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British farm land prices more tightly pegged to local conditions
The British farmland market is becoming more finely balanced leading to a greater range in values achieved with sale prices more tightly pegged to local supply and the number of potential buyers. Overall values increased by 0.2% during the first six months of the year, a reduced rate, according to Savills most recent review of the GB farmland market. But this conceals some localised falls in prime arable values, where there is now evidence of more price sensitive demand coupled with reduced competition between farmer and non farmer/investor buyers. Indeed, average grade 3 grassland values, which in recent years lagged way behind arable values continue to strengthen with an average uplift of 1% during the half year. Meanwhile, 5% more land was publicly marketed in compared with the first half of 2014. Almost half of the acres advertised were arable compared with around 30% in the previous four years. ‘There is evidence of some farmers, especially those without successors taking the opportunity of current record values to exit the industry,’ said Alex Lawson director of Savills farms and estates. The report also shows that non-farmer buyers overtook farmers as the principal buyers of land and the proportion of farmers buyers is now at its lowest since 2003. However, of those continuing to buy land the proportion doing so in order to expand their existing businesses is rising and now accounts for the reason behind half of all purchases. ‘There are many entrepreneurs still growing their businesses, despite current commodity prices, reflecting the longer term view they take. It also reflects the fact that many farming businesses now produce significant non-farming income which helps spread business risk,’ said Ian Bailey of Savills rural research. A breakdown of the figures shows that 85,000 acres were publicly marketed in the first half of 2015 which is 5% more than in the same period in 2014 but 1% less than the average of the same period of the previous five years. In England 13% more land was publicly marketed in the first half of 2015 at 65,500 acres compared with 57,100 acres in the same period of 2014, which is 7% more than the five year average of 60,100 acres. Supply in Scotland fell by 7% to around 18,500 acres which was very similar to 2013. Here sellers and buyers continue to be affected by uncertainty surrounding land reform, the general election result and reform of the Common Agricultural Policy. Welsh land supply has dwindled most dramatically, with only 1,900 acres for sale so far in 2015. This is less than half the area marketed in 2014 and of the average area over the past five years. ‘Almost half of the acres advertised were arable compared with around 30% in the previous four years. This shift and the regional increases in supply are, to some degree, reflected in the pressures on the arable and regional value growth noted… Continue reading
Average property prices in Scotland up 3.5% year on year
Average property prices in Scotland increased by 3.5% to £167,765 in the second quarter of this year compared to the previous year, according to the latest data from the Registers of Scotland. It means that the average price of a home is now at its highest for this quarter since Registers of Scotland began compiling quarterly statistics in 2003. The highest rise was 10.1% recorded in West Dunbartonshire, taking the average price to £120,822, while Edinburgh recorded the highest average at £237,286, a rise of 4.4% compared with the same quarter the previous year. The largest percentage fall in price was in East Renfrewshire, with a drop of 7% taking the average price to £216,565. Sales of property across Scotland increased by of 1.6% on the same quarter the previous year, the highest volume of sales for this quarter since 2008. Glasgow saw the biggest rise in the number of sales with an increase of 17.6% compared to the same period in the previous year. This increase brought Glasgow above Edinburgh in terms of volume with 3,035 residential house sales compared to 3,002 in Edinburgh. This is the first time that the volume of Glasgow sales have exceeded those in Edinburgh since quarter four of 2012. Aberdeenshire sae the biggest decrease in the number of sales with a fall of 18% as in Aberdeenshire, and the total value of sales across Scotland increased by 5.1% compared to the previous year to over £4.14 billion, the highest value of sales for this quarter since 2008. Edinburgh was the largest market with sales of over £712 million for the quarter, an increase of 6.4% on the previous year. West Dunbartonshire recorded the highest increase in value with sales of over £45 million, an increase of 27% compared with the same quarter last year. In terms of type, flats showed the biggest increase in average house price in this quarter, up 4.7% to £133,790. Semi-detached properties also showed an increase of 1.8% on the previous year. Meanwhile detached and terraced properties saw decreases in average house prices of 0.2% and 0.3% respectively. Semi-detached properties and flats both showed an increase in sales volumes, with flats showing the biggest increase at 6.9%. Detached and terraced properties showed a decrease in sales volumes with terraced properties showing the biggest decrease of 3.7%. Property consultancy, CKD Galbraith, said that its own research shows a similar pattern and Simon Brown, partner and head of residential sales at CKD Galbraith, said it is an encouraging picture for the Scottish property market as a whole which has witnessed steady growth over the first half of 2015. ‘The market has improved somewhat post-referendum and we have witnessed a surge in viewings being conducted, the numbers of prospective buyers registering with us and the number of properties coming onto the market, all highlighting a real boost in market confidence both from sellers and buyers alike,’ he explained. ‘We believe this will continue as… Continue reading
Surge in house equity release in UK as over 55s cash in on property wealth
Equity release lending to UK home owners over the age of 55 totalled £384.3 million in the second quarter of 2015, the largest amount for any quarter since records began. The latest data from the Equity Release Council show that this surpasses the previous high of £375.4 million reached in the third quarter of 2014 and that the over 55s withdrew £4.2 million of housing wealth every day from April to June. This uplift comes despite savers gaining greater access to their pension pots under the freedoms launched on 06 April. With house prices rising again, it shows the growing appeal of using property wealth as an extra source of retirement income in later life, according to the report. Also, record lending in the second quarter meant the total value of equity released in the first six months of 2015 hit £710 million, the largest sum on record for the first half of the year and an 11% increase on the first half of 2014. There were 5,414 new equity release customers in the second quarter of 2015, an 11% increase on the last quarter, pushing the total number of new customers past 10,000 for the first six months of 2015. The value of lending, via lump sum lifetime mortgages, increased by 10% year on year in the first half of 2015 to reach £285.3 million, the highest total for lump sum activity in the first half of any year since the first half of 2007 when the value hit £355.9 million. However, the value of lending via drawdown lifetime mortgages surpassed this rate of growth, rising 12% year on year from £379.2 million in the first half of 2014) to £423.5 million in the first half of 2015. The data shows it also rose faster from the first to second quarter, at 21% compared with 14% for lump sum products. The Council says this was as customers took advantage of the flexibility to withdraw their housing wealth in regular instalments rather than as a one off amount. Home reversion plans account for less than 1% of the overall equity release market, yet these too saw an increase of 18% in lending from £534,765 in the first quarter of 2015 to £632,647 in the second quarter. ‘The last three months have been a landmark period for UK retirees and those approaching retirement, and equity release activity continues to grow amid a sea of change. There is no doubt the pension freedoms have created more options for people to consider, but the appeal of tapping into housing wealth is on the rise as older consumers seek to make use of all the assets at their disposal,’ said Nigel Waterson, chairman of the Equity Release Council. ‘Doom and gloom often surrounds discussions on retirement income, but while contributions to pension pots remain low, an entire generation of home owners have been paying into property their whole lives… Continue reading
