Tag Archives: london
Prime central London lettings market subdued in second quarter of 2016
Activity in the prime central London (PCL) lettings market has been subdued during the second quarter of 2016, according to the latest analysis report. The sector saw a reduction in demand and as a result a higher number of properties on the market, says the report from real estate from JLL. As a result prospective tenants have ample choice and this has led to falls in rental values in some price ranges, particularly where properties are not presented to the highest standard. The excess of supply has led to pressure on rents across Prime Central London. However, immaculate properties presented in first class condition are not dropping in value and while the lower end of the market had previously been relatively immune, rental values fell in the second quarter. On average rental values declined by 1.9% during the second quarter of the year and over the 12 months values fell by 4.3% with declines of 8% to 10% per annum across higher rent levels. Rental market activity has remained stable with the number of transactions in the 12 months to the first quarter of 2016 down by only 1% compared with the same period in 2015. But activity picked up slightly quarter on quarter in the second quarter of 2016 with the volume of transactions increasing by 12% during this period to a similar level with the second quarter of 2015, with apartment lettings down by 1% but house rentals up by 8%. The main feature of the current market is an oversupply of stock, according to Neil Chegwidden, residential research director at JLL. ‘With weakened tenant demand, the increased supply of properties on the market is not being eroded. Available supply has also been boosted by owners electing to rent out their properties as opposed to selling them, given the diminished demand in the sales market,’ he said. ‘Sources of new demand have been limited in 2016 and this has left existing tenants in a strong bargaining position. Although most are choosing to remain in their current accommodation due to the upheaval and cost of a move, some are moving elsewhere to take advantage of these conditions,’ he added. According to Lucy Morton, director, residential agency at JLL based in Knightsbridge, the outlook for the third quarter of the year is much more optimistic. ‘Whilst the first six months of 2016 were challenging for the prime central London lettings market, the third quarter is more active,’ she said. ‘Along with an increase in transactions we expect the current oversupply of available properties to diminish as demand increases. We are seeing and letting to an influx of high net worth students and families eager to get settled before the start of the next school year. There is a marked increase in enquiries from relocation agents acting for the City corporations relocating expats into London,’ she added. Continue reading
UK house prices set to slow in 2016 and fall slightly in 2017 then recover in 2018
House price growth in the UK is forecast to slow to 2.5% by the end of 2016 due to economic risks and uncertainty as Brexit unsettles the economy, according to new research. With growth slowing in 2016 next year prices could fall by 1% but the market will recover in 2018 and see growth of 2%, says the analysis from Countrywide. It predicts that while growth will slow across all regions, London is likely to see price growth slow to 3.5% in 2016 before a fall of 1.25% in 2017 and a recovery to 2% in 2018. The prime central London market is expected to be the hardest hit with prices forecast to fall by 6% in 2016, rising to 0% in 2017 and 4% in 2018 while the South and East of England is also expected to slow in 2016 followed by small price falls in 2017 before returning to positive price growth in 2018. Prices in the South East are expected to ease to 3.5% in 2016 from 9.6% in 2015 and fall by 1% in 2017 and a similar outlook is forecast for house prices in the East and South West as prices adjust to weaker economic conditions and previous strong growth. Weaker economic conditions are also expected to hit prices in the North, the Midlands and Wales. The North East is expected to see price growth fall to 0.5% in 2016 and a decline of 0.25% in 2017. Price growth in the North West, Yorkshire and Humberside, Wales and the Midlands is also expected to slow in 2016. Next year is likely to see small falls too as uncertainty about life outside the European Union impacts investment and labour markets despite the support of a weaker currency. The report points out that the vote to leave the EU has unsettled the UK economy as uncertainty surrounding the arrangements for decoupling from the EU and the effect this will have on trade and future economic growth. The firm expects a weaker economy and for this to affect house prices and transactions through consumer confidence, household incomes and the labour market. This is not the only factor affecting the path of house prices. It also points out that higher stamp duty continues to take its toll on the top end markets and after several years of double digit price growth, expectations of future capital gain have weakened in many areas leading to reduced demand. However the continuing lack of supply of property and very low borrowing rates will remain a supportive factor for house prices. The predicted price falls in 2017 will mean prices returning to levels similar to the first quarter of 2016. And the report explains that there are higher than usual risks to these forecasts given the extraordinary nature of the challenges ahead. These are mainly to the downside, although the UK housing market always has the capacity to surprise to the upside and… Continue reading
Research suggests UK tenants worried about deposit protection
The majority of private sector tenants in the UK are worried that the deposits they pay for their rented home are not protected. Under the law a deposit, the money held as a fund for any damage caused during the tenancy, should be put into a deposit scheme and not held by a landlord or a lettings agency. But some 70% of tenants are concerned that their deposit has not been placed in a protection scheme and believe their landlord or letting agent has kept the deposit, according to new research. The study, conducted by online letting agent PropertyLetByUs, also shows that just 50% of tenants have ever received confirmation that their deposit is in a protection scheme and three quarters of tenants believe their landlord, or agent, will try and keep the deposit at the end of the tenancy. It is estimated that £3.2 billion deposits are being held in the deposit schemes, or by letting agents and landlords. The government intends to reform rental deposits and is looking at what it can do to make sure that people who rent have ‘proper consumer protection, including protection from landlords who withhold deposits unreasonably’. Tenant Deposit Protection was introduced in April 2007, as part of the Housing Act 2004 for all assured shorthold tenancies in England and Wales where a deposit was taken. It was identified as a way to raise standards in the lettings industry and ensure tenants are treated fairly at the end of the tenancy. ‘Tenants are right to be concerned. While deposit protection schemes protect tenants, there is little or no policing to ensure landlords and agents are compliant,’ said Jane Morris, managing director of PropertyLetByUs. ‘Our research shows that tenants simply don’t trust landlords and agents with their deposits, which is disappointing in light of the fact that the schemes have been around for many years. Agents and landlords have a legal obligation to put deposits in one of the three approved schemes within 30 days of receiving it,’ she explained. ‘There definitely needs to be reform and hopefully the Government will introduce new measures that will ensure that tenant deposits are fully protected,’ she added. Continue reading
