Tag Archives: real-estate
Smaller prime properties in London commuter belt set to see strongest rental growth
Smaller properties in prime markets in the commuter belt around London continue to see the strongest rental growth in the first quarter of 2016, according to a new research report. There is such strong demand for smaller properties because tenants are faced with the issue of raising the deposit for their first mortgage,’ says the report from real estate firm Savills. It points out that landlords have been hit with a number of measures introduced by the current government in an attempt to limit future investment in the residential sector and Savills expects that these measures to limit the amount of stock which comes onto the rental market, underpinning the growth in rents for existing investors. Rental values of prime property in the commuter zone increased by an average of 1.4% over the year to March 2016 to bring five year rental growth up to 7.6%, reflecting the continuation of modest but consistent rental growth in the period since the middle of June 2012. The figures from the report show that the average rent for one or two bedroom homes is up 2.5% year on year, for three bedrooms it is up 2.8%, for four bedroom up 1.6%, or five bedrooms up 0.9% and for six bedrooms or more up 0.5%. This brings growth over five years to 12.3% for one or two bedroom prime properties, 12.3% for three bedrooms, 9% for four bedrooms, 5.5% for five bedrooms and 4% for six bedrooms or more. The report suggests that the strength in demand for one and two bedroom accommodation reflects the age profile of the tenants in this sector with one third of tenants being in their 20s and a further 35% in their 30s and their personal and financial circumstances. ‘Such tenants face well documented issues in raising the deposit for their first mortgage but are also increasingly attracted by the flexibility of renting given an increasing propensity to move jobs in the first half of their working life,’ said Lucian Cook, director of Savills residential research. ‘With such tenants renting for longer life stages, this has fed into more demand for small family accommodation for tenants in their thirties and early forties,’ he added. He pointed out that markets for these smaller properties are generally serviced by landlords with a strong investment motive for the purchase and ownership of their rental property. By contrast, Landlords of larger prime rental properties are more likely to be letting out a dwelling which has previously been their main residence. ‘Our research shows that 39% of Landlords of properties of five bedrooms or more are letting their property out because either they are relocating for employment purposes or are unable to sell their main home. Landlords of such properties have only seen rents rise by a net figure of 4% over the past five years, and a meagre 0.5% in the past 12 months,’ Cook explained. He also pointed out that going forward, all landlords will have… Continue reading
Edinburgh property market seeing strong demand and steady price growth
The residential property market in Edinburgh is experiencing high demand, especially at the middle to high end of the market, new reports show. The long term picture is one of steady growth. A comparison of property prices by agents Strutt & Parker shows that in March 2015, the month leading up to the introduction of the new Land and Buildings Transaction Tax (LBTT), and March 2016 reveals a 26% fall in average value. In March 2015 prices averaged £320,466 but in March 2016 this was down to £237,226, much of which has been put down to the distortion caused in the market by LBTT last year. However, the average value in March 2016 is significantly up on the average price in March 2014 which was £209, 624 and March 2013 when it was £200,744, indicating a steady upward trajectory in property prices. ‘The drop in average value simply serves to underline the huge spike in sales before the introduction of LBTT in April last year and it highlights the importance of experience when interpreting housing market trends,’ said Blair Stewart, head of Edinburgh City Residential Sales at Strutt & Parker. ‘It is not surprising that the 2016 average property price is less in comparison. It is more important to look back over the last three years during which time, taking 2015 out of the equation, we can see a steady rise in the city's average property price,’ he pointed out. In March, there were 247 sales in Edinburgh of which 225 were £300,000 to £750,000, 13 in the £750,000 to £1 million range and nine at over £1 million, up from 159 in February and 146 in January but down from 363 in March 2015, again underlining the surge in sales before the introduction of LBTT. ‘The high volumes and associated lower values in Edinburgh are partly reflective of a surge in the purchases of investment properties before the LBTT surcharge was introduced at the start of April. In general, additional and investment properties are lower in value, which is illustrated by both the jump in transactions and drop in average value,’ Stewart explained. ‘Correspondingly, we have noticed an adjustment in the average sale prices of the properties we are selling in Edinburgh change from around £780,000 in 2015 to approximately £600,000 in 2016. However, these figures also show a strong performance in the market in the first months of 2016 and I am confident we will see that continue into the summer,’ he added. He also pointed out that behavioural changes following two tax regime changes in a year are still playing out so a true picture of the market will become clearer over the next six months once there can be an analysis of figures which have not been distorted by either LBTT or the additional 3% surcharge on additional homes introduced this April. Agents CKD Galbraith is also reporting that demand for middle to high end residential property in Edinburgh city… Continue reading
Buying a home costs less in more than half of UK cities
Buying a home now costs less than renting in over half of the cities in the UK, according to new research which shows where monthly mortgage repayments are less than rent. Buying is most cost effective Doncaster, Hull and Bradford while London, Brighton, Bristol and Swansea are the only cities where it is more cost effective to rent, the study from Strata Homes shows. Using available statistics, the firm has calculated the average sale price of two bedroom properties in the UK and worked out the typical average monthly mortgage repayments in contrast with average monthly rental fees of two bedroom properties. The research also reveals that monthly mortgage repayments or using the ISA help to buy scheme works out cheaper than renting in over half of UK cities Doncaster, Hull and Bradford scored the top three cheapest areas in the UK to purchase a house, with mortgage repayments totalling as little as £520 per month for a two bedroom house in Glasgow in comparison to £729 average rent per month. In Peterborough, a first time buyer using the ISA scheme would actually save £344 a month paying off a standard mortgage on a house than renting one. To rent a two bedroom house in Manchester would cost an average of £762 a month, but to buy would mean only paying an average monthly mortgage repayment of £676 per month. While to live in the second city, Birmingham residents would only be paying a £2 difference to own a home over renting per month. ‘Once you get over the initial deposit sum, people are surprised at how much you can save in some areas of the UK than to rent. Thanks to the Government's ISA Help to Buy scheme, it is easier than ever to get onto the property ladder with over 3,000 accounts opened so far this year,’ said Gemma Smith, sales director at Strata Homes. She pointed out that from the research gathered, southern cities such as London, Brighton, Bristol and Swansea were least cost effective when buying a house due to sky high house prices. Continue reading
