Tag Archives: real estate
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
Housing market demand rises in UK, but falls in London
Demand for homes in the UK has increased by 3% since the first quarter of the year but in London it is a different picture with demand falling by 2%, the latest research shows. Overall, national demand now stands at 40% but it 39% in London but excluding London the demand has grown by 8% since the first three months of the year, according to the hot spot index from eMoov. Despite demand cooling in London the borough of Bexley remains the hottest spot in the UK for property demand at 71%, but this has fallen by 7% since the start of the year. Bristol remains the hottest spot outside of London with demand at 69%, followed by Bedford at 67%, Aylesbury and Medway both at 64%, and Ipswich, Sutton and Watford all at 61%. Both Cambridge and Milton Keynes are no longer in the top 10, replace by Northampton and Coventry at 64% and 58% respectively. While in Scotland Edinburgh is top with 54% and Glasgow at 48%. In Wales Cardiff is at 48% and Swansea 27%. In London some locations are seeing growth with Kingston Upon Thames seeing demand rise to 59% and Southwark 47%, the first and second largest increases across the UK respectively. There has also been a resurgence for property demand across the North East. Stockton-on-Tees at 47%, North Tyneside at 46%, Gateshead at 42%, Durham at 37% and Newcastle at 32% have recorded some of the biggest increases in property demand since the first quarter of 2016. The coldest spot for demand is the London borough of Westminster at 12% along with Kensington and Chelsea, with Hammersmith and Fulham at 17% and Camden at 20%. Aberdeen is also in the bottom group at 13%. ‘The changes to stamp duty tax brackets for those looking to secure a second home or buy-to-let property seem to have hit the London market harder than the rest of the UK. Despite London tending to drive the UK market as a whole, it would seem for once, it has taken a back seat whilst the rest of the UK has enjoyed upward growth on the first quarter of this year,’ said Russell Quirk, chief executive of eMoov. ‘That said national demand is still lower than the levels seen at the back end of last year and the big decider on which way it goes now will be Britain's choice to leave the European Union. There has been a lot of talk about the consequence of this vote on the UK property market with many forecasting a detrimental impact on house prices. We don't believe this to be the case and I'm certain that our third quarter index will show a further increase in property demand across the nation,’ he added. Continue reading
