Tag Archives: homes
Core UK regional city markets see office rental growth, latest data shows
Growth in prime headline office rents has continued across the UK’s regional property markets with an average increase of 4.3% in the year to June 2015. The growth has been seen across the core eight markets covered by the index from property consultants JLL and reflects a solid outlook for demand and tight supply of new space. The firm says that headline rents are expected to continue on an upward curve with average growth of 2.9% per year in the core regional markets over the period from 2015 to 2019. ‘Sustained levels of occupier demand combined with the decreasing availability of Grade A office supply has contributed to healthy rental growth with year on year increases witnessed in all bar one of the core eight cities,’ said Jeremy Richards, dead of national office agency at JLL. The data shows that Manchester and Leeds saw the most significant increases with rents up by 6.5% year on year to £33 per square foot and by 6% year on year to £26.50 per square feet respectively. According to JLL’s research report office take up across the regional markets reached 3.8 million square feet in the first half of 2015 and is forecast to exceed last year’s full year total of 7.3 million square feet, well ahead of the 10 year average of 6.6 million square feet. The figures also reveal that Manchester and Birmingham dominated activity in the first half of the year accounting for 677,000 square feet or 18% and 650,000 square feet or 17% of take up respectively. The falling supply of good quality office space remains a key theme according to JLL. Available office space across the core markets stands at 19.5 million square feet with an average overall vacancy rate of 8.2%, down from 9.1% over the year. The Grade A vacancy rate is just 2.4% on average, with Leeds and Cardiff the lowest at 1.5% and 1.3% respectively. JLL’s report shows that total pre-leasing jumped sharply in the first six months of the year to 837,000 square feet across 14 transactions in comparison to 138,000 square feet across five deals in the whole of 2014. Some 5.36 million square feet is currently under construction speculatively across the core cities in 58 schemes, which compares to just 3.3 million square feet in the first half of 2014. ‘Partly aided by pre-lets, the development pipeline is now responding to the supply issue with Manchester accounting for the greatest volume of speculative development activity at 875,000 square feet,’ said Richards. Office investment volumes across the core cities hit £1.9 billion, well up on the £1.5 billion traded in the first half of 2014. Domestic investors accounted 74% of investment volumes with the weight of money targeting the regions continuing to place inward pressure on prime yields, which now range between 5% and 5.25% for the largest regional cities,… Continue reading
Prime London rental market affected by financial market jitters, says new report
Annual rental value growth in the prime central London property market fell to 2.5% in August as demand remained subdued over, probably due to financial market jitters, a new report suggests. The analysis from international real estate firm says that as a significant proportion of tenant demand in prime central London derives from companies, in particular financial services, it should be no surprise that volatile global stock markets continued to affect sentiment in August. Rental values rose 0.1% from July, however quarterly growth was 0.2%, the lowest three month change since April 2014. Prime gross rental yields edged back up to 2.96% from 2.95% in July. Tom Bill, head of London residential research at Knight Frank, pointed out that there is a correlation between rental values in prime central London and the performance of the FTSE 100 and the recent stock market dip has been due to concerns over the state of the Chinese economy, with weak manufacturing data and the recent devaluation of the Yuan increasing nerves. ‘Despite the recent volatility, the devaluation should be seen in its historical context and China has several levers it can pull in an attempt to calm stock market falls that aren’t necessarily a reflection of its underlying economic health. The result is more subdued corporate activity and fewer relocation agents currently active in prime central London,’ he explained. He also pointed out that new tenancies in recent weeks have been UK based families that are moving from one neighbourhood of London to another. In the three months to July this year, the number of new applicants fell by 15% compared to the same period in 2014, while viewing levels were down 12.6% and the number of tenancies agreed declined by 12.1%. Meanwhile, the rentals market is still affected by distortions in the sales market following the general election, Bill also pointed out. ‘Some vendors have delayed selling and are exploring the rental option as they wait for stronger house price growth to return after a stamp duty increase in December for properties worth more than £1.1 million dampened growth,’ he said. ‘The result is more rental stock on the market, which has led to prospective tenants making offers on multiple properties, meaning deals are harder to finalise,’ he added. Continue reading
One in five UK landlords could be out of business due to tax breaks change
The cut in UK tax breaks for certain buy to let landlords due to be phased in over the next few years could put one in five out of business, new research suggests. The blow comes at a time when £9.9 billion is lost to rent arrears and damage every year and for some the change in tax could be the final straw. Landlords are also losing £4.5 billion in terms of damage to their properties. There are also concerns about the new immigration checks on tenants which have been running as a pilot scheme in the West Midland and due to be rolled out nationally, according to the annual landlord report from specialist landlord law firm Access Legal. It points out that many but to let landlords are running a small business and would not continue if they face making a loss. Currently 33% say they feel that the odds are stacked against them and in favour of tenants. The research cites extortionate upkeep costs, cuts to tax breaks and around 46% of tenants getting away with not paying their rent arrears, even after court proceedings, as the main reasons for the pessimism. Three quarters of buy to let investors also stated that they don’t feel money is safe with letting agents, and 43% of landlords have dropped their letting agents to save money and avoid safety issues. The research says that in total damage, repairs and rent arrears amounts to £9.9 billion every year. £4.5 billion and it means that every landlord in the UK is out of pocket by £6,600 covering these costs, every year. ‘We work with many landlords covering tenant and landlord disputes. The extortionate cost of being a landlord seems to be a figure that keeps growing. Many landlords are subject to damaged properties and rent arrears. The law doesn’t always side with tenants, but it’s a hard process for landlords to go through and a tricky legal system,’ said Eamonn Hogan, a solicitor at Access Legal. The five most common causes of damage to a property are broken appliances at 41%, damaged decorating at 40%, damaged carpets 37%, lack of cleanliness 33.18% and cigarette burns 22%. Worst areas in the UK for rent arrears include Cambridge, Newcastle, Oxford, York and Manchester while the worst areas in the UK for property damage include Manchester, London, Wrexham, Chelmsford and Birmingham. The study also found that 40% of landlords have been subject to a tenant not paying rent and 20% of landlords have been subject to vandalism in their properties. Continue reading
