Tag Archives: london
Demand leaves key Scottish city centres short of office space
A lack of suitable office space in Scotland’s key cities, combined with rising rents, is leading to companies looking to take offices in locations outside the city centre, new research shows. According to the latest Scottish Office Market report from real estate firm Savills, take-up of office space outside the central business districts of Aberdeen, Edinburgh and Glasgow was 4% higher in the first quarter of 2016 than the previous quarter. The firm believes this trend is set to increase as occupiers continue to be attracted by the low rents on offer in out of town locations, where in some cases there can be a 50% discount on the £30 per square foot prime rents being achieved in the city centre. ‘The out of town markets are on the cusp of experiencing a resurgence in popularity, particularly in Edinburgh and Glasgow. This is primarily due to occupiers being able to save money on rents compared to inner city locations,’ said Mat Oakley, head of commercial research at Savills. As a result Savills predicts Scotland’s strongest rental growth could be seen in the out of town markets of both Edinburgh and Glasgow, where rents in the early £20's could be achieved in the next three years. Savills research also shows that demand for office space across Scotland has increased significantly this year. Glasgow has seen approximately 300,000 square foot of space let in the first quarter of 2016 alone, more than half of the total amount of space taken in the city during the whole of 2015. Edinburgh, meanwhile, saw its second strongest quarter of leasing activity since 2013 at 324,000 square feet. According to the report, this spike in demand, combined with further employment growth and falling availability of Grade A space, has led to a squeeze in supply. Total supply in Glasgow has now fallen below two million square feet for the first time since 2011, with only approximately 500,000 square feet of Grade A space available. In Edinburgh availability has steadily fallen since its peak in 2008. Savills estimates that there is now only 2.1 million square feet of office space available across the city’s combined central business district and out of town markets, of which only 365,000 square feet is Grade A. The report also points out that Scottish office investment volumes have stayed healthy, with just over £811 million transacted in 2015, 33% above the long run average, and just over £300 million transacted in Aberdeen, Edinburgh and Glasgow in the year to date. Prime yields have fallen in Edinburgh and Glasgow, leaving both markets at 5%. However, Aberdeen's recent slowdown in leasing activity has seen yields there rise from 6% to 7% over the last two years. Of all Scottish office investments in 2015 some 44% were by non-domestic investors according to Savills research. Figures show this has continued into 2016 with 89% of all purchases made by non-domestic investors. Savills attributes this to a combination of UK… Continue reading
London property prices have risen in last 20 years by over 400%
Property prices per square metre have risen by 432% in Greater London against a national average increase of 251% over the past two decades, according to new research. Although London dominates the country's list of most expensive property locations on a per square metre basis, several areas outside southern England fetch a higher property price per square metre than the national average of £2,216. These locations are given as Solihull and Leamington Spa in the West Midlands, Altrincham in the North West, Scotland’s capital, Edinburgh and Harrogate in Yorkshire, according to the report from UK lender the Halifax. It points out that there has been a substantial gap widening in property prices per square metre between southern England and the rest of Britain over the past 20 years. This has continued since 2011 with London gains nearly double that of the rest of the country. The borough of Kensington and Chelsea remains Britain's most expensive neighbourhood, with an average price of £11,321 per square meter. Despite dropping 1% lower than last year, it is more than five times the national average of £2,216. Kensington and Chelsea, along with Westminster at £10,552 are the only areas in Britain with an average price above £10,000 per square meter followed by Camden at £9,012. Some 17 areas, all in Greater London, have an average price in excess of £5,000 per square meter with the borough of Merton in South West London the latest addition to this group since last year. Half of the 10 most expensive towns outside southern England are in the West Midlands. Solihull, with an average price of £2,661 per square meter and Leamington Spa at £2,645 are the two most expensive towns. The other West Midlands towns that made the top 10 include Sutton Coldfield at £2,113, Bromsgrove at £1,970 and Stourbridge at £1,943. Meanwhile, five places outside southern England have average prices per square meter above the national average of £2,216. In addition to Solihull and Leamington Spa, these include Altrincham in the North West at £2,634, Edinburgh at £2,355 and Harrogate at £2,342. The research found that nowhere in Britain had an average price below £1,000 per square meter but Airdrie in Scotland had the lowest average price at £1,019, less than a tenth of the average price per square metre in Kensington and Chelsea. Six of the 10 towns with the lowest prices per square metre are outside England. There are four in Scotland with Airdrie at £1,019, Lanark at £1,040, Coatbridge at £1,071 and Kilmarnock at £1,120. Two are in Wales with Llanelli at £1,028 and Neath at £1,065. The four English towns with the lowest house prices on a per square metre basis are all in northern England with Scunthorpe at 1,036, Accrington at £1,055, Hartlepool at £1,062 and Wallasey at £1,067. ‘House price per square metre can be a useful comparison measure as it helps to adjust for differences in the size and type of properties between… Continue reading
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
