Tag Archives: outlook
Property prices still falling in London, but five year outlook suggests rise of 30%
Residential property prices are continuing to fall in London while Scotland and Northern Ireland outperform the rest of the UK, according to the latest monthly survey from the Royal Institution of Chartered Surveyors (RICS). Some 28% of surveyors in London reported falling prices in February, the sixth monthly decline in a row. But RICS members are positive about the outlook for prices and believe that they will rise by 30% in the next five years. Values increased across the rest of the country due to the demand supply imbalance, the report shows. There was also price growth across the South West and the South East. The upward shift in prices is in part being driven by a decline in the number of houses coming onto the market in most parts of the UK and 8% more surveyors saw declines in new supply in February and new instructions have now fallen in six out of the last seven months. Price expectations over the next three months increased from a net balance of 3% to 10% and despite anecdotal evidence suggesting that political uncertainty may be leading to the election effect of vendors sitting on the fence, RICS member forecast for house price growth over the next 12 months stand at 2.4%, up from 1.8% in January. Notable exceptions to the trend however were London, the North of England and the East Midlands, which may indicate that political uncertainty may be weighing more heavily on specific markets, the report suggests. It points out that as supply dips, the national picture of demand appears to be stabilising after seven consecutive months in which the headline reading for new buyer enquiries was negative and a slightly more upbeat trend is also emerging in more parts of the country than previously was the case. In the lettings market, demand continues to rise, while instructions to let remained unchanged following 10 months of steady declines. This is being reflected in the medium term view for rents with respondents, on average, envisaging an increase of 2.6% over the coming year. ‘It is encouraging that that the negative trend in buyer enquiries appears to be dissipating, perhaps in part because of growing confidence that the cost of borrowing will stay lower for longer, but more worrying that instructions to sell property continue to drop,’ said Simon Rubinsohn, RICS chief economist. ‘This very modest reversal in the demand picture is already being felt in the key measures of price expectations highlighting the extent of the challenge policy makers will face in addressing the housing crisis in the aftermath of the coming general election,’ he explained. ‘Even in London, where the key RICS indicators remain in negative territory, there is a strong view in the survey that property will become even more unaffordable over the medium term. Respondents suggests, on average, that house prices will rise by a further 30% in the capital over the next five years,’ he added. Continue reading
Positive outlook for overseas buyers in the Caribbean and Central American
Property sectors in the Caribbean and Central America are set to grow in 2015 with the quality of life, good value for money and stability attracting more people to these regions, it is claimed. According to an analysis by 7th Heaven Properties the Caribbean region has reinforced its appeal to property buyers and investors, particularly in the face of social, economic and political volatility in other regions. ‘Many investment locations such as the Turks and Caicos, the Bahamas and the Cayman Islands experienced strong growth last year and we expect 2015 to be the year that the Caribbean real estate market as a whole turns a corner,’ said Walter Zephirin, managing director of London based 7th Heaven Properties. ‘A growth in enquiries from prospective buyers indicates a renewed confidence in the region and sales levels on many islands are returning to pre-crisis levels,’ he explained. He pointed out that locations across the Caribbean and Central America are benefiting from an upturn in the US, Canada and the UK, resulting in an increase in visitor arrivals, tourist spend and property sales. ‘A growing pipeline of new projects, significant infrastructure investments and a thawing in relations between the USA and Cuba are also expected to provide an additional boost to the region,’ he added. The firm believes that a positive economic outlook for the Caribbean and Central America region, with GDP forecast to grow 5.8% in Panama and 4.8% in the Dominican Republic in 2015, will attract property investors. There has been a series of announcements relating to new luxury residential developments in multiple locations, including Antigua, Costa Rica, Honduras and Panama and of government programmes to incentivise property buyers, including Citizenship by Investment in Antigua and Barbuda, Grenada and St Kitts and Nevis as well as retirement programmes in Belize and Panama. On top of this there has been an increase in direct flights to destinations including Costa Rica, the Bahamas, the Dominican Republic and St Lucia improving access for tourists and property buyers as well as recent and on-going investments in private jet terminals and airport upgrades. Royal Westmoreland, a gated community and golf estate on the west coast of Barbados has just launched a fractional ownership option in response to feedback from regular rental guests who said they simply don’t have the holiday time to commit to full ownership. Kim Goddard, head of sales at Royal Westmoreland, said that the fractional ownership program allows for purchasers to own just the time they intend to stay at the resort. The property is held freehold/deeded in a third party trust in the Isle of Man, governed under UK commonwealth property law, and ownership shares in the villas are fully transferable, and sellable. ‘We often find that potential purchasers might have the means to buy full ownership but are constrained by the amount of holiday time they have to utilise their home at this point in time. So for them this is a savvy way of… Continue reading
Rent rises in Scotland tumbled during 2014, latest index shows
The pace of annual rent growth in Scotland dropped by two thirds in 2014 with average rents now just 1.2% or £6 higher than a year ago, the latest index figures reveal. This follows a monthly drop in average residential rents, down 0.4% in December to £536 per month, according to the Scotland Buy to Let Index from Your Move, one of Scotland’s largest lettings agent networks. It means that growth has slowed from a 3.9% annual jump in rent prices seen in 2013 but Edinburgh and the Lothians has bucked the trend with annual rent growth over the past year from 2.5% in December 2013 to 4.5% in December 2014. ‘Annual rent growth braked sharply over 2014, reducing the speed of rent rises to a sustainable and affordable pace. This is providing some welcome relief to the thousands of renters itching to jump on the housing ladder, who are already faced with enough hurdles to saving a deposit,’ said Christine Campbell, regional managing director of Your Move. ‘This wider downturn in growth during 2014 marks a return to the natural market rhythm. Scottish rents were holding fast on an even keel throughout 2011 and 2012, until the abolition of tenancy fees in November 2012 sparked a new tide of unnaturally steep rent hikes,’ she explained. ‘This should act as cautionary tale for policymakers considering further constricting changes to lettings legislation. The rental market is thriving by its own hand, and too much undue intervention may poison the current climate of affordability,’ she pointed out. ‘Scaring landlords out of the rental market would exacerbate the current housing shortage, and wound thousands of tenants as competition hots up. Buy to let investment is a vital remedy for the current housing shortage, and for the health of tenant finances,’ she added. A breakdown of the figures shows that overall, rents are higher than a year ago in three out of five regions of Scotland. After a strong acceleration in the pace of growth during 2014, average rents in Edinburgh and the Lothians have seen the fastest year on year increased at 4.5% in the 12 months to December. A 2.2% annual rise in Glasgow and Clyde takes the average monthly rent to £559, however this still represents a significant deceleration in the pace of annual rent growth, declining from 7.3% a year previously. While rents climbed consistently across all regions of Scotland during 2013, the slowdown in rent growth witnessed during 2014 has been more severe in some cases with two regions experiencing annual falls in rent prices. Average monthly rents in the Highlands and Islands are now 2% lower than December 2013. The South was the only other area of Scotland to experience an annual fall, with average rents down 1.8% over the past 12 months. The average monthly rent in the South of Scotland now stands at £484, down from £493 a… Continue reading
