UK annual house price growth hits two-year high

Liverpool Skyline

British annual house price growth picked up more than expected last month to hit its highest in over two years, mortgage lender Halifax said on Wednesday, contrasting with other signs of a muted housing market.

House prices in the three months to April stood 5.0 percent higher than a year ago, the strongest growth since February 2017 and a marked increase from the 2.6 percent rise recorded for the three months to March.

The reading came in above all forecasts in a Reuters poll of economists that had pointed to an annual increase of 4.5 percent in the three months to April.

“The surge in house prices reported by Halifax cannot be reconciled with any other evidence from the housing market. Less volatile measures paint a far more subdued picture,” said Samuel Tombs, economist at Pantheon Economics.

Halifax said the year-on-year gains reflected unusually weak prices in April 2018, as well as more sales of more expensive newly built homes and a bigger proportion of sales coming from London, where house prices are above average.

Bank of England data last week showed British lenders approved the fewest mortgages in March since December 2017, and that consumer borrowing slowed sharply in the run-up to the original Brexit deadline of March 29.

While house prices have been rising across the country as a whole, prices in London have fallen according to various indicators, hit by unaffordable prices for many buyers, tax changes affecting the buy-to-let market and Brexit uncertainty which has weighed heavily on the capital.

Halifax said house prices in April alone rose 1.1 percent, again stronger than all forecasts in the Reuters poll that had pointed to an increase of just 0.1 percent. However, this represented only a partial recovery from March’s 1.3 percent drop.

(c) Reuters, May 2019

Mortgage approvals increased in April, latest data shows

bradford city centre

There was a sharp increase in mortgage approvals in April as home owners continued to take advantage of low mortgage rates across much of the market, the latest data shows.

There were 65,781 mortgages approved during April 2019, up 2.7% compared to the same month in 2018, according to the mortgage monitor from residential chartered surveyors e.surv.

The report points out that while new activity in the wider housing market remains stagnant in many areas of the country, existing home owners are capitalising on a battle between High Street banks and other lenders which has seen interest rates fall so far this year.

This was also reflected in the rise in activity, with new approvals up 5.5% compared to March and the proportion of loans given to those with small deposits, usually first time buyers, reached 28.5%, up from the 26% recorded in March.

‘In many parts of London and the South East, the property market continues to move slowly. Yet this has not translated into the mortgage market with activity remaining strong. There has been a healthy increase in the proportion of loans going to first time buyers, showing that lenders are welcoming these customers,’ said Richard Sexton, director at e.surv.

‘Previously it may have been difficult for these borrowers to get their foot on the ladder, but lenders are now reaching out to these parts of the market,’ he added.

However, the data also shows that the proportion of mortgage approvals to large deposit borrowers fell in April, continuing the recent trend away from this part of the market. Indeed, less than a quarter of all loans, just 24.3%, were to these borrowers in April, lower than the 26.2% recorded in March 2019 and some way off the 2019 high of 28.1%, recorded in January.

There was a modest fall in mid-market activity, down from 47.8% to 47.2% month on month while on an absolute basis, the number of small deposit borrowers rose substantially, increasing from 17,205 to 18,748.

‘Large deposit borrowers once held a tight grip on the mortgage market but that has loosened in recent times. Yet the low rates available mean that there are still many current homeowners coming to the market for new loans,’ Sexton pointed out.

First time buyers, and others looking to purchase in Yorkshire benefited from the most favourable market conditions for small deposit borrowers. More than a third of the region’s mortgage approvals were to those with little equity or cash to spare at 36.6%. This is the fifth successive month that the region has been top.

Next was the North West where 35.1% of loans went to this part of the market and then the Midlands at 31.8%. By contrast, those looking to buy in London had a much tougher time, accounting for just 18.9% of approvals recorded in April.

The capital was the area of the country most dominated by large deposit borrowers, with 33% of all loans going to this market segment. This was ahead of the South East region at 28.1% this month. Behind that were Northern Ireland and the South and South Wales regions, both on 25.5%.

(c) Property Wire, 16 May 2019

Property investors are ‘confident’ in Yorkshire following hundreds of new planning proposals

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Over 200 industrial and logistics schemes are reportedly being planned for the region showing investors’ confidence in the region.

Research from planning and design consultancy Barton Willmore shows an estimated 203 industrial schemes, worth around £10.2bn, are in the pipeline.

Analysis of industry data shows the schemes are at various stages of the planning process and include buildings for a variety of uses – from manufacturing, warehousing to workshops and research centres.

Claire Kent, director at Barton Willmore, said: “Our research shows a significant number of industrial schemes planned for Yorkshire, across a variety of industries and local authority areas.

“It demonstrates the strength of confidence in Yorkshire, and the Northern Powerhouse as a location for growing industrial operators.

“A lack of high quality industrial and logistics space across the country has been caused by a decade of under investment, and now Yorkshire can benefit from the accumulated demand by providing the space that companies need.

“We can encourage further schemes by investing in transport and infrastructure and offering incentives to developers. In doing so we’ll attract further investment to Yorkshire.”

