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Publications & Reports

Brexit effect on UK house prices is changing

By | Publications & Reports, Residential Property

The latest data from mortgage lender Nationwide has added to growing signs that any impact of Brexit uncertainty on UK house price growth is starting to ease.

Growth in British house prices picked up slightly in April, with a year-on-year rise of 0.9%, up from an annual rise of 0.7% in March. The average price for a property in the UK now stands at £214,920 ($280,656). Month-to-month figures show prices were up 0.4% between March and April, marking the biggest increase since November.

“While the ongoing economic uncertainties have clearly been weighing on consumer sentiment, this hasn’t prevented further steady gains in the number of first-time buyers entering the housing market in recent quarters,” said Robert Gardner, chief economist at Nationwide.

“Indeed, the number of mortgages being taken out by first-time buyers has continued to approach pre-financial crisis levels in recent months,” Gardener added.

“First-time buyer numbers have been supported by the strength of labour market conditions, with employment rising at a healthy rate, and earnings growth slowly gathering momentum.”

Although house prices growing by just under 1% doesn’t seem too much to laud over, the consistent rise over the last few months has shown that some pockets of buyers are shaking off Brexit uncertainty.

“Given the previous years of outstanding house price growth, we could be forgiven for thinking that anything below the 1% mark where the annual rate is concerned, is entering life support territory,” said Marc von Grundherr, director of estate agent Benham and Reeves.

“This simply isn’t the case and while the rate of price growth has paused for breath, it remains within easy reach of wider targets for the year as we enter just the second quarter, von Grundher added.

“Without the sufficient market fuel of buyer demand and replenished stock levels the market may struggle to make it out of second gear, however, it’s likely that we will see conditions accelerate through the spring and summer seasons with some more positive growth levels registered despite the continued uncertainty of Brexit.”

Source: Yahoo News

Government confirms annual CPI+1 Rent Increase

By | Publications & Reports, Social Housing

The Government has indicated that it will permit annual rent increases of up to one per cent above the consumer price index (CPI), in it’s response to a consultation with the sector.

The MHCLG announced plans in October 2017 to permit Registered Providers to increase rents on social rent and affordable rent properties by up to CPI plus 1% each year from 2020, for a period of at least five years.

In September 2018 it launched a consultation on its proposed direction to the Regulator of Social Housing concerning social rents from 1 April 2020 onwards, which closed on 8 November. Yesterday it published the results of that consultation and it’s response.

Seventy-one per cent of respondents to the consultation agreed that the regulator’s Rent Standard should apply to local authorities.

Meanwhile 57 per cent agreed with the proposal to permit Registered Providers to increase rents by up to CPI plus one per cent each year. However 34 per cent of those responding to this question disagreed with the proposal, including 87 per cent of responses from individuals and organisations representing tenants.

The MHCLG stated in its response: “The government acknowledges the concerns raised about the potential impact on tenants of permitting rent increases of up to CPI+1% each year from 2020. However, it is important to recognise that most existing tenants will have benefited over the previous four years from a reduction of 1% each year as implemented through the Welfare Reform and Work Act 2016. MHCLG adds that the CPI plus one per cent is the maximum increase but “landlords have discretion to apply a smaller (or indeed no) increase based on local circumstances”.

The response concludes; “Overall, we believe that the proposed CPI+1% limit strikes a fair balance between the interests of landlords, tenants and taxpayers.”

It adds: “The Government therefore intends to proceed with the proposal to permit annual rent increases of up to CPI+1%.”

In October 2017, Theresa May announced that the CPI plus one per cent rises would resume for five years from 2020, and the government launched its formal consultation in November last year.

The consultation received 157 responses, of which 37 per cent were from local authorities or their representative bodies. Eighteen per cent were from private Registered Providers or their representative bodies and 35 per cent were from individuals or tenant organisations.

 

Source: Social Housing

 

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