Tag Archives: financial
Property in French Alps now offers a better deal due to currency changes
Buyers in the French Alps are not happy to buy for the sake of buying but increasingly wanting to rent their property so it provides an income all year round, a new analysis has found. There is also strong demand for off-plan projects, according to the latest prime ski rental index report from international real estate firm Knight Frank. On top of this currency fluctuations are favouring certain nationalities such as the British and Americans. Overall Alpine resorts have seen muted sales activity since the financial crisis took hold in 2008 but new investment in infrastructure, a broader pool of demand and the realisation that a ski chalet is able to offer a competitive investment return is reinvigorating the market,’ the Knight Frank report says. During the 2013/2014 season demand continued to be focussed on the resorts located within an hour of Geneva Airport in particular Morzine/Les Gets, Megeve and Chamonix. The €1.5million to €2 million price bracket in Val d’Isere also saw strong activity, with many buyers wanting to be in the heart of the resort. In the year to June 2014 Knight Frank’s Alpine enquiries came predominantly from prospective European buyers, who together accounted for 61% of all applicants. The Europeans were followed by Asian and Middle Eastern buyers at 12% each, then Russians and CIS nationals at 5% and North Americans also at 5%. An analysis of Knight Frank’s enquiries data by price band shows that there was stronger demand for properties priced below €2.5 million in 2014 with this price bracket accounting for 72% of applicants, compared with 47% a year earlier. The proportion of buyers looking at properties above a €20 million threshold by comparison shrunk from 7.6% in 2013 to 3.8% in 2014. The report points out that price of a luxury home in the Alps can vary significantly, a fact that surprises some non-European buyers. Courchevel 1850 leads the pricing stakes with the average luxury property priced around €30,000 to €32,000 per square meter but in Chamonix, a two hour drive away and crucially outside the desirable Trois Vallées, prime prices are €7,000 to €8,000 per square meter. In the Alps, the authorities in Courchevel have announced they are spending over €100 million on upgrading the resort’s lift system, complementing the new €67 million aquatic centre which is due to open in 2015. Chamonix has gone one better announcing investment of around €477 million to improve its ski lift system, albeit over a longer time period. Knight Frank also says that sales enquiries are now less seasonal than they were. Buyers are recognising the year round appeal of the Alps and gardens, for example, now being sought by more applicants registering with the firm. ‘Buyers today are comfortable with the concept of buying off-plan through CGI imagery, floor plans, site plans and stage payments,’ said Knight Frank’s Roddy Aris, adding that over a period of four months the firm has sold virtually half of the Carré Blanc… Continue reading
Demand for prime rental properties in London set to continue in 2015
The strengthening London economy and the continued expansion of sectors such as technology and telecommunications will underpin demand for prime rental property in London, a new analysis suggests. This will also filter out into the wider commuter zone, though demand from the financial and business services sector is forecast to remain relatively subdued, according to a new report from real estate firm Savills. The firm is forecasting rental growth of 17% over the course of the next five years unless a mansion tax is introduced and levied on the owners of homes worth £2 million or more. The Labour party has said that if it wins the general election in May it will introduce such a tax. On the supply side, a more muted sales market in the run up to the election could result in more would-be sellers bringing stock to the rental market, according to Lucian Cook, director of residential research at Savills. ‘In the short term this is likely to continue to suppress rental growth. In addition, in certain locations on the fringes of prime London, where high levels of new build stock have been bought by overseas investors, we expect rents to come under pressure over a longer period,’ he said. ‘Beyond London we expect the preference for prime family housing in key commuter towns to continue, with existing demand supplemented by that from those relocating to these areas and temporarily renting before buying,’ Cook explained. ‘On the supply side, we believe a stronger sales market is also likely to reduce the impact of the accidental landlord over the medium term, causing a reduction in available rental stock at the top end of the market and supporting rental growth,’ he added. He also pointed out that the reform of the stamp duty system in December may impact on future investor behaviour. ‘Stamp duty costs will be lower for all acquisitions below £937,500. However, across Kensington and Chelsea the average stamp duty bill is expected to rise by over £40,000. This may drive investor demand to higher yielding, lower value parts of the market that equally are less likely to be affected by the continued political rhetoric around a mansion tax,’ said Cook. ‘The Autumn Statement also contained provisions to increase the levy on those long term UK residents who wish to retain their non-dom status. Though many will be home owners, this may impact on the budget of long-term renters,’ he explained. ‘A similar differential in rental performance was seen in the prime regional market. Smaller properties servicing core market demand have generally performed the most strongly, with one and two bedroom units delivering annual price growth ?of 4.3%, bringing total growth over the three years to 11.7%,’ he added. ‘By contrast, there has been a much thinner market for large properties at the top end, which continue to be price sensitive. Rental value for properties with six or more bedrooms rose by just 1.1% over the course of 2014, with… Continue reading
Research reveals the downsize windfall possible in UK property market
In the UK an average of £121,686 can be potentially raised by downsizing to a semi-detached home with London the most lucrative place to do so, new research suggests. Downsizing to a bungalow is the most common option, with those moving from a detached house releasing an average of £103,715 and those moving to a semi-detached house standing to raise up to £121,686. The latest report from Lloyds Bank also shows that 52% of those looking to move in the next three years considering downsizing, and it continues to be the main reason to sell a home and downsizing in 2014 is nearly 10% more profitable than in 2004. For those trading down, the potential amount that can be raised by downsizing from a detached property to a bungalow has risen by 8% or £8,081 over the past decade. A downsizer today would receive an average of £103,715 compared with £95,634 in 2004. The potential amount of cash home owners could raise by downsizing their property from a detached home to a semi-detached stood at an average of £121,686 in 2014, an increase of 6% or £6,943 since 2004 Three in four expect to make money when they downsize. Of those, 43% will reinvest this money in a new property, 26% will invest in other financial products and 13% will invest in their pension or give to their family members. Some 26% are planning to move to a more affordable area, 5% less than in 2013. Some 63% said one of the main reasons for downsizing is to find a smaller property that better suits their current circumstances. After this, 40% are looking to downsize to help reduce bills and outgoings. Some 28% of downsizers are also looking to release equity from their property, and 25% are looking to help support their retirement plans. The research also found that 25% of downsizers are trading down earlier than expected and there are a variety reasons for this including health, change in relationship status and proximity to amenities. The average downsizer is 56 years old, with the greatest proportion having lived in their current property between 11 and 20 years, and having moved in to that property at the age of 39. ‘Downsizing is clearly still a major part of the housing market with over half of potential home movers considering a smaller property. The volume of downsizers is therefore helping to keep the market moving, freeing up larger properties for those making their way up the ladder,’ said Andy Hulme, mortgages director at Lloyds Bank. ‘Once people do look to trade down, the benefits are clear. Downsizing can generate significant amounts of money, on average over £100,000 in 2014. It also helps to lower the cost of household bills and frees up funds so that people can enjoy their retirement or invest their money for the future,’ he added. A breakdown of the figures show that downsizers in London stand to make the most in monetary… Continue reading
