London home to buy a bigger one elsewhere.
In its research, Savills revealed that towns with a good transport hub such as a railway station were in the highest demand, particularly those within a 40-minute journey to central London.
Those towns with good rail links, coupled with an increase in new homes, saw the biggest spike in passenger traffic heading towards London. The likes of Aylesbury Vale Parkway in Buckinghamshire and Didcot Parkway in Oxfordshire have seen spikes in house prices fuelled by an influx of commuters.
House price growth in those areas is 5 percent higher than neighbouring areas over the last five years, according to Savills. And the knock-on effect is that commuting-distance areas with lower-value homes are becoming increasingly popular, particularly those on the HS1 link to Birmingham.
In fact, the commuting distance is now stretching beyond the traditional Home Counties as far Coventry, Rugby and Birmingham itself as people take advantage of regular, fast trains to London without the cost of living in the capital.
Meanwhile, more people than ever before are leaving London, according to figures from the Office for National Statistics. The number of people in their 30s who are moving out of the capital has risen by 27 percent in the last five years with the traditional commuter belt their destination.
Savills said 14 percent of its new home buyers are those moving from London with 39 percent of them buying a larger property, demonstrating the financial power of London property.
Its report said: “We expect the ripple effect of Londoners moving to the commuter belt to continue. Searching for more space, they are likely to bring London’s equity with them and will be targeting markets with the quickest links to the capital.
“These include established prime locations and up-and-coming areas that are more affordable than their neighbours.
“Yet we also expect the ripple effect to move beyond London’s commuter zone to markets in the Midlands and the north. These markets have seen house prices rise more in line with wages and therefore remain affordable. They will have the most capacity for growth over the next few years.”
Property price growth is on the slide in London. New data has revealed that two-fifths of postcodes in the capital showed a fall in annual property prices, down to 1 percent from 4.3 percent a year earlier.
The figures from Hometrack showed that 42 percent of London postcodes actually had negative house price growth, the worst figures seen in a decade.
Hometrack’s monthly house price index said “weak demand” was translating into a fall in house prices in London. Meanwhile, Edinburgh’s house price growth is now at 8.0 percent with Liverpool just behind at 7.8 percent, followed by Birmingham and Leicester at 7.7 percent.
Of the 46 local authorities in London, 15 saw house prices fall in the last year. The biggest drop was in the City of London (7.9 percent), but property hotspot such as Camden (1.9 percent) and Islington (1.4 percent) also registered a decrease.
Factors impacting sales
According to Hometrack, which analyses the UK property market, there are several factors to blame for the drop in London house prices. Its monthly report stated: “This is a result of tax changes impacting overseas and domestic investors and stretched affordability levels for owner occupiers that have been compounded by Brexit uncertainty.
“Sales volumes are first to be hit when demand weakens, and housing turnover across London is down 17 percent since 2014.
“Prices are next to follow, but the scale of current price falls remain modest.”
While sellers may not be achieving the price they hoped for when marketing their property, falling prices are an opportunity for buyers to secure a better deal. Give the expert team at Capital Conveyancing a call on 0207 406 5880 to kickstart your sale or purchase in London.
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Asking prices for properties in London are dropping, according to figures from home-listing website Rightmove. Its latest report said the sixth consecutive fall in asking prices in the capital suggests London’s boom phase is over.
That means home sellers are becoming more realistic about the price they want for their property, Rightmove said, while those who want a higher price are delaying putting their home on the market, stifling the supply and stopping prices falling even further.
Miles Shipside, director of Rightmove and housing market analyst, said: “End-of-the-boom prices normally readjust more quickly if there is an over-supply of sellers trying to exit their property investments.
“However, the lack of new listings in the typically pricier more central locations indicates that some would-be sellers are holding back, preventing a glut of competition from forcing prices downwards.
“Cash-rich owners are showing that they are able to sit tight instead of coming to market now and await their hoped-for price recovery.”
London’s housing market lagged behind the rest of the UK for all of 2017 in asking prices and that pattern has continued into 2017. Only the south-west reported a decrease in asking prices in the latest Rightmove report with the rest of the UK seeing an increase.
Rightmove identified Livingston in West Lothian as the town with the fastest sale agreed time of 17 days, with the Warwickshire towns of Rugby and Nuneaton the quickest English towns to agree sales with 21 days.
