Tag Archives: city
Prime property prices in central London rise for first time in five months
Prices in prime central London rose for the first time in five months in February, boosted by price growth in markets with a higher proportion of properties that would not be subject to a proposed mansion tax. It saw a marginal increase of 0.1%, the first since September 2014 but annual growth slowed to 4%, which is half of the 2014 average of 8.1%, according to the latest report from Knight Frank. The firm says that it is a market where activity has been kept in check by the potential of a mansion tax on properties worth more than £2 million after May’s general election. Stronger performing markets included Islington and the City and Fringe in the eastern area of prime central London, where prices grew by 1.3% and 1% respectively in February. Both recorded annual growth of 9.1%. The Riverside market, which was included in the index six months ago to reflect the high quality of developments in areas like Battersea and Vauxhall, has also risen 0.4% this year. Elsewhere, there were declines in more traditional prime markets with higher value properties, including a fall of 0.8% in Chelsea, a drop of 0.2% in Notting Hill and a fall of 0.2% in South Kensington. The existence of a two speed market was underlined by the fact values for properties worth in excess of £5 million and £10 million declined by 0.1% in February. Meanwhile, prices in the £1 million to £2 million price bracket grew 0.4% in February, up 6.8% in the last year. ‘We estimate that 46% of £2 million-plus properties are located in the prime central London boroughs of Westminster and Kensington and Chelsea. However, eight out of 10 properties on the £2 million mansion tax threshold would be located outside the two boroughs in areas of suburban London and the Home Counties,’ said Tom Bill, head of London research at Knight Frank. ‘Though any tax would be lower in value and there is more clarity on the potential levy for properties worth between £2 million and £3 million, it underlines the mistaken belief the mansion tax would start to bite in prime central London,’ he added. Continue reading
2015 set to see strong growth in demand for prime properties in Spain
The international financial markets are expected to be a key driver in the uptake of Spanish prime residential property during 2015, according to a new analysis. The latest market reports from Lucas Fox International Properties, suggest there has been an increase in demand from UK, US and Swiss buyers thanks to the rise of the dollar, pound and Swiss franc against the Euro. Conversely, the number of Russian investors is expected to dwindle as the rouble goes further into free fall in 2015. ‘With unemployment falling, the economy growing faster than predicted and property reaching the bottom, 2015 is set to be a pivotal year for Spain's property market. Prices are on average 40% below what they were since the start of the crisis in 2007 and we predict a slow and steady recovery. This is an opportune time to invest,’ said Lucas Fox co-founder Alexander Vaughan. The report says that prices in Barcelona have stabilised in the past 12 months and new international interest is impacting on demand for prime residential property. 2015 is expected to be the most significant year of recovery for the prime market in Barcelona since 2007. Lucas Fox sales data shows that Middle Eastern buyers accounted for 12.5% of all purchases during 2014, followed by the Spanish and French both at 11%, the Germans at 8% and the British at 7%. The bulk of prime market property purchases in Barcelona during 2014 was for investment use with two out of five buying for that reason, whereas in2013, the main reason for buying was for use as a primary or secondary residence. The number of transactions in 2014 increased over 2013, with more properties above €1 million selling than in the previous year. ‘We see 2015 as the recovery year for the Spanish prime residential property market, driven mainly by increasing numbers of overseas buyers. We expect that those who were deterred by falling prices during the past seven years or so, will enter the market, enticed by some real opportunities,’ explained Vaughan. ‘Prices have fallen by up to 40% in some areas of the city but, in the last 12 months, these prices have stabilised. Some recent figures suggest that, in some of the most desirable areas of the city such as Eixample and the beachfront, prices for the best properties are starting to creep up again. The key change in the Barcelona Residential market during 2015 will be the return of quality new build residential developments which have not been seen on the market for several years and where demand currently outstrips supply,’ he added. In the Costa Brava, foreign investment in residential property has grown significantly. In 2010, foreign investment in new housing properties accounted for 9% of the market. In 2014, foreign investment represented 26% of the market. Price movement in the prime residential property market for the Costa Brava region is not expected in 2015. However, sales volume is predicted to increase particularly… Continue reading
House purchase lending in London slowed in fourth quarter, says CML
Greater London saw a decline in the level of house purchase and remortgage lending both year on year and quarter on quarter at the end of 2014, according to the latest data from the Council of Mortgage Lenders. First time buyers in Greater London borrowed £2.9 billion, down compared to the third quarter by 11% in value and down 7% in number of loans. Compared to the fourth quarter of 2013, the total number of loans was down 10% and the amount borrowed decreased by 4%. Home movers saw a decrease in numbers to 8,800 loans, valued at £2.9 billion, which was down 15% by volume and down 20% by value compared to the third quarter. Compared to the fourth quarter of 2013, there was a decrease of 15% by volume and down 9% by value. Remortgage lending declined in the fourth quarter totaling 9,800 loans at £2.5 billion, which was down 12% by volume and down 13% by value. Compared to the fourth quarter of 2013, remortgage lending in London was down 13% by volume and 11% by value. The data also shows that overall lending in Greater London accounted for 21.5% of UK wide house purchase activity, down from 22.6% in 2013. First time buyer affordability changed slightly in Greater London quarter on quarter with first time buyers typically borrowing 3.84 times their gross income, less than the 3.86 income multiple in the third quarter but more than the UK average of 3.38. The typical loan size for first time buyers was £216,000 in the fourth quarter, down from £222,275 in the previous quarter. The typical gross income of a first time buyer household was £56,314 compared to £58,000 in the third quarter. The CML says that first time buyers' payment burden remaining relatively low in the fourth quarter at 20.8% of gross income being spent to cover capital and interest payments, lower than the third quarter's 21%. Home mover affordability changed fractionally, with home movers typically borrowing 3.64 times their gross income compared 3.69 in the third quarter and to 3.03 for the UK overall. The typical loan size for home movers was £276,355 in fourth quarter, up from £289,999 in the previous quarter. The typical gross household income of a home mover was £80,160 in fourth quarter compared to £83,592 in the third quarter. Home movers' payment burden in London was on average 20.5% of gross income being spent to cover monthly capital and interest payments, less than the 20.9% in the third quarter but more than the 18.8% UK average. ‘London is a unique market, with equally unique conditions and challenges, which will need a focus on all types of housing tenure going forward,’ said Paul Smee, director general of the CML. ‘Last year had the highest annual level of borrowers buying a home in London since 2007, with first time buyers leading that growth, but there have been recent signs of the market cooling. The dip in the last quarter of… Continue reading
