Tag Archives: finance-update
Prime seaside properties in UK can cost up to 71% more
It’s well documented that that living by the sea in the UK comes at a cost with the latest research showing prime properties on the coast can cost as much as 71% more. The prime waterfront index from international real estate firm Knight Frank points to a number of towns and cities along the Devon, Dorset and Cornwall coast which have surpassed the wider property market over the last two decades in terms of price growth. Using data from the Land Registry, based on actual sales volumes going back to 1995, the index has calculated the annual price performance of individual coastal markets relative to the average price increase across the three counties. Croyde in North Devon has been the best performing coastal market over this time, with annual outperformance of 4.1% on average. While this may seem relatively muted over the course of a year, over 20 years this equates to cumulative price growth of around 122% above the wider Cornwall, Devon and Dorset area. Over the past two decades, Croyde has seen prices more than quadruple, by 432%, compared to 310% combined across the three local authorities. A number of other long established prime markets including Rock, Salcombe, Padstow and Falmouth feature in the hotspots identified in the research, and have all experienced outperformance of at least 2% annually since 1995 according to the analysis. The index report points out that price growth and outperformance can be very location specific. For example, the average annual price outperformance for the top 15 best performing small coastal towns and villages has been 2.8%, compared with 2.6% for medium sized coastal towns such as Christchurch, Topsham and Lyme Regis and 2.5% for the top five large coastal towns or cities including Bournemouth and Exeter. It also explains that higher outperformance in smaller settlements since 1995 is likely to be related to the scarcity of available stock relative to demand. Demand for prime coastal property comes from a variety of sources. Such markets benefit from their appeal to upsizers and downsizers often moving within the local area or looking for a lifestyle change, as well as second and holiday-home buyers. The research also points out that many homes bought in top seaside locations are second homes and the announcement in the Chancellor’s 2015 Autumn Statement that a higher rate of stamp duty would be introduced for additional properties, including second homes, from April 2016 prompted a number of purchasers to bring forward deals ahead of its introduction. ‘In the short term, it may take time for the tax to be absorbed, especially in a market where there are notable levels of discretionary purchases. In turn, this may have an impact on pricing, potentially providing opportunities for committed buyers,’ the report says. ‘Over the longer term we believe transaction volumes will rise once the additional stamp duty is fully priced into the market,’ it adds. Continue reading
Property sales and prices up in Spain in first half of 2016
Residential property sales in Spain increased by almost 20% in the first half of this year suggesting that the real estate market recovery is well underway. The latest figures from the General Council of Notaires shows that transactions were up by 19.6% in the first six months of 2016 to a total of 225,551 sales, and prices increased by 6.1% year on year. The data reveals that new home sales are not boosting the recovery and indeed falling. Sales of non-new homes increased by 19.29% year on year, accounting for 68.1% of all the homes sold but new homes sales fell 13.6%. This upward trend continued in June, when home sales grew by 7.1%, year on year, again driven by the transactions on second hand homes, which increased by 11.5% reaching a total of 29,052 units, while transactions on new housing registered a decline of 33.4%, with a total of just 2,751 sales. The price of an average home increased by 6.1% to €1,418 per square metre. But new homes cost more and this could explain why sales are falling. The average price of a new build was €1,886, some 12.7% more than second hand homes. The data also shows that in June some 44.7% of home sales were financed through a mortgage with the average capital loaned €128,480, a slight increase, of 0.4%, over last year. The cost of renting a home in Spain is also increasing, up by 2.4% in the second quarter of 2016 taking the average to €7.41 per square meter per month, according to figures from property portal Fotocasa. It means that after eight years of falling, residential rents have now been increasing since 2015. Beatriz Toribo, Fotocasa head of research, a growth in demand is boosting rental values which are now up by 4.8% year on year. A breakdown of the figures show that rents increased in 15 regions in the second quarter of the year compared to the previous quarter and in 16 regions year on year. The highest annual increase to data was recorded in May this year when rental prices increased by 5%. But the recovery still has some way to go as average rents are now 26.8% lower than they were at the peak of the market in May 2007 when they were €10.12 per square meter per month on average. But in three regions prices are down even more. Monthly rents are some 39.6% lower than peak in Aragon, 35.2% lower in Castilla La man cha and 33.7% down in Cantabria. The most expensive rents are in Madrid at €10.36 per square meter per month, followed by Catalonia at €10.24 and then the Basque Country at €10.16. The most affordable rental prices are in Extremadura at €4.56 and Castilla La Mancha at €4.69. Continue reading
UK asking prices slowed in August but no more than usual for the summer
The price of property coming onto the market in the UK in August fell by 1.2% but as the summer is often a quieter time it is not necessarily all due to Brexit, according to the latest asking price report. Indeed, the monthly decline is in line with the 1.2% average drop over the last six years at this seasonally subdued time of year and the Rightmove report points out that it is usual for sellers in the summer holiday season to price more cheaply. The monthly fall took the average asking price to £304,222 and prices are still up by 4.1% year in year, the data also shows. A breakdown of the figures shows that while first time buyers are paying 0.5% less month on month at an average of £188,237, it is the top end of the market that has seen asking prices fall the most, down 2.9% month on month to £538,755. The report also points out that larger homes are taking longest time to sell while the number of days to sell increased the most in London and South East in the last two months. It suggests that 2016 on course to be a year of two halves with activity skewed in the first half of year with the buy to let surge boosting property transactions to 12% higher than 2015 but the outcome of the second half of 2016 hangs on the strength of the traditional autumn market rebound How different the two halves will be depends on the strength of the traditional market rebound this autumn, especially at the upper end of the market and within the London commuter belt, which currently appear to be the most subdued, according to Miles Shipside, Rightmove director and housing market analyst. ‘Many prospective buyers take a summer break from home hunting, and those who come to market at this quieter time of year tend to price more aggressively. This summer is also affected by both Brexit uncertainty and the aftermath of the buy to let rush in March to beat the stamp duty deadline,’ he said. ‘The average fall in new seller asking prices at this time of year has been 1.2% over the last six years, so this month’s fall is exactly in line with the long term average. The largest price falls at this time of year were 2% and 1.3% in 2014 and 2010, with the smallest fall being 0.8% after the general election in 2015,’ he pointed out. Shipside explained that the sector that would benefit most from an autumn pick-up is made up of larger homes with four bedrooms or more. They are taking the longest time to sell, with an average of 74 days from being advertised on Rightmove to being marked as sold subject to contract by estate agents. This ‘top of the ladder’ sector is also suffering the largest drop in new seller asking prices this month, with a fall of 2.9%…. Continue reading
