Housing market confidence rise!

"Four out of five (81%) UK homeowners think that property prices will continue to climb over the next six months, according to the latest Housing Market Sentiment Survey from leading property website, Zoopla.co.uk. Optimism around the housing market outlook is significantly improved from one year ago, when less than one third of homeowners (30%) expected house prices to rise.

According to the survey, only 9% of homeowners believe that property values will fall over the next six months whilst a further 10% expect prices to remain flat. The average growth predicted by those surveyed is for house prices to rise by 5.7% by October.

The current level of optimism bodes well for market activity, with transaction volumes expected to rise significantly over the coming months given the historically high correlation between the confidence level in the Zoopla.co.uk Survey and market activity approximately three months later.

However, the availability of mortgage financing remains the main obstacle to a sustained improvement in the housing market with four out of five (78%) of those surveyed saying that it is now no easier to obtain a mortgage than it was three months ago. And the upcoming election is also a clear factor in terms of current market activity with almost a quarter (23%) of those surveyed stating that they will wait to assess the outcome of the election before making any property-related decisions.

Across the UK, the Scots are most upbeat over the prospects for the local property market, with 86% expecting house prices in their area to rise over the next six months, compared to 80% in England and 76% in Wales. The picture is somewhat less optimistic in Northern Ireland, with only 62% predicting house prices will rise over the next six months.

Nicholas Leeming, Commercial Director of Zoopla.co.uk, said: "With the bad weather behind us and the recent stamp duty relief introduced for first-time buyers, confidence in the property market has bounced back well. Despite the optimism, significant concerns remain around the supply of mortgages and whilst affordability levels are now higher than at any time in the past few years the lack of mortgage funding, especially for first-time buyers, remains the single biggest threat to a full housing market recovery."" Source www.zoopla.co.uk

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Stamp Duty threshold increased to £250,000 

"The National Association of Estate Agents (NAEA) today welcomed as a major victory Chancellor Alistair Darling's decision to raise the threshold of stamp duty land tax for two years.

The NAEA has long campaigned for a major rethink on stamp duty - which it believes to be a tax on aspiration. Today, in the final Budget before the election, Mr Darling announced that the threshold would be raised to £250,000 from midnight tonight, but only for first time buyers.

Peter Bolton King, chief executive of the NAEA, said: "For thousands of first time buyers the dream of getting onto the property ladder was slipping out of reach. This announcement has added a new rung to the property ladder, one within reach of thousands of young families. We have long argued that stamp duty is a tax on aspiration that smothered the natural demand of the market. We still believe that more reform is needed and there is more work to be done, but this is a good first step - a major victory for first time buyers."

The NAEA has for years called for a major reform of stamp duty land tax, beginning with the threshold being raised. Most recently in the run up to this Budget the association led a coalition of property organisations in calling for reform, under the banner of the 1808 campaign". Source www.naea.co.uk

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Asking rents rise again

"March saw the second consecutive month of rising asking rents, which are now £16pcm higher than in January, and at £820pcm are now at the same level as in December last year. The annual rate of decline has reduced, with the year-on-year change now standing at just -0.8%, the lowest annual decline since the index began. Rents sought by landlords are now just £7 lower than a year ago.

Further Tightening Of Supply In Rental Market
The firming of rents has been underpinned by a reduction in the availability of rental properties on the market, which are now at the lowest level since October 2008. This is in marked contrast with an oversupply of rental properties for the majority of last year when the market was flooded with new rental properties by sellers who were unable to sell: “accidental landlords.” These accidental landlords, encour¬aged by rising prices and strong demand, are now returning to the sales market, a major cause for this tightening of stock levels.

Tenant Demand Is Strong
The latest RICS Lettings Survey shows that tenant demand remains positive with 16% more respondents seeing demand rise rather than fall. Would be first-time buyers, unable to get a foot on the property ladder, are still a major source of increasing demand for good rental properties.

Even-footing Between Landlords And Tenants
The lower level of stock and strengthening of rents is an indication that the rentals market is gradually return¬ing to equilibrium. With less surplus stock and rents now starting to rise modestly, there is more balance between landlords and tenants, and less scope for either party to dictate the terms of a tenancy". Source www.findaproperty.co.uk

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Campaign group PricedOut states that the Treasury was aware as early as 2004 that the housing market was overheating but chose to do nothing to stop it.

The document, obtained through the Freedom of Information Act, was requested by Tony Blair after he read a newspaper article which suggested that a housing market collapse was on the cards.

Key points in the briefing include a fall in the number of first-time buyers taking out loans for home purchase and the fact that the growing buy-to-let sector was crowding them out.

PricedOut spokeman William Griffith said: "There was a red hot and overheating UK housing market when this briefing was written. The role of the government should have been much greater caution - seeking to slow obvious excesses developing in mortgage lending and the buy-to-let sector."

Paul Holmes, chief executive of Firstrung, believes the government has failed first-time buyers with regards to the raising of the stamp duty threshold, stating that it will have little or no effect on those trying to get a foot on the ladder". Source www.houseladder.co.uk

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