Tag Archives: investment
Property supply stagnates in UK, as new property listings slow
Property supply stagnated in the UK in April, with new property listings across the country rising just 0.5% compared with the previous month, the latest supply index shows. This comes on top of a 4% fall in supply recorded in March, according to the date from the index from HouseSimple which tracks the number of new properties marketed every month in more than 100 major towns and cities across the UK and all London boroughs. Although more than half, some 60%, of towns and cities actually saw an increase in supply last month, in many areas the increase was marginal and some of the UK’s most populated towns and cities experienced large falls in new property listings in April. New property listing dropped the most in Inverness, Scotland, down 29.1%. Supply was down 22.6% in Hereford, down 22.3% in the London borough of Wandsworth, down 19.2% in Rugby, down 18.6% in Chichester and down 16.9% in Ipswich. London did not see much of a change with listing down by 0.8% while the biggest increase was in Bexley with a rise of 58.9%, in Winchester new listings were up 35.6%, up 25.4% in Southport, up 24.5% in Maidstone and up 23.1% in Chelmsford, up 21.2% in Bradford and up 20.9% in Swansea. In the rest of London Ealing saw a rise in new listings of 43.4%, Tower Hamlets up 37.2%, Greenwich up 27.6%, Barnet up 25.7%, Westminster up 18.4% and Lambeth up 15.1%. However, more than half of London’s 32 boroughs saw a month on month decline in supply, highlighting the ongoing shortage of new properties being marketed in London. ‘Although 60% of UK’s towns and cities saw an increase in property supply in April, these rises weren’t nearly material enough to make a dent in the stock shortage. There’s simply not enough new stock coming onto the market to meet demand,’ said Alex Gosling, the online estate agents’ chief executive officer. He pointed out that April saw the stamp duty hike on second homes at the start of the month feed through to a massive rise in the supply of rental properties. ‘The residential sales market could do with a similar spurt in supply. However, there is a possible knock on effect for the sales market,’ he said. ‘with an expected drop off in buy to let investors purchasing properties because of the 3% surcharge on second homes and buy to let properties, this may help to redress slightly the demand supply imbalance, offering first time buyers in particular opportunities to purchase, until the supply tap is turned on again,’ he explained. But any hope of a prolonged period of rising supply could be affected by uncertainty over the referendum on the future of the UK in the European Union which is just a month away. ‘We may well see a spike in supply in May as home owners try to sell their properties before the vote on 23 June, but supply could well dry up… Continue reading
UK asking prices up just 0.4% but first time buyers paying much more
Property asking prices in the UK increased by the modest amount of just 0.4% in May, taking the average price to £308,151, according to the latest index figures. But it is first time buyers who have faced the highest rises, with the data from property portal Rightmove showing that for this segment of the market asking prices increased by 6.2% month on month and 11.4% year on year. In some areas first time buyers have seen prices rise even more with Croydon, Dartford and Luton recording an annual price surge of 18%. Those moving up the housing ladder have fared better with second steppers seeing prices fall 0.8% month on month, but they are still paying some 8.1% more than a year ago. The report points out that it was speculated that the investor activity drop-off after the April additional home stamp duty deadline would act as a brake on prices at the lower end of the market. However, intense investor activity, with March transaction numbers up a massive 80% on last year, exacerbated the property drought in this sector and is now causing upwards price pressure. This resulted in prices for properties with two bedrooms or less, typical first time buyer homes, increasing. ‘If you were expecting a long period of price doldrums at the lower end of the market following the mass exit of the buy to let brigade, this month’s 6.2% price rise will come as a big surprise,’ said Miles Shipside, Rightmove director and housing market analyst. ‘Properties at the lower end of the market were the most common target for the investor community, and the immediate aftermath of the tax deadline saw new seller asking prices drop in this sector for just one month. The 1.4% fall reported in April’s index appears to have been a very short lived knee jerk, with an average price surge of £11,298 this month for properties coming to market with two bedrooms or fewer,’ he explained. ‘It remains to be seen if these prices can be achieved and there may be some over pricing in the market; it is also a reflection of better quality property coming to market in this sector which is now targeting owner-occupiers rather than landlords,’ he added. He pointed out that since November when it was announced that an extra 3% stamp duty would be charged on additional homes and its implementation at the end of March, the price of property coming to market in this first time buyer/investor sector increased by 3%. In just four weeks it has now risen by 6.2%, the highest monthly rise recorded for this sector since February 2012. The report also show that demand for typical entry level property remains high, with searches on Rightmove specifying two bedrooms or fewer being up by 47% in April compared to April 2015 in spite of waning investor interest. In contrast, fresh supply for this sector is down by 1.5% in the last four… Continue reading
UK farmland values down 3% in first quarter of 2016
As uncertainty around the UK referendum on the country’s future in the European Union grows, values for farmland fell by 3% in the first quarter of 2016, dropping back below £8,000 an acre. The drop was the largest quarterly since the 5% decrease that occurred following the collapse of Lehman Brothers in the fourth quarter of 2008, according to the latest analysis report from real estate firm Knight Frank. It shows that around 25% fewer acres of farmland had been advertised by the end of March, compared with the same period in 2015. However, despite the uncertainty and value drop, a recent survey by Farmers Weekly shows that 60% of farmers will be voting to leave the EU on 23 June. The report also looks at what has happened to farmland prices since the UK joined what was known as the European Economic Community (EEC) in 1973. Data from the Ministry of Agriculture/DEFRA shows land values increased sharply around the time, even managing to beat the hyper-inflation of the 1970s. Over the long term that trend has continued with land values outpacing inflation. But the sobering trend for farmers is how agricultural commodity prices have failed to keep up. The report also points out that investors’ priorities have changed dramatically over the past year, as they are now looking much further afield and for value-add opportunities such as diversified income streams or development potential And it also shows that prime country house prices rose by 0.3% on average in the first quarter of 2016, taking annual growth to 2.4%, down from 5.2% in 2014 but there was a notable rise in activity in the first quarter of the year with Knight Frank figures showing a 24% rise in sales volumes across the prime country market, compared with the same period in 2015. Activity was focused on the sub-£1 million market, which showed strongest price growth of 4% across the last 12 months. Homes worth £5 million or more saw values fall by 2.7% in the same period. ‘From weighing up the hugely complex issues surrounding the EU referendum, to coping with a slump in agricultural commodity prices and working out what the implications of the latest changes to the planning system could be for them, estates, farms and other rural businesses are having to take some extremely big decisions,’ said Andrew Shirley, head of rural research at Knight Frank. ‘Long term strategic planning can be extremely helpful when it comes to coping with such challenges and there are also exciting opportunities to be grasped and the level of innovation and entrepreneurship in the countryside has never been greater,’ he added. According to James Del Mar, Knight Frank’s head of rural consultancy, the tax environment for the rural landowner in the UK is becoming more challenging, particularly for those who are domiciled elsewhere. ‘At the same time, the pent up demand for new housing and infrastructure, combined with changes to the planning system, presents what some… Continue reading
