Tag Archives: markets
Election result hailed as positive for UK commercial property markets
The UK general election result should be positive for the country’s commercial property markets but the landslide in favour of the SNP in Scotland could result in uncertainty north of the border, according to experts. If the SNP push for another referendum on independence then uncertainty could creep into the markets north of the border, it is suggested. And a referendum on the UK’s position within the European Union could add to that. ‘There is good reason to now suppose the UK economy, that appeared to slow in the run-up to the election, can now resume a strengthening recovery. This will be good news for both the commercial leasing and investment markets,’ said James Roberts, chief economist of real estate firm Knight Frank. He believes there remains a great deal of political uncertainty that will influence but not derail the property market. ‘Firstly, the SNP’s overwhelming victory has put the existence of the Union back on the political agenda. Last year there was a brief slowdown in activity in the Scottish market in the run-up to the referendum, which may be replicated in a future poll. This comes with the caveat that some investors actually saw last year’s referendum as an opportunity to buy,’ he explained. ‘Secondly, a Conservative majority increases the chances of a referendum on European Union membership. If the prospect of Scottish independence caused a market slowdown, the idea of the UK leaving the EU will surely do the same, probably on a greater scale. Either a Tory backbench rebellion against the Bill or a vote sooner rather than later may be the best outcome,’ he pointed out. ‘Thirdly, the UK’s deficit remains large. If the financial markets suspect that not enough is being done to balance the books, sterling could fall in value. This will initially make UK commercial property look attractive to overseas money, but inflationary pressures would increase and bring closer the day that interest rates rise,’ he added. Over the next five years, the firm believes that this climate of political uncertainty will at times cause market confidence to drain away temporarily. ‘Some investors may decide to wait until after an upcoming referendum before buying; some occupiers might shelve expansion plans because a sudden fall or rise in sterling hits profits,’ said Roberts. ‘In short, we should expect the odd air pocket ahead, but overall the election outcome was probably much better for commercial property than one would have expected,’ he concluded. Miles Gibson, head of UK research at CBRE, also pointed out that the overall economic outlook remains favourable for markets. ‘Strong employment, low inflation, low interest rates and high levels of inward investment all bode well for the property sector,’ he said. But he believes that there remains, however, a question mark over EU membership, something ‘which bothers most of our clients immensely as they feel investment would suffer if we were to leave the EU’. The firm believes… Continue reading
UK property market set for further growth due to stable election result
House prices in the UK, especially the prime property market in London, are set to rise on the back of the Conservative win at the general election, according to property experts. London is likely to see sales surge as people who put off buying, particularly overseas buyers, now go ahead and make a decision with the possibility of a mansion tax evaporated. Indeed, according to Edward Heaton, of Heaton and Partners property search agency prime country house prices could rise by as much as 10% within weeks. ‘There will be bun fights in the next few weeks for the best houses which come to the market as confidence in the top-end of the regional market returns,’ he said. ‘For many operating in the prime property market, there is a palpable sense of relief at the election outcome as there were some genuine concerns about the possible impact of mansion tax tied in with the attack on non-doms proposed by Labour,’ he added. The result will bring stability to the markets, according to Michelle van Vuuren, managing director of residential development at Sotheby’s International Realty UK. The firm is already getting calls from would be international buyers. ‘The removal of the uncertainty that has clouded the last year of the coalition will allow developers to plan confidently for the medium term with a consistent economic policy. Having said that, we do hope to see the Tories come good on their annual pledge of 200,000 new homes and freeing up brownfield sites for development,’ she said. ‘Increasing the supply of homes is the only way to truly overcome the hurdles that the housing market places for the majority of buyers. At the top end, for the next five years at least, a cessation of the clamour for a mansion tax will see a number of transactions that have stalled to come back on line as certitude creeps back into the market. It is going to be an exciting time to be in the London market,’ she added. ‘Andrew Ellinas, director of central and north west London agency Sandfords, believes that confidence will return quickly and it is likely that there will be a significant late spring bounce in activity as those who have held back start to act. ‘London has established itself around the world as a safe and thriving place to invest and increased confidence will once again be restored and with that see the return of overseas investors. It has felt like the market was becalmed and now will steam ahead once again, with London prices that have been subdued steadily rising throughout the second half of the year,’ he pointed out. ‘My advice to those who have been thinking about selling, but awaiting political certainty, is to make a move now and beat the rush. The market has been challenged most recently by a lack of stock, but this is likely to change quite swiftly now, creating more competition for vendors. Take… Continue reading
Average prime property prices outside London up 1% in first quarter
Growth figures reveal stability in the prime regional markets in the UK with average prices up by 1% outside of London in the first quarter of 2015, according to data from Savills Research. This means that year on year they have risen by 2.2%, despite the increase in stamp duty on sales over £937,500 that was introduced in the Autumn Statement last year and price growth continued to be strongest in the prime urban markets in the first quarter of the year. The firm’s latest Market in Minutes report also shows that in the 30 to 60 minute commuter band around London, prices of prime property in town and city locations have risen by 5.8% year on year. This is the highest of all of the sub-categories of property within Savills’ prime indices. By contrast, prices in the prime London markets are showing annual price falls of 1.6% marking an anticipated turning point in the market, where the gap between the pricing of prime property in London and the regions begins to narrow. Generally the country markets have remained a little more subdued. In particular, the large houses have had to contend with the biggest increases in stamp duty and the threat of a mansion tax in the run up to a general election. So whereas prime country cottages have seen annual price growth of 4.4%, prices of manor houses have on average fallen by 0.8% over the course of the year. Similar concerns have affected the markets on the high value private estates in the South East, such as St George's Hill and Wentworth. However, across the London suburbs and the inner commuter zone, prices have risen by 2.2% in the past year on average, meaning that they are 6.8% above their pre-crunch levels. In England quarterly price growth also returned to markets beyond the commuter zone with prices rising by just over 1% having softened marginally in the wake of the autumn statement. In particular, markets such as Bath and Cheshire are continuing to benefit from demand from aspiring young families and downsizers. Coastal markets that have generally been much slower to recover due to their dependency on discretionary buyers, also showed encouraging signs of increased activity as prices increased by an average of 4.1% over the past year. The divide between prime housing in urban and rural prime locations is also evident in Scotland, where prices rose marginally in the quarter leaving them up by just 0.4% year on year, compared to the prime markets of Edinburgh which are showing 6% annual growth. All of the regions, from the prime suburban towns in striking distance of London to the prime markets of the Midlands and the North, have seen annual price growth. However, there are significant differences in where prices sit relative to their peak in different sectors of the market. This is likely to shape the market over the medium term, says Savills. ‘In the same way that the value gap… Continue reading
