Tag Archives: house
Positive outlook for UK regional commercial markets
UK regional office markets have seen subdued rental growth over the last few years but the outlook is now more positive as a broadening economic recovery is feeding through to improved occupier demand. This together with the diminishing availability of Grade A stock and lack of significant speculative development completions over the last few years is driving rental growth across the regions, according to the latest report from Knight Frank. The real estate firm expects to see strong rental growth in the majority of regional city centres over the next 12 months, with new development completions securing higher prime rental levels. Manchester, Birmingham, Newcastle and Aberdeen will see the strongest growth while all other centres, apart from Sheffield, will see positive growth. Prime headline rents in Manchester and Aberdeen are expected to reach record highs of £34.00 per square foot by the end of 2015, representing corresponding increases of 10% and 6% over the year. Birmingham offices will also see rents rise by 8% to a seven year high of £32 per square foot. While there is unlikely to be any rental growth in Sheffield in 2015, Sheffield rents are expected to rise more sharply up to £22 per square foot by the end of 2016. Given the diminishing availability of Grade A stock and lack of developments, vacancy rates are likely to fall or at least remain stable, with the exception of Aberdeen where the level of speculative development is higher, the report points out but the firm is also anticipating a slight softening of incentives over the next 12 months. ‘As economic growth spreads to the regions we expect to see prime office rents rise across regional city centres in 2015. Lack of supply at the prime end of the market will add further upward pressure on both prime and secondary rental growth,’ said Louisa Rickard, associate, commercial research, Knight Frank. According to James Robert, Knight Frank’s chief economist, office rents will rise across regional city centres in 2015. ‘Lack of development to date could quickly migrate growth from prime to secondary,’ he says in the firm’s latest UK market outlook report. He explained that while the punchy rebound seen by commercial property in 2014 is encouraging, the recent figures from IPD are not sustainable in the long term. ‘The total return numbers may accelerate a little further, but we expect them to drop back early in 2015, perhaps picking up again in the autumn on rental growth. This will be due to slower capital growth as investors acknowledge that prices have rebounded from the double dip period. The slow and methodical business of increasing value by asset management then begins. Note though we are predicting a deceleration not a decline,’ Robert said. ‘A year ago one could only speak meaningfully of rental growth in central London, but in 2014 we saw it re-emerge for prime in many M25 towns, Birmingham, Glasgow, and Leeds. The economic recovery… Continue reading
Almost a third of UK landlords have seen rent arrears in 2014, new research shows
Almost a third of landlords in the UK, approximately 500,000, say they have experienced rent arrears in the last 12 months, according to new research. The research from the National Landlords Association (NLA), shows that a typical landlord faces £1,649 of outstanding rent each, totalling £850 million worth of rent arrears across the UK. The findings also show that 22%, approximately 300,000, are worried that their tenants won’t be able to keep up rental payments over the next year. The research supports the launch of the NLA’s latest campaign called Rent, Risk Resolve which aims to highlight four of the biggest risks facing landlords and help them to minimise the impact on their lettings business. The biggest risks are named as rent arrears, rising interest rates, local landlord licensing and regulation and the introduction of rent controls. ‘All landlords will be affected by one or more of these issues to some extent somewhere down the line and it’s vital for them to keep in mind the major threats to the success of their business,’ said Carolyn Uphill, NLA chairman. Regardless of the size of a portfolio the potential impact of these risks can be devastating on both the business and personal life. As the largest landlord association in the UK, we have a duty to support and advise on how to plan ahead effectively and manage these risks,’ she explained. The first focus of the NLA’s campaign will be the risk of rent arrears. The NLA has produced a guide to support landlords to deal with the problem. Continue reading
Third of UK properties have seen prices drop since going on sale
A third of properties on the market in the UK currently for sale have been discounted, up from 27% in February and the highest since August 2012 the latest data shows. The highest proportion of asking price reductions are to be found in Yorkshire and Lancashire in Preston, Barnsley, Wakefield, Rotherham, according to the latest research from property firm Zoopla. London is among cities with the fewest price reductions but discounts have doubled since start of year and overall some £3.8 billion has been knocked off UK asking prices, equivalent to £24,429 per property The average price reduction has also grown since the start of the year, with asking price reductions now at 6.7% on average off the initial asking price, equivalent to £24,429, up from 6.3% or £20,781 in February 2014. Preston has the highest proportion of price reductions in the country at 44% of properties having had their asking price lowered since first coming to the market. This is closely followed by the Yorkshire towns of Barnsley, Wakefield and Rotherham all at 43%. However it is not just in the north of England where sellers are resetting their expectations. The largest discounts currently are to be found in affluent Mitcham in south west London where sellers have dropped prices by 9.2% on average, equal to £55,606. The research also shows that sellers in Edinburgh are the most confident of achieving their original asking prices, with only 22% of properties for sale having their prices reduced, the lowest proportion across the country. This is followed by London where only 29% of homes have seen their asking prices lowered from the original price. However, this is almost double the proportion recorded in February 2014 when only 15% saw their asking prices reduced. ‘The property market typically slows in December as buyers postpone their plans until the New Year and become pre-occupied with the festive season, but these figures suggest that sellers may be being forced to rest their expectations and become more realistic in order to secure a buyer. People are well attuned to a bargain at this time of year, so homebuyers may want to capitalise on the latest raft of reductions,’ said Lawrence Hall of Zoopla. ‘The recent Stamp Duty reforms have injected a real feel-good factor into the property market that is likely to last into January when there will be a renewed surge in buyers looking for property. There would usually be an air of uncertainty in the lead up to an election, but the positivity created by the tax overhaul should ensure this isn’t as keenly felt as usual,’ he added. Continue reading
