Tag Archives: real estate
London residential rental market disparate due to Brexit uncertainty
Rents in London have peaked in many locations with the market currently stagnant and facing uncertainty due to the UK deciding to leave the European Union, the latest analysis suggests. While Benham & Reeves Residential Lettings' Heat Map generally shows relatively consistent trends across the capital, second quarter results show a disparate market. For example rents were up more than 4% in Chelsea but in nearby South Kensington they were down more than 4%. Similar contradictory results were to be found across London with adjacent areas showing wildly different fortunes. The report explains that even in the early part of this year, uncertainty over Brexit was affecting the prime central London rental market. Non-nationals were awaiting the result of the referendum while UK nationals were finding better value in East London and the suburbs. Rents in central London were falling, much to the frustration of landlords who were also suffering from the double blow of stagnating capital growth. Rental value growth was to be found in outer London until recently. However, the most recent figures from Benham & Reeves Lettings demonstrates that rental values have finally peaked there, as well. Most areas outside of prime central London saw rents plateau or boast only nominal growth. The report says it is perhaps noteworthy that there is a lack of definable trends. Hampstead Garden Suburb saw growth of over 4.5% while adjacent North Finchley saw rents fall by over 10%. The report suggests that the contrast may be due in part to the reopening of the Northern Line interchange at Tottenham Court Road. The eastern part of the City also saw double digit growth, thanks in part to the release of some highly anticipated new developments in the area, while the western part of the City saw rents fall by over 4%. ‘There is nothing the property market hates more than uncertainty. While the referendum result may not have been what many London residents wanted, it has provided us with an answer,’ said Marc von Grundherr of Benham & Reeves Lettings. ‘Our quarter two results are a reflection of what was happening in the market in the run up to the vote. If anything, the referendum result could be just what the market needed. The rental market always benefits in financially volatile times as people would rather rent than commit to buying a property,’ he explained. ‘Demand is still strong and since the referendum, we are receiving an average of 17 applicants per property compared to 13.9 at this time last year. Notably, many of the applicants have been from the EU,’ he added. Continue reading
New property listings fall in UK with Brexit affecting the market
Some 68% of UK towns and cities saw new property listings fall in June, with supply down 13% in London alone, according to the latest property supply index which suggests Brexit is to blame for the decline. Lichfield and Winchester registered the biggest drop in supply in June, with new property listings down 37% and 36.5% respectively, the index from online estate agents HouseSimple shows. It also reveals that four of the top 10 biggest fallers in June were in the South of England and although the majority of areas saw supply levels fall in June, there were a few areas that bucked the trend. The biggest risers in June were the Scottish towns of Inverness and Stirling, where new property listings were up 30.5% and 18.5% respectively. Out of the top 10 risers, half the towns were in the South of England. In London new properties listed across the capital fell by 12.8%, following a fall of 2.4% in May. Wandsworth and Waltham Forest saw the biggest drop in supply, both down 34.9%. This follows a big rise in supply in both these boroughs in May, with new property listings up 9.5% in Wandsworth and 31% in Waltham Forest. Only five out of 32 London boroughs saw an increase in supply last month, with new property listings in Barnet up 11.4% in June and Barking and Dagenham up 8.8% leading the way. ‘Fear and uncertainty over the Brexit vote definitely had an impact on buyer and seller confidence in June, with many sellers holding off putting their properties on the market until the result was known,’ said Alex Gosling, chief executive officer of HouseSimple. ‘Now we know, and although the decision has come as a bit of a shock, at least a degree of uncertainty has been taken out of the equation. The property market can now roll up its sleeves and get on with it. Nothing has fundamentally changed overnight and people still need to buy and sell homes whatever the market conditions,’ he explained. ‘We still have a supply shortage, and this may well counter any fallout from Brexit. There were concerns about the London market faltering, but demand is still strong in the capital and the weak pound should attract foreign investors looking to pick up bargains, particularly at the top end of the market,’ he added. ‘For the rest of the year, we may see a small dip in prices as there are choppy seas ahead, but it’s certainly not the end of the world levels predicted by some doom-mongers. Supply should hopefully edge up, as fears around the impact of Brexit dissipate, and sellers feel more confident about market conditions and the wider global economy,’ he concluded. Continue reading
Steady growth for UK commercial property returns and rental values in June
Commercial property returns and rental values saw steady growth in the UK in June but capital value growth slowed, according to the latest index report. Overall, rents across the UK grew by 0.2% in June, matching the trend for the year to date despite uncertainty in the build up to the EU referendum, according to the latest CBRE Monthly Index. But capital values grew by 0.1% over the month, a drop on 0.2% in May although the 0.6% total returns for the month matched returns seen almost every month of the year to date. In the first half of 2016 as a whole, rental value growth hit 1.1%, trailing the 1.7% seen in the same period of 2015. Capital values grew by 0.6% for the first six months of 2016, some way shy of the 4.1% in the first half of 2015. Total returns were also lower, from 6.7% in the first half of 2015, to 3% in the first half of 2016. The reports says that this lower return partly reflects an increase in stamp duty land tax in March. The retail sector experienced rental growth of 0.1% in June, above trend for the year so far, but capital values, which had been flat in April and May, fell by 0.2%. Total returns in the sector were 0.3%, compared with 0.5% the month before. The industrial sector experienced a strong monthly performance, with rents increasing by 0.4%, equal to its best monthly performance in 2016. The office sector saw rents grow by 0.3% in June, an improvement on the 0.2% of both April and May and in line with trend so far this year, while capital value growth slowed slightly from 0.4% to 0.3%. London offices mirrored this overall trend. Rental values rose by 0.3%, faster than the 0.2% seen in May, and capital value growth slowed from 0.6% in May to 0.5% in June, producing total returns in June of 0.8%. The London office market saw some outliers. Rental values in West End and Midtown offices were flat, down from 0.1% growth in May, while capital value growth also cooled to 0.2% from 0.5% in May. Offices in the City of London also experienced muted growth in the month, with rental growth of 0.2% and capital value growth of 0.1%, down from 0.6% and 0.3% respectively in May. ‘Overall, rents and capital values continued to grow in June, with the industrial sector in particular showing strong growth in a month of significant uncertainty. Clearly, capital value growth has slowed, but occupier demand has remained high across the country, pushing up All Property rental growth as fast as any other month this year,’ said Miles Gibson, head of research at CBRE UK. ‘These figures reflect CBRE valuations carried out in the days immediately following the referendum vote, but July’s monthly index will give a much clearer… Continue reading
