The average house in England and Wales is now worth about £166,798 which is a 6.7% increase over last 12 months. While this is an impressive increase in house prices over the period there is no doubt that pressure is starting to tell on the UK property sector. Over the last few weeks we have seen would-be buyers retreating to the sidelines hoping to catch more value on the way down as more sellers keep appearing out of the woodwork.
Over the last few weeks it has become more and more apparent that the UK property sector is benefiting somewhat from an increase in those looking to rent rather than those looking to buy. The Royal Institute of Chartered Surveyors has confirmed this trend which could actually see UK property prices pushed higher and more and more people effectively blocked from entering the market as first-time buyers.
Internet-based property operation Rightmove has today announced half year profits up 39% to £24.5 million. Despite the fact that the UK property market is under pressure the internet company reported a record level of buying interest in March which appeared to remain fairly high during the often quiet summer months. Indeed the company is suggesting that trade numbers continued to grow in July and August which would appear to be against the general trend of the UK property sector.
The Scottish property market produced a very surprising scenario this week with news from the Council of Mortgage Lenders that mortgages agreements for first-time property buyers increased by 18% to 4,700 in the second quarter of 2010. The total of these mortgage arrangements was £419 million which was again a significant increase of 27% against the first quarter of 2010.
At this moment in time the first-time buyer of property in the UK is a very rare commodity as mortgage lenders look to pull up the drawbridge and reduce their short-term risks. Despite the fact that we have seen an increase in the number of first-time property buyer mortgage options over the last few days this is not a trend which the vast majority of mortgage lenders in the UK have yet taken up. Many appear happy to sit on the sidelines and reduce their own risk/reward ratio while the UK property market continues to struggle.
At the height of the boom time for the UK property market it seemed that nobody could lose money and conversely at the bottom of the UK property market it seems that nobody can make money. Investor sentiment is very often based upon short-term trends and many investors can become blinkered with regards to the potential long-term prospects for the UK property market. So will UK property ever be back in vogue?
In a further reflection of difficulties currently being experienced by the US economy, it was revealed today that sales of existing properties fell to a 15 year low in the US. There was an unprecedented fall in the annual rate of existing property sales from June 2009 to June 2010 which equates to 27.2%!
A report into the UK buy to let sector would appear to indicate concerns are growing and many landlords are looking to remove themselves from the industry in the short to medium term. The report by LSL Property Services shows that 42% of buy to let investors believe it is still a good time to buy in the UK against 48% during the first quarter of 2010. Around 20% of buy to let landlords are also looking to exit the industry which is an increase of six percentage points from the first quarter of 2010.
Bovis, one of the UK's leading house builders, has today gone public with a number of concerns regarding the short to medium term future of the UK property market. While the company reported a return to profitability, with £3.5 million surplus for the first six months of 2010, and an increase in both house prices and housing sales, there was much mention of the government's spending cuts and tax rises.
Despite the fact that the students of today are often associated with very little income, often spendthrift and looking to save as much money as possible, it seems as though a number of university towns in the UK have benefited from the growing influx of students. Figures in the press this weekend show that students in six out of ten university towns have forced the price of property up by around 30%.