We are going from frenetic at the start of the year to merely very, very busy.Graham Beale, Nationwide Chief Executive
• Annual house price growth in London accelerated sharply to 17% in April
• UK residential sales in the first four months of this year were 30.3% higher than in 2013
• Lloyds Bank will cap its mortgage loans above £500,000 to a maximum multiple of 4 x income
• Average London rents rose by 9.4% in the year to April 2014 to £1,348 per month – the highest amount on record
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• Latest Land Registry data confirms that annual house price growth in London accelerated sharply to 17% in April, up from 12.4% in the previous month. Prices are still growing fastest in Waltham Forest (+26.2%) while prices are rising most slowly in Redbridge (+6.1%).
• Communities & Local Government Minister Eric Pickles is to remove regulations dating from the 1970s that prevent the short-term renting of private homes in London. Currently, Londoners who want to rent out their homes for less than 3 months still have to apply for planning permission from the council - something that doesn’t apply anywhere else in the country.
• The housing shortage in London is reaching critical levels according to a new report from the National Housing Federation (NHF). Less than half of the homes needed just to house new households are currently being built. 52,500 new households are expected to form each year up to 2021 but only 18,310 new homes were built during 2012/2013, says the NHF.
• Somewhat belatedly, up to 50,000 new London homes are to be built on 20 brownfield sites, in a £400m scheme announced by the Treasury. The homes will be built in “housing zones”, where planning restrictions are removed to get homes built quickly. The new zones are in line with a shake-up of planning rules to support house building announced in the Chancellor’s Mansion House speech in June.
• The Nationwide Building Society last week said that the London housing market could face a ‘natural correction’, which if accurate may help to alleviate growing fears among some economists that the residential property market is overheating in some parts of the country, particularly in the capital. Chief Executive, Graham Beale stated that the number of property transactions had also begun to fall in the capital, but did not predict a widespread crash, “We are going from frenetic at the start of the year to merely very, very busy.”
• Flats at the redevelopment of the former BBC Television Centre will reportedly only be marketed in the UK, amid growing political pressure over the sale of London properties to overseas buyers.
• CML data on new mortgage lending in London for house purchase in Q1 2014 show the number of loans was 22% up on Q1 2013, with the value of new loans 37% higher. The corresponding increases for first time buyers were 29% and 49% respectively. The typical first-time buyer borrowed 3.83 times their gross income in Q1 and the typical loan size was £200,000.
• Redeveloping existing NHS buildings to include floors of apartments above the service buildings could provide 77,000 new homes in London, according to property consultants WSP. A recent report by the London Health Commission found that £50-£60m was being spent annually on maintaining NHS buildings that were either not used or not fit for purpose.
• Lloyds Bank, the UK’s biggest mortgage provider, has announced it will cap its mortgage loans above £500,000 to a maximum multiple of 4 x income. Although it will be applied nationally, the bank has stated that the measure is specifically aimed at the London market. RBS subsequently adopted an identical approach but with the additional restriction that loans will have a maximum 30-year term, in order to prevent borrowers taking out larger mortgages by spreading out repayment over a longer period.
• According to Homelet, average rents in London rose by 9.4% in the year to April 2014 to stand at £1,348 per month – the highest amount on record. Tenants in the most expensive area, West London, are paying monthly rents (£1,769) that are 92.9% more expensive than those in the least expensive, Romford (£917). ns ns
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Average monthly rents in London by submarket – Q1 2014 (& 12 month percentage price growth)