House price growth in Northern Ireland still increasing
According to the Department of Communities and Local Government (DCLG), the average house price in the UK in June 2007 was £214,222, up from £210,793 in May 2007, but in Northern Ireland annual house price inflation in June was 55.9%, compared with 53% in May.
Fionnuala Earley, Nationwide chief economist, said: “ The speed of house price growth in Northern Ireland remains astonishing and well above that of other UK regions although it looks like the market there may have peaked in the first quarter of the year. The Northern Ireland property market may be more risky compared with the rest of the UK.
The rise in UK prices between May and June can be attributed to increases in average prices for flats (2.4%), detached properties and bungalows (2.3%), semi-detached dwellings (1.1%) and terraced houses (1%).
UK annual house price inflation in June 2007 was 12.1%, up from 10.8% in May 2007.
House price inflation rose in all nine of the English regions. The highest annual inflation rate was in London (17.5%) followed by the South East (10.7%), East and Yorkshire and the Humber (9.6%) and the South West (9.4%). Inflation rates were lower in the North West (9.1%), East Midlands (8.5%) and the North East (8.1%). The lowest inflation rate was in the West Midlands (7%).
Wales saw a decrease in inflation in June 2007 as annual house price inflation fell from 8.5% in May to 7.6% in June. In Scotland, the annual inflation rate did not change from May to June (15.6%). In Northern Ireland, annual house price inflation in June was 55.9% compared with 53% in May.
Student accommodation rents 4% higher than 2006
According to Accommodationforstudents.com, the average weekly rent in the UK is now £60.58, which is 4% higher than last year’s figure of £58.19.
However, weekly rented student accommodation in London costs on average £102.33, which is 69% above the UK average. The rest of the south of the country is also above the average weekly rent by 20% or more, and this includes Cambridge (the second most expensive in the UK at £84.15 a week), Guildford (£81.54), Oxford (£79.11), Exeter (£75.74) and Brighton (£72.61).
In Scotland, St Andrews is the UK’s third most expensive city for accommodation at £82.56 per week, 36% above average, and Glasgow and Edinburgh’s students have average weekly rents of £69.76 and £68.96 respectively.
Accommodation in Liverpool, Birmingham, Manchester, Sheffield, Nottingham, Newcastle and Leeds are all below average for student rentals. Best value locations in terms of student rental accommodation are Middlesborough, Crewe, Stoke, Wolverhampton, Bradford and Sunderland, with average weekly rents of between £39 and £44.
Simon Thompson, co-founder and director of Accommodation for Students, said: “Now that students are accumulating large borrowings to subsidise their studies, the cost of accommodation has become a critical factor in their choice of university.
“Although southern universities are still more expensive for accommodation, with London way out in front, some other increasingly popular university locations have also seen a considerable rise in rents such as Durham, Warwick and Loughborough.”
Number of first-time buyers continues to drop
According to the Council of Mortgage Lenders (CML), the number of first-time buyers has fallen to 35,600 in June 2007 compared to 39,800 in the same period last year.
Although this figure is up slightly on the 34,600 first-time buyer loans in May 2007, it is the lowest June figure since 2004 when there were 33,600 first-time buyers on the property ladder.
The number of loans to home movers also declined in June 2007 to 66,300 from 71,100 in June 2006. In addition, the first-time buyer income multiple slightly increased to 3.37 the average first-time buyer income, which is up slightly from 3.36 times in May 2007 and 3.22 times in June 2006.
In addition, the majority of first-time buyers who have got on the property ladder are opting for fixed-rate mortgages. In June, 90% of first-time buyers took out a fixed-rate deal, up from 89% in May and 83% in June 2006. But it is not just first-time buyers that are warming to fixed rates as 76% of home movers also took out fixed rate loans in June, up from 75% in May and 63% in June 2006.
According to CML, buyers are showing a stronger preference for fixed-rate mortgages to protect them against further interest rate rises during the period for which their loan is fixed and will give them confidence in their monthly mortgage payments.
Commercial buildings will be going green
Communities’ secretary Hazel Blears has asked environmental and planning consultancy Entec to draw up new planning rules that will make it easier for businesses to install green technologies like solar panels and wind turbines.
The research will specifically look at removing barriers to installing small-scale renewable and low carbon technology equipment that can currently lead to increased costs and lengthy delays.
At present, businesses must go through the planning system when they, for example, want to install a solar panel or a small wind turbine. A planning application can cost about £1,500 and take up to 8-16 weeks to be considered by councils, with no guarantee it will be approved.
Entec’s job will be to investigate how renewable energy equipment can be included as ‘permitted developments’, meaning changes can be made without the need for specific planning permission if it does not impact on others or the local environment.
Blears said: “ This Government is committed to bringing forward changes that will allow us to tackle the growing challenge we face in climate change. This research will be crucial to working out how we can support the business world to do its bit, as we move to a zero-carbon culture.
“Whether it is your local supermarket, pub or the place where you work, green technology could soon be playing a big role in powering the building, whilst cutting carbon emissions and fuel bills too.”
In the four months since Tenancy Deposit Protection became a mandatory requirement in the private rental market, it now safeguards the deposits of over 225,000 tenants, which are worth nearly £150m, according to the Tenancy Deposit Scheme.
Currently more than 125,000 landlords have joined the scheme, mostly through letting agents who are members of the Association of Residential Letting Agents (ARLA), the National Association of Estate Agents (NAEA), the Royal Institute of Chartered Surveyors (RICS) and the National Approved Lettings Scheme (NALS).
However, a recent survey for the Tenancy Deposit Scheme showed that nearly a fifth of all landlords are still unaware of the mandatory nature of tenancy deposit protection. The scheme was implemented in April, meaning there is less than two months to go before a likely increase in the number of disputes requiring Alternative Dispute Resolution (how parties settle civil disputes without the need for a formal court hearing), as six months is the initial length of a tenancy agreement.
Lawrence Greenberg, chief executive of the Tenancy Deposit Scheme, said: “There is still too much complacency about mandatory deposit protection in the rental market. As a result, some landlords, and even their agents, could be in for a rude shock as tenancies come to an end. Worse, it also means that there are too many tenants who are unsecured, which is disappointing.”
