Tag Archives: european
EU citizens renting homes in UK concerned about Brexit effect
Over 30% of European Union (EU) citizens living in the private rented sector in the UK say they are worried that the result of the referendum will make it harder for them to rent a home. Some 31% expect difficulties and 25% are worried that landlords will be less willing to rent to non UK nationals due to Brexit, according to the latest survey from the National Landlords Association (NLA). The poll found that 18% of private renters, approximately two million people, are EU citizens who currently have the right to freedom of movement within the EU. However, there are concerns about whether or not EU citizens will be able to remain in the UK if the right to freedom of movement is removed or restricted during the process. ‘These findings show that a significant proportion of tenants from the EU are genuinely concerned they’ll have to uproot themselves from their work, studies, or friends and family on the strength of the referendum result,’ said Richard Lambert, NLA chief executive officer. ‘There is still a great deal of uncertainty surrounding the referendum, but we want to reassure European citizens living in the UK it’s simply not the case that landlords will stop letting to them just because the country has decided to leave the EU,’ he pointed out. ‘However, if the right to freedom of movement within the EU is curtailed during the exit negotiations, then landlords may have no other option than to end tenancies rather than facing fines and even jail time if they let property to someone without the legal right to remain in the UK,’ he added. Continue reading
Housing development land prices in UK down by 2.3% quarter on quarter
Residential development land prices in the UK fell by 2.3% between April and the end of June and activity remained steady in the run up to the historic vote on the future of the country in the European Union. The quarterly reduction extended annual declines in pricing for prime central London and greenfield development land, but urban brownfield land is still recording strong annual growth, according to the latest index from real estate firm Knight Frank. Greenfield development land prices declined by 2.3% between April and the end of June taking the annual fall to 3.8%. In prime central London, average residential development land prices fell for the third consecutive quarter, dropping by 6.9%. Average values are down 9.4% on an annual basis, but the report points out that this follows several years of very strong growth, so the index has returned to 2014 levels. Developers reported that activity continued in the run-up to the EU referendum vote, with house purchase rates remaining steady, especially in the regional markets. ‘The fundamentals of the market, characterised by an imbalance between supply and demand and ultra-low mortgage rates, remain unchanged,’ said Grainne Gilmour, head of UK residential research at Knight Frank. However, she pointed out that some house builders and developers are increasing their margins and hurdle rates on greenfield and prime central London land deals. ‘This is in order to allow for increased uncertainty over the future economic landscape as the UK negotiates its way to a new position within the Europe. This is feeding into land prices,’ she explained. In terms of greenfield sites, smaller plots for around 150 to 200 units close to urban areas and transport links are still the most in demand, with higher levels of competition for such opportunities and the report also points out that construction costs, which have risen notably over the last two years, are also a factor in land prices, especially in the central London market. Indeed, in London the cost of construction is altering the viability of some sites and in some cases this has led to a trimming of land costs. Urban land values are up by more than 9%. There is still strong demand for city centre sites in key regional locations, and in outer London boroughs, although the dynamics of each market are closely aligned with the demand and supply fundamentals at play in the local area. Continue reading
Stamp duty change more of an impact than Brexit on prime central London
Stamp duty change is more of an issue for the prime central London sales market than the UK leaving the European Union, new research suggests. However, the vote to leave the EU has created a backdrop of short term uncertainty that is affecting behaviour in the prime central London property market. As a result prices are now down 1.5% compared to a year ago and the number of new prospective buyers has fallen by 6.2% over the same period, according to the latest index from real estate firm Knight Frank. The index report also shows that the number of exchanges, including new build properties, fell by 10.5% in the first half of 2016 but the number of viewings was 40.8% higher than in 2015. However, the sub-£1 million market registered a relatively stronger performance, with annual price growth of 1.1%. According to Tom Bill, head of London residential research, early indications suggest the Brexit vote is reinforcing existing pricing trends and viewing the referendum in the context of the preceding two-year period is helpful. In June 2014, annual growth in prime central London was 8.1%, the last peak before a period that saw growth fall steadily to -1.5% in July 2016. ‘This slowdown was a natural consequence of strong price rises between 2009 and 2013, however the process was accelerated by two stamp duty increases and a series of other tax measures,’ said Bill. ‘Despite the widespread media coverage devoted to the EU referendum and its potential impact on house prices, the primary factor curbing demand in prime central London remains stamp duty. The result of this two year slowdown is that vendors had already begun to adapt to the new pricing environment and in many cases Brexit has been a trigger to make overdue reductions to asking prices,’ he explained. ‘Indeed, had the result of the referendum been a victory for Remain, it is likely there would have been a similar mismatch between expectations and reality that followed the 2015 general election. Following the formation of a majority Conservative Party government, high stamp duty costs acted as a brake on demand that was widely expected to surge. Since the vote, a number of buyers have requested discounts due to the climate of political and economic uncertainty,’ he pointed out. ‘However, where the asking price was set at an appropriate level before the vote, deals are proceeding with no reductions. In other cases, the Brexit vote has encouraged vendors to show increased flexibility. It is too early to say whether the reductions are likely to trigger higher transaction levels,’ he added. Bill also pointed out that there is no uniform picture across London and the situation is compounded by thin trading during seasonal summer lull. However, it is possible to see the benefit of recent downward repricing in some markets. In Belgravia overly ambitious vendor expectations, which had led to weak trading over the past two years, has been replaced by a more realistic approach from… Continue reading
