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BTL and Housing Statistics

Landlords if it’s true that there are “lies, damn lies and statistics” then I apologise in advance for some inevitable half truths. Here are a few interesting statistics about the buy-to-let property & housing market to give landlords and especially the ‘Stattos’ amongst you something to chew on. Enjoy.

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House price inflation / deflation

There are apparently 16 different house price indices. So it’s not surprising that landlords get confused. It’s fair to say that they all agree that house prices are still heading down. The Land Registry’s official house price indices says that prices have fallen 16.5% over the year and are 17.3% from the peak. The biggest regional fall was experienced by N.Ireland where prices fell 20.5% to Oct 08. The place where asking prices were cut the most in March 09 was Newcastle where average asking prices fell by £14,035 or 7.8 per cent of the price according to figures released by Globrix.

House prices vary seasonally by between -2% and +1% in a way that reflects seasonal changes in demand – there is a dip at Christmas and the New Year with a broad peak during June-July.

House prices & predictions

The average house price in the UK stood at £157,226 in March according to figures produced by the Halifax. This compares to the peak price of £199,270 reached in August 07.

Graham Beale of the Nationwide predicted in September 08 that house prices could fall by 25% from peak to trough between 08 and 2010. The latest figures produced by the Nationwide up to March 09 shows prices have fallen by 18.87%.

Number of properties
There were 673,000 properties on the market, with 83,489 additional properties coming on to the market in February according to Right Move. The long term average number of properties added to the market each month is 172,340

Property Auction figures

A round up of the residential auction results across the UK provided by EIG shows that in March there were 2101 lots compared to 2708 in March 08 a fall of 22.4%. The annual figures from April 08 to March 09 was 30,182 down 1.2% on the previous year.

The percentage of lots sold in March 09 was up to 72% compared to only 65% a year earlier indicating that buyers are more comfortable to buy and that sellers may have become more realistic about their reserve prices. Total value from lots sold for period April 08 – March 09 was £3,510,018,676 down almost 31% on the year earlier. Given that numbers of lots fell by only just over 1% that falling average values could have fallen by as much as 30% over the year.

House sales
The average number of properties sold per month is 118,003. The number of houses sold in January was 42,000. The total number of houses sold in 08 was 642,000.

The average commission paid to an estate agent for a house sale was 1.4% according to the National Association of Estate Agents.

Housing completions

3 million new homes is the target Gordon Brown set back in 2007 as the number of new homes he wanted completing by 2020 or an average of 230,000 per year. Annual completions in 08 in England were 141,900 down 19% compared to 07 according to DCLG. In the December Qtr there were 16,300 seasonally adjusted completions, down 58% on the 07 figure.

Housing equity

Total housing equity in the UK in 2007 amounted to £3.5 trillion pounds according to the CML.
New research by James Tatch, senior statistician at the Council of Mortgage Lenders (CML), suggests that about 900,000 home-owners currently have some degree of negative equity, although the majority of these – around two thirds – face only modest shortfalls of less than 10% (equating to around £6,000 for those first-time buyers with negative equity, and £8,000 for other home-buyers). It is estimated that 250,000 borrowers have a mortgage worth around £20,000 more than the value of their home.

The CML estimated at the trough of the last housing depression in 1993 1.5 million houses were in negative equity.
In 2007 it was estimated by the Council of Mortgage Lenders that the average equity in a buy-to-let property was 38%.

Housing affordability

Since 1983, data from the Halifax shows that the proportion of household income spent on mortgages has been an average of 19.62%. In Q4 2008, it was a significantly lower 18.31%. House price to earnings ratio based on Halifax figures peaked at 5.84 in July 07. The long-term average is 4 and in March 09 it was 4.42.

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