Tag Archives: europe
Lettings agents call on UK govt to help restore confidence in lettings market
A leading group of lettings agents in the UK is calling for the Government to take action to restore confidence in the residential lettings market in the aftermath of the vote to leave the European Union. There has been a cooling in investment in the lettings market due to pre-referendum uncertainty, plans to cut mortgage tax relief for landlords and now Brexit, according to Belvoir Lettings, at a time when there is growing tenant demand. ‘With the Bank of England hinting at further reductions in interest rates, which will continue to hit savers, property remains a very attractive long term investment opportunity, particularly for those with cash to invest,’ said Belvoir managing director, Dorian Gonsalves. ‘However, in some areas continued uncertainty over the future of EU nationals in the UK is having a negative impact. For example, in Boston in the East Midlands, which was reported as being the most pro-Brexit town in the UK with 75% of the population voting to leave, thousands of EU workers remain anxious about their immigration status,’ he pointed out. ‘We hope that the Government will act quickly to resolve this uncertainty and reassure EU citizens about their future in the UK. This will also help to reassure those overseas landlords who are also expressing concern,’ he added. Indeed, Donna Burrell, owner of Belvoir Boston, reports that although the rental and sales market has now picked up, there is continued anxiety amongst Eastern European workers, with many now adopting a 'wait and see' attitude before committing to investments. ‘During the build up to the referendum we noticed that business was quiet. Belvoir Boston now provides an estate agency service, and prior to the referendum many Eastern European tenants who had been working and renting in the area had started to buy the properties they had been renting. Now that Britain has voted to leave the EU we have noticed a more cautious wait and see approach and some have pulled out of sales,’ she explained. ‘There has also been some racist backlash from a minority group, which is making Eastern European tenants and foreign investors feel uncomfortable about committing to investment. Boston is reliant on Eastern European migrants to work in factories and keep local businesses afloat. If these workers feel forced to leave, it could potentially be catastrophic for the town, its people and local businesses,’ she pointed out. ‘I really hope that the Government will end the uncertainty by giving out a strong message of reassurance, as many of these people have worked and lived here for several years, and contribute enormously to the community,’ she added. According to Emma Falco, co-owner of Belvoir Peterborough, Brexit has been a hot topic for landlords and tenants, but whilst there is a lot of conversation surrounding it, it doesn't seem to have deterred serious investors. ‘In fact, I think many still have the 2008 crash in their minds and are hopeful that they may be able to pick… Continue reading
Foreclosed homes in US increased in value almost twice as much as others
Homes that were foreclosed during the housing crisis in the United States have gained almost twice as much value as other homes, according to a new analysis. But the original owners of those homes have not benefited from that recovery as low end homes were much more likely to be foreclosed, the report from real estate firm Zillow shows. It explains that during the run-up to the housing bubble, many low income earners bought homes, and the home ownership rate rose from about 65% in the middle of the 1990s to almost 70% in 2006. However, when home values crashed in 2007, millions of home owners had to walk away, abandoning their initial investment and missing the opportunity to gain equity as home values recovered. It also points out that the rich-poor divide is growing in the US. In 2000 high income households made an average of six times as much income as the lowest third of households. In 2015, the top third made nearly seven times as much as the lowest third. Of all foreclosed homes, some 46.7% were among the least expensive third of homes. Only 16.6% were among the most expensive third. Foreclosed homes gained value faster than other homes, and in many markets, are more valuable now than they've ever been. Since the lowest point in the housing bust, the average US home has risen 22% in value, while the average foreclosed home has risen 39% in value. The report suggests that in many cases, investors bought foreclosed homes and converted them into rental properties, benefiting from the recovery as home values bounced back. The percentage of single family homes being rented out has risen from 13% to 19% over the past decade. ‘Income inequality is an important topic in the US right now, because the gap between the richest and poorest Americans is growing,’ said Zillow chief economist Svenja Gudell. ‘Many lower income Americans lost their homes during the foreclosure crisis, forcing them to pay ever increasing rents and locking them out of the benefits of the housing market recovery,’ she added. Meanwhile, a separate report from the National Association of Realtors shows that at a national level, housing affordability is down from a year ago as higher prices continue to outpace household income growth. Housing affordability declined from a year ago in April pushing the NAR index from 167.5 to 162.4. The median sales price for a single family home sold in April in the US was $233,700 up 6.3% from a year ago. Regionally, all four regions saw declines in affordability from a year ago. The Midwest had the largest decline of 5.6%, the South had a decline in the affordability index of 3.4%, followed by the West with 2%. The Northeast had the smallest dip in affordability at 1%. By region, affordability is down in all regions from the previous month. The Midwest with a fall of 6.2% had the biggest decline, followed by the South and West… Continue reading
London residential rental market disparate due to Brexit uncertainty
Rents in London have peaked in many locations with the market currently stagnant and facing uncertainty due to the UK deciding to leave the European Union, the latest analysis suggests. While Benham & Reeves Residential Lettings' Heat Map generally shows relatively consistent trends across the capital, second quarter results show a disparate market. For example rents were up more than 4% in Chelsea but in nearby South Kensington they were down more than 4%. Similar contradictory results were to be found across London with adjacent areas showing wildly different fortunes. The report explains that even in the early part of this year, uncertainty over Brexit was affecting the prime central London rental market. Non-nationals were awaiting the result of the referendum while UK nationals were finding better value in East London and the suburbs. Rents in central London were falling, much to the frustration of landlords who were also suffering from the double blow of stagnating capital growth. Rental value growth was to be found in outer London until recently. However, the most recent figures from Benham & Reeves Lettings demonstrates that rental values have finally peaked there, as well. Most areas outside of prime central London saw rents plateau or boast only nominal growth. The report says it is perhaps noteworthy that there is a lack of definable trends. Hampstead Garden Suburb saw growth of over 4.5% while adjacent North Finchley saw rents fall by over 10%. The report suggests that the contrast may be due in part to the reopening of the Northern Line interchange at Tottenham Court Road. The eastern part of the City also saw double digit growth, thanks in part to the release of some highly anticipated new developments in the area, while the western part of the City saw rents fall by over 4%. ‘There is nothing the property market hates more than uncertainty. While the referendum result may not have been what many London residents wanted, it has provided us with an answer,’ said Marc von Grundherr of Benham & Reeves Lettings. ‘Our quarter two results are a reflection of what was happening in the market in the run up to the vote. If anything, the referendum result could be just what the market needed. The rental market always benefits in financially volatile times as people would rather rent than commit to buying a property,’ he explained. ‘Demand is still strong and since the referendum, we are receiving an average of 17 applicants per property compared to 13.9 at this time last year. Notably, many of the applicants have been from the EU,’ he added. Continue reading
