Tag Archives: london
Shortage of supply pushing up house prices in Ireland
A nationwide supply shortage has fuelled a rise of over 2% in the price of the average house in the last three months in Ireland. The majority of counties in the country recorded price increases in the second quarter of 2016 with a lack of supply exacerbated by would be commuters moving further from Dublin as they look for more affordable homes. The Real Estate Alliance Average House Price Survey shows that the average three bed semi-detached home nationally now costs €195,361, an increase of over €4,000 or 2.18% since the end of March and up 4.49% compared to the same time last year. ‘We are seeing firms who are in business for 50 years who have never experienced such a low level of supply, and this is responsible for causing sharp increases in prices in some areas over the past three months,’ said REA chairman Michael O’Connor. While prices in Dublin city and county grew by 1.4% to €363,333 since March, competition for scarce housing below the Central Bank’s €220,000 deposit limit in both the inner and outer commuter areas is fuelling an inflationary market. Prices in the commuter counties of Cork and Galway have risen by €5,000 to €214,588, a rise of 2.4%, while those in the rest of the country have increased by over €3,000 to €128,768 or 2.75%. Three bed semi prices in Kilkenny city rose by €20,000 or 12.5% in the past three months, a figure that is entirely driven by record low supply, according to Michael Boyd of REA Boyds. ‘Our analysis of the Price Register tells us that there are 15 less units per month selling in the county than this time last year and that this is the lowest level since these records began,’ he said. ‘We are finding that demand is strong, mainly from loan approved returned emigrants or Eastern European buyers. We desperately need new building to start, especially as prices for quality stock are now well into viable levels for builders to commence,’ he added. The survey also shows that as the flight to another of the outer commuter counties continues, prices in Laois have risen by €10,000 or 8% in the past three months while prices in Kildare have remained static at €242,500 in the four main towns, due to a low supply of suitable housing stock, combined with a relatively higher price to neighbouring counties. In contrast, Meath has now broken the €200,000 barrier at €201,250 following a 3.21% growth in three months, as Dublin based commuters move out to houses they can afford under the Central Bank’s deposit guidelines. In Wicklow, prices in Blessington have risen from €240,000 to €265,000 in a three month period, a rise of 10.42%, with agent REA Murphys advising that there is a bubble in the three bed semi market. Prices in the county as a whole have gone up by 4.44% to €235,000 over the past three months. Louth continues to act as a microcosm of… Continue reading
Signs that currency volatility could boost UK market, especially in London
Currency volatility sparked by the decision in the UK to leave the European Union could create a scenario where overseas investors make major profits by continuing to invest and store their wealth in prime property in London, it is suggested. Market conditions are ripe for opportunistic foreign investors, which could create a welcome increase in the level of sales enquiries received by London developers and give a lift to the British property sector, according to a report from Arcadis. Since the result of the EU referendum was announced, sterling has fallen relative to the euro and the US dollar with further falls forecast before the end of the year. The report suggests that buyers from Europe, Asia, and the Middle East are now well placed to secure bargains in the London prime housing market by exploiting both a softening of property values and a favourable currency situation. Furthermore, with some Banks forecasting a recovery of sterling during 2017 and agents predicting some recovery of prime London house prices during 2018, those investing £2 million now may see their investments rise by as much as £250,000 in value, according to Mark Cleverly, head of commercial development at Arcadis. Although the appetite for opportunistic investment will depend on forecasts of further depreciation of sterling in the short term, the London prime market could soon see another influx of foreign investment. This would provide a timely boost for the UK construction sector in the long term, particularly if increased competitiveness is also matched by government funding for infrastructure, helping to underpin confidence in the new build sector. ‘The market volatility we’ve seen as a result of the Brexit vote is, perhaps ironically, going to re-open the luxury property market to overseas investors, as several of our clients have already reported a bounce in enquiries following the referendum. This influx of investment coming into the UK could boost British construction again in the future as well as giving shot in the arm to the Treasury through increasing stamp duty receipts,’ Cleverly explained. ‘For a market that, in some areas, has been stuttering for some time due to ongoing stamp duty hikes taking the steam out of buyer demand, the buying opportunity presented by recent events could be a big plus. More buyers means a more buoyant market which can only be good news for the industry,’ he added. Already there has been a surge in interest from overseas buyers, according to Benoit Properties International due to the plunge in the value of sterling. The firm says buyers could make a saving of around 12%. Matthew Lavin of Benoit Properties International said there has been a surge in interest in buy to let property from investors in the Middle East, Hong Kong and other countries with currencies pegged to the dollar. Within days of the referendum result the firm sold… Continue reading
Buy to let lending via limited companies up in the UK in first half of 2016
Lending to buy to let investors borrowing via limited companies in the UK grew in the first half of the year according to the latest data to be published and the number of lenders and products available to limited company borrowers also increased. According to transactional data the number of buy to let mortgage applications completed by limited companies grew to 30% of all buy to let completions, up from 21% in the second half 2015, and 18% in the first half of 2015. By volume the number grew to 30% of all buy to let loans, up from 25% in the second half of 2015 and 20% in the first half of 2015, according to the buy to let data from Mortgages for Business. It also shows that the number of lenders offering products to limited company borrowers also increased in the first half of the year to 14 from 12 in the second half of 2015. The rise was due to existing buy to let lenders introducing limited company products rather than new lenders entering the buy to let sector. Lenders offering limited company products now account for 42% of the whole buy to let lending sector, up from 30% in the first half of 2016. Product numbers increased to an average of 154, up from 147 in the last six months of 2015, although the actual proportion of them as a percentage of the whole buy to let market fell due to the increase in product numbers available to individual borrowers. Whilst average products numbers for limited companies accounted for 13% of all buy to let products in the first half of 2016 but by the end of June the percentage had risen back to 16% of all buy to let products, the same percentage recorded in the first half of 2015. ‘Both applications and completions for limited company borrowers appear to have stabilised at around one third of all buy to let business,’ said David Whittaker, managing director of Mortgages for Business. ‘However this masks a dramatic change in the investment pattern for new purchases where the proportion investing through limited companies has risen from less than 20% by number or 25% by value in the first half of 2015 to over 50% in 2016, with second quarter applications by limited companies running at over 60% of total applications related to purchases of buy to let properties. This increasing proportion will also drive an increase in the proportion of completions in the next quarter,’ he explained. He pointed out that there has only been a slight uplift in the proportion of remortgaging activity that relates to limited company borrowers, due to historical investment patterns. ‘It would, however, appear that some landlords who already own property personally are sitting on their hands somewhat and holding back from remortgaging, probably waiting to see how the economy pans out post-referendum,’ he said. ‘With the Chancellor announcing his intentions to lower corporation… Continue reading
