Tag Archives: finance
More people moving out of London with research suggesting it is due to prices
There are more home owners moving out London than ever before with more than 280,000 moving away in 2015, an increase of 3% compared to 2014, a new analysis shows. The exodus is led by young people in their twenties and thirties, suggesting that rising house prices could be behind the decision, according to the research from multi-disciplinary property company Humberts. The report by ResiAnalytics for Humberts, which analyses the newly released data from the Office of National Statistics (ONS), shows that 26% were aged 20 to 29 but this was less than the 30% recorded in 2014, while 23% were aged 30 to 39, up slightly from the 22% recorded in 2014. ‘The average cost of a London house today is almost double the English average at £470,000 compared to £224,000 and consequently we are seeing more and more people cashing in and moving out,’ said Jeremy Campbell-Harris from Humberts’ London Country House Department. He believes that those in their 20s probably struggle to afford to buy a home in London and those in their 30s who may have young children are looking for a bigger home and more peaceful surroundings. Birmingham, the UK’s second city where average house prices are less than half those in London, tops the list of most popular destinations for London leavers. Brighton and Hove, where house prices are similar to those in London, is also popular choice due to being commutable yet on the coast. In third place is Thurrock, followed by Epping Forest, Elmbridge, Bristol, Medway, Manchester, Dartford, Hertsmere, Luton, Reigate and Banstead, Slough, Canterbury, Welwyn Hatfield, Leeds, Sevenoaks, Nottingham, Spelthorne and finally Coventry makes up the top 20 destinations. The research also looked at regions which have grown in popularity over the past five years. The East of England has seen a 4% increase in the number of people moving from London in 2015 compared with 2011. This is in contrast to the South East, which has seen a 3% fall in the number moving to the region. ‘The price of housing in London and the South East has risen so significantly over the years that Londoners are looking for new areas where their money can go further. Of all the regions in England and Wales, the East of England and the South West are the only two regions that have seen increases in the number of Londoners moving there,’ said Campbell-Harris. ‘Better broadband connections, better transport links and great value for money are three main reasons why these areas are proving to be increasingly popular amongst people from the Capital,’ he added. 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
Brexit hits UK commercial property market sentiment
Sentiment in the UK’s commercial property market has dampened significantly since the referendum vote to leave the European Union with investment demand falling sharply, most notably in London. The heightened sense of caution is visible across both investment and occupier sides of the market, with uncertainty pushing rental and capital value projections into negative territory, according to the latest commercial property market survey from the Royal Institution of Chartered Surveyors. It shows that and increasing share of respondents across the UK now feel the market is in an early downturn phase and the 12 month capital value and rental projections have now moved into negative territory. On a UK wide basis, occupier demand failed to rise for the first time since 2012. The headline net balance fell from +21% previously to a reading of zero in the second quarter of the year. Declines were reported in the office and retail areas of the market but demand proved somewhat more resilient across the industrial sector. The regional breakdown shows the occupier demand gauge moderated across all parts of the country, although the shift was most noticeable in London. Alongside this, availability remains constricted, with the supply of leasable space more or less unchanged in the office and retail sectors during the second quarter, while industrial availability continued to decline. Worries over a potential hit to business confidence, caused by political and economic uncertainty, appear to be reflected in respondents’ rental outlook. This is especially the case over the shorter term. Indeed, the headline three month rent expectations net balance dropped from +26% to -7% in the second quarter. The office and retail sectors experienced the steepest decline, with the reading for both now comfortably in negative territory. In the industrial sector, although the net balance softened notably, it remains positive given the very tight supply and demand conditions. When the results are disaggregated, the rental outlook is most negative in London. Over the next 12 months, rents are projected to fall by around 3% at the all-sector level. Within this, rents across the secondary retail sub market are expected to come under the most significant downward pressure. The survey report points out that the weakness in demand is perhaps even more visible on the investment side of the market. During the second quarter the investment enquiries series fell sharply, posting a net balance of -16%, down from +25% in the first quarter of the year. What’s more, all traditional sectors covered in the survey experienced a drop-off in investor interest. Foreign investor demand declined at an even greater rate, as the net balance fell to -27%. While respondents in virtually all parts of the UK noted a decline in overall investment enquiries, the trend was again most pronounced in London. In fact, at -41%, the investment enquiries gauge for the capital was the weakest since 2009. Back at the UK wide level and, despite a softening demand backdrop, the supply of… Continue reading
