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London property sales over £1 million down 26% in second quarter
London saw a 26% drop in the number of properties sold above the £1 million level year on year in the second quarter of 2015 with the economic slowdown in China regarded as having an impact, a new report says. The situation in China is having a knock on effect on global equities and other buyers are still holding back since the stamp duty increase towards the end of last year, according to Richard Barber, director at agents W.A. Ellis. 'This could be perceived as good news for buyers, signalling a return to normality in the market due to more realistic pricing strategies. Such strategies will play a significant role for vendors looking to secure a prospective buyer this autumn,' he said. 'Discerning purchasers continue to take stock of last year’s increases to stamp duty and the ongoing strength of Sterling. After one of the most tumultuous weeks on record for the world’s financial markets, there is naturally considerable speculation regarding the real estate manifestations of the economic slowdown in China and knock-on negative impact for global equities,' he explained. 'In short, this will depend on the depth and duration of the nervousness that investors are now displaying and whether this becomes a protracted slowdown in investment activity,' he added. He pointed out that UK real estate is one area that traditionally experiences countervailing investment activity, with perceived defensive characteristics against weaker investment alternatives. 'International investment in London commercial property is currently running at around 60% of all Grade A space and this flow will remain strong well into 2016. Residential investment is also likely to experience continued support from international investors, with bricks and mortar investment often being compared with gold for its defensive investment characteristics,' said Barber. He also explained that there are exceptions to this trend, notably from economies experiencing a more severe currency devaluation and Russia, China, and Malaysia are all likely to fall into this category and investment flows from these countries may moderate through the remainder of 2015. In contrast, weak equity and real estate investment alternatives from the largest traditional residential investors, Hong Kong and Singapore, could possibly drive improvements from these countries. The report says that new build residential in London continues to perform well, notably in areas such as Nine Elms and East London, including Canary Wharf, where public transport and infrastructure improvements are driving seismic changes to the underlying real estate value. However, Barber concludes that prime London pricing has been relatively weak for the past 12 months. 'It may well be time that investors begin to again see value in these traditionally favoured locations during times of perceived uncertainty,' he said. According to Tom Middleditch, director at JLL Kensington, the prime lettings market has undergone an important shift in the second quarter of 2015 as pre-election weakness affected both sales and lettings but this was reversed with the Conservative party win. 'Although transactions were not quite at the euphoric levels that some agents reported in the… Continue reading
Property prices outside Dublin rising faster year on year, latest data shows
Residential property prices in Ireland increased by 0.9% across the country in July compared to the previous month but values in Dublin price growth is slowing, the latest official figures show. On an annual basis prices are 9.4% higher nationwide but in Dublin they are 9% higher than a year ago. It is the first time since the middle of 2013 that prices in the capital city have risen by less than 10% year on year. A breakdown of the data from the Central Statistical Office shows that Dublin house prices rose by 0.6% in July whilst apartment prices increased by 2.7%. However, a CSO spokesman said that it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series. Outside of Dublin residential property prices rose by 1.2% in July and prices were up 9.6% compared with July 2014. So prices outside of Dublin are now rising faster on an annual basis. At national level residential property prices were 36.9% lower than their peak level in 2007. Dublin house prices were 36.3% lower than their peak, Dublin apartment prices were 40.6% lower than their peak and Dublin residential property prices overall were 37.9% lower than their highest level. Outside of Dublin residential property prices were 39.8% lower than their highest level in 2007. According to Dermot O’Leary, chief economist with Goodbody Stockbrokers, it had been expected that prices outside Dublin would rise at a faster pace because new mortgage rules were having a bigger impact in Dublin. ‘We expect further moderation over the coming months, with the slowdown in price inflation to be particularly felt in the capital,’ he said, adding that house price inflation continued to be supported by ongoing supply shortages. Experts are now predicting that residential property prices are likely to slow towards 5% by the end of the year. Continue reading
UK home builders facing a severe shortage of workers
It is not a lack of materials, sites or ability that is preventing house builders in the UK from meeting targets but a lack of workers, according to some of the country’s largest home firms. If 200,000 new homes are to be built by 2020, a target pledged by the government, recruitment in the industry would have to take a sharp upturn from current numbers, especially for the most highly skilled workers. ‘Whilst we as an industry are committed to the target of more affordable homes available to first time buyers, Weston Homes has had to really ramp up its recruitment in order to meet these targets,’ said Bob Weston, the firm’s chairman and chief executive. ‘We currently have a shortfall within the industry of skilled tradesmen, construction managers and fabricators, especially those with many years’ experience providing the quality we expect,’ he added. He pointed out that Weston Homes has recently sent 6,500 letters to local schools, attempting to attract more young people into apprenticeships and eventually the construction industry to meet the shortfall. In the last month Weston Homes has taken on 23 new recruits into its apprenticeship scheme, who join in to the around 20% of employees studying for NVQ’s, attending ILM management training or on sponsored day release courses. ‘It takes two years to train skilled workers and five years to train our best recruits to management level, though of course development lasts a lifetime. Finding someone with 20 plus years of experience is becoming increasingly rare and difficult,’ Weston said. ‘We have always been committed to getting more young people involved in the industry, and with these new affordable home targets we will need, as an industry, to open our doors to bright young apprentices,’ he added. Recent research from the Federation of Master Builders said that 66% of small and medium construction firms have had to turn down work because they don't have enough workers and the biggest shortages are for bricklayers and carpenters. The shortages all around the UK, with the east of England suffering from a short supply of plasterers, while the West Midlands is struggling to find scaffolders. Northern Ireland has the greatest need for general labourers. Firms said the main problem was difficulty in finding apprentices, and a lack of apprenticeships has held back potential new entrants to the jobs market with a belief that many are bowing to pressure from their parents to stay in full time education. ‘The lack of experienced multi skilled workers is a huge concern for my business, as it could affect our future growth plans. We urgently need tradespeople that are trained in more than one area, such as plumbing, tiling and joinery for bathroom installations but we just aren’t seeing the candidates come through,’ said Tony Passmore, chief executive of the Leeds based Passmore Group. The Home Builders Federation (HBF) agreed that recruiting and training people was now… Continue reading
