Tag Archives: european
Buy to let property investors in UK still positive post Brexit
Confidence in the lending environment remains unchanged for buy to let property investors in the UK after the historic vote to leave the European Union, according to new research. The survey, which explores the views of property professionals in the wake of the UK’s decision to leave the EU, reveals that some 57% of property investors are feeling very confident or fairly confident about the lending environment over the next six months, compared to 59% in January 2016, the latest survey of property professionals from Shawbrook Bank shows. It says that this confidence is reflected in the proportion of investors looking to buy an additional buy to let over the next year at 58% compared with 56% in January 2016, and suggests Brexit has not had an immediate impact on people’s future investment plans and their attitudes towards buy to let investing. However, while Brexit may not have de-railed investor plans, it is still cited as the biggest challenge this group will face over the next year, according to 32% of investors. While 44% remain unsure of what impact Brexit will have and how the subsequent changes to property prices and market competition will impact them, 42% think the result will negatively impact property investors. Only 14% believe the result will have positive implications. Similarly, property investors are feeling a lot less confident about the prospect for the UK economy with 48% of investors fairly concerned or very concerned about the economic outlook, an increase of 19% from six months ago. Some 54% of investors are more negative in their outlook and believe that falling house prices would be the main negative consequence while 23% think it will be decreased competition. In contrast, 37% of those that predict positive outcomes see decreased competition in the market due to uncertainty as the main positive consequence, 24% cited less regulation and red tape while 20% said falling house prices. Property prices are one area which property investors expect to see significant changes over the next six to 12 months. In January 2016 some 67% of property investors predicted a small increase in property values and 6% predicted a small decrease. The latest figures reveal that 42% are anticipating a small decrease in prices and only 21% are predicting a small increase over the next 12 months. ‘As a lender, it is encouraging to see sustained confidence in the lending market since the beginning of the year at a time when the sector has seen a great deal of change,’ said Stephen Johnson, deputy chief executive officer and managing director of property finance at Shawbrook Bank. ‘Seeing this optimism reflected in investors’ plans to acquire new buy to let properties is a promising sign that the specialist market shows no signs of slowing despite uncertainty. At Shawbrook, we have not yet seen any real change in customer behaviour and there is still a great deal of activity across the commercial business,’ he explained. ‘While the aftermath of… Continue reading
No signs yet of Brexit creating a UK housing recession says new analysis
Since the European Union Referendum the number of residential properties advertised for sale in the UK has increased and average asking prices have reduced by 0.2%, new research shows. While the number of properties with a reduced asking price has increased from 29.3% to 34.5%, mortgage availability remains broadly unchanged, according to the analysis report from global investment banking firm. The early conclusion from the industry note from the firm’s UK Building and Residential Services team of analysts is that UK households have the confidence to try and move house and accept that prices may need to soften to make it happen since the decision to leave the EU while there is no sign of a property recession. The research says that listings volumes, for example, do not suggest a slowdown and an analysis of residential property listings on major UK property portals and have found that since the EU referendum the number of listings has increased by 3.6%. It also points out that in the two previous UK recessions housing transactions were, with hindsight, a lead indicator, falling for more than 18 months ahead of the recession. In the absence of current transaction data we view listings activity as an early look towards housing transactions. With listings increasing, it appears UK households are prepared and ready to move. Before the vote there were headlines suggesting that Brexit would result in a steep fall in house prices but according to the analysis the trend in asking prices is only just downwards. On average asking prices have reduced by 0.2% since the EU referendum, somewhat less than the movement in the prices of the shares of the companies which service the UK housing market. ‘Perhaps more interesting is the movement in the number of properties which have reduced their asking prices. Before the EU referendum 29.3% of listings had reduced their initial asking price, this figure has now increased to 34.5%, overall a move of 520bp or 18%. This suggests to us that UK households remain keen to move and are adjusting their price expectations,’ the report explains. In the two previous recessions London house prices were the first to fall and the first to rise but the research show that so far 76% of London postcodes have seen an increase of listings, 22% a reduction and 1% unchanged. With respect to asking prices 70% of London postcodes have seen a reduction in asking prices and 30% an increase. A breakdown of the figures show that in East London 35% of postcodes have seen asking prices rise and 65% fall, in the North of the city 30% have risen and 70% fallen, in South London the split is 27% up and 73% down and in West London 25% up and 75% down. ‘London has the largest rental market in the UK and we believe that asking rents provide the most cutting edge data point with respect to the health of the underlying… Continue reading
Central London office leasing bounces back after referendum vote
The amount of central London office space leased by businesses bounced back from a pre-referendum dip to reach 980,400 square feet in July, according to the latest research. This 24% above the level seen in June and the strongest monthly average since March this year, according to global real estate advisor CBRE. Appetite for London office space was validated by three deals over 50,000 square feet in July, including a major move by Wells Fargo for 220,700 square feet of space in the City of London. The report points out that this move has been widely seen as a vote of confidence from the banking and finance sector after the UK voted to leave the European Union. The sector accounted for 31% of take-up in July, followed by the business services sector at 22% and creative industries at 17%. However, July’s office take-up in central London remained below the 10 year average of 1.1 million square feet per month, but above trend leasing activity in the City and Southbank which CBRE says suggests that businesses still see London as an attractive place to locate. ‘Much has been said about the health of the London office market this year, but clearly demand for office space remains buoyant. Businesses are still confident about London’s significant advantages as a global business centre, even when the UK is outside the EU. This continued demand, mostly driven by key lease events, in a market with low supply, is maintaining headline rents at the same rate as in May and June,’ said Emma Crawford, head of London Leasing at CBRE. ‘Of course the jump in leasing activity is good news for the market, and whilst this is not universal across all sub-sectors of the London market, even with heightened economic and political uncertainty, longer term prospects remain promising,’ she added. The data also shows that available office space increased by 2% over the month to stand at 13.6 million square feet but remained 7% below the 10 year average, as secondhand, completed and pipeline space continues to enter the market. The development pipeline is strong, but much is pre-let, with 46% of the 5.1 million square feet of space expected to complete before the end of the year already pre-committed to occupiers. Office space under offer fell by 14% over the course of the month to stand at three million square feet as a number of large deals completed. This is 7% above the 10 year average of 2.8 million square feet which CBRE says is another indicator of strong demand. A separate CBRE report shows that rental values across the UK’s commercial property market were steady in July, while capital values fell by 3.3%. But it points out that the fall in capital values was widely expected and pulled year on year growth down to 0.4%. The report explains that heightened economic uncertainty, especially for financial services firms, hit offices in the City of London, shrinking capital values… Continue reading
