Tag Archives: finance
English farmland prices fall in first quarter of 2016
English farmland values fell by 3% in the first quarter of 2016 with average prices dropping back below £8,000 an acre, according to the latest index. Year on year farmland prices fell 2% but they are still up 32% over five years, up 176% over 10 years and up 4,886% over 50 years, the data from the Knight Frank Farmland Index shows. However, the drop was the largest quarterly decline since the 5% slide that occurred during the final three months of 2008, following the collapse of Lehman Brothers bank. ‘Given the significant issues weighing on the market at the moment, a period of readjustment is perhaps unsurprising. Agricultural commodity prices remain low with little prospect for a strong rebound in the short term, while the potential implications of a UK exit from the European Union are adding further uncertainty,’ said Andrew Shirley, head of rural research at Knight Frank. ‘To put the drop into context it should also be noted that the average value of farmland is still only £18 an acre lower than it was at the end of 2014, and remains almost 180% higher than it was 10 years ago. And despite falling in the two quarters after Lehmans’ collapse, farmland values had recovered all of their lost value and more by the end of 2009,’ he explained. Shirley also pointed out that while last year the feeling was that the In campaign was going to win the EU referendum relatively comfortably, now the polls are predicting a much tighter result, with neither side of the argument yet to establish a convincing lead. ‘Predicting where values will head in 2016 and beyond is almost impossible until we know the results of the EU referendum in June. In the case of a Brexit much will depend on for how long DEFRA commits to providing a replacement system of support payments,’ he said. ‘But if sterling weakens for a prolonged period as some analysts predict, this would make UK grain and meat more competitive on global markets. UK land, which is already cheaper than in some EU countries, may also become more attractive to international investors,’ he added. ‘Whatever the outcome, we are still seeing strong demand from farmers who are either not reliant on EU subsidy payments or have taken the long term view that expansion is the way forward for their businesses,’ he concluded. Continue reading
UK house prices up 7.6% year on year, down slightly from previous month
UK house prices increased by 7.6% in the year to February 2016, down from 7.9% in the year to January 2016, taking the average price to £284,000, the latest official figures show. House price annual inflation was 8.2% in England, 2.8% in Wales, and 2.4% in Northern Ireland. But prices fell by 0.8% in Scotland, the data from the Office of National Statistics (ONS) also show. Annual house price increases in England were driven by year on year growth of 11.4% in the South East, growth of 10.3% in the East and growth of 9.7% in London. Excluding London and the South East, UK house prices increased by 5% in the 12 months to February 2016. Also excluding London and the South East, the average UK mix-adjusted house price was £216,000. On a seasonally adjusted basis, average house prices increased by 0.4% between January 2016 and February 2016, compared with an increase of 0.8% in average prices during the same period a year earlier. The index also shows that in February 2016, prices paid by first time buyers were 8% higher on average than in February 2015 while for existing owners prices increased by 7.4% for the same period. London continued to be the English region with the highest average house price at £524,000 and the North East had the lowest average house price at £158,000. London, the South East and the East all had prices higher than the UK average price of £284,000. David Brown, chief executive officer of Marsh & Parsons, explained that while annual growth was down slightly he believes that UK property prices are certainly on a solid footing and despite the regulatory knocks over the past year, London remains one of the leading regions out in front. ‘Government intervention has prompted a lot of yo-yoing in the housing market of late, and the last week of March was one of the busiest we’ve ever experienced. A sense of urgency was palpable in the last few working days leading up to the implementation of higher stamp duty on second homes and buy to let purchases, and solicitors were working around the clock to service more than quadruple our average number of purchase completions per day,’ he explained. ‘Now we’re over the hump and this immediate buy to let incentive has passed, activity is sure to level out into the summer months, but continued high levels of buyer demand will help to keep London house prices strong,’ he added. Rob Weaver, director of Investments at property crowdfunding platform Property Partner, pointed out that first time buyers are still feeling the pinch, with average prices paid by them of £214,000. He believes that as the rate of inflation on new builds is accelerating more than existing housing stock, demand is still outstripping supply but a mood of uncertainty over the June referendum on the country’s future in the European Union could slow house price growth. He also believes that a dip… Continue reading
US holiday home market cooled in 2016, but still second best sales in a decade
Holiday home sales in the United States cooled off in 2015 but remained at the second highest amount in nearly a decade, new research shows. The survey report from the National Association of Realtors also shows that investment purchases increased for the first time in five years. And mirroring the strong price growth seen throughout the US, the median sales price of both holiday and investment homes surged in 2015. They Investment and Vacation Home Buyers Survey, covering existing and new home transactions in 2015, found that holiday home sales last year declined to an estimated 920,000, down 18.5% from their most recent peak level of 1.13 million in 2014. Investment home sales in 2015 jumped 7% to an estimated 1.09 million from 1.02 million in 2014. Owner occupied purchases jumped 15.9% to 3.74 million last year from 3.23 million in 2014, the highest level since 2007. According to Lawrence Yun, NAR chief economist, while holiday homes sales took a sizeable step back in 2015 they still came in at the second highest amount since 2006. ‘Baby boomers at or near retirement continue to propel the demand for second homes, although headwinds softened the overall volume of vacation sales last year,’ he said. ‘The expanding pool of buyers amidst a dwindling number of bargain priced properties led to tighter supply and fewer sales and caused the price of vacation homes to rise. Furthermore, the turbulence that hit the financial markets the second half of the year likely seized some would-be buyers' available cash,’ he added. The median sales price of both vacation and investment homes soared in 2015. For holiday homes at $192,000 it was up 28% from $150,000 in 2014. The median investment home sales price was $143,500, up 15.3% from $124,500 a year ago. According to Yun, many of the metro areas with the strongest price appreciation in 2015 were in the South, the most popular destination for vacation buyers, and particularly in several Florida markets. While increased buyer demand contributed to the run-up in prices, it also likely squeezed less affluent households looking to purchase vacation properties. Holiday home sales accounted for 16% of all transactions in 2015, down from 21% in 2014 but still the second highest share since the survey was first conducted in 2003. The portion of investment sales remained unchanged from a year ago at 19% and owner occupied purchases increased to 65% from 60% in 2014. ‘Despite a smaller share of distressed properties coming onto the market, investment purchases reversed course in 2015 after declining for four straight years. Steadily increasing home prices and strong rental demand appear to be giving more individual investors assurance that purchasing real estate will diversify their portfolios and generate additional income if they decide to rent out the home,’ Yun said. The survey found that in addition to longer term rentals, investors are most likely to attempt to and rent their properties for less than… Continue reading
