Tag Archives: business
Latest data suggests slowing in residential markets in UAE
The residential property market in the United Arab Emirates seems to be going through a period of stabilisation with some locations seeing growth and others recording a slowdown. In the first quarter of 2016 sales and rental prices in upcoming, inland neighbourhoods across the UAE are rising while in prime areas they are falling, according to the latest property report from classified website Dubizzle. It records an increase of up to 13% in sales and rental prices in emerging locations such as Al Ghadeer, Al Reef and Al Furjan, when compared to the first quarter of 2015. For example, property sale prices in Abu Dhabi’s Al Ghadeer and Al Reef rose by 3% and 4% respectively when compared to the same quarter in 2015, while rental prices for one and two bed apartments in Al Reef rose by 9% while three bed apartments in Al Reef rose 11% and in Al Furjan in Dubai rents for one bedroom apartments increased by 13%. Meanwhile, prices in more established, central areas have dropped, for example rents dropped by 10% for one and three bedroom apartments in Abu Dhabi’s Corniche when compared to the first quarter of 2015. The same trend was seen in Dubai, where sales prices for properties in mature locations such as Business Bay, Dubai Marina, Downtown Dubai and Jumeirah Lakes Towers fell by between 8% and 10%. Business Bay saw rents for one bedroom apartments fall by 5% and two bedroom apartments were down by 4% while the rental price for three bedroom apartments remained unchanged. Data from property firm Bayut also records falls in some locations in Dubai in the first quarter of 2016. Rents were down by 3% year on year and sale prices down 6%. The firm believes that as more and more households move to the suburbs, investment opportunities in areas like Dubailand and Dubai Sports City could become more enticing. It suggests that the increased popularity of these localities coupled with low property prices has resulted in rental yields as high as 9%. ‘We think Dubai’s suburbs are ideal for both new home buyers who can still benefit from low prices and investors, who can enjoy impressive rental yields thanks to these areas’ rising popularity,’ the report says. Continue reading
Number of buy to let mortgage products available in UK rise significantly
The number of buy to let mortgage products available in the UK increased significantly in the first quarter of 2016, particularly for landlords with a limited company. The introduction of more products targeted at limited company borrowers saw the average product numbers for buy to let mortgages increase from 963 in the final quarter of 2015 to 1,105 in the first three months of 2016. Data from the latest index from Mortgage for Business also shows that remortgages yet again outstripped purchases in all categories with the exception of HMOs, where purchase numbers were slightly higher. ‘With tenants looking for less expensive accommodation and landlords looking for higher yields it is no surprise that the number of HMO purchases has risen in the last quarter,’ said David Whittaker, managing director of Mortgages for Business. ‘Even though remortgage transactions were higher this is not to say purchase numbers were down. All types of residential investment showed a marked increase in the number of purchase transactions as investors rushed to beat the 3% stamp duty surcharge deadline,’ he pointed out. The index report also shows that yields for semi commercial property also rose in the first quarter of 2016 making it the second highest yielding property type. Whittaker predicts that the number of landlords purchasing semi-commercial property is set to rise in the coming months as mixed use properties are technically classed as a commercial premises and as such will not be liable for the 3% stamp duty surcharge. Continue reading
Buy to let borrowing surges in UK, probably due to stamp duty change
Home owners in the UK borrowed £8.7 billion for house purchases in February, up 4% month on month and 21% year on year, according to the data from the Council of Mortgage Lenders. They took out 48,000 loans a rise of 4% compared with January and up 12% on February 2015, the data also shows. First time buyers borrowed £3.4 billion, up 3% on January and 21% on February last year, a total of 22,000 loans, some 3% more month on month and 11% more than a year ago. Home movers borrowed £5.3 billion, up 4% on January and up 20% compared to a year ago. This totalled 26,000 loans, up 4% month on month and up 14% on February 2015. Remortgage activity totalled £4.8 billion, down 17% on January but up 37% compared to a year ago. This came to 28,400 loans, down 15% month on month but up 24% compared to a year ago. Landlords borrowed £3.7 billion in February, unchanged month on month but up 61% year on year. This came to 23,700 loans in total, up 1% compared to January and up 47% compared to February 2015. Paul Smee, director general of the CML, pointed out that there has been substantial increases in house purchase and remortgage activity year on year already in 2016 but warned that this reflects the sluggish market in early 2015, perhaps driven by election uncertainties. ‘Buy to let has also seen substantial year on year increases, with particularly strong growth in remortgaging, a pattern which we have seen in the buy to let sector the past six months,’ he said. ‘Activity has been boosted by landlords seeking to complete purchases before tax changes in April. We do not expect activity to show such strong year on year growth later in the year,’ he added. According to Steve Bolton, founder of Platinum Property Partners, it is significant that three in five buy to let loans are now for remortgage, with the number and value of these loans rising significantly year on year. ‘Landlords are clearly taking advantage of the low rates available on the market, especially as they will soon lose the ability to claim their mortgage interest payments as an allowable business expense,’ he said. He suggested that the 7% monthly increase in the number of buy to let purchase loans is perhaps an early indication of some landlords pushing to complete ahead of the changes to Stamp Duty implemented this month. ‘We expect to see an even greater rush of activity reported for March as landlords seek to complete on purchases,’ he explained. He pointed out that buy to let activity could plummet in the future as the cost of running a buy to let business continues to grow due to recent Government legislation. ‘The introduction of Section 24 of the Finance (No. 2) Act 2015 is a real threat as many landlords in the sector could find themselves… Continue reading
