Tag Archives: crisis
Valuations activity up 9% in UK despite price growth slowing
Valuations activity in the UK housing market grew 9% year on year in 2014 despite a cooling in property price growth, according to the latest research from Connells Survey and Valuation. On a monthly basis, total valuations dropped 17%, however, this is slightly lower than the average decrease of 18% typically recorded from November to December for every year since 2010. ‘This latest increase in valuations activity does contrast with more rapid expansion recorded earlier in 2014. But a more balanced and sustainable pick up bodes well for 2015,’ said John Bagshaw, corporate services director of Connells Survey and Valuation. The firm’s data also shows that remortgaging is the strongest performing sector of the market. On a monthly basis, remortgaging valuations had one of the smallest falls of 7% and saw a robust 25% surge year on year to December 2014. According to Bagshaw thousands of households are taking advantage of the record low rates and this looks set to continue for the foreseeable future. He pointed out that just this week Barclays launched a new 10 year fixed rate at less than 3%. ‘At the same time, the relative strength in remortgaging activity in December can be partly explained by the fact it isn’t as heavily influenced by seasonal factors. While home movers and first time buyers may typically avoid a busy upheaval during the festive period, for remortgagers this period is not as disruptive,’ he said. ‘However, remortgaging has wind in its sales as we enter 2015. With the Bank rate set to remain at its historic low for some time, lenders will probably be able to offer even more competitive rates very soon,’ he added. First time buyer activity also saw significant annual growth. On an annual basis the number of valuations for first time buyers increased by 9%. This is despite the fact that valuations dropped by 16% compared to the previous month. By contrast, the buy to let sector of the market saw one of the biggest falls in activity both on a monthly and annual basis. Compared to November 2014, activity fell 33% while on an annual basis it was down 9%. ‘With an improving jobs market, greater mortgage affordability and consistent above-inflation wage growth it is clear that confidence is returning to first time buyers. Looking ahead, the recent changes to stamp duty and the ongoing Help to Buy Scheme should help this sector continue to perform well in 2015,’ said Bagshaw. He explained that after a slightly disappointing performance in October and November, first time buyer activity seems to have regained strength. ‘This sector of the property market was particularly affected by the spate of regulatory policies such as the loan to income caps. Coupled with rising house prices these lending restrictions have proven a hurdle for first time buyers,’ he added. But… Continue reading
Latest data shows UK Help to Buy scheme has now helped over 73,000
The majority of sales under the UK government’s Help to Buy equity loan scheme continues to be to first time buyers representing 83% of total sales, the latest figures show. The data from the Department of Communities and Local Government (DCLG) also shows that the average (mean) purchase price was £211,566 in the first 20 months since the scheme was launched. The top six local authorities in terms of completed sales are Wiltshire with 664, Leeds at 628, Central Bedfordshire at 581, Milton Keynes at 516, Peterborough at 512, and Birmingham at 465. These figures firmly but to bed concerns that it would benefit people in London and the South East buy higher priced properties and also shows over 73,000 have benefitted. Figures also show that 30,269 households buying new and existing homes through the Help to Buy mortgage guarantee scheme and 5,518 households were supported into a new build home through the NewBuy scheme. The Help to Buy equity loan scheme was introduced along with other Help to Buy products to support people who can afford a mortgage, but struggle to save the deposits required by lenders in the wake of the financial crisis. ‘Our long term economic plan has turned this country around from the one we inherited, suffering from a crashed economy and a housing market where builders wouldn’t build, lenders wouldn’t lend and buyers couldn’t buy,’ said Housing and Planning Minister Brandon Lewis. ‘Now numbers of first time buyers are at their highest since 2007, house building continues to climb and planning permissions are at record levels. All these measures combined are helping record numbers of people into a new home, including 73,000 households benefiting from Help to Buy and we will keep striving to get that total even higher,’ he added. Continue reading
Private equity investment boosts commercial property market in Northern Ireland
The value of commercial property investment in Northern Ireland reached pre-economic crisis levels in 2014, according to a new report from Savills Northern Ireland. The emergence of private equity in the market resulted in approximately £500 million worth of commercial property deals completed by the end of the year, a 186% increase on 2013. Retail investment was to the fore accounting for 88% or £440.27 million of all deals and according to Savills, resilient jobs growth and positive momentum in occupational markets, particularly in the retail sector, has resulted in attractive returns for investors. Ben Turtle, a director of Savills Northern Ireland, expects this trend to continue in 2015. ‘One of the key drivers of investment activity has been rental growth and we expect both retail and office rents to increase this year,’ he said. ‘As a result, we see strong investor demand continuing into 2015 with £300 million of assets already scheduled for sale. This time last year that figure was £200 million,’ he added. Key investment deals which took place in 2014 included; The Obel, Donegall Quay, Belfast, Shane Retail Park, Belfast and Cityside Retail Park, Belfast. Savills NI transacted 78% of all investment deals in 2014. In the Belfast office market, Savills report that lettings in 2014 reached 348,500 square feet and were driven by improvements in the labour market, with private sector employment increasing by nearly 3.5% in the year to the third quarter of 2014. ‘This has resulted in a significant reduction in the availability of prime office space in Belfast and will result in continued rental increases this year. We estimate that approximately 500,000 square feet is currently required to meet occupational demand and it is expected that rents in the region of £183 per square meter will be agreed for deals in 2015,’ said Neal Morrison, a director of Savills Northern Ireland. The report also says that a strong economic backdrop has led to resurgence in retail activity with a number of new entrants coming into the market, according to Savills. Fashion and footwear and food and catering dominated take up of retail space in 2014, accounting for 61% of all deals in the year. ‘Renewed consumer confidence is now beginning to be reflected in the retail property market. While rents remain below peak levels and the supply of space exceeds demand, new entrants have started taking space in prime and secondary locations. With new arrivals across a variety of sectors, the broad based nature of the recovery is encouraging,’ explained Paul Wilson, a director of Savills Northern Ireland. Looking ahead, Savills say the rating revaluation in April 2015 could have a significant impact with a reduction in rates expected. For example, Donegall Place could experience a reduction of between 40% and 50%. Savills expect that the revaluation will put Belfast on a competitive footing with other UK regions. Limited supply of new housing development, in addition to strong demand, are expected to drive… Continue reading
