Tag Archives: investment
UK house prices crept up in May but annual growth slowed, says latest index
House prices in the UK edged up 0.2% in May but annual growth slowed to 4.7% to an average of £204,368, according to the latest index to be published. The annual pace of house price growth remains in the fairly narrow range between 3% and 5% that has been prevailing for much of the past 12 months, according to the date from the Nationwide, one of the leading home lenders in the UK. ‘In the near term, it’s going to be difficult to gauge the underlying strength of activity in the housing market due to the volatility generated by the stamp duty changes which took effect from 01 April,’ said Robert Gardner, Nationwide’s chief economist. ‘Indeed, the number of residential property transactions surged to an all-time high in March, some 11% higher than the pre-crisis peak as buyers of second homes sought to avoid the additional tax liabilities,’ he pointed out. ‘While cash purchases accounted for a significant proportion of the increase in activity it is not possible to determine whether or not these were purchased by landlords. Mortgage data suggests that, while buy to let purchases were a major driver of the increase, the purchase of second homes also accounted for a substantial proportion,’ he explained. The report also shows that the number of home mover mortgages, which is where second home purchases with a mortgage would show up, increased sharply in March. Gardner said that house purchase activity is likely to fall in the months ahead given the number of purchasers that brought forward transactions. ‘The recovery thereafter may also be fairly gradual, especially in the buy to let sector, where other policy changes, such as the reduction in tax relief for landlords from 2017, are likely to exert an ongoing drag,’ he added. But he also pointed out that healthy labour market conditions and low borrowing costs are expected to underpin a steady increase in housing market activity once stamp duty related volatility has passed, providing the economic recovery remains on track. ‘However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will tilt the demand/supply balance in favour of sellers and exert upward pressure on price growth once again in the quarters ahead,’ he said. He added that according to the Royal Institution of Chartered Surveyors (RICS), the number of properties on estate agents’ books was already close to all-time lows on data extending back to the late 1970s. According to Matt Andrews, managing director of Bluestone Mortgages, consumer confidence is still rising, so with more people looking to secure lending it is important to see some innovation come into the sector to help more people get onto the housing ladder. ‘In order to help those who currently struggle to gain access to lending, such as people who have experienced a genuine blip on their credit scores, or who only have limited trading histories, we need to offer a more… Continue reading
Rental supply in the UK continues to fall, latest analysis report shows
The supply of residential rental properties in the UK has continued to fall but this comes at a time when rental costs are expected to rise. Overall the number of rental properties managed per lettings agents branch increased by 8% in April to the highest level this year but is down from April 2015, according to the data from the Association of Residential Lettings Agents (ARLA). The jump from March this year follows a rush from buy to let landlords pushing to complete sales ahead of the April stamp duty increase deadline, the ARLA report says. But supply still stands at 5% lower than in April last year and continues to fall year on year. In April 2015, the average number of properties managed per branch was 193, this year it stands at 183. Demand is also falling year on year: In April, the number of prospective tenants per branch was 34, down from 33 the previous month and down from 36 April of last year. Meanwhile, rent costs expected to rise following buy to let stamp duty rise. Some 66% of ARLA agents predicted that the stamp duty reforms will push rent costs up for tenants down the line. ARLA agents also reported an increase in the number of landlords selling their buy to let properties. An average of four, up from three in March, are pulling out of the market, showing an increase for the first time in a year. ‘It’s likely that this increase in supply is only temporary. At the end of April we saw a flurry of landlords seizing the last few moments before the stamp duty rise to complete sales, triggering an increase in the supply of empty rental homes to be filled this month,’ said David Cox, ARLA managing director. ‘However, we expect that fewer investors will be taking on buy to let properties over the next six months, following the price hikes, meaning that once these properties are filled we’ll see supply nose dive once again,’ he added. Continue reading
Global office leasing environment set to be competitive in 2016
The leasing environment in key global office markets is highly competitive with rents on prime spaces up by 3.6% year on year in the first quarter of 2016. This is despite heightened financial market volatility and global economic across the 95 major markets covered by the JLL Global Office Index which also shows that quarter on quarter rents increased by 0.6% compared to 1.3% in the fourth quarter of 2015. With the world’s major real estate markets appearing to be back on track following a cautious start to the year, business sentiment is improving and corporate activity is expected to ramp up over the course of 2016, according to the report. It suggests that leasing volumes are projected to broadly match those of 2015 and adds that there is some upside potential of up to 5% while strengthening global occupier demand through 2016 and tight supply will drive continued rental increases. Overall JLL forecasts prime rental growth of around 3% to 4% for the whole of 2016. A breakdown of the figures show that the Americas Index saw quarterly rental growth slow to 0.3% in the first quarter, down from 0.8% in the previous quarter. The report says that declines in Latin America and Canada weighed on relatively stronger gains in the United States. In Asia Pacific, quarterly rental growth decelerated to 0.6% from 1.1% in the fourth quarter of 2015 as overall growth was encumbered by lacklustre economic conditions in several tier one markets. Europe saw rental growth moderate to 0.6% quarter on quarter from 1.0% the final quarter of 2015 although general sentiment continued to be positive and no markets registered quarterly rental falls. The Middle East and North Africa Index rose by 2.7% during the first three months of 2016 but this was compared with the 7.4% in the previous quarter and rental growth was confined to Dubai while all other markets were stable over the quarter. While 2016 is expected to represent the peak of the global office development cycle, completion levels are still well below the previous peaks seen in 2001 and 2008, and the global vacancy rate is projected to remain generally stable over the rest of the year, the report explained. Office leasing volumes in Asia Pacific were up 7% year on year in the first quarter of 2016 and the region is expected to outperform with growth of 10% to 15% for the full year, supported by robust outsourcing markets and the sustained strength of domestic occupiers in China. Sydney is forecast to be the region’s top rental performer in 2016, while Singapore is likely to see further declines and economic uncertainty and supply pressures are anticipated to result in more moderate overall regional rental increases in 2016. In Europe, occupier leasing activity is anticipated to continue to hold up in 2016. The report says that most markets have joined the rental growth cycle, and a longer period of steadier rental growth… Continue reading
