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Large group of UK first home owners can’t afford to move up the housing ladder
Over four million young home owners in the UK are frustrated middle movers who cannot afford to move up the property ladder, new research reveals. Some 68% of home owners aged 18 to 34 are still in their first property and 63% said that the main barrier is the need for property prices at the lower end of the market to increase so that they can afford a bigger home. The research from Santander Mortgages also shows that 89% have made compromises on their first home such as location or size, at 63% and 55% respectively. Some 47% bought a home with fewer bedrooms that they would have liked. Of the home owners aged 18 to 34 who would like to buy their next home within the coming 24 months some 71% think it is unrealistic that they will be able to do so. Overall 50% of home owners in this age group expected to live in their first property for more than five years, but 59% have already had to do so. ‘There are a lot of frustrated middle movers who made compromises on their first homes and have now been stuck with these for longer than they wanted, as they are finding it difficult to move up the property ladder,’ said Miguel Sard, head of mortgages at Santander. ‘There are a lot of great deals to be had for buyers at the moment, however, both in terms of properties and mortgages, so it’s worth looking around,’ he added. Of those homeowners aged 18 to 34 who would like to purchase a new home in the next two years, the average time they think they will realistically have to wait until they can do so is over three years, the research also found. Whilst the main barrier is the need for property prices to increase, as cited by 63% of those surveyed, 28% blame a lack of suitable properties on the market and 51% say they need to do work on their current home to increase its value before putting it on the market while 34% say they are waiting for property prices to fall further. Others see wider economic issues as barriers to purchasing a new home, with 53% citing personal fears about the state of the economy as an obstacle, while 38% are concerned about the stability of their own or their partner’s job. Upfront costs are also a big issue, with 58% saying they need to save for a bigger deposit. Continue reading
Top end of luxury rental market in London booming, new analysis suggests
The top end of the luxury home rental market in London is booming with a lack of supply and concerns about next year’s general election driving the market, according to a new report. The ultra prime market where rents are £100,000 plus per annum and the super prime sector with rents of £1 million and over are currently booming, according to lettings specialist Beauchamp Estates. Its latest report in conjunction with market intelligence group Dataloft, looks at the top 5% of properties let in prime central London over the past five years in terms of rental price achieved. In order to live in luxury in one of the capital’s top 5% of lettings properties, a tenant now has to pay a minimum rent of £108,000 per annum or £9,000 per month, which is the highest entry level for this sector of the London lettings market ever recorded. In addition, there has been a 12.8% rise in the number of properties let at rental values of over £10,000 per week compared to the same period in 2013. The average weekly rent in London’s ultra prime lettings market is now £3,500 per week or £182,000 per annum, a 23% rise since 2009 when the equivalent average figure stood at £2,813 per week or £135,025 per annum. Outside of the capital, a household could purchase a property for this annual rent, since the latest Land Registry records show that the average price of a home in England and Wales is now £177,299. Over the last 12 months ultra prime rental levels have continued to rise. Across prime central London the average rent paid in the third quarter of 2014 was 6.5% higher than 12 months earlier, the highest rate of growth for more than three years. The research reveals that the super prime lettings market, properties to let for over £1million per annum, is also extremely buoyant. The findings show that the £1 million plus rentals market first emerged back in 2010. Initially, the £1 million plus super prime rentals market was confined to Mayfair and Knightsbridge, however during 2013 and 2014 the market has expanded significantly and Chelsea, South Kensington, Notting Hill, Regent’s Park, St John’s Wood and Holland Park have all seen properties let at rents equivalent to over £1 million per annum. The firm points out that the ultra prime lettings sector is highly lucrative and therefore, despite its small percentage size, in terms of rental income it is disproportionally large and is extremely important to the overall health of the capital’s lettings industry. The annual rent roll from ultra prime London rentals agreed in the first nine months of 2014 is equivalent to £102 million in annual rental income. This represents 21% of the total annual rental income of all lets agreed so far this year across prime central London. In other words, a twentieth of the deals make up a fifth of the income… Continue reading
Paris office market see strong year despite poor economic conditions
Despite the difficult economic background in France, the Paris office market has turned in a strong performance over the first nine months of this year, according to a new report from Knight Frank. Office take up increased by 13.2% and investment volumes rebounding by 39% compared to the same period in 2013, the report shows. Occupier take-up reached 1.4 million square meters in the first nine months of 2014 and is expected to reach two million square meters for this year as a whole. The increase has been driven by a number of significant deals over 5,000 square meters to major corporates such as KPMG and L’Oreal. The overall office vacancy rate has stabilised and stood at 7.2% at the end of the third quarter, although there is a disparity between the city’s different submarkets. Vacancy rates in La Défense and Western Crescent are at 11%, while in the CBD the vacancy rate is less than 6%. The report suggests that the office investment market remains buoyant and somewhat decoupled from the leasing market, with the current strong interest in trophy assets expected to continue. Transaction volumes for 2014 look set to reach their highest since the peak of 2007, having surpassed €11 billion in the first nine months. With a strong final quarter in prospect, deal volumes for 2014 as a whole are expected to end up in the region of €15 billion. International investors remain very active in the market and are showing interest in higher-yielding assets outside the core, as well as prime opportunities. ‘The Paris office market has bucked the wider economic backdrop and, while the economic outlook remains somewhat uncertain, the recently released positive GDP figures for quarter three will provide a boost for both occupiers and investors as we move towards the year end,’ said Darren Yates, head of global capital markets research, Knight Frank. According to Luke Condon, partner, Knight Frank Paris, the size and on-going resilience and stability of the Paris occupier market provides comfort to investors, as demonstrated by the increasing proportion of international capital attracted to the market. ‘This, coupled with improved financing conditions, has also led to significantly improved demand for non-core products. Market sentiment is positive but more product is required to satisfy demand,’ he added. Continue reading
