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Central London property prices still falling, latest index shows
Further evidence is emerging that the central London housing market bubble has burst and price falls are spreading throughout the rest of Greater London, the latest index suggests. Prime central London prices are still falling as the supply of properties rises and confidence in property as an investment ebbs away,’ according to the data from Home.co.uk. Central London locations dominate the latest list of biggest house price falls across the UK, with Walworth in the London Borough of Southwark seeing a 15% fall in average house prices between January 2014 and January 2015. House prices in Belgravia fell by 10.3% over the same period and Cromwell Road in Kensington saw a slump of 8.3%. Of the 20 UK areas with the biggest annual fall in sales prices, 11 are in London. Landlords' return on investment on central London properties is also falling. Of the 15 UK locations recording negative real % yield, which occurs when the value of the property depreciates by more than the annual rent, 12 are in central London. The index shows that in January 2015, landlords with a property in Walworth recorded a negative real % yield of 11.3%, while in Belgravia the negative real % yield stood at 7.1%. Central London flat prices are among the hardest hit. On average, the price of a flat fell by 9% in central London between January 2014 and January 2015. Over the same time, the number of flats for sale in central London has increased by 64%. Since November 2013, the price of a typical flat in Belgravia has fallen 20%, from £1,995,000 to £1,600,000. A similar price correction has already spread into Islington, where the typical asking price of a flat has dropped 11% since March 2014. This represents a loss of £85,000 for flat buyers in Islington over the last 10 months. There is further evidence that price falls are rippling out to more remote areas of Greater London and look set to spread further into the South East. The spectre of negative equity is looming large for recent buyers. Further out in Greater London, Holloway flat prices peaked in May 2014 but have since dropped by 13%, while the typical time on market for flats in the area has more than doubled. Meanwhile, Muswell Hill in North London has seen flat prices fall 4% since October last year. ‘Optimism in the UK housing market is still riding high in the?rest of the country, but it comes as a?shock to many to?learn that prices are?crumbling in the?most expensive streets in London,’ said Doug Shephard, Home.co.uk director. ‘These price movements may soon have a knock-on effect for the rest of Greater London and, later, the Home Counties,’ he added, pointing out that prices in central London went up too far, too fast during 2012 and 2013. ‘In a synthetic property boom and bust such as London has experienced, on account of ultra-low interest rates and other stimulus measures, it is hard to… Continue reading
Estate agents under more pressure to sell in some parts of the UK, it is claimed
Estate agents in some parts of the country are facing increased pressure from vendors over the length of time it is taking to sell property, according to new research. According to Part Exchange Register, agents are under increased pressure in areas were the sales process is much slower and are at a higher risk of losing their vendors to another agent. The research points out that there are enormous regional variations in the country’s housing market. It can take up to three months longer to sell a home in some parts of the UK than others, with certain areas taking ‘more than a year’ to find a buyer. In fact, Wales and the North West dominate Rightmove’s list of the most difficult places to sell a home. Of the bottom 10, three are in Wales, namely Powys, Gwynedd and Conwy, and four are in the North West, Sefton, Fylde, Rochdale and Allerdale, as well as Workington in Cumbria. Properties sell the quickest in the university town of Cambridge than they do anywhere else in the country, typically taking just 27 days to find a buyer, compared to a national average of 65 days. ‘The recent housing boom has not reached many parts of the UK and the good times experienced by agents in the South East is certainly not reflected in Wales and the North West,’ said Joanne McClarence, operations director of Part Exchange Register. ‘In some parts if the UK, it can be very challenging for agents to find buyers and at the same time, assure vendors that everything possible is being done to sell their property. Agents often face aggressive marketing from their competitors, who target their vendors who have not sold in a given period,’ she explained. The firm has developed a new ‘matching’ service, which enables agents to generate additional property sales, by bringing vendors and buyers together, in a more targeted and effective way. ‘Part Exchange Register creates property matches between an agent’s vendors and those of other Agents, as well as matching vendors to new homes from a national network of property developers. The fact is that many vendors are really keen to move, but can’t do so until they find a buyer for their property. The problem is that many home movers wait around until their property is sold before they start to view other houses,’ McClarence pointed out. The aim is to give agents the opportunity to offer a unique, added value service to vendors and provides another sales channel and is described at ideal for agents who are looking to secure new sales opportunities. Continue reading
Residential property prices in Dubai likely to remain steady or fall in 2015
Dubai's residential property bubble is deflating and average prices will remain the same or fall by up to 10% during 2015, a new study suggests. According to international real estate firm JLL, prices and rental rates have grown to an unsustainable rate over the last two years. JLL head of research for the Middle East and North Africa (MENA), Craig Plumb, said that a period of stability will be good for the market. There have been concerns voiced that lower oil prices could have an impact on the emirate’s property markets but JLL points out that Dubai is less vulnerable to lower oil revenue than other Gulf Cooperation Council (GCC) oil exporters, due to its diverse economy and growth in non-oil sectors. Overall, the second half of 2014 saw Dubai’s residential market stabilise as average rents and sale prices remained relatively flat, with marginal declines over the last quarter. On an annual basis, the REIDIN rental index shows growth levels dropping from 18% in 2013 to 15% in 2014. Similarly, the sales market saw some cooling down as the REIDIN sales index points to a decline in growth levels from 23% in 2013 to 20% in 2014. This comes as the number and value of transactions dropped 30% & 14% respectively in 2014, according to data from the Land Department. JLL predicts that the residential sector is likely to remain subdued over the next 12 months as the market is expected to absorb 25,000 additional units in 2015. ‘In reality, we remain cautious of the delivery of some of these projects within the timeframe,’ the firm says. It also points out that as Dubai’s economy continues to expand and job creation grows, demand for affordable housing is expected to increase over the next 12 months. This comes as a proposal to ensure the availability of affordable housing for the middle-income segment of the market is currently under review. ‘These efforts aim to create a balance between the supply of luxury and affordable housing units that cater to all residents in the Emirate, as many were previously priced out of the market during the 2013/2014 price rally,’ the JLL market overview report says. It also shows that in 2014 the supply of units in Dubai increased to 377,000, up from 342,000 in 2011 and the firm predicts that 25,000 residential units will be added in 2015, some 13,000 in 2016 and 12,000 in 2017. ‘While lower oil prices are likely to dampen investment sentiment in the short term, Dubai’s success at diversifying its economy and expanding its global reach makes it less vulnerable to oil price fluctuations,’ the report explains. ‘The next 12 months are expected to see a boost in business activity, highlighted by the government’s 2015 budget announcement which saw planned spending and revenues increase 9% and 11% respectively. However as government charges increase further in 2015, we remain wary of pressures on the cost of living as inflation registered 4% at the… Continue reading
