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Average prime property prices in London up £260 a day in 2014
Average prime London property values rose by £260 a day over last year, and Balham saw the biggest leap as prices jump by 21% over the 12 months period, new data shows. Overall the majority of property market gains in London were made in first half of 2014, and prices dropped 1.6% during the final three months of the year, the first quarterly fall since the second quarter of 2011. The data from the latest London Property Monitor report from Marsh & Parson, also shows that supply of Prime London property for sale increased by 26% in last three months of 2014 and the New Year has seen an uplift in demand, with 13 buyers to every available property in January. The average Prime London home has risen in value by £95,000 in the past year but in Balham they have jumped £152,000 over the same period. With property prices in outer prime areas of the capital typically 25% lower than the wider prime London average, stronger demand for more affordable homes has pushed the rate of house price inflation up in these kind of suburban areas. Indeed, house prices in outer prime London climbed 9% during 2014, compared to a 4.3% annual increase in prime central areas. Balham is favoured by first time buyers and young families and the growth in this area was followed by Brook Green where property values are now 19% higher than a year ago. In contrast, average prices in exclusive prime central enclaves of Kensington and Holland Park have grown 8% in the past 12 months. ‘The prestigious prime property bastions of Kensington, Chelsea and Holland Park will always command worldwide appeal from buyers, however, everyday demand for more affordable homes has catapulted Balham and other outer prime corners of the capital onto the map,’ said Peter Rollings, chief executive officer of Marsh & Parsons. ‘Londoners are increasingly willing to compromise on a central location in return for more living space and manageable price tags, and as a result the price growth seen in these green village suburbs has overtaken the Goliaths of London property this year,’ he added. So, a breakdown of the figures show that throughout prime London prices now average £1,572,342, up 6.4% year on year but down 1.6% month on month. In prime central London they are £2,199,531, up 4.3% annually but down 2.1% month on month. And in outer prime London average prices are £1,180,348, up 9% year on year but down 1.1% month on month. However, the majority of this house price growth occurred in the first half of 2014, and in the last three months, prime London property values declined 1.6%. This is the first quarterly price drop witnessed for three and a half years, as the market corrects after remarkable growth seen throughout the first half of 2014 . A 26% uplift in the supply of prime London properties… Continue reading
European commercial property sales set to continue with growth in 2015
European commercial property transaction volumes for 2014 are likely to exceed the €160 billion mark, up 10% on 2013, new research shows. A significant amount of capital continues to target commercial real estate and forecasts from real estate firm Knight Frank suggest a similar rate of growth in 2015, with total volumes expected to be in the range of €175 to €180 billion. All the main commercial sectors are attracting strong interest, while specialist sectors such as hotels, healthcare and student accommodation are becoming increasingly part of the mainstream property market, the firm’s report shows. ‘The really good news for both occupiers and investors is that rents in most markets remain lower than their pre-recession peaks, in some cases significantly below,’ said Darren Yates, head of Global Capital Markets Research. ‘This should provide a further boost to activity in 2015, with more occupiers looking to take advantage of good deals, while investors will seek to cash in on better rental growth prospects as the economic outlook continues to improve,’ he added. According to Andrew Sim, head of European Capital Markets, the forecast 10% rise of commercial investment volumes is a positive start for the first quarter of 2015. ‘We have witnessed a strong recovery in cities such as Madrid and Dublin and we are expecting demand to generally broaden out to smaller cities,’ he said. ‘Investors are looking to move increasingly up the risk curve to target good quality secondary stock, in addition to development opportunities,’ he added. While there are some lingering doubts about the strength and uneven nature of Europe’s economic recovery, both the European Union and the Euro area are poised for positive growth in 2014 and 2015, the report points out. Occupier markets are likely to continue to move in line with wider economic trends, with the Nordic countries and the Baltics currently seeing a significant improvement in occupier sentiment, while the UK is finally seeing a pick up in its regional city markets. However, the firm says that perhaps the most encouraging trend is the rebound in some of the peripheral markets, notably Ireland and parts of Southern Europe, with Dublin and Madrid in particular recording solid rental increases in 2014 and further growth expected in 2015. Despite the recent dip in economic performance, major French and German cities are also expected to perform well on the back of limited availability, with development yet to accelerate significantly in either country. The Russia-Ukraine crisis meanwhile continues to weigh heavily on those countries and, while property markets in the wider Central and Eastern European region have remained relatively untouched by the conflict, plentiful supply has constrained rental growth in key cities such as Prague and Warsaw. Continue reading
Demand for prime rental properties in London set to continue in 2015
The strengthening London economy and the continued expansion of sectors such as technology and telecommunications will underpin demand for prime rental property in London, a new analysis suggests. This will also filter out into the wider commuter zone, though demand from the financial and business services sector is forecast to remain relatively subdued, according to a new report from real estate firm Savills. The firm is forecasting rental growth of 17% over the course of the next five years unless a mansion tax is introduced and levied on the owners of homes worth £2 million or more. The Labour party has said that if it wins the general election in May it will introduce such a tax. On the supply side, a more muted sales market in the run up to the election could result in more would-be sellers bringing stock to the rental market, according to Lucian Cook, director of residential research at Savills. ‘In the short term this is likely to continue to suppress rental growth. In addition, in certain locations on the fringes of prime London, where high levels of new build stock have been bought by overseas investors, we expect rents to come under pressure over a longer period,’ he said. ‘Beyond London we expect the preference for prime family housing in key commuter towns to continue, with existing demand supplemented by that from those relocating to these areas and temporarily renting before buying,’ Cook explained. ‘On the supply side, we believe a stronger sales market is also likely to reduce the impact of the accidental landlord over the medium term, causing a reduction in available rental stock at the top end of the market and supporting rental growth,’ he added. He also pointed out that the reform of the stamp duty system in December may impact on future investor behaviour. ‘Stamp duty costs will be lower for all acquisitions below £937,500. However, across Kensington and Chelsea the average stamp duty bill is expected to rise by over £40,000. This may drive investor demand to higher yielding, lower value parts of the market that equally are less likely to be affected by the continued political rhetoric around a mansion tax,’ said Cook. ‘The Autumn Statement also contained provisions to increase the levy on those long term UK residents who wish to retain their non-dom status. Though many will be home owners, this may impact on the budget of long-term renters,’ he explained. ‘A similar differential in rental performance was seen in the prime regional market. Smaller properties servicing core market demand have generally performed the most strongly, with one and two bedroom units delivering annual price growth ?of 4.3%, bringing total growth over the three years to 11.7%,’ he added. ‘By contrast, there has been a much thinner market for large properties at the top end, which continue to be price sensitive. Rental value for properties with six or more bedrooms rose by just 1.1% over the course of 2014, with… Continue reading
