Tag Archives: real-estate
Brexit could create opportunities for UK farm land market
The decision by the UK to leave the European Union has created uncertainty for farm land values but it could also create opportunities, according to new research. In the short term the effect could be muted, according to the initial analysis from real estate firm Savills. It says that a weak Pound creates export opportunities and if this continues into September there will be a significant increase in farm subsidies to British farmers in 2017. It also points out that a weak Pound creates a favourable buying environment for overseas investors and this, along with the potential of reduced supply due to uncertainty may help to support farmland values. However, according to Ian Bailey, head of rural research at Savills, in the event of a significant reduction in farm subsidies, and therefore incomes, the negative effect is likely to be greater on rents than land values. ‘The full impact of Brexit on all of the UK's property markets will be very dependent on the macroeconomic background and the evolution of the story over the next two to three years. We must stress it is early days and there are many unknowns,’ said Bailey. ‘Uncertainty has to be the key factor and this will principally be around those factors that have direct impact on farm incomes. It is likely that farmland market activity in the remainder of this year will be more subdued as potential sellers wait and see,’ he explained. The report is Savills’s first analysis of how the change might affect rural markets in the UK and this is likely to be updated on a regular basis over the following months as hard data, anecdotal news and forecasts evolve. ‘Uncertainty is the key factor and it is very likely that farmland market activity in the second half of this year will be more subdued as potential sellers wait and see. Our research shows just over 100,000 acres were publicly marketed across Great Britain in the first half of 2016, which was on a par with activity for the same period of 2015,’ Bailey said. ‘Historic trends suggest uncertainty creates a lull in market activity and this appears to be the case across England, where supply in the first half of this year, at 68,000 acres, was 10% lower than the same period last year,’ he pointed out. However, in Scotland and Wales the opposite pattern was recorded. ‘Anecdotal evidence suggests that, in Scotland at least, there has been a degree of referendum fatigue which has not hindered activity. In Wales the market is very small and a few farms can make a difference either way,’ Bailey added. Savills also suggests that the uncertainty will principally be around those factors that have direct impact on farm incomes. These will include the UK’s international trade relationships and the level of farm support that will replace the Common Agricultural Policy (CAP). Currently subsidy represents about 67% of the average UK farm income. However, farming subsidies under the… Continue reading
Supermarkets can add an average of £22,000 onto the price of a home
Living close to a well-known supermarket chain can add an average of £22,000 to the value of a home, new research has found. The report also reveals that premium brands can add even more to nearby house prices, with properties close to a Waitrose store receiving an average boost of £38,666 or 10% than the wider town in which they are located, according to the research from Lloyds Bank. In addition to Waitrose, properties near a Sainsbury’s, Marks and Spencer, Tesco or Iceland also command the highest house price premiums of £27,939, £27,182, £22,072 and £20,034 respectively. The lowest house price premiums are in areas with an Asda, Lidl or Aldi stores with premiums of £5,026, £3,926 and £1,333 respectively. ‘Our findings back-up the so called Waitrose effect. There is definitely a correlation between the price of your home and whether it’s close to a major supermarket or not,’ said Mike Songer, Lloyds Bank mortgage director. ‘Our figures show that the amount added to the value of your home can be even greater if located next to a brand which is perceived as upmarket. Of course, there are many other drivers of house prices beyond having a supermarket on your doorstep, but our research suggests that it is a strong factor,’ he added. A breakdown of the figures shows that homes in the same postal district as Waitrose command the highest price premium compared to other areas in the same town in seven out of ten regions of England and Wales. The largest premium is in the North West where the average house price in an area with a Waitrose is £73,629, some 39% higher than in the surrounding areas. Other regions with a high premium are the West Midlands at £57,539, Yorkshire and the Humber at £36,376 and the South East at £31,681. At a local level, Chiswick in West London commands the largest average house price premium when compared with the surrounding area, at £476,738. The average house price in Chiswick, which offers residents a Waitrose, Sainsbury's and Marks and Spencer, is £961,564, almost double the average for Hounslow at £484,826. Golder’s Green, which has a Sainsbury's and Marks and Spencer, has the next largest premium in cash terms at £423,180, followed by Belsize Park and Hampstead at £313,166. Outside of southern England, the largest average price premium is in the Cheshire town of Wilmslow, where shoppers are catered for by supermarkets including Waitrose, Sainsbury's, Marks and Spencer, Tesco and Lidl. Buyers can, on average, expect to pay a price premium of £277,028 for a home in Wilmslow. In the Ponteland area of Newcastle, the average premium is £206,401 with a Waitrose, Sainsbury's and a Co-op store. The also data shows that this ‘supermarket bounce’ is not necessarily just confined to those areas which have a Waitrose, Sainsbury's or Marks and Spencer's located in them. There are several locations with a discount supermarket store where average house prices trade at a premium…. Continue reading
Rate of city house price growth in UK starting to plateau
The rate of house price growth in key cities in the UK is starting to plateau after a strong first half of the year with London in particular likely to see slower growth ahead, according to the latest index data. Month on month the Hometrack Cities Index recorded growth of 6.9% in June and year on year growth is running at 10.2%, the same level as the previous month. The index report suggests that double digit year on year growth has been sustained by the surge of investor demand ahead of the stamp duty change in April while low mortgage rates and improving economic conditions have continued to attract households into the market against a backdrop of dwindling supply with the net result being continued upward pressure on prices. In June Bristol remained the fastest growing city with year on year price growth of 14.7% taking the average price to £253,400, followed by London with annual growth of 13.7% to £476,800 and then Cambridge up 11.5% to £411,800. The data also shows a strong uplift in price growth in large cities such as Glasgow, Manchester, Liverpool and Leeds where house prices are comparatively affordable and yields above average and attractive to investors. Month on month the highest growth was in Oxford at 9.6%, followed by Cambridge at 9.5%, London at 8.2% and Bristol at 7.8%. At the opposite Aberdeen has seen prices fall by 8.2% year on year but the city recorded a small uplift month on month of 0.3%. The report points out that any impact from the decision by the UK to leave the European Union will not be reflected in the index for two to three months. ‘That said, we have reported signs of slowing growth in some cities, particularly in southern England where affordability levels are close to record highs. The slowdown might have been more apparent by now had the stamp duty change not been introduced,’ it says. A new analysis looking at listings also shows that for selected cities new supply has grown faster in the last three months than the average increase in supply seen over the last 12 months. For all cities in England and Wales excluding London new supply has grown 10% faster than the 12 month average, this rises to over 15% in London. In contrast, the relative change in sales over the last three months has registered a relative fall of 8% in London meaning that 8% fewer homes sold in the last three months compared to the 12 month average. The relative change in Bristol is 0%, while in larger regional cities, where house price growth has been picking up momentum, the relative change is sales is positive at up to 7% in Manchester. 'This analysis shows how recent sales momentum in regional cities, and higher house price growth, appears to have held up over the referendum period. In contrast, the headwinds facing the London market ahead of the vote… Continue reading
