Tag Archives: finance
Short term rental market described as having potential for property investment
The supply of short term rental accommodation is not meeting a new demand from companies who are relying more on sort term employment models, according to a new real estate report. It means that those investing in the short term market in cities with demand in the sector are in line to reap the economic benefits, according to the Global Cities 2016 report from international property firm Knight Frank. It says that short term assignments are forecast to grow to over a fifth of all international relocations in the three years to 2017 meanwhile, long term assignments are expected to fall from 52% to 45% over the same period. However, supply of short term rental accommodation is struggling to meet demand in many established markets and the situation is compounded by the fact that short term lets often fall into a legal grey area. ‘Against this background, those cities that embrace the short term rental model stand to benefit in the future,’ the report points out. ‘For investors and landlords, there are clear long term rewards in the world of short term rental accommodation. Cities that embrace the flexibility of models like serviced apartments will reap the economic rewards,’ it adds. The research also shows that worldwide, the number of serviced apartments has grown by 80% since 2008 to over 750,000. The trend looks set to continue with the number of apartments increasing by as much as 18.2% between 2014 and 2015. The United States accounts for 61% of the world’s serviced apartment locations, followed by Europe at 17%, Australasia at 11% and Asia at 5.5%. The fact that demand exceeds supply puts upwards pressure on occupancy levels with nearly three quarters of global operators reporting a year on year increase. The report describes the private short let market as a potentially lucrative option and says that the reward from higher rental values, which are typically double those in the long term market, is balanced by the greater risk of void periods. However, private lets below a certain period of time are restricted in many key markets around the world. It also points out that while lets of less than 30 days are a grey area in New York for example, this has done little to diminish the growth of online short term accommodation providers like One Fine Stay and Airbnb. Despite many companies favouring serviced apartments for reasons of transparency and uniformity of service and quality, Airbnb is increasingly targeting corporate travellers and aims to grow this side of its business which currently accounts for 10% of stays. Continue reading
New manifesto calls for a more democratic planning system in the UK
A new manifesto has been launched in the UK to fight back against what it calls an assault on the country’s planning system and calling for a more democratic outlook for home and infrastructure building. Over 60 organisations and individuals have come together to call on the Government to ensure that people are placed back at the heart of the planning system, led by charity the Town and Country Planning Association (TCPA) and supported by environmental and disability rights organisations, professional bodies, housing associations and community groups. The manifesto represents the views of a broad cross sector coalition of organisations and individuals who share a common belief in the value of planning to improve the quality of lives and the condition of communities, according to TCPA chief executive Kate Henderson. ‘We believe that a powerful and democratic planning system can help ensure the delivery of decent healthcare, schools, jobs, public transport and affordable homes which are accessible and have enough space for kids to play,’ she said. ‘These are things that all sections of society should be able to enjoy as a matter of course, regardless of where they live or their ability to pay. However, the planning system as we knew it is being continually undermined and devalued though significant reforms and deregulation,’ she explained. ‘Over the last 30 years the reputation of planning has declined and it has lost all sense of the progressive social values that once lay at its core. This is partly because it lost sight of any vision that connected with people's real lives and partly because planning regulation was seen as a brake on the free market. We know this is wrong: the countries that are creating great places have strong planning systems,’ she pointed out. ‘That is why we have brought together organisations and individuals who are determined to ensure that planning shapes the kind of places that this nation deserves. Planning must change so it is genuinely focused on people's needs. Our objective is to reinvent creative social town planning which did so much to lay the foundation of a civilised Britain,’ she added. The manifesto says that the Government should give councils back power over permitted development, rebalance the National Planning Policy Framework to ensure that outcomes for people are just as important as the needs of land owners and developers, and restore a comprehensive framework of place making standards for housing including mandatory minimum standards for accessibility and space. It also says that local Government should adopt a strong social dimension to local plans. This means shaping policy that prioritises place making, providing for the full range of hard and soft infrastructure, and ensuring social and affordable homes receive the highest priority. It also suggests that the private and third sectors should establish corporate commitment to a fair and inclusive planning system while planning professionals and academics should transform planning education to ensure planners have the right skills in community development. As… Continue reading
British property rents up 2.7% annually, fastest rate in three years
Private rental prices in the UK increased by 2.7% in the 12 months to September 2015, but there are considerable regional variations, according to the latest data from the Office of National Statistics. Private rental prices grew by 2.8% in England, 1.6% in Scotland and 0.5% in Wales, while excluding London they increased by 1.8% year on year. In the capital city they were up 4.1%. Rental prices increased in all the English regions. The largest annual rental price increases were in London followed by the South East at 2.7% and the East also at 2.7%. Rental price increases have been stronger in London than the rest of England since November 2010. The ONS index report says that the rental market in Great Britain continued to show signs of strength with rental prices now growing at their joint fastest annual rate since October 2012. Increasing demand for rental properties coupled with low supply may be supporting price growth, it adds. August’s ONS House Price Index showed that house price growth has typically been stronger than rent price growth for a number of years. The Bank of England’s Agents’ Summary of Business Conditions for the third quarter of 2015 reported the long term growth in demand for rental properties continued in the three months to September. The Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS) for September confirmed this robust growth, noting the strongest tenant demand since the second quarter of 2012 in the third quarter of 2015. Despite signs of a slight increase in supply growth, growth in demand continues to outpace supply. While the latest RICS release did suggest a marginal increase in new landlord instructions, the longer term trend within the wider housing market is one of under supply, the report points out. Reflecting the Bank of England’s August Inflation Report, which noted that supply remains weak within the housing market, the Association of Residential Letting Agents reported a dwindling supply as the average number of properties held per branch fell by 5.8% in August. According to Rob Weaver, director of investments at property crowdfunding platform, Property Partner, it is no surprise than rents rose the most in London, as the supply issue in the capital is especially pronounced. ‘We need to build more homes, but there are a number of obstacles getting in the way, from slow moving planning departments to the practice of land banking. Recent initiatives such as the Government's decision to make it easier to convert commercial property into residential property are a step in the right direction,’ he said. ‘Unused office space is a way to tackle the housing shortage without eroding the green belt. We need more initiatives like this from both the public and private sector if we are to get Britain building and genuinely improve supply,’ he added. Steve Bolton, founder of Platinum Property Partner, also believes that a shortage of suitable properties, coupled with strong demand, both… Continue reading
