Tag Archives: european
Prime commercial property rents up across UK in second quarter of 2016
Rents across the UK’s prime commercial property increased by 1% in the second quarter of 2016, boosted by near record levels of rental growth in central London shops, according to a new report. The latest CBRE’s Prime Rent and Yield Monitor shows that in a quarter characterised by uncertainty around the European Union referendum, prime yields remained stable, implying flat capital values overall. Rents grew significantly across several sectors during the quarter, with high street shops and industrial rents rising 2.8% and 1.4% respectively. Central London saw the greatest rental growth among high street shops driving up overall shop rents, increasing by 8.9% over the last quarter, some way ahead of the 0.2% rental growth in shops across the rest of UK. Indeed, a third of the tracked locations in Central London saw rent increases over the quarter, showing that retailers are still willing to pay premium rents for the limited stock available in the most sought after streets of the capital. Prime yields remained almost flat during the quarter, rising by 4bps to remain close to 5.4%. Yields from prime shops and shopping centres remained unchanged over the three months, while the office sector also saw little yield fluctuation, ticking up 1bp. Industrials and retail warehouses were the main drivers of the slight uplift in overall yields in the second quarter. ‘The second quarter wasn’t exactly business as usual for the UK’s political and economic landscape, but despite the heightened uncertainty in the run up to the referendum vote, the commercial property sector demonstrated strong underlying health, with yields largely unmoved in core markets,’ said Miles Gibson, head of UK research at CBRE. ‘In particular, ample demand for commercial space pushed up rents nationwide, especially in prime London retail, which saw some of the highest rental growth on record. The capital is open for business, and remains an attractive proposition for occupiers seeking to locate in a world leading global city, and investors and landlords capitalising on this desire,’ he pointed out. ‘Although the shadow cast by Brexit means rental growth is unlikely to grow at this pace next quarter, the UK is well positioned to capitalise on the demand for new space,’ he added. Continue reading
Residential sales in UK up by almost 5% between May and June
The provisional seasonally adjusted UK property transaction count for June 2016 was 94,550 residential and 10,930 non-residential transactions. Residential property sales recorded in the UK increased by almost 5% between May and June 2016, according to the latest estimated figures to be published. The residential transaction count was 94,550 and while this is up 4.9% month on month, it is 10.2% lower compared with the same month last year. The large increase in transactions for March 2016 followed by the substantial reduction in April is likely to be associated with the introduction of the higher rates on additional properties in April 2016, according to HMRC which publishes the figures. However, whilst April and May 2016 are lower than the corresponding months in 2015, it should be noted that the total for March to May 2016 is still substantially higher than the corresponding period last year, it pointed out. The additional property rates were announced in the Autumn Statement 2015 for England, Wales and Northern Ireland, and in the Scottish Government's draft 2016/2017 budget for Scotland. Non-tax factors may have played a role as well, for example the Bank of England's plans to curb buy to let mortgages resulting in a rush to purchase before April 2016, and the European Union referendum affecting transactions in recent months. The residential count includes properties paying the main and additional rates. For June 2016 the number of non-adjusted residential transactions was about 21.2% higher compared with May 2016. The number of non-adjusted residential transactions was 11.1% lower than in June 2015. According to Doug Crawford, chief executive officer of My Home Move, June’s figures show a market returning to health after a very quiet April and May which was due to investors doing business earlier in the year to avoid the stamp duty changes. ‘While the number of property transactions remain below the levels seen a year earlier, a 4.9% increase between May and June is very encouraging. My Home Move’s own data suggests that the number of completions in June 2016 was actually 2.7% higher than in June 2015,’ he said. ‘The June increase shows that the property market mostly shook off the uncertainty from the Brexit referendum at the end of the month. This reflects our experience as most purchases went ahead without any issues. The big question now is what the impact will be for the rest of the year,’ he explained. ‘While this is less clear, our view is that the fundamentals of the property market are strong enough that there will not be a significant impact. There have been anecdotal reports of a slight slowdown in July from the estate agents we work with, but it is impossible to tell how much of this is actually Brexit related and how much is down to a normal summer slowdown. The picture will only start to be clearer in September after the holiday season,’ he said. Continue reading
UK gross mortgage lending up 16% in June month on month
Gross mortgage lending in the UK reached £20.7 billion in June, some 16% higher than May’s lending total of £17.8 billion, and 3% higher than the £20.1 billion lent in June last year. The data from the Council of Mortgage Lenders (CML) shows that this is the highest June figure in eight years when gross lending reached £22.6 billion in 2008. Gross mortgage lending for the second quarter of 2016 was therefore an estimated £56.1 billion but this is 10% lower than the first quarter of this year, but 8% higher than the second quarter of 2015. ‘The result of the European Union referendum is likely to affect the housing market, but there remains considerable uncertainty,’ said CML senior economist Mohammad Jamei. ‘Although mortgage firms have ample lending capacity, activity levels are likely to bear the brunt of any market adjustment over the next six months or so, as buyers and sellers wait to get a clearer idea of where we might be headed,’ he explained. ‘But as with the economy, the UK housing market’s starting position is relatively favourable, with transactions having increased by almost 80% from post-crisis lows. Over the next six months, activity is likely to soften modestly, while lending will be driven more by remortgaging and less by house purchases,’ he added. ‘We also expect some form of monetary easing to be undertaken by the Monetary Policy Committee when it meets on 04 August, given the uncertain outlook that has set in after the vote result,’ he pointed out. According to John Goodall, chief executive officer of peer to peer platform Landbay, this spike in mortgage lending levels in June suggests both home buyers and sellers refused to sit on their hands in the run up to the EU referendum result. ‘The market has been something of a rollercoaster ride since the Stamp Duty stampede at the start of 2016, but while the mortgage market continues to find its new normal, its foundations continue to show strength,’ he said. ‘We’re yet to see the long term effects of the Brexit vote on market activity, but it’s clear that the UK’s housing shortage will remain the pivotal issue in defining the future health of the sector. Theresa May has made her political intentions clear for further housebuilding pledges, but must recognise the vital importance of the private rented sector in the housing mix,’ he pointed out. ‘Even with a radical programme to combat housing shortages, supply has a mountain to climb before it catches up with demand, so even a moderate house price correction would do little to hamper the UK’s reliance on the buoyant buy to let market,’ he added. Continue reading
