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Cost of winter storms in UK revealed by ABI
Residential and commercial property owners in the UK are being urged to make sure they understand flood insurance cover after the full cost of the latest winter storms were revealed. The number of insurance claims for flooded homes and businesses made in the wake of December’s storms has climbed to more than 15,000 with 85% of these either fully or partly paid out so far, according to the Association of British Insurers (ABI). The average cost of each domestic claim for the floods caused by Storms Desmond, Eva and Frank is around £50,000 which is higher than usual and reflects the extensive damage caused by the flood waters in some locations. Insurers are spending nearly £27.5 million on alternative accommodation for affected families while their properties are repaired. The final bill for all repairs is expected to reach £1.3 billion. ‘Being flooded is horribly traumatic, not only because of the initial devastation but also because of the time it can take to get your home and business fully repaired and back in working order,’ said Mark Shepherd, manager of General Insurance Policy at the ABI. ‘Insurers are committed to getting all customers back in their properties as safely and as quickly as possible and it’s good to know that thousands of homes and businesses are getting back to normal nearly six months on. Small businesses are the lifeblood of many local economies and insurers have been working flat out to get many open and trading again,’ he explained. ‘Repairing a flooded building cannot be rushed because of the importance of making sure it is properly dried out before repairs are done. The work needed to fully restore every single property affected in December continues with the same sense of urgency as in the immediate aftermath,’ he added. According to the ABI the drying stage is one of the most important parts of the repair process, and it can take a significant amount of time. When properties are flooded by several feet of water, it gets deep into the brickwork and structure of the building. The building needs to be completely dried out before repairs and rebuilding start, and that means dry deep into the walls, not just dry at the surface. It added that although new technology is being used more often to speed this process up where possible but it isn’t always suitable for all properties and repairs done to a property which isn’t completely dry may create future problems for the owner or resident. There also needs to be full decontamination to ensure the property is safe to return to. Where properties aren’t ready for people to return to them, insurers will be funding alternative accommodation as required. Some people may choose to live in the upper storeys of their property or to stay with friends or family members instead. Businesses may also be offered alternative premises to trade from for a period. Payments have been made towards 85% of claims. Where payments… Continue reading
New home lending in Australia recorded solid growth in April
New home lending to owner occupiers in Australia saw solid growth during April, up 4% month on month but still 5.9% lower than a year ago. The figures, published by the Australian Bureau of Statistics, also show that loans for building new homes increased by 4.4% and for buying new homes there was a 3.3% rise. The official figures confirm that demand for new home purchase across Australia remains very strong, according to Housing Industry Association, the voice of the residential building industry. ‘Even though the amount of new home lending for owner occupiers peaked over a year ago, current loan volumes remain elevated by historic standards. This means that activity on the ground over the remainder of 2016 will be healthy,’ said HIA senior economist Shane Garrett. He pointed out that May’s interest rate reduction is likely to provide some impetus to new home lending over the coming months. The HIA believes that 2016 will be another remarkably strong year overall. ‘Further easing on the interest rate front would augur even better for the short term outlook in residential building,’ added Garrett. Compared with a year earlier, the number of loans to owner occupiers constructing or purchasing new homes increased in four of the eight states during April 2016. A breakdown of the figures show that in the Australian Capital Territory there was a 30% rise, in South Australia and increased of 9.7%, in Victoria a rise of 4.5% and in New South Wales a rise of 1.1%. But there were declines over the same period in Western Australia with a fall of 18.9%, a fall of 15.2% in Tasmania, a fall of 2.2% in Queensland and a fall of 1.8% in the Northern Territory. Continue reading
London office market strong in uncertain time for commercial property market in UK
Commercial property rental values grew by 0.1% across the UK in May, slightly down on 0.2% per month for the last three months, according to the latest index. Capital values grew by 0.2%, continuing the growth trend seen since the start of the year, the data from the CBRE monthly index also shows. Rental growth in May was weighed down by West End and Midtown offices and these two submarkets recorded rental value growth of 0.1%, their weakest since October 2013, leading Central London offices rental values to their weakest growth of 0.2% since June 2013. Although some parts of London demonstrated flat or slightly negative performance, parts of the capital performed well, such as the City, where office rental values grew by 0.6% last month, compared to just 0.1% in both March and April. Meanwhile capital values across the UK grew by 0.2% in May, in line with the level of growth seen throughout the year, with the exception of March when values were hit by the one-off impact of stamp duty tax changes. Total returns followed the same pattern as capital values, demonstrating a steady growth of 0.6%, maintaining the level seen since January. ‘Commercial rents and capital values continue to grow in a period of great uncertainty. The London office market has seen some volatility, but the fundamentals of the market are strong,’ said Miles Gibson, head of UK research at CBRE UK. ‘This time next month, we’ll have a clearer idea of the direction capital values and rents will go in the second half of the year, and a flavour of the pace at which they will get there,’ he added. Meanwhile, 2015 saw a marked increase in banking and finance leasing activity in Central London according to another report from CBRE which says that a relentless drive to cut costs has forced financial services occupiers to focus on reducing real estate costs and adopting strategies to occupy their space more efficiently. Using a combination of offshoring and nearshoring, there has been an ongoing move by big banks to relocate non-core functions outside of Central London, as seen in HSBC’s decision to move 1,000 head office staff from London to Birmingham, the report points out. Indeed, financial services firms are also turning to outsourcing. Areas such as risk management, trade reporting, compliance and IT are increasingly being outsourced. Last year alone, Bank of America Merrill Lynch, Citigroup, Commerzbank, JPMorgan, Société Générale and Standard Chartered joined forces last year with Swift to develop and use a centralised due-diligence system. However despite the inherent challenges, banks continue to cite client needs, recruitment, profile and presence as key reasons to keep office space in London. This is reflected in last year’s leasing figures with banking and finance occupiers leasing 3.2 million square feet, some 4.9% above the 10 year average. There are a variety of compromises companies may make as part of… Continue reading
