Tag Archives: europe
Residential rent gap between London and rest of UK widens again
The gap between the pace of annual rent rises in London and the rest of the UK has widened again after converging over the summer months, the latest index report shows. Rents were up 7.5% year on year in London and 3.5% in the rest of the UK in the third quarter of the year, according to the date from the HomeLet Rental Index. On average London tenants paid £1,560 per calendar month, which is over £800 more per month that the rest of the UK and for the second month in a row rents are now rising most quickly in Scotland, up by 9%. While the pace of rent rises has slowed over the autumn, rent inflation has increased in nine out of 12 regions of the country with the exception of the North West, where rents were 4.9% down, Northern Ireland with a fall of 2.1% and East Anglia down 1.2%. The October index report also includes new research into tenants’ views about the rental market which reveals that a large proportion of tenants are renting their homes for the long term and that they value relationships of trust with landlords and letting agents. Some 64% said that they planned to continue renting for a year or longer and 90% said they were happy with their landlord. However 71% would prefer to buy a home with 66% believing that saving for a deposit is the biggest barrier preventing them from doing so. ‘Our survey showed that many tenants ultimately aspire to own their own home, but that just over half of them aren’t actively saving for a deposit yet. 66% of those questioned said that a deposit wasn’t affordable for them,’ said Martin Totty, chief executive of HomeLet parent company Barbon Insurance Group. ‘However, the positive news is that almost nine out of 10 tenants told us that they were happy with the standard of their current rented property and the majority of tenants told us they were happy with the service provided by their landlord or letting agent,’ he pointed out. ‘Whilst we are seeing upward pressure on the rental market it’s important that the sector continues to drive professional standards forwards for mutual benefit of tenants, landlords and letting agents,’ he added. Continue reading
Prime properties in commuter areas set to outperform London prices
Prime commuter housing markets are set to outperform prime London in the five years to 2020, according to new research from international real estate advisor Savills. Overall the relative value offered compared to the capital is likely to underpin medium-term house price growth, the five year UK prime housing market report says. However, short term growth prospects are likely to be hampered by the combined impact of stamp duty, mortgage market review and a slow prime London market. The price gap between property in London and its commuter belt indicates the potential for significant growth once the ripple effect is restored, it explains. Prime London property prices are 36.8% above their 2007 levels, compared to a 6.6% rise in commuter areas over the same period. Consequently, the prime housing markets in London suburbs, inner commuter, up to 30 minutes train journey to London, and outer commuter up to 60 minutes, locations have the strongest growth prospects over the five years to 2020, at 24.5%, 24% and 23.4% respectively. However, the report explains that these prime housing markets in the commuter zone markets are dependent on movement in the prime London housing markets, which is only expected to occur after they acclimatise to a new tax and regulatory environment, allowing the fundamentals of wealth generation, both domestic and global, to translate into restored demand. This is expected to start to take effect in 2017, with trend rates of price growth returning from 2018 onwards to deliver five year price growth of 21.5% in prime central London and 18.2% growth in other prime London markets. Across the rest of the country prime housing markets are expected to be driven by a preference for city and town locations and strengthening local economies. Scotland is seeing a similar predilection for metropolitan areas, but all markets over £750,000 are being constrained by Land and Buildings Transaction Tax to some degree. ‘We expect the trend for urban living to continue as London buyers seek out vibrant locations where they don’t have to sacrifice the convenience of living close to shops, restaurants and leisure facilities,’ said Sophie Chick, Savills research associate director. ‘Positive sentiment for cities in the north of England is also being bolstered by talk of a northern powerhouse, despite the proposals being some way off,’ she explained. ‘While the prime property market is continuing to adjust to a new fiscal and regulatory environment, wages are increasing, interest rates are still low and there is political certainty for the next five years. Under these circumstances, we expect prime property to return to long term trend rates of real price growth in 2018,’ she added. Continue reading
City of London office market sees strongest recovery on record
Rents for City of London offices have proved more resilient in recent years than during previous market downturns and recoveries, according to new research. The analysis from real estate firm Knight Franks indexed City of London office rents at 100 for the pre-downturn peaks recorded in the fourth quarter of 1989, the third quarter of 2001, and the fourth quarter of 2007. This showed that rents in the most recent downturn found a floor and moved into recovery far sooner than during the early 1990s and early 2000s downturns and overall the City office market has seen its strongest recovery on record. Also, the current recovery is proving to be far more enduring than that seen after the early 2000s downturn. Indeed that market cycle lasted just six years, with the arrival of the global financial crisis in late 2007, the report points out. It also explains that the outlook is good as it is over seven years on from the market peak for rents, and growth is still occurring, and expected to continue. ‘These figures demonstrate that the City office market has proved far more resilient in recent years than anyone would have imagined back in 2007 when the financial crisis began,’ said Bradley Baker, central London tenant representation partner at Knight Frank. ‘One of the keys to the City’s success has been its’ significant diversification away from an over-dependence on the financial sector in the past and instead embracing and attracting technology and media firms such as Saatchi & Saatchi, Amazon, Hachette and Uber,’ he explained. ‘Unlike previous downturns, the current recovery began within two years of the initial crash and has been sustained for over five years. This compares favourably to the 2001/2003 and 1989/1991 crashes which took over three and four years respectively to post a recovery, and even then they were short lived,’ he added. Continue reading
