Tag Archives: tsi
Demand sees average rents in UK go up, especially at end of 2014
A slowdown in the sales market in the UK during the last six months of 2014 saw a demand for rental accommodation grow with average rents up 1.8% during the year. But this headline figure hides what has actually been happening towards end of the year as there was a 4.2% rise in average rents for new lettings, according to research by Countrywide Residential Lettings. There were 7% more would be tenants registering during the second half of the year than they did during the traditionally busier first half. The firm says that movement of households between the sale and rental markets has had an impact on shaping growing demand in the second half of the year. Indeed, the data shows that 14% of households that moved in England last year, moved between the owner occupation and the private rental sector, broadly in equal numbers. The increase in demand from tenants for rental properties is reflected in the growth in average rents. For newly let properties, the rate of annual growth ran at an average of 3.7% during the first six months of 2014, rising to 4.2% during the final six months. It was a similar story for sitting tenants for whom rents increased from 1.7% to 1.8% over the same period. 26% of tenants who chose to renew their contract at the end of 2014 saw their rent rise 2.9% over the year. Alongside the relationship with the sales market, the nature of the lettings market means it is highly seasonal. Much activity is concentrated within a few key times of the year. In city centre markets, the summer months tend to see particularly high levels of activity, the time when students seek property for the forthcoming year. In the heavily dominated student markets of Birmingham, Bath, Cambridge, Oxford and Liverpool, over a third of lets are made during just two months in the summer. For many investor landlords, this represents the best time to market their property to let. Outside of the city centre, where three times the proportion of homes are let to families with children, activity in the rental market is closely correlated to school terms. Given the longer timescales involved, properties have to be secured well in advance of the September term. April, May and June represent the three months when 35% of lets are made in the year. Conversely, half terms and the first few weeks of September see activity levels decrease, with the number of registering tenants, viewings and agreed lets all running at two thirds of the average over the year. ‘The sales and rental sector are closely linked with thousands of households moving between the two tenures every year. In the second half of 2014, we saw a decrease in the number of tenants actively looking to buy. This has kept demand for rental accommodation at a high, allowing more landlords to stand firm in the face of attempted negotiation… Continue reading
Property in French Alps now offers a better deal due to currency changes
Buyers in the French Alps are not happy to buy for the sake of buying but increasingly wanting to rent their property so it provides an income all year round, a new analysis has found. There is also strong demand for off-plan projects, according to the latest prime ski rental index report from international real estate firm Knight Frank. On top of this currency fluctuations are favouring certain nationalities such as the British and Americans. Overall Alpine resorts have seen muted sales activity since the financial crisis took hold in 2008 but new investment in infrastructure, a broader pool of demand and the realisation that a ski chalet is able to offer a competitive investment return is reinvigorating the market,’ the Knight Frank report says. During the 2013/2014 season demand continued to be focussed on the resorts located within an hour of Geneva Airport in particular Morzine/Les Gets, Megeve and Chamonix. The €1.5million to €2 million price bracket in Val d’Isere also saw strong activity, with many buyers wanting to be in the heart of the resort. In the year to June 2014 Knight Frank’s Alpine enquiries came predominantly from prospective European buyers, who together accounted for 61% of all applicants. The Europeans were followed by Asian and Middle Eastern buyers at 12% each, then Russians and CIS nationals at 5% and North Americans also at 5%. An analysis of Knight Frank’s enquiries data by price band shows that there was stronger demand for properties priced below €2.5 million in 2014 with this price bracket accounting for 72% of applicants, compared with 47% a year earlier. The proportion of buyers looking at properties above a €20 million threshold by comparison shrunk from 7.6% in 2013 to 3.8% in 2014. The report points out that price of a luxury home in the Alps can vary significantly, a fact that surprises some non-European buyers. Courchevel 1850 leads the pricing stakes with the average luxury property priced around €30,000 to €32,000 per square meter but in Chamonix, a two hour drive away and crucially outside the desirable Trois Vallées, prime prices are €7,000 to €8,000 per square meter. In the Alps, the authorities in Courchevel have announced they are spending over €100 million on upgrading the resort’s lift system, complementing the new €67 million aquatic centre which is due to open in 2015. Chamonix has gone one better announcing investment of around €477 million to improve its ski lift system, albeit over a longer time period. Knight Frank also says that sales enquiries are now less seasonal than they were. Buyers are recognising the year round appeal of the Alps and gardens, for example, now being sought by more applicants registering with the firm. ‘Buyers today are comfortable with the concept of buying off-plan through CGI imagery, floor plans, site plans and stage payments,’ said Knight Frank’s Roddy Aris, adding that over a period of four months the firm has sold virtually half of the Carré Blanc… Continue reading
Investment in London commercial property market close to last peak in 2007
Investment in central London’s commercial property market reached £20.5 billion in 2014, marginally below the last investment peak in 2007 when £20.6 billion was traded, a new report shows. The huge weight of money flowing into the London real estate investment market from the UK and abroad looks set to continue in 2015 with the level of demand far outstripping the available supply, according to the data from global real estate adviser Cushman & Wakefield. A breakdown of the findings show that investment volumes in the City of London and Docklands reached just over £5 billion in the fourth quarter of 2014, the highest quarterly volume ever recorded in the market. The report says that the strong end to the year meant that the annual total reached £13.8 billion, which is the second highest on record behind the 2007 peak of £13.9 billion. Indeed, half of all investment volumes in the final quarter were as a result of three transactions in excess of £250 million each, which reflects the annual trend and 48% of all 2014 investment volumes were due to 10 transactions above this threshold. The report points out that increasing numbers of investors and surging volumes of equity are being invested into the City of London market with interest from a wide cross-section of investors, notably the world’s largest sovereign wealth funds. It also shows that overseas investors remain the most active in terms of transactional investment volumes accounting for 78% of both the fourth quarter and annual total. Asian investors dominated fourth quarter investment volumes but over the year North American investors have spent the most money in London. However, 2014 witnessed positive net investment from both Asia and the Middle East, while all other regions including the UK disinvested from the capital. Due to exceptional demand, the market yields are being driven down for all investments with prime at 4.25 to 4.5%, albeit several transactions have completed below 4%, notably the Gherkin. ‘We saw a strong City of London investment market in 2014 with international investors dominating acquisitions. The international appeal of London continues with an ever increasing spread of new global investors entering the market and there are no signs of an imminent slowdown,’ said James Crawford, Cushman & Wakefield’s head of City of London investment. ‘Deals from £1 million to £1.2 billion closed during 2014 and capital values hit an all-time high of over £1,400 per square foot at the Gherkin. The first half of 2015 shows all the early signs of a continuation of last year but we expect some profit taking to occur later in the year and uncertainty around the general election in May,’ he explained. ‘We estimate there is £250 billion of liquidity in the market available for direct investment in property and when this is combined with an improving debt market, a severe supply demand mismatch will be created,’ he added. The report also shows that the momentum recorded in… Continue reading
