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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
Prices rise in Dublin but fall elsewhere in Ireland
Residential property prices in Ireland increased overall by 7.1% in the 12 months to April 2016 and were up by 0.3% month on month, the latest official figures show. This compares with no change in March and an increase of 0.6% recorded in April of last year, according to the data from the Central Statistics Office (CSO), and the market is still open to some volatility with prices rising in Dublin but falling elsewhere. In Dublin residential property prices increased by 1.6% in April and were 4.6% higher than a year ago. Dublin house prices increased by 1.9% in the month and were 5% higher compared to a year earlier. The data also shows that Dublin apartment prices were 1.1% higher when compared with the same month of 2015. However, a CSO spokesman said it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series. The price of residential properties in the rest of Ireland decreased by 0.6% in April compared with an increase of 0.3% in April of last year. Prices were 9.5% higher than in April 2015. It means that house prices in Dublin are 33.1% lower than at their highest level in early 2007 while apartments in Dublin are 41.5% lower than they were in February 2007 while overall prices in Dublin are 35.2% lower than at their highest level in February 2007. The price of residential properties in the rest of Ireland is 35.8% lower than their highest level in September 2007. Overall, the national index is 33.3% lower than its highest level in 2007. John McCartney, director of research at Savills, pointed out that price growth in Dublin has accelerated steadily over the first four months of the year, as predicted by the firm. ‘Price growth slowed in Dublin last year as tighter mortgage lending forced people into renting. However, this slowdown was always going to be temporary. The shift to renting has forced up rents, attracting investors who are now scrapping to buy properties and driving up prices. As this continues the Dublin market may become increasingly like London with expensive properties, many of which are owned by investors,’ he explained. He said that with tighter mortgage lending introduced in February 2015, many people were priced out of the Dublin market and bought properties in Wicklow, Meath and Kildare. This drove strong price increases in those counties last year, but he added that this has diminished their attractiveness, and increasingly, families are weighing up the cost savings against the longer commute and choosing to stay renting until they can assemble the deposit to buy in Dublin. Looking ahead, Savills says Dublin house price inflation will heat-up further in the coming months. ‘The only thing preventing stronger inflation in today’s figures was the strong growth recorded 12 months ago. However, prices slowed sharply from last May, meaning that next… Continue reading
