Property Market Review
Property news! The commercial property market is slowing, there's new mortgage deals to be had and first time buyers still need a sizeable deposit!
Construction slowdown as demand falters
Recent data has revealed a loss of momentum for the UK construction sector. Activity and incoming commercial property, new home and civil projects, have fallen at the fastest pace for over a decade, as new orders tail off.
The IHS Markit/CIPS UK Construction Total Activity Index fell to 43.1 in June, down from 48.6 in May and 50.5 in April. Any score below 50 indicates a fall in business activity. Commercial work has fallen for the sixth consecutive month and is the worst performing area of construction activity. Brexit uncertainty and subsequent delays to project starts have been cited by respondents as the prime contributors.
Improving sentiment as new instructions hold steady
Supporting the emergence of a more stable trend across the residential market, a recent survey by Royal Institution of Chartered Surveyors (RICS) shows respondents reported (in net balance terms) a very modest rise in buyer demand and new instructions holding steady throughout June.
Last month, new buyer enquiries were up 10%, which is the first time since November 2016 where survey contributors reported an increase in appetite from potential purchasers.
A further sign of stable market activity, according to Savills, is a continued rise in the number of mortgage approvals and increase in Loan to Value (LTV) ratios, with the national average LTV for first-time buyers now standing at 78%.
Average earnings of £54,000 required to buy a home in the city
Property website, Zoopla has released data to show that first-time buyers now need an average income of £54,000 to purchase a typical property in a UK city. This average income figure has risen by 9% since 2016, largely due to higher property prices.
In the 20 cities that account for more than one-third of the UK’s housing stock, Zoopla found that Liverpool had the lowest gross household income required for first-time buyers, at £26,000. In addition to being named the most affordable city for first-time buyers, Liverpool was also the city with the highest house price growth, at 5% over the 12 months to May.
In contrast, an average household income of £84,000 is needed in London and whilst this may appear unattainably high, it is actually £3,250 less than the amount required in 2016 and the lowest figure for four years.
Outside the capital, Oxford and Cambridge require the highest typical household incomes at £69,000 and £72,000 respectively. However, these were down on £71,000 and £76,000 respectively three years ago.