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The growth of London house prices has slowed down, new data suggests
London house price growth has slowed in the first quarter of 2016 and is now nearly three times lower than it was in the last quarter of 2015, new research shows. The London market recorded price growth of 1.2% in the first three months of the year while nearby regions have seen higher price growth, according to the latest UK House Market report from the Lancaster University Management School. For example, the Outer Metropolitan area has seen price growth of 3.1%, Outer South East 2.5% and East Anglia 4.1%, the data from the report shows. The report says that this is in line with the so-called ripple effect, suggesting that substantial house price increases in London over the last few years spread out to surrounding regions over time and have a leading effect on the UK housing market. It suggests that the slowing growth in the London property market has coincided with two factors, possibly working in opposite directions: an increase in the uncertainty of global economic conditions, especially in the East, and the run-up to the introduction on the 01 of April of extra 3% stamp duty on additional property purchases. The Observatory has been set up to monitor for signs of exuberance in prices in the UK regions, and releases its analysis each quarter alongside the house price data. Continue reading
Office space demand increased across major Australian markets in first quarter
Demand for office space across major Australian markets is on the rise in 2016, according to new data from Colliers International. According to the firm’s latest Office Demand Index, a total of 507,799 square meters of demand was recorded in the first quarter of 2016, a 33% increase from the fourth quarter of 2015. Large businesses looking for more than 3,000 square meters of office space accounted for over 50% of the total area enquired for in the first three months of 2016, while representing just 9% of the total number of enquiries, by volume. Small businesses looking for 1,000 square meters or less accounted for almost 80% of the total number of enquiries recorded in the first quarter this year. ‘We have found that compared to this time last year, on average, businesses are enquiring for more space,’ said Simon Hunt, Colliers International managing director of office leasing. ‘On a national level, the average area enquired for as of the first quarter of 2015 was about 888 square meters. In the first quarter of 2016 it increased to 1,050 square meters,’ he added. Notable increases were recorded in Brisbane, where average size required increased to 1,287square meters in the first quarter, up from 774 square meters in the first quarter of 2015, and Canberra, which recorded a significant jump in average size enquired for from 1,167square meters to 1,942 square meters. There was also an increase in average size requirement in the Sydney CBD, from under 1,000 square meters in the first quarter of 2015 to over 1,600 square meters in the first quarter of 2016. Locations that saw a small drop in average size included Sydney Metro and Melbourne CBD. ‘This quarter, we have seen the greatest number of large businesses enquire for office space in almost 10 years, which has contributed to the increase in the average area currently in demand,’ Hunt said. ‘This trend is also flowing through to transactions. In the first quarter of 2016, we have seen an increase of more than 15,000 square meters or 22% in the amount of office space leased. Larger businesses are doing the deals at the moment and this is showing up in both transactional and demand data. In the coming months, we expect smaller businesses will also increase their activity,’ he added. According to Simon Crouch, Colliers International head of tenant advisory, much of this smaller demand had been created by the compulsory acquisition of buildings associated with the Sydney Metro project. ‘Since February 2016 we have been appointed by 10 businesses averaging 300 square meters in size who require expert advice to help them through the relocation process,’ he pointed out. Continue reading
Uncertainty creeping into UK housing market likely to be short term
Uncertainty is set to creep into the UK housing market due to stamp duty changes, the European Union referendum and forthcoming regional elections, it is claimed. Overall short term confidence in the market has flattened following the rush from buy to let investors to beat the extra 3% imposed on additional homes at the start of April, says the latest monthly survey report from the Royal Institution of Chartered Surveyors (RICS). Survey respondents say that the uncertainty is fuelled by stamp duty changes, a weaker pound, the UK potentially leaving the EU (Brexit) and devolved elections in Scotland and Wales and local elections in England. The report also shows that the rate of house price inflation is slowing with indicators pointing to more modest house price gains and house prices have fallen further in London than elsewhere. These factors have been most strongly felt in central London, where 38% more respondents expected to see house prices fall over the next three months. The report also says that across the UK, while expectations around the number of new house sales peaked following the Chancellor’s Autumn Statement, this trend has reversed with 2% more respondents expecting to see the number of sales fall rather than rise over the coming months. Confidence around house price inflation has also dampened with 17% of respondents (net balance) expecting to see prices rise over the next three months, compared to 44% (net balance) in December. However, the longer term outlook suggests that prices will still be expected to rise by more than 4% each year for the next five years across England and Wales, with prices in London projected to grow by a broadly similar amount rising by 3% each year over the same period. Despite, the increased rates of stamp duty tax, now expected to be paid by prospective landlords, rent inflation, while expected to increase, is not predicted to rise any faster than it has in previous months. Although over the next five years respondents continue to anticipate rents will increase by an average of 4.5% per annum, there is no indication yet that tax increases are being passed on to the tenant. The expected rate of rent of inflation has remained constant for the past year at around 3%. ‘As expected, the buy to let rush has now run its course and, as a natural result, the market is starting to slow. But there are other significant factors that are currently weakening short term confidence in the UK property market,’ said Simon Rubinsohn, RICS chief economist. ‘Elections inevitably bring with them periods of uncertainty in the market, and our figures would suggest that next May’s devolved elections are no exception. Likewise, the EU referendum, is likely to be an influencer in terms of the damper outlook for London in particular,’ he added. ‘However, all indications suggest that whatever the outcome of the forthcoming elections and referendum, in the long term, the imbalance between demand and… Continue reading
