Weekly Property Round Up
This week sees Harry Edwards round up the property news, from the drop in property prices both at home, in some of London's top boroughs, and abroad, a little more unsurprisingly in Greece; to the recent statistics showing more people than ever are investing in their own homes.
Greek Property prices may drop up to 18% by 2017
The Greek property market is expected to enter a new cycle of decline as a result of increased recessionary pressure on the Greek economy, according to a report by chartered surveyors GLP Values, adding that in the next two to three years prices are likely to drop by as much as 18% from their current levels.
If this forecast proves correct, “the total decline in the housing market will reach 60%,” Tasos Tsombanidis from GLP Values states.
After the stagnation in transactions throughout the first half of the year and the introduction of the new austerity measures, “an average decline of prices between 12-18% is considered likely, depending on the category and the various characteristics of each property,” states GLP Values.
House prices 2015: surprise drop in top London boroughs
House prices in the most expensive London boroughs have unexpectedly dipped, according to figures published on 20th July by property listing website Rightmove, but prices across the country continue to edge up according to The Guardian, which cited rising house prices in North-East England but a softening in London, where price inflation has been rampant in recent years.
During July, prices in the most expensive London borough, Kensington and Chelsea, fell 7.2 per cent. City AM notes significant falls in other high-value areas of the capital, such as Camden and Richmond-Upon-Thames, with the five worst-performing boroughs in the report all boasting average prices of above £618,000. Cheaper boroughs meanwhile closed the gap a little, with house prices in Greenwich and Lambeth up by 7.9 per cent and 7.8 per cent respectively for the month.
Bloomberg mid July report recorded a rise of 1.1 per cent for London homes with two bedrooms or fewer, the most in-demand for first-time buyers, while the broader average was up just 0.2 per cent. The Guardian identifies similar concerns in other cities, where private landlords are buying up smaller housing stock. Last week the Royal Institute of Chartered Surveyors said the number of homes listed for sale was at its lowest level since records began in 1978.
House prices: record cash injected into homes
Low savings rates, rising house prices and a mortgage price war are persuading British homeowners to pour money into bricks and mortar, reports The Times.
The Bank of England says net housing equity injection – the rate at which people pay off their mortgages or add value to property with home improvement works – has reached a record £13bn in the first quarter of 2015. That's an increase of £400m from the final three months of last year, and the 28th quarter in a row of net injection of equity into houses. A total of £31bn has been injected since 2008.
The present trend contrasts sharply with a period of continuous housing equity withdrawal between 2000 and the first quarter of 2008. During that time, borrowers often re-mortgaged their homes to pay for holidays, clear other debts and top up pensions.
During the financial crisis many people attempted to clear as much debt as they could, but The Guardian reports that economists have been surprised to see the trend continuing as the economy recovers.
An increasingly bitter price war between lenders and building societies reached a peak last month, as Chelsea Building Society became the first to offer home loans below the 1 per cent mark. The Bank of England says it would be misleading to assume British households are set on the path to financial responsibility. Overall levels of savings, released last week, continue to show a worrying decline, it said.