Tag Archives: economy
UK buy to let sector surging ahead, it is claimed
The UK’s buy to let sector surged ahead of other areas of the housing market in January, according to the latest research from Connells Survey and Valuation. While most of the housing market began the year with a subdued outlook, buy to let bucked this trend and was the strongest performing sector with 37% growth in activity since the previous month, and on an annual basis the smallest dip of just 4%. It means that the sector has bounced back from a disappointing performance in December 2014 when it recorded one of the biggest monthly falls, according to John Bagshaw, corporate services director of Connells Survey & Valuation. He believes that as landlords are now ‘spoilt for choice’ with a record number of mortgage products to choose from, they are beginning to invest more. Low mortgage rates have also continued, posing even more attractive deals for potential landlords or those expanding portfolios. The first time buyer sector of the housing market was the only other sector which saw a monthly increase in valuations activity. On a month on month basis, activity for first time buyers increased by 3% though on an annual basis it saw one of the biggest falls of 28% compared to January 2014. ‘First time buyer activity increased on a monthly basis despite a stark contrast in performance with January 2014 when this sector had dominated the housing market. This was largely due to the flurry of activity as customers rushed to secure deals before the Funding for Lending Scheme (FLS) stopped mortgage funding at the end of January 2014. At the time the policy had boosted the housing market, particularly first time buyers by lowering mortgage rates,’ said Bagshaw. ‘Since then however, a series of policies have been introduced that have restricted lending criteria which have affected first time buyers more than other sectors and consequently had a major impact on demand. However, this month on month growth is encouraging and indicates that as the sector stabilises and adjusts to the new regulatory landscape, it should continue improving in the coming months,’ he explained. By contrast, activity for those already on the property ladder has been subdued. On a monthly basis activity dipped by 4%, though compared with January last year, valuations activity fell by a steeper 23%. Similarly, remortgaging saw one of the biggest falls in activity both on a monthly and annual basis. Since December, recent activity fell by 25%, while compared with January 2014 it decreased by 28%. ‘The current economic outlook indicates that low inflation and therefore the low Bank rate will continue for some time. As a result it appears that this is giving rise to optimism as more borrowers anticipate that lenders will be able to lower their mortgage rates even further. They are now waiting before securing a deal,’ said Bagshaw. ‘However, it is… Continue reading
UK commercial property rental value reaches highest growth since 2007
UK commercial property markets have recorded their highest rental value growth since the third quarter of 2007, a new report from real estate firm CBRE shows. Of 1,022 locations monitored, some 16% showed an increase in rental value but prime yields fell by an average of 8 basis points and the UK All Property average currently stands at 5.6%, with 35% of locations recording falling yields. In 2014 total prime rental value growth was 3.8%, up from 2.8% in 2013, with the rate increasing steadily over the last 12 months. The average prime yield recorded a fall of 41 basis points over 2014, compared to 32 bps in 2013, and the combination of continued falls in yields and strengthening rental value growth resulted in capital value growth of 11.8% for 2014. ‘During 2014 we have seen prime rental growth strengthening across many UK markets. Prime yields also recorded a substantial improvement, reflecting the growth in investment activity over the last year,’ said Michael Haddock, CBRE senior director. ‘At a national level, total transaction volume reached £61.7 billion in 2014 compared to £54.5 billion in 2013 and just beating the total reached in 2006,’ he explained. Within the office sector, central London experienced the strongest rental value growth, at 11.4% in 2014 compared with 8.1% for the UK as a whole. However, yields are showing the reverse of this pattern, with the strongest falls in office yields being recorded in the rest of the UK. Over 2014, the South East and Eastern regions stood out because of the lack of rental value growth. The report explains that yield shift is spreading to the rest of the country meaning that capital value growth has been fairly evenly distributed across the country. In contrast the industrial sector is seeing an even pattern of both rental value growth and yield shift across the country, although the West Midlands, which is experiencing a shortage of good quality industrial space, appears to be leading the way. Yields in the shopping centre and retail warehouse sectors stabilised in the fourth quarter 2014 after sharp declines in the first three quarters. Although, prime yields were flat in these two sectors in the last quarter, they have recorded the highest average fall for the year as a whole, with the average prime yield down by 53 and 63 basis points respectively compared to the all sector average of 41 basis points. ‘Capital value growth in the Office sector has been seen across the whole of the UK. Central London recorded growth of 7.2% for the quarter and 15.6% for the year as a whole,’ said Andrew Marston, CBRE director. ‘However, the gap between London and the rest of the UK is narrowing, with capital value growth of 10.6% for the UK, excluding London, South East and Eastern. In the fourth quarter of 2014 East Midlands and Yorkshire and Humberside recorded the highest capital value growth in the office sector. ‘All Industrials also performed very… Continue reading
Property prices in Cyprus continue falling, latest RICS index shows
Residential property prices in Cyprus continued to fall in the final quarter of 2014 but some local agents are reporting an increase in sales. Average price of houses fell by 1.1% and apartments by 0.7%, according to the latest index from the Royal Institute of Chartered Surveyors (RICS). The country’s property market was particularly badly hit during the global economic downturn of 2007 and since the RICS index was first published in 2010 house prices have fallen by an average of 30% and apartment prices by 40%. The largest quarterly falls were in Famagusta where house prices fell by 3.6% and in Nicosia where apartment prices were down 1.1. Compared to the fourth quarter of 2013, the average price of an apartment has fallen 5% and the average price of a three bed home is down 5.4%. RICS said that sales have rebounded but prices are expected to continue falling in 2015. The situation is not helped by a strict lending regime following the island’s banking crisis and high interest rates. ‘The market is affected by increased property taxes and the issue of foreclosures on mortgaged properties, preventing the market from stabilising,’ said a spokesman. Rental values are also still on a downward trend, with house rents down 0.2% and apartment rents down 1.3%. ‘During the fourth quarter of 2014 the Cyprus economy showed some signs of stability, with the economy’s performance being better than expected and tourism mildly outperforming forecasts. Unemployment remained at a historical high level, stabilised at around 17%, and discussions were ongoing regarding privatisations of state owned enterprises and the foreclosure bill,’ the RICS report says. ‘Given prevailing economic conditions and the turbulence in Cyprus’ banking system, there were few transactions during the quarter although volume was higher on a year on year basis. Local buyers in particular were the most discerning as the increase in unemployment and the prospects of the local economy maintained the lack of interest,’ it explains. ‘Furthermore, those interested were unable to access bank finance. The Property Price Index has recorded falls in almost all cities and asset classes, with significant falls being recorded in Nicosia. Nicosia is clearly feeling the impact on the government and banking sector, the two sectors who dominate the local employment market, whilst other cities are progressively bottoming out,’ it adds. According to local property firm Fitzgerald Marketing, sales increased by 20% in 2014 compared with the previous year, but it is local people who are buying again as the international market has not really picked up since the global economic downturn. The firm believes that as property prices have reduced significantly, up to 40% in popular areas such as Paphos, buyers could be keen to grab themselves a bargain in 2015. It is thought that with the discovery of oil and gas fields in Cypriot waters, as oil companies set up their offices thousands of workers will arrive in two to three years, all in need of homes. There have been tales… Continue reading
