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House developers looking outside London for land
Over the last six months, there has been a shift in direction of the residential development land market in the UK and urban locations with London links are increasingly being sought by developers, new research suggests. Developers are looking for opportunities beyond London as the capital city has seen much slower growth in land prices over the six months to September than the previous half year, according to the research from real estate firm Savills. Values for residential land in London rose by 4.1% from the first quarter to the third quarter of this year compared to 15.2% in the six months to March 2014. The slower increase in the value of residential land follows the cooling housing market in the capital over the same period. Sites with good transport links across all zones however are still highly sought after. The main flow of this movement is the south western corridor from London out to commuter hotspots, Guildford, Woking and Farnborough, according to the report. London based developers as well as those from other regions are interested in investing in the area. Values for urban land in Guildford and Woking are amongst the highest outside London, but despite this they have seen steady growth of 2.4% over the last quarter and 5.5% in the last year. Other cities have seen the influence of developers investing in land from London. An example is Manchester which two years ago only saw regional interest. Development land in Manchester has seen growth for the second quarter in a row after six years of stagnation. Many parties are now interested in land in and around the city although access to finance remains a potential barrier to delivery of homes. Urban land has seen stronger growth in the last quarter having previously lagged behind the growth seen for green field development land since the downturn. Along with Manchester, places in the Midlands, such as Northampton, Nottingham, Leicester and Derby, have stood out as having seen strong growth in urban values, into double digit percentage figures in some cases, indicating that the market has picked up again. Further south, Cambridge has seen increased growth in urban land values along with a large volume of development in recent years. The report points out that here development is supported by a strong and growing local economy, a significant London commuter base and its vibrant historic centre. Construction on urban extensions in Cambridge began at the end of 2011, and an additional 5,000 units will be built in and around the city in the next five years. Sales rates here have been the highest in the country outside London, indicating a strong demand for property. However, not all of the UK is seeing land value increase and in many places land values have remained stable, particularly where there has been high supply of consented land. One example is Telford, where there has been a high supply of sites controlled by the HCA. Continue reading
Spanish properties prices up 1.15% in third quarter
Residential property prices in Spain rose 1.15% in the third quarter of 2014 compared to the same period last year, according to the latest index published by the Property Registrars. That is the first time this index has edged clearly into positive territory since the Spanish housing bubble burst, and according to real estate expert Mark Stucklin it means the market could be turning. On a quarterly basis prices were basically stable, with a decline of just 0.08% between June and September and the peak to present fall in house prices is 32.4% according the Registrars’ figures. It says that these figures paint a picture of stable house prices. The registered number of homes sold also shows a favourable evolution with transactions up 1.4% to 79,561 sales in the third quarter compared to the second. The market bottomed out with 72,560 sales in the fourth quarter of 2013. The improvement was driven by resale properties with 52,127 sales, practically double those of new builds at 27,434. Resale transactions were up 4,268 on the second quarter, meaning a quarterly rise of 8.92%, against a fall of 10.36% in new builds. Cumulative sales over 12 months were 313,607, up by 2,743 on the second quarter of the year when a record low of 310,864 was reached. Andalucia saw the most sales with 16,006 transactions, followed by the Valencia at 12,189, Catalonia at 11,975 and Madrid at 10,883. The data also shows that the proportion of Spanish property sales involving a foreign buyer has hit a new high of 13.1% market share, an annual rise of 19% and year to date, foreign buyers bought 30,708 properties, up 23% on the same period last year. British buyers were the strongest nationality buying 1,886 Spanish properties in the third quarter, up 37% on the same time last year, followed by the French, Russians, and Germans. In terms of foreign market share, the British represented 18% of total purchases by foreigners, and 20% of key markets. France was next with 12%, Russia with 8%, and Germany with 7%. Stucklin pointed out that in the boom years foreign buyers, led by the British, accounted for between 8% and 9% of the market. That fell to a low of 4.24% in 2009, at the nadir of the financial crisis. Since then foreign demand has increased in market share whilst local demand continues to shrink. ‘For the last year or more it has been possible to buy new property in Spain for less than it costs to build, thanks to a housing bust that has forced banks to take over thousands of new developments, and repossess hundreds of thousands of new or recently built homes. Such low prices are a once in a cycle situation that will not be repeated again, at least not until the next boom and bust, which could take decades,’ he said. He also explained that there are bargains, especially when it comes to property owned by the Spanish banks. ‘Not only are there thousands of… Continue reading
Average home prices in areas of high employment rise faster, research has found
Average house prices in the 20 top performing employment areas in the UK have risen by 45% over the past decade, more than double national average of 21%, new research has found. Home owners in the local authorities that have seen the largest rises in employment have also seen the average value of properties rise by over £100,000 over the past 10 years, according to the study by the Halifax. The average house price in the 20 local areas recording the largest increases in employment in the decade to June 2014 rose by 45% or £103,785. This was more than double the national average increase in house prices over the period at 21% or £35,456. At the same time, employment in these areas rose by an average of 26% well ahead of the average national increase of 4%. According to Martin Ellis, housing economist at the Halifax, there is a clear relationship between employment patterns and house price performance over the past decade. ‘Top performing areas for employment have generally seen well above average house price gains while the worst performing employment areas have typically recorded much more modest property house price rises. This demonstrates the importance of economic conditions to the health of the local housing market,’ he explained. The research also shows that over the past decade, the top 10 performing house price locations have been evenly split between northern Scotland and central London. Seven of these top 10 areas also feature among the top 25% of local areas in terms of employment growth over the period. Aberdeen and Aberdeenshire both feature in the top 10, with prices in these areas boosted by the strong performance of the oil sector during the past ten years. Tower Hamlets, Hackney and Lambeth also feature in the top 10, with prices in these areas boosted by the wider house price growth in London. Southwark and Lewisham have also recorded significant price gains. The top 10 performing house price locations have significantly outperformed the rest of the country as a whole, with an average house price gain of 89%, more than four times the national average of 21%. Employment in these 10 areas of house price growth has increased by an average of 15%; well above the national average of 4%. At the other end of the spectrum, the 20 areas experiencing the worst employment performance over the past 10 years have typically underperformed the national average in terms of house price gains. On average, these areas have recorded an increase in property values of less than £20,000. The average house price in the 20 local areas recording the smallest increases in employment rate in the decade to June 2014 rose by 13% or £19,698. This was little more than half the national average increase in house prices over the period. Employment in these areas fell by an average of 11%, well below the national average increase of 4%. The bottom 20 employment areas are concentrated in northern England (8) and the… Continue reading
