Tag Archives: london
First time buyer property valuation activity increased after Brexit vote
Housing market activity in the UK has shifted in favour of first time buyers and remortgagors, in the first full month after the vote to leave the European Union, according to the latest research. Overall, July has seen the number of all property valuations fall 2% compared to the same month last year, says the latest monthly analysis from Connells Survey and Valuation, which reflects a slight cooling compared to June. ‘Judging the Brexit effect might take years but in the meantime the first full month after the vote already looks encouraging as change has mainly been confined to the mixture of activity, rather than the overall volume of valuations,’ said John Bagshaw, corporate services director of Connells Survey & Valuation,. The data shows that activity in the first time buyer and remortgaging sectors have driven July’s valuation market. There were 12% more first time buyer valuations in July 2016 than in July 2015. Meanwhile remortgaging activity also saw the same 12% annual rate of growth. ‘July was particularly good for those making their first step on the property ladder. Despite some widespread fears about Brexit, any negative impact on wages, employment or inflation has not materialised and first time are continuing to make the most of government schemes and are now boosted by even lower mortgage rates this summer. This is the same development that is proving a boost for remortgagors, also benefitting from a new wave of even better mortgage deals,’ Bagshaw explained. Those already on the property ladder looking to move home appear to have been slightly more cautious in July than those making their first step. Compared to the same month in 2015, home mover valuations have fallen in number by 8%. Similarly, buy to let activity has been relatively cooler in July than at the same point a year ago. The total number of valuations for buy to let purchases has now fallen by 41% since July 2015. ‘Buy to let activity is steady post-Brexit vote, even if at a level lower than last year. In fact this correction is not new, and mainly not as a result of referendum uncertainty. Since April, held back by the Government’s 3% Stamp Duty surcharge, some landlords are pausing for thought,’ Bagshaw explained. ‘Looking ahead, tax changes are increasingly factored in to landlords’ investment plans which forms a strong core of buy to let activity focused on the long term and a solid basis of future growth in demand for valuations from landlords,’ he added. Continue reading
Brexit unlikely to affect Dubai real estate markets
British investors are one of the largest group of investors in Dubai’s property markets but the decision by the UK to leave the European Union is unlikely to have much of an impact, according to experts. As the most open real estate market in the Middle East, Dubai has always found itself more susceptible to external factors. But, despite the interim uncertainty brought about as a result of Brexit the emirate unlikely to feel any long term effects, says a report from international real estate firm JLL. British citizens are the third largest investors into Dubai’s real estate market, potentially leaving them more susceptible to any negative impacts from Brexit, however, JLL’s Craig Plumb, head of research for The Middle East and North Africa, believes that any negative ramifications will only be temporary. ‘Even though it is too early to predict the long-term implications, overall there is a slight probability of British investors being negatively impacted by the devaluation of the British Pound following Britain’s decision to exit the European Union,’ he said. ‘However, we believe the effect of the decision will only have temporary repercussions as a substantial number of British investors who work and reside in the UAE avoid sourcing their income in sterling,’ he explained. ‘If we dissect the market further, particularly for residential, we notice that expatriates in Dubai are most likely to continue renting their homes instead of switching to ownership, resulting in sales being more negatively affected than the rental sector. If external factors stabilize over the rest of the year, we expect the Dubai residential market to easily recover in early 2017,’ he pointed out. During the second quarter of the year, office vacancy rates throughout Dubai showed a general downward trend. However, Plumb attributes this to a lack of supply, confirming that Dubai remains the largest and most active office market in MENA with many businesses still preferring to use the Emirate as their regional hub. Meanwhile, the retail and hotel sectors have fared less well in the immediate aftermath of the decision given the devaluation of the British pound. ‘Dubai and the MENA region as a whole has become an increasingly expensive destination for European visitors,’ Plumb added. Continue reading
UK interest rates cut to lowest ever at 0.25% in boost for home borrowers
The decision by the Bank of England to cut interest rates in the UK to their lowest ever level at 0.25% is not expected to have a major impact on the general property market but it is a signal that borrowing on a home is not likely to rise in the near future. It is the first time that the interest rate has been cut for seven years and some experts had even been predicting that it might rise but the potential economic fallout due to Brexit has ensured that borrowing will remain historically low. However, some parts of the real estate market could see an effect. According to Andy Pyle, UK head of real estate at KPMG, it will depend on location and price. ‘Whilst a number of overseas investors are being cautious, others are attracted by the depreciation in sterling enabling them to buy more cheaply, and the reduction in interest rates has already had an impact on the value of the pound,’ he said. Adam Challis, Head of residential research at JLL, pointed out that the reduction will signal to mortgagors that cheap mortgage rates will be around for even longer. ‘This will benefit many would be home movers and we are encouraged by the Term Funding Scheme that will ensure lenders pass on most of the rate reduction to consumers,’ he said. ‘More important for the housing market is a strong, stable economy and the rate cut will help. Post-referendum we need greater certainty that will encourage house builders, protect jobs, and ultimately provide a range of housing that people can afford,’ he added. While it will be welcomed by many home owners, Mark Hayward, managing director, of the National Association of Estate Agents (NAEA) explained that for future first time buyers saving for a deposit on their first home they face getting less interest on these savings. ‘It represents a body blow for savers and those hoping to get their first foot on the property ladder. Home owners with outstanding mortgages are currently enjoying some of the lowest fixed rate mortgages seen for a long while, with lenders battling it out to offer the cheapest deal. Cutting interest rates further is likely to improve confidence among those prospective house-buyers who may have put their search on hold, following the Brexit vote in June,’ he said. ‘But for those saving to pay a deposit on a future home, the interest rate cut will be frustrating. The last government focused heavily on supporting first time buyers with the introduction of schemes such as Help to Buy. Many of those looking for help now will have to wait for initiatives such as the Lifetime ISA to launch, which will then only help those under 40 to save for a home,’ he pointed out. ‘The outcome of the today’s rate cut is simple in that we will see aspiring homeowners saving harder for longer, which will no doubt have an impact on… Continue reading
