Tag Archives: crisis
Majority of UK buyers and renters would pay more for ideal home
Millions of buyers in the UK would pay more than they intended for the right home with 62% willing to go over their budget by 10%. Overall 43 million, 78%, would pay more and 62% would spend up to 10% more for their ideal property with those in London, Scotland and Northern Ireland most willing to do so. The 31 million willing to go over budget by up to 10% would find themselves paying some £28,000 more for a home or £912 more per year if renting, according to the research from Ocean Finance. Only one in four would not go over budget at all and 2% of people would be willing to go more than 20% over budget, adding a minimum of £56,000 onto the original purchase budget or £156 per month, £1,872 annually, onto rental payments. A breakdown of the figures show that 34% are willing to go up to 5% over budget, 28% 6% to 10%, some 7% would go 11% to 15% over their initial budget, 4% 16% to 20% and 1% 21% to 25% over. In Scotland and Northern Ireland some 79% are willing to pay more for their ideal home while 77% in London are also willing to do so. The research also shows that it is buyers under the age of 34 who are most willing to stretch their finances with 80% of young people saying they would increase their budget for the right home. ‘Whether we are renting or buying a property most of us have a budget that we can afford in mind. But three quarters of us are happy to ignore the budget and stretch our finances to get the home that ticks all our boxes,’ said Ian Williams, Ocean Finance spokesperson. Continue reading
UK farmland market sees muted activity post Brexit
Just over 123,000 acres were publicly marketed across Great Britain in the first seven months of 2016, which is comparable with the acreage marketed during the same period of last year. But the data from the latest UK farmland update report from real estate firm Savills suggests that uncertainty surrounding Brexit has created a lull in market activity. The data also shows that during the first half of 2016, the average value of farmland across Great Britain fell by just under 2%. The average downward trend continues to be led by arable values, which are more exposed to pressure from low commodity prices. In England activity was down by 6% but in Scotland, the opposite, a degree of referendum fatigue may have helped increase activity which was up by 8% while in Wales activity increased by 35% but the report points out that was coming from a much smaller base where a few farms can distort the figures either way. It also points out that the farmland market normally quietens in the summer so it is difficult to assess the ‘actual’ Brexit effect. ‘Most of the questions surrounding Brexit and its impact on the UK remain unanswered and will do for some time,’ said Ian Bailey, head of agricultural research. ‘But our analysis to date is beginning to suggest that the impact of changes to trade agreements could be far more significant than changes to the existing agricultural subsidy. The key issues determining prices achieved for farmland remain low commodity prices and location based demand,’ he explained. He also pointed out that in some areas there is evidence of a good number of larger farms coming to the market, especially across the southern half of England but in many areas there is an expectation that the second half of the year will be quieter than during the first six months. The Savills report predicts subdued activity overall with 2016 supply down around 8% in compared with 2015. It expects that the muted activity in England will continue to the end of the year and in Scotland there will be reduced supply in the second half of the year after an active first six months while supply is likely to be boosted in Wales. An analysis of farm transactions, where Savills acted for the buyer or seller, for the first half of the year indicates that there has not been any material change in the profile of buyers and sellers during the first half of this year compared with last year and the last analysis in February. ‘We expect this to continue into the second half of the year although, the opportunities offered by weak sterling, may increase the activity of overseas buyers,’ said Bailey. ‘Agriculture tends to do well in time of economic uncertainty. In addition, the weak pound creates opportunities for overseas buyers. Both of these factors, along with the anticipated reduced supply, may help support farmland values,’ he added. Continue reading
Demand for rural land in the UK fell sharply in first half of 2016
Demand in the UK’s rural land market fell sharply in the first half of 2016 while supply continued to increase, albeit very modestly, the latest industry survey shows. This rise in supply relative to demand pushed 12 month price expectations deeper into negative territory with a net balance of 49% of contributors now expecting prices to fall, across all farm types, over the coming year. The data from the RICS/RAE rural land market survey also shows that yields on investment land drifted slightly down, to 1.6% and anecdotal evidence from respondents suggests that increased uncertainty due to the Brexit vote and resulting confusion over the future of CAP payments has weighed on the market. This has compounded the already subdued demand due to low commodity prices, the report points out and while commercial farmland continues to experience the worst of the current downturn with demand falling most substantially, blocks with a residential component also saw a sharp contraction in buyer interest. Indeed, some 19% more contributors reported a fall rather than a rise. Likewise, while expectations for prices at the 12 month horizon are slightly worse for commercial farmland, the outlook for mixed residential farmland turned markedly more negative in the first six months of the year with a net balance of 42% of surveyors expecting prices to fall rather than rise over the next year. The survey’s transaction based measure of farmland prices, which includes a residential component where its value is estimated to be less than 50% of total, edged down in the latest period and now stands at £10,750 per acre. Meanwhile, the survey’s opinion based measure, a hypothetical estimate by surveyors of the price of bare land, fell by 4% between the first half of 2016 and the second half of last year. Since 2015, the difference between the two measures has widened somewhat and RICS says that this may reflect several influences but the fact that the transaction based measure contains some residential element is probably a significant factor at the moment, given that residential prices in most parts have continued to rise steadily over the past year. According to surveyors, average arable land rents fell by 8.8% in the first half of the year and by 3.1% over the year as a whole. Average pasture land rents fell by 6.7% and by 7.3% respectively. The buyer profile has remained broadly unchanged over recent years with individual farmers still representing around 60% of purchases. Meanwhile lifestyle buyers compose around a quarter of the demand. Continue reading
