Tag Archives: finance
Scottish rents up just 0.1% in November, latest index shows
Scottish residential rental growth has almost ground to a halt in the run up to the festive holiday season with the average monthly rent up in November by 0.1% month on month. This takes the average rent to £546 per month with the data from the Your Move Scotland buy to let index showing that growth has fallen from a 0.2% rise between September and October. On an annual basis, the pace of rent rises in Scotland is also continuing to decline. November marks the fifth successive month where annual rent growth has slowed. With Scottish rents now just 1.4% higher than a year ago, the pace of annual rent rises has more than halved since the June peak when rents were up 3.1% year on year. But the headline figures disguise rises in some locations. For example, in Edinburgh and the Lothians rents increased to a new peak of £635 per month with a 0.8% monthly rise in November. The index data also shows that landlord total returns have increased to 6% across Scotland led by Glasgow and Clyde at 9.8% and the buy to let sector has seen its first fall in tenant arrears for six months. According to Brian Moran, lettings director at Your Move Scotland, the market is now set for change in 2016 with an extra 3% stamp duty tax set to be in place from April and rent control proposals looming. He reckons it will result in fewer properties available for rent which could push up prices. ‘Fresh supply is likely to be put on ice. Rents will then be ultimately be vulnerable to the shrinking pool of available homes for let. Landlords and the private rented sector have become a popular target for the Government recently but any attempts to curb investment in the private rented sector, and undermine landlords, will only have an adverse effect on tenants’ rents,’ he said. A breakdown of the index figures shows that as well as Edinburgh and the Lothians seeing growth above average, rents in the South of Scotland climbed 0.2% and those in the South were up 0.1%. Glasgow and Clyde saw the most significant monthly fall in rents, down 0.6% and the Highlands and Islands saw a 0.1% decrease in average rents since October. The picture is also mixed on an annual basis, with only three of the five regions of Scotland seeing rents increase in the past year. The Highlands and Islands saw rents rise 5.8% year on year, taking the average to £569. The next strongest annual increase was in the South of Scotland, up 3.1% and in Edinburgh and the Lothians typical rents are now 2.9% higher than in November 2014. Compared to a year ago, Glasgow and Clyde saw the biggest drop in rents, down 1.3% while average rents in the East of Scotland were down 0.1% year on year. After five months of successive rises, tenant arrears in Scotland… Continue reading
London prime property prices still falling and expected to be flat in 2016
Prime property prices in London fell by an average of 0.8% in the final quarter of 2015 and are expected to remain flat in 2016 and into 2017, the latest residential index shows. The latest fall in the prime London homes sector leaves prices a marginal 0.5% above the levels seen at the beginning of the year, while prime regional town and city markets averaged 4.4% annual growth, according to the research by international property adviser Savills. The marginally positive average annual house price growth across all prime London is attributable to the performance of property below £2 million, which recorded growth of 2.2% over the course of the year, according to the report. However, over the course of 2015 prices fell in all of the submarkets above this price level in London. Prime central London has seen prices fall year on year by 3.4% and 1.5% quarter on quarter and are 6% below the peak of 2014. Overall in prime London prices are up 0.5% year on year, down 0.8% quarter on quarter and down just 0.9% since the peak. Prices have been affected by the stamp duty changes a year ago. In the under £2 million sector they are up 2.2% year on year and 1.7% above the peak but down 0.4% quarter on quarter while all other sectors have seen prices fall. In the £2 million to £3 million market prices are down 1.4% quarter on quarter, down 0.2% year on year and down 2.7% since the 2014 peak. In the £3 million to £5 million sector they are down 1.2% quarter on quarter, down 1.3% year on year and down 3.8% from peak. The higher end of the market is also affected with price growth down all round. In the £5 million to £10 million market prices are down 1.5% quarter on quarter, down 3.3% year on year and down 5.9% from peak. In the £10 million plus market prices are down 1.3% quarter on quarter, down 3.7% year on year and down 7.5% since peak. ‘This reflects a continued adjustment to a less hospitable tax regime and successive increases in stamp duty rates in particular. This is particularly impacting the higher value markets of prime central London,’ said Lucian Cook, the firm’s head of UK residential research. ‘Since the credit crunch, is has been common practice to index price growth in prime London to the previous peak of 2007/2008. It is now clear that 2014 is the new peak reference point for a market that has continued to adjust to higher taxation, introduced at a time when the market was already looking fully priced,’ he added. He also pointed out that while the prime central London market remains price sensitive, data from LonRes indicates that transaction levels in the first 11 months of the year were 75% of the levels seen in the year previous for stock sold for over £1million. ‘In addition,… Continue reading
UK property prices set to rise by 3% to 8% in 2016, even with a rate rise
Residential property prices in some locations in the UK could increase by as much as 8% in 2016 as the recovery that has taken hold in London ripples out across the country. But overall price growth is expected to be around 6% across the country during the year, according to the forecast from the Royal Institution of Chartered Surveyors. One location tipped to see strong growth is Cambridge because of its buoyant jobs market and good commuter links to London. However, the RICS report also suggests that the current shortages of supply in the market is set to continue and this will push up prices with this growth likely to outstrip any rises in household income. According to RICS surveyors the average number of properties for sale have fallen to a record low of 46 and 40% of chartered surveyors believe that it is this lack of stock which is the main reason sellers are not entering the market, leading to a vicious circle. After East Anglia, the strongest growth is expected to be in the South East and the West Midlands, where 7% rises are forecast. The lowest level of increase is forecast for the North East of England where prices are forecast to rise by a much lower 3%. Areas with the highest number of transactions are likely to be the North East, Wales, Scotland and Northern Ireland, where prices remain low relative to the rest of the UK. RICS chief economist, Simon Rubinsohn, explained that an interest rate rise of 0.25% has been taken into account when making the forecast but he does not expect there to be a big rise in mortgage rates. ‘Housing has clearly leapt up the government’s agenda, but despite the raft of initiatives announced over the past year the lags involved in development mean that prices, and for that matter rents, are likely to rise further over the next 12 months,’ said Rubinsohn. ‘Lack of stock will continue to be the principal driver of this trend but the likely persistence of cheap money will compound it for the time being. Critically our principal concern with the measures announced by the government is that they are overly focused on promoting home ownership at the expense of other tenures,’ he pointed out. ‘Discouraging buy to let could see private rents take even more of the strain if institutional investment doesn’t increase significantly, particularly given the likely reduced flows of social rent property going forward,’ he added. Continue reading