Mr Shipside added: “London is a myriad of different markets, under-pinned by a historical shortage of affordable supply. Rapid price rises in recent years have resulted as usual in a readjusting market, with overall year-on-year price falls in new seller asking prices of 1 percent.
“If fewer sellers come to market, then competition and downward price pressure will be less. However, unless you have an extra-special property, you may have to sacrifice some of the substantial price gains of the last few years to attract more buyer interest and effect a speedier sale.”
Rightmove monitored 134,556 asking prices from January 7 to February 10.
There are now more than 750,000 homes in the UK worth more than £1 million, making us a nation of growing property millionaires.
Data from online property specialists Zoopla showed that the number of properties valued at £1m plus stands at 768,553. And the town of Guildford in Surrey has the most property millionaires in the country with 5,889. Meanwhile, nearly half of all homes (49 percent) in the Buckinghamshire town of Beaconsfield are valued at £1m or more, demonstrating that the north-south divide is alive and kicking in the housing market.
Those seven-figure plus homes are only 2.7 percent of the entire UK housing stock. But their number has risen by 143,476 since Zoopla last analysed the data in August 2016.
It’s no surprise that London and the south-east dominates the figures. The capital has an incredible 430,720 homes that are worth more than a million, while there are 180,397 million-plus properties across the south-east.
Wales has the fewest property millionaires. There are just 2,223 homes valued at seven figures and upwards there.
Zoopla has also unveiled a new online calculator so users can put in their postcode and find out when their own home might hit that magical million mark.
Lawrence Hall of Zoopla said: “While there might be a greater number of £1 million-plus properties than ever before, the data shows that they still only represent a small fraction of all UK housing stock.
“Our latest tool allows curious homeowners to dream a little and see when their home might hit the million-pound mark.” –
Here are the top 10 UK regions by £1 million-plus properties:
Thousands of London homeowners will continue to face spiralling costs when extending the lease on their property or attempting to buy the freehold because of a landmark court ruling.
Campaigners had brought a case to the Court of Appeal to have the current valuation system thrown out and replaced by a new “fairer” system after a Chelsea-based property company demanded £420,000 from a leaseholder to renew a less with only 23 years remaining.
However, the court dismissed the appeal and said the current system – first developed by surveyors working for Britain’s richest man, the Duke of Grosvenor on his Grosvenor Estate – should stay in place at least until the Law Commission reports on its own review of valuations under the Leasehold Reform, Housing and Urban Development Act 1993.
In Mundy v Sloane Stanley Estate, surveyor James Wyatt of Parthenia Valuation had argued that the valuation model used by property surveyors to judge what a new lease is worth was out of date. A new statistical model, known as the Parthenia model, was proposed that would reduce leasehold extension and freehold purchases by up to 50 percent.
Leasehold reform campaigners vowed to fight on. Mr Wyatt said after the judgment had been delivered: “Now we need the government to act.” And Paula Higgins, chief executive of the Homeowners Alliance, described the ruling as “deeply disappointing”.
She added: “This ruling means leaseholders will continue to hand over huge amounts to their freeholders for very little in return. The method of lease valuation currently employed is over two decades old and is no longer appropriate.
“The Government must now act to ensure there is a fairer way to calculate leasehold extensions that is not subjective and favours the freeholders over leaseholders. The fight must go on.”
Louie Burns, managing director Leasehold Solutions, said the ruling was “devastating” and he said leaseholders are being overcharged all over England, adding: “The valuations model at the heart of this case estimates that leaseholders are currently being overcharged by £480 million a year. Over the past two decades that’s a staggering £9.6 billion that has been taken from householders due to flawed valuation methods that have favoured freeholders at the expense of leaseholders.”
There are around 4.1 million leasehold properties in England and Wales with around 2.1 million with less than 80 years left on the lease. Of those, around 500,000 are in London.
Leaseholders don’t own the land on which their property stands. Instead it’s owned by the freeholder who charges an annual ground rent and offers a long-term lease, usually decades long. It is when those long leases get close to expiring that householders face increasingly punitive renewal costs.
If you’re buying a leasehold property, you need the right legal advice from the start. Capital Conveyancing’s solicitors panel are experts in the property field and can provide clear, informative advice on leasehold, length of leases and the costs associated with such properties, including ground rent, maintenance fees and service charges.
Call Capital Conveyancing now on 0207 406 5880.