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Improved rail links to London boost prime property prices in commuter towns
Prime property prices in key UK locations where train services make them commuter zones for London have seen prices rise in the second quarter of 2016, according to the latest index data. In Bristol, where commuters are within reach of London’s Paddington station, prime property prices have increased by 7.4% in the year to June 2016 with the second quarter of the year seeing a 17% rise in new buyer registration and a 19% rise in viewings. In nearby Cheltenham prime property prices increased by 8.6% year on year and 2% quarter on quarter, according to the index data from real estate firm Knight Frank, and this compared with annual growth of 1.3% in the UK wide prime property market. But in Oxford, another popular commuter city, prime prices increases by just 0.3% between April and June, taking annual price growth to 0.7% but the data report says that demand remains strong. In Oxford the slow down in price growth is attributed to uncertainty in the run up to June’s historic referendum and the decision to leave the European Union. ‘After several years of strong price increases, during which the city has comfortably outperformed the wider UK, the latest figures suggest that price growth at the top end of the market in Oxford has started to ease,’ said Oliver Knight, research associate at Knight Frank. ‘While the fundamentals underpinning the market remain unchanged, the reasons for the easing are twofold. Firstly, there was a softening in demand for prime property in the immediate run up to the EU referendum, with potential purchasers adopting a wait and see approach,’ he explained. ‘Secondly, and arguably more importantly, recent changes to stamp duty levied on the purchase price of the most valuable properties has made buyers increasingly price sensitive,’ he added. He pointed out that prime homes in Oxford worth more than £2 million rose in value by just 0.1% in the year to June as buyers and vendors factored higher purchase costs into pricing and offers. In comparison, properties worth up to £750,000, where the stamp duty burden is lower, rose by 1.7%. According to William Kirkland, Knight Frank Partner in the firm’s Oxford City Department, demand remains consistent and new high speed rail link at Oxford Parkway, which opened in October 2015, has helped stimulate demand in property markets to the north of the city as commuters using the line can now be in London Marylebone in under an hour. ‘As a result, there has been an increase in the number of Londoners looking to buy property in Oxford so far this year. Some 25% of all prospective buyers registering with Knight Frank's Oxford office in 2016 were based in the capital, up from 19% in 2015,’ he added. A growing imbalance between supply and demand continues to drive strong price growth in the prime Cheltenham market. There were 19% fewer prime properties available for sale across Cheltenham at the end of June year on year… Continue reading
Hong Kong residential sales fell by 8% month on month in July
The volume of residential sales in Hong Kong fell 8% month on month in July after three months of growth in a row, the latest figures from the Land Registry show. Overall property prices remained stable and this was due to sustainable end user demand, according to the analysis in the latest monthly report from international real estate firm Knight Frank. It explains that the new build market, which contributed to about one third of total residential transactions in Hong Kong, is where major developers generated good sales in their recently launched projects. For example, Park Yoho Venezia in Yuen Long has sold 95% of its 62 units in its third batch of sales in July and The Ascent in Cheung Sha Wan was oversubscribed seven times and sold over 94% of its first batch of 125 units in one day. There have been some transactions in the otherwise muted land market. In one notable sale, a domestic site in Pak Shek Kok, Tai Po was sold at an accommodation value of HK$3,932 per square foot, up 19.2% from two years ago when the adjacent site was sold. However, the report points out that despite the recent pickup in sales, the surge in upcoming supply is expected to suppress growth in home prices. According to the latest data from the Transport and Housing Bureau, 93,000 new homes are to be provided in the coming three to four years. ‘Developers are expected to continue offering deep discounts and competitive mortgage schemes to attract buyers in order to offload inventory before a possible US interest rate hike in the coming months,’ the report says. ‘We maintain our forecast of luxury home prices falling 5% to 10% this year and mass residential prices dropping up to 10% over the year,’ it adds. The report also says that the Grade A office market in Hong Kong remained subdued in July as many large financial institutions continued to downsize which had a negative effect on leasing demand. This means that medium sized firms are using it as an opportunity to take up space released by multinational corporations and Knight Frank expects this trend to continue. By the end of the year Knight Frank expects central office rents to increase but in decentralised areas, such as Kowloon East, there is likely to be rental pressure due to increasing upcoming supply. Continue reading
Housing associations organisation criticises lack of affordable homes in UK
More British landlords now rent to people on housing benefit with amounts increasing from £4.6 billion in 2006 to £9.3 billion last year, new research shows. According to the study from the National Housing Federation the reason are twofold. Firstly a 42% rise in the overall number of private renters receiving housing benefit since 2008 and secondly the fact that claims in the private rented sector (PRS) are much higher than in the non-profit housing association sector. The research says that it costs £21 a week more to house a family in a PRS home than in a social home at £110 overall in comparison to £89 and points out that over a year this is an additional £1,000 per family being spent at £5,705 in the PRS compared to £4,638 in the social rented sector. In London, the contrast is even starker with PRS payments at £64 per week more than to those in social homes, adding up to £3,300 more each year, according to the NHF which represents independent non-profit housing associations. It says that the lack of affordable housing available means that a wider group of people need housing benefit. Nearly half, 47%, of all families claim housing benefit in the PRS sector are in work, almost double the proportion it was six years ago at 26%. Housing benefit recipients renting privately now earned an average £4,000 more than on six years ago. The NHF believes that the increase in taxpayer’s money being spent on housing benefit would have been better allocated to building more affordable homes. ‘It is madness to spend £9 billion of taxpayers’ money lining the pockets of private landlords, rather than investing in affordable homes,’ said David Orr, NHF chief executive. ‘Housing associations want to build the homes nation needs. By loosening restrictions on existing funding, the Government can free up housing associations to build more affordable housing at better value to the taxpayer and directly address the housing crisis,’ he added. But the National Landlords Association (NLA) said it should not criticise PRS landlords and pointed out that the number letting homes to housing benefit recipients is now falling. ‘Housing benefit is not a subsidy to landlords; it’s a support for tenants to ensure they can pay for their housing. However, the proportion of landlords who let to tenants in receipt of housing benefit has halved over the last five years as benefit levels have not kept up with rents,’ said , Richard Lambert, NLA chief executive officer. ‘The private rented sector has grown as the market responds to the increasing demand for homes, particularly from a growing proportion of tenants whom the social sector and housing associations simply are not able to support in the current circumstances,’ he explained. ‘The private rented sector plays a significant role in providing much needed homes for tenants. What we should all be talking about is the failure of successive governments to adequately allocate its housing budget and to incentivise… Continue reading
