Tag Archives: house
Positive medium outlook for prime UK property beyond London
Value offered in prime residential property markets beyond London suggests a positive medium term outlook despite some caution among buyers ahead of the UK general election next month. But there are differences on a regional basis, according to real estate firm Savills whose latest analysis report points out that it has become pretty much impossible to talk about the UK’s prime housing markets beyond London as a single entity. It explains that since the economic downturn of 2008, the markets have become increasingly stratified, reflecting not only their distance from the capital, but also the tier of the prime market in which they sit and whether they are in an urban, rural or coastal location. Wide price differentials now exist between London and its commuter zone, the remainder of England and Wales and, indeed Scotland. A property worth £1 million in 2007 would now be worth £1.34 million in London, £1.05 million in the commuter zone and £780,000 in Scotland. ‘Within each of these areas, the prime urban markets have generally been on the rise, while their rural counterparts have lagged behind to date. Although the medium term prospects remain positive, all of these submarkets face challenges in 2015,’ explained Lucian Cook, head of residential research at Savills. ‘Although the economic recovery has held firm and the outlook for interest rates remains relatively benign, political uncertainty in the run up to the general election has, for the moment at least, resulted in an air of caution among buyers,’ he said. ‘The mainstream markets, which impact on sentiment higher up the value chain, seem to have been similarly affected despite the best efforts of the Chancellor to stimulate a feel good factor with the recent long overdue reform of stamp duty. The reality is that the increased regulation of the mortgage market will have played a significant part in bringing a period of sobriety to the wider housing market following strong growth in the first half of 2014,’ he pointed out. ‘Despite lower levels of mortgage debt dependency, regulatory limits on the amount of borrowing a buyer can take on board will also have had an impact on those looking to work their way up the prime housing market. Meanwhile, a significant chunk of the prime market now finds itself with a larger stamp duty liability,’ he added. Cook also explained that taxation has been an even greater concern in the upper echelons of the prime market and the debate around a mansion tax has done nothing to engender a sense of urgency among buyers. ‘However unwelcome and unwarranted the proposal, owners of prime regional housing may take some solace from the fact that the main burden of the tax would be felt by owners of higher value properties in London,’ said Cook. ‘If a mansion tax is introduced it has the potential to make properties outside of the capital, that already look comparatively good value, appear even more attractive. Over time it could… Continue reading
Property prices near London Crossrail stations set to outperform local markets
On average property prices within a 10 or 15 minute walk from the new Crossrail stations in and around London have already outperformed prices in the wider area by some 5%, new research shows. While there are pockets of sustained outperformance, especially in central London, average residential property prices around a few of the stations in the Eastern and Western sections of the line show a more mixed picture. Yet those areas where price growth has lagged the surrounding areas may offer significant opportunities for further price uplifts, especially where large scale regeneration and development is underway, according to the major analysis report from real estate firm Knight Frank. It points out that when fully complete in 2019, Crossrail will bring an additional 1.5 million people to within a 45 minute commute of the centre of London. ‘In many cases, it is not just the reduced travel times that have the potential to create value, but also large regeneration projects connected with Crossrail, which are not only improving the realms around stations, but providing a wider choice of higher level amenities as well as residential property options,’ said Grainne Gilmore, Knight Frank head of UK residential research. The firm has previously assessed how residential prices around central Crossrail stations performed between 2008, when Royal Assent for the project was granted, and 2012 and found that on average, prices within a 10 minute walk of the stations outperformed the wider prime central London market by 8%. Now it has taken its analysis further and also looked at how property prices around each of the stations from Shenfield to Maidenhead have moved over the last seven years, and comparing this with average price growth in the surrounding areas. In total, there are 2,976 residential units in schemes which have been started within a 10 minute walk of central Crossrail stations and a further 10,096 units with planning approved. ‘Some of these schemes may be phased, and take some years to deliver but the development potential of the areas surrounding the stations is clear,’ said Gilmore. ‘The research shows that prices around Canary Wharf Station have lagged the strong growth seen in prime outer London from 2008 to date, but the scale of development taking place in the area, and further East, make this an area to watch,’ she pointed out. Residential property prices within a 10 minute walk of the central stations have risen, on average, by 57% since 2008 compared to 43% growth in the prime central London market over the same period, according to Knight Frank’s own index. The biggest rises in residential prices have been seen within a 10 minute walk of Bond Street with an 82% uplift in prices in the area surrounding the station, which encompasses much of Mayfair. ‘While some of this increase has been underpinned by the buoyant central London market, it does not explain the full uplift. Prices in the wider Mayfair market were some 30% higher… Continue reading
Prime central London rental values up for third month in a row
Rental values in the prime central London rose by 0.2% for the third consecutive month in March, pushing annual growth to 4%, the highest rate in more than three years. The rental value index is now at the same level it was during the summer of 2012, when London hosted the Olympic Games, according to the latest report from real estate firm Knight Frank. Rental values subsequently dipped as the sales market strengthened but growth returned at the start of 2014 but the lettings market benefited as the UK economic recovery took hold and companies began hiring more staff. Annual growth was 4%, the highest rate in more than three years but the report says that some landlords are hesitant to agree deals because they believe the sales market could strengthen. The number of tenancies, viewings and new prospective tenants are up markedly on 2014 rental yields at 2.92%, an increase on March 2014, the report also points out. The report points out that jobs in London’s financial services sector rose 17% in February compared to 2014 and according to recruiters this is due to oil price stability and subsiding concerns over a Greek exit from the euro zone. However, it is not a clear cut picture, the report says, and activity and stock levels have been dampened by the kind of indecision that has affected the sales market. ‘While some vendors have become landlords in order to wait out the general election to obtain more clarity around the future political landscape, the overwhelming mood of uncertainty has led to hesitancy as the election draws closer and campaigning steps up,’ said Tom Bill, head of London residential research at Knight Frank. He pointed out that some property owners who had considered the rental option have been reluctant to sign two year tenancy agreements while there is a possibility the sales market could strengthen in the second half of the year, depending on the outcome of the election. ‘Either way, demand in the lettings market remains strong. In the year to February 2015, the number of tenancies increased by 37% compared with the preceding 12 month period,’ Bill said. Meanwhile, the number of viewings rose 16%, property inspections increased 14% and the total number of new prospective tenants registering grew by 18%. A stronger lettings market and slower price growth in the sales market resulted in rental yields of 2.92% in March, higher than a figure of 2.83% recorded in the same month last year. Continue reading
