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Prime property market across UK not picking up, new analysis suggests
Prime property outside of London increased by just 0.6% in the second quarter of the year, suggesting there has been little sign of a post-election bounce at the top end of the UK housing market as buyers remain cautious. A lack of upward pressure on prices has been consistent across all regions beyond London, with a lack of urgency among buyers in part stemming from a relatively sluggish market in the capital, according to the latest prime residential market report from real estate firm Savills. The report says that this has combined with relatively high levels of stock available on the market, built up largely as a result of a relative dearth of transactional activity in the run up to the general election. ‘For the time being this has slowed the ripple effect, despite the significant value gaps between London, the commuter zone and beyond, which would normally drive a flow of demand through the different segments of the prime housing market at this stage in the cycle. As a result, annual price growth in the prime regional markets stands at a subdued 1.6% on average,’ it explains. Though the threat of a mansion tax has now evaporated, the report suggests that the market continues to be held back by tax considerations. ‘In London and at the top end of the country market, the increased cost of stamp duty, following the Autumn statement of December 2014, remains a barrier to both price growth and activity,’ is says. Illustrating this fact, in the regional housing market over £2 million prices are 1.7% below their June 2014 level. In Scotland the introduction of the Land and Buildings Transaction Tax, which replaced stamp duty in April has introduced higher rates of tax at lower price points, has caused prime values to fall by an average of 0.6% in the past quarter and by 0.9% year on year. In England and Wales the markets under £1 million and between £1 million and £1.5 million have been less affected by these tax concerns but more affected by weak buyer sentiment and the restricted availability of mortgage debt feeding up from the mainstream markets. The report points out that despite a continued benign interest rate environment, transactions in the mainstream market appear to have plateaued at around 1.2 million per annum. With the mortgage regulations restricting the amount of debt prospective buyers are able to obtain and restricting their ability to trade up the market, this is still well short of pre-crunch norms, it adds. Although mortgage availability has a less significant direct impact in the prime markets, it will impact on some buyers in their 30s and 40s, the report also suggests. ‘While restricting the amount they can borrow, this may act as a catalyst for them to move into the commuter zone as they look to stretch their debt and equity further in less expensive markets,’ it explains. While sellers need to remain realistic in… Continue reading
Research shows most people who move home find it stressful and costly
The majority of people who moved home in the UK recently found it a stressful experience and two fifth paid out £5,000 more than they expected, new research has found. Some 86% were stressed and 46% felt they were not in control while 39% said the cost was more than anticipated, according to the study by finance comparison website MoneySuperMarket. It also found that 19% said that moving home has forced led them to compromise their career and 20% found it had caused arguments with their partner. Those who bought their home paid over £6,000 more than expected, while renters overpaid more than £3,000 each. To foot the extra cost, 63% dipped into savings, a further 16% put it on credit Cards and 11% had to rely on their parents. Some 71% said that packing up belongings in their old home was the most stressful part of moving, 62% said it was finding a property within the right price range while 57% said it was getting the location right. The research also found that 56% found dealing with estate agents was the most stressful part of the process while 57% said it was setting up new utilities contracts and 56% said it was unpacking in their new home. Some 20% said that they unable to concentrate on their job and 19% had to take annual leave just to get things sorted. In addition, 17% had to use work time to complete their paperwork. ‘Whether for the first time, or stepping up the ladder, moving home is a momentous life choice for people to make. There is so much to consider, both before, and after keys are handed over, and as it takes an average of six months just to find a property, it’s understandably stressful and has a knock on effect in all aspects of people’s lives,’ said Dan Plant, consumer expert at MoneySuperMarket. ‘It should be a really exciting time, but unfortunately the most common words people associate with moving are tiring, draining and frustrating. But moving house doesn’t have to be a completely arduous process. Being as prepared as possible will help ease the angst,’ he explained. ‘It’s important to consider all costs involved so you aren’t hit with an unexpected bill at any point from the mortgage, surveys and stamp duty, to removal hire and any other necessary additions to the new house. Simple steps such as creating a checklist and timeline will also alleviate the extra pressure on your relationships, job and health,’ he added. Although moving house is an upheaval, recent movers did feel supported by others during the process. Some 69% said partners offered support, 67% got support from friends and 57% from family. Furthermore, despite the introduction of more stringent lending rules last year, only 34% found dealing with mortgage lenders stressful. Ultimately, almost all, 92% of those who have moved house in the last two years said it was worth the hassle and just 8% said it… Continue reading
Office market in Saudi Arabia flat as new completions offset higher demand
Annual office take up in key Saudi Arabian cities is continuing to rise but higher demand is offset by new office completions, according to the latest report into the country’s commercial property market. In Riyadh and Jeddah in the 12 months to June 2015 this resulted in vacancy rates remaining broadly stable over the same period and rents were also unchanged in the two cities. The analysis from international real estate firm Knight Frank also shows that in the first half of 2015 Grade A and B office rental values in the capital stood at SAR1,300 and SAR900 per square metre per annum, respectively. Meanwhile, Grade A at SAR1,200 per square metre per annum and Grade B at SAR700 per square metre per annum rents in Jeddah were also flat. In Eastern Province, demand for office space was flat in the 12 months to June 2015 and the report points out that there is little to indicate that demand will rise in the near term, suggesting that the completion of new office projects will exert upward pressure on vacancy rates. However, with landlords in the market largely insensitive to changing supply demand dynamics, it is suggests it is difficult to see rents budging from their current levels of SAR1,050 for Grade A offices and SAR700 for Grade B offices. The report says that the current supply of Grade A and Grade B office stock in Riyadh stands at 3.5 million square meters, the majority of which is concentrated in the central and northern parts of the city. ‘Due to current dynamics we do not expect the market as a whole to see increased vacancy rates or a reduction in achievable rental rates as demand for quality commercial spaces that are well located and benefit from good floor plates will remain strong in the short to medium term,’ it adds. Supply of office space in Jeddah currently stands at 820,000 square meters with over 100,000 square meters of office supply due to be added to the market in the short term. As a result of construction delays, the first half of the year saw few completions which resulted in market wide vacancy rates remaining stable at 10%. Total stock is expected to exceed 1 million square meters in the medium term as new supply comes online and the report says that the second half of the year will see additional supply coming from a number of small to medium sized projects. ‘Due to the historic lack of Grade A stock in the market, we see robust demand for good quality offerings in the short to medium term as tenants look to upgrade to better quality premises and the non-oil economy continues to show healthy growth,’ the report adds. Whilst the Eastern Province does not benefit from a well-defined CBD, supply looks set to grow with a number of projects under construction due to be released to the market between the fourth quarter of… Continue reading
