Tag Archives: crisis
Interest rates and property tax concerns impacting prime central London market
Concerns around interest rates and property taxes have impacted on sentiment within the prime central London residential market, it is claimed. The latest market commentary report from W.A. Ellis says that sentiment within the housing market often reflects the mood of the overall economy and this has resulted in demand falling over the last four months. Richard Barber, director of W.A.Ellis, pointed out that this coincides with the Bank of England’s ‘sabre rattling’ over raising interest rates and increasing taxes on property, particularly those with a high capital value or owned by foreign investors. ‘This, coupled with the run-up to what must be the most property centric general election that we have experienced, is what is now bringing swift realism to our previously bullish market,’ he said. ‘The prime central London market is undoubtedly slower, and the usual withdrawals from the market are becoming more apparent as discretionary sellers now wait and see the result of the general election. Purchasers are also more wary of paying last spring’s frothy prices,’ he explained. ‘There are many factors influencing our market, both negative and positive but undoubtedly higher property taxation, stronger sterling and a fear of the politically unknown has had a cooling effect,’ he added. This has influenced the firm’s more restrained prediction of 1.5% growth within the prime central London market through 2015. ‘More positively, we expect to see 4% growth within the central London new development market and the interest generated from the third phase of the Battersea Power Station development is indicative of the sustainable growth we foresee within this sector,’ said Barber. ‘Furthermore, our research predicts stronger growth in prime central London from 2016 to 2019, once political uncertainty and potential increased taxation has been absorbed, culminating in a predicted rate of growth of nearly 20% from 2015 to 2019,’ he added. In the sector’s lettings market Lucy Morton, director and head of agency, explained that the end of the month has seen the release of third quarter research results from Lonres, the agents’ intranet, which have confirmed that the recovery in the central London rental market that began earlier in the year has continued, boosted by the positive state of both the UK and London economies. There were 43% more properties let in the third quarter of 2014 than in the previous quarter, although this is still 4.6% less than in the third quarter of 2013. ‘While demand from tenants for properties has increased, stock levels have eased back. There were 9.5% fewer properties available to let across central London in the third quarter of 2014 compared to the same quarter in 2013,’ she said. ‘Demand is out stripping supply at the lower levels of the market but there is more of a balance in the middle tier of the market, with the most choice for tenants with budgets from £1,000 to £2,000 per week,’ she pointed out. ‘Competition for properties has increased rents over the last quarter indicating an optimistic outlook… Continue reading
Official figures show rent increases in Scotland are largely below inflation
Between 2010 and 2014 most average rents in Scotland increased below the rate of inflation, with some rents falling, the latest data from the Scottish Government shows. In particular, a total of 16 out of the 18 rental market areas across Scotland have seen below inflation changes in average rents for two bedroom properties, the most common size of property in the private rented sector. Some areas of the country have seen higher increases over these years, including Aberdeen and Aberdeenshire where average rents for all property sizes have increased well above inflation. In Lothian increases for one, two and three bedroom properties have been above inflation. A breakdown of the figures show that the city of Aberdeen and Aberdeenshire has seen the highest increase in private rents for two bedroom properties from 2010 to 2014, with average monthly rents rising by 39.8% over four years. Average rents in the Lothian area have risen by a cumulative 17.2% over the last four years, whilst rents in Greater Glasgow have increased by 11.1% and rents in Fife have risen by 9.8% over this time period. For the remaining areas of Scotland, cumulative increases over the last four years have ranged from 5.7% in the Highlands and Islands to 0.6% in the Scottish Borders. In addition, three areas of the country have seen cumulative decreases in average rents from 2010 to 2014 with the Ayrshires seeing an 0.8% fall, Argyll and Bute a 1.5% fall, and West Dunbartonshire a 2.7% fall. These regional trends combine to show an 11.2% cumulative increase in average rents from 2010 to 2014 for 2 bedroom properties at the Scotland level. For the latest year the annual increase has been 3.6%. The data also shows that over the four year period, average rents for two bedroom properties in the Aberdeen, Aberdeenshire and the Lothian areas have risen faster than the consumer price index, whilst changes in average rents for two bedroom properties in other areas of the country have been below the rise in the consumer price index. For the year to the end of September 2014, Aberdeen and Aberdeenshire had the highest average monthly rents for two bedroom properties across Scotland at £898 per month. Other areas with higher rents included Lothian at £779, Greater Glasgow at £626, and East Dunbartonshire at £604. Areas with the lowest average rents for two bedroom properties included North Lanarkshire at £464, the Ayrshires at £461, the Scottish Borders at £444, and Dumfries and Galloway at £442. The data is from the first Private Sector Rent Statistics report is a result of a Scottish Government commitment to publishing more comprehensive statistics on rent levels across the country. ‘These statistics highlight wide variations in the rate of rent increases, with hotspots in the Lothian area and in Aberdeen, but modest rises, or even falls elsewhere. This is clearly good news for those tenants whose rents have risen at or below the rate of inflation, but a real problem for those affected by… Continue reading
Asking prices in London push up averages in the UK as a whole, latest index shows
Property asking prices in London are still increasing and have helped push up the average prices of a UK home for the tenth month in a row, according to the latest index figures. Overall average asking prices increased by 0.2% in October and 8.2% year on year, taking the average asking price to £267,466. But outside of London home prices fell in all English regions except the East Midlands and the South East, Scotland and Wales. The Asking Price Index from Home.co.uk says that coupled with last month’s rise of 1.1% it puts London back on a rising trend following a dip in the summer which it says was caused by a correction in prime property prices. The supply of property for sale in Greater London is up by 54% compared to October last year but the typical London property is now 15% more expensive. But excluding London, the UK property market is cooling in line with seasonal expectations, the index report says. Prices are edging back in most regions after what was a solid year, especially in the South but prices continue to stagnate in the North. The worst performing region over the last six months has been the North East with a fall of 0.9% since May. The firm describes this as ‘a very poor performance’ for what has been the best year for UK property prices since the onset of the financial crisis. Wales, the North West and Scotland are not much better and only just managed to keep in positive territory. ‘Within those areas, it is only the more upmarket locations that are supporting the regional averages,’ the report explains. Across the UK, supply of property for sale is steadily increasing but remains historically low. The number of properties that entered the market last month was 14% higher than during October 2013. ‘Areas of great demand, such as London, will be less sensitive to rising demand, while Scotland, which has a much weaker property market, has registered an annual rise of 18% in the number of properties for sale. This will likely thwart further price rises in 2015 north of the border,’ the report points out. ‘In Wales and the other English regions, we have observed only minor increases in the volume of sales properties coming onto the market,’ it adds. The data also shows that the average mix-adjusted 12 month change in asking prices for England and Wales reached a maximum in June at 9.6% and this is steadily falling back. The average year on year price change trend for England and Wales reflects an end to the accelerating price growth observed over most of the last two years. The firm says that annualised gains are being eroded in the current cooler market, and it expects this gentle downtrend to continue into 2015. Continue reading