Barton Willmore’s research highlighted planning submissions across the county, with concentrations in the East Riding of Yorkshire, Hull and Sheffield.

Claire added: “This research shows us there is wider reason for optimism in the Yorkshire economy – because there is both demand and investment.

“There were record levels of take-up of industrial property throughout 2018 in Yorkshire, putting further pressure on supply. Barton Willmore’s clients are helping to alleviate that supply constraint.”

Claire added that Barton Willmore is working on many high profile schemes across Yorkshire.

This is said to include the former Kellingley Colliery where developer Harworth Group plans to provide 1.45 million sq ft of manufacturing and distribution space and Gateway 45 in Leeds.

(c) Bdaily, May 2019

Berkshire Hathaway seeks UK investment despite Brexit

Warren Buffett has said he wants to invest more in the UK and other parts of Europe, despite uncertainty over the UK’s future relationship with the EU.

The US investment guru said he would like his firm, Berkshire Hathaway, to be better known across the Atlantic.

“We’re hoping for a deal in the UK and/or in Europe, no matter how Brexit comes out,” the billionaire told his annual shareholders’ meeting.

“I have the feeling it was a mistake,” he said of the UK’s vote to leave.

However, he added: “It doesn’t destroy my appetite in the least for making a very large acquisition in the UK.”

Mr Buffett, known as the “Sage of Omaha”, is chairman and chief executive of Berkshire Hathaway, which owns dozens of US stocks.

The company reported first-quarter earnings of $21.7bn (£16.5bn) on Saturday, a marked improvement on last year’s first-quarter loss of $1.1bn.

(c) BBC, May 2019

South Yorkshire Pension Fund to invest £80m in region

student buy to let investment

South Yorkshire Pension Authority has announced plans to ramp up its local investing efforts, committing £80m to lending aimed at supporting property development in Sheffield and extending an existing allocation to another Yorkshire-based property fund.

The Sheffield City Region Joint European Support for Sustainable Investment in City Areas fund has been allocated £80m in loans by SYPA.

The SCR Jessica fund, managed by real estate investment firm CBRE, was initially established in 2013 with £22m of investments by the authority into the SCR, and has so far deployed £25.5m of capital into the Yorkshire city.

The SYPA’s £80m allocation is its second round of investment in the urban development fund, which has £20m of debt available to lend and hopes to provide more than £300m of capital to the region.

Separately, the SYPA has invested £25m in residential and socially orientated properties in the region with St Bride’s Managers. The local authority fund originally invested in the St Bride’s White Rose Partnership, which invests in property across Yorkshire – including offices and hotels in the south of the county – but has recently agreed an extension focusing solely on the residential market.

Local and social impact investments make up a small but important part of the SYPA’s portfolio. The Local Government Pension Scheme member’s 25 per cent stake in the original White Rose Partnership fund amounts to just £12.9m, and its most recent £80m and £25m investments equate to 1.25 per cent of the scheme’s total assets.

The plan also holds other assets with some local element or impact, such as a private equity investment targeting the north of England, but does not class these as local investments.

George Graham, fund director at SYPA, says: “As a local authority pension fund, we have a strong connection to our locality, and if we can achieve the same returns at an appropriate level of risk through a local investment we will always consider it. However, local investments will only ever be a relatively small part of the overall fund in order to maintain an appropriate level of diversification.”

According to the latest SYPA annual report and accounts, the fund owns a number of properties in the UK collectively valued at around £650m. The diversified portfolio consists of commercial and residential properties.

(c) Property Week, April 2019

Leeds city centre named in Sunday Times Best Places to Live Guide 2019

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Leeds city centre has been named one of the UK’s best places to live by The Sunday Times.

The newspaper has included a total of seven Yorkshire postcodes in its 2019 edition of the annual guide to desirable locations.

York was named the overall national winner in 2018 and this year tops the list of the 10 best places to live in the north of England.

Leeds city centre appears for the first time, with experts citing the arrival of Channel 4’s national head office this year as a key factor in LS1’s boom in popularity.

Two more newcomers are former mill village and UNESCO World Heritage Site Saltaire, between Leeds and Bradford, which is now popular with young professionals and creative types, and commuter village Boston Spa, near Wetherby.

Dropping out of the guide this year are the north Leeds suburb of Chapel Allerton, the market town of Malton, Dales ‘capital’ Skipton and Wetherby, which all featured in 2018. There’s also no return for 2017 entries Helmsley, Hull, Horsforth, Richmond, Saltburn and Fulwood in Sheffield. Sheffield was dropped last year after the ongoing tree protest saga, while Hull appeared during its year as City of Culture.

The annual supplement uses a wide range of criteria to compile the list, from employment, schools and broadband speed to culture, community spirit and local shops.

The methodology uses robust statistics, including exclusive, up to date house prices provided by Habito and TwentyCi, but also the knowledge of The Sunday Times’s expert panel. The judges combine the hard data with their own on-the-ground experience and insight to ensure the chosen locations truly are places where everyone can thrive.

(c) Yorkshire Post, April 2019