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Prime property markets in key UK towns set to see continued demand
Price growth for prime properties in key urban markets in the UK is likely to continue this year, driven by growing demand among buyers, new research suggests. In particular demand for properties in key town and city locations such as Oxford, Bath, Bristol and Cheltenham with access to good schools, transport links and amenities is expected to be high. They are attractive to buyers from London, including commuters, as infrastructure improvements make them and their amenities more accessible, according to the research from real estate firm Knight Frank. These include the electrification of the Great Western rail line to London from Bristol and Bath and the new Oxford Parkway railway station just opened to the north of the city. Annual price growth for prime properties in the Oxford city market eased to 1.3% in 2015, but the research suggests that as Oxford’s economy is diverse, led by IT, high tech manufacturing and publishing and the city’s hospitals and two universities are major employers, demand from local buyers is ever present. ‘Activity is expected to remain strong in early 2016, especially as some buyers look to complete purchases ahead of the introduction of new stamp duty rules which have the potential to impact a small section of the market,’ the report says. The report points out that annual price growth for prime properties in the Bath city market was 4.5% in 2015, compared to a 3.1% rise across the wider prime country market and this outperformance reflects the continued demand among buyers for prime properties in city centre locations. Bath is an international tourist destination home to a wealth of museums, Georgian streets and other attractions that mark it out as a desirable place to live and visit, including a compact city centre with a good retail offering. This was underlined by a 6% rise in the number of potential buyers registering their interest in purchasing a home in Bath through Knight Frank year on year, a 15% jump in sales volumes over the same period and a 43% increase in the number of people searching for homes in Bath on Knight Frank’s website. A number of these individuals were relocating or looking to relocate from the capital. Knight Frank data shows that outside of the Home Counties, Bath along with Oxford was the most popular location for Londoners looking to move in 2015. ‘The prospect of more regular services between Bath and London from 2017 as a result of improvements being made to both the track and the trains will make commuting an even more viable option,’ the report explains. Property prices in Bristol rose by 6.6% in 2015 driven by the growing trend among buyers for properties in key town and city markets with access to good schools, transport links and amenities and a lack of available properties for sale has been the biggest driver of the market in Bristol over the last year, according to the report. Stock levels were at… Continue reading
Parking spaces with new properties in London can cost an extra 13%
Less than a fifth of new build properties in London include a parking space in the purchase price, compared to 67% for other major cities, new research has found. And this may because they are unaffordable as a parking space with a new home in London adds to the price for a buyer, which can be up to 13% on the price of the property. However, it appears that restrictions from developers often mean only those purchasing two or more bedroom properties even have the option of buying a parking space. The research from Direct Line’s SELECT Premier Insurance suggests that developers are charging an average of 5% of a new property’s purchase price for an accompanying parking space. It gives as an example a parking bay to accompany a new build property in London’s Battersea was being sold for £65,000, some 13% of the property’s £500,000 listed purchase price. In London, researchers found parking spaces were only available and included in the purchase price of a new property 18% yet in major cities outside London including Leeds, Glasgow and Bristol, parking spaces were included in the purchase price of a new property 67% of the time. Restrictions on building parking spaces for new properties mean they have become a desirable commodity. In many cases, developers were found to impose controls even within new build developments, only allowing buyers of large or expensive properties to purchase a parking bay. A new wharf development in Hammersmith for example, only allows parking spaces to be purchased for properties valued at over £1.5 million, while developers in areas of London such as Stratford, Ealing, Greenwich, Elephant and Castle and Wembley Park are restricting spaces in new developments to those buying a property with at least two bedrooms. The same practice is also applied in cities such as Leeds and Nottingham. Where parking spaces cannot be purchased, some developers offer annual permits to rent out parking bays. Spaces in Brixton accompanying new build apartments costing £577,000 were available for just £104 a year, whereas in Bristol, a parking permit to accompany a £425,000 property was available for £1,400. There are huge variations even within cities, in Brighton’s Marina Village a permit for a £775,000 property clocked in at £250 while elsewhere in the City a space accompanying a £410,000 apartment costs £1,000 a year. ‘Restrictions on the number of parking spaces developers can build to accompany new properties make these slots a hot commodity carrying a premium price point. In many new developments, those purchasing studios or one bedroom homes are denied the opportunity to purchase a space as they are reserved for larger properties,’ said Nick Brabham, head of SELECT Premier Insurance. ‘As larger scale residential developments are built in urban city centres, traffic volumes will become an increasing issue and planners may restrict the construction of new parking bays even further, making it very difficult for homeowners with vehicles,’ he explained. Access… Continue reading
Mortgage lending in UK up 23% year on year, says latest CML data
Gross mortgage lending in the UK reached £19.9 billion in December, some 3% less than the previous month but up 23% year on year. The data from the Council of Mortgage Lenders (CML) brings the estimated total for the year to £220.3 billion, an 8% increase on 2014’s £203.3 billion and the highest annual gross lending figure since 2008. Gross mortgage lending for the fourth quarter of 2015 was therefore an estimated £62.3 billion. This is a 1% increase on the third quarter and a 23% increase on the fourth quarter of 2014. ‘Lending ended the year stronger than it started, with our estimate of nearly £20 billion lent in December. This brings total lending to just over £220 billion for 2015 as a whole, and slightly higher than we had anticipated,’ said CML economist Mohammad Jamei. ‘The low inflation environment, along with real wage growth, an improving labour market and competitive mortgage deals have all helped to underpin demand. Having said this, the upside potential looks limited over the near term, as the supply of existing and new properties on the market remains weak, and affordability pressures weigh on activity,’ he pointed out. ‘There is an added element of uncertainty as we wait to see the impact of tax changes on the buy to let sector,’ he added. John Eastgate, sales and marketing director of OneSavings Bank, believes that the stamp duty tax changes on second properties from April are expected to increase mortgage lending activity ahead of their rollout. ‘However we don’t see this as a long term trend. The end of the year is a difficult time to conclude a great deal. Regulatory changes are expected to cause a short term spike in demand from investors, which will be reflected in first quarter figures, while overall conditions are supportive of sustainable growth in gross mortgage lending,’ he said. ‘Investor demand may balance out after the April rush, but the Help to Buy ISA will help underpin long term first time buyer demand, and the diminishing prospect of an interest rate rise will help keep a lid on monthly mortgage payments. As UK employment hits a record high, all this bodes well for borrowers’ finances and the health of the market,’ he added. The indusry should not be concerned about that dip in December, acdoring to Rishi Passi, chief executive officer of Oblix Capital. 'In the longer term, low inflation and reasonable wage growth look set to improve affordability for first time buyers and those on the bottom rungs of the ladder,' he said. 'Help to Buy will also go some way to fill the void left by any buy to let landlords downsizing their portfolios, so developers with one eye on the future should be preparing future stock to meet this shifting demand,' he added. Continue reading
