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New analysis identifies rising commercial opportunities in smaller UK cities
Rising capital values and strong competition are now driving investors to look beyond the major UK cities for quality office stock and potential value, a new report shows. The analysis from global property consultancy JLL looks at the economic and office market performance of 37 smaller towns and cities giving an insight in to which locations will offer the biggest opportunity over the next five years. The report shows some smaller cities are found to have a stronger outlook than the major cities such as London, Manchester and Birmingham. It explains that the success of these smaller cities will be closely associated with their ability to develop and grow clusters of businesses, along with strong university links and the provision of integrated transport and infrastructure. Growth leaders, including Brighton, Solihull and Reading have seen capital value increases of over 25% since the end of 2012 and are expected to see a stronger than average economic performance over the next five years. With the outlook remaining solid for these cities, most of which have firmly established business clusters, JLL says it may be prudent for investors to focus on opportunities where they can reposition their assets to benefit from any price growth. The report also reveals locations such as Oxford, Warrington, Southampton and Nottingham, with a similarly strong economic outlook but where recent capital value growth has not been as strong as the growth leaders and opportunities may actually be greater going forward. These potential performers include a broad range of property markets that JLL anticipates could benefit from further capital growth as the property market continues to respond to the improving economic climate. ‘The outlook for the UK’s smaller cities is now more optimistic than it has been for some time. Our research shows potential performers, including the likes of Oxford and Warrington, should benefit from further capital growth over the coming years as the property market continues to improve,’ said Chris Ireland, chairman and lead director for UK Capital Markets at JLL. ‘Indeed, the potential for growth in some of the smaller cities may be greater than in the big six regional centres which have already seen substantial uplift,’ he added. ‘From an occupational perspective, we think there will be a gradual shift towards office rental growth in a number of these centres which should ensure continuing investor and developer interest,’ explained Ireland. According to Ben Burston, head of UK offices research at JLL, strong business clusters are a key determinant of future growth prospects. ‘For instance, Oxford’s strong life science cluster is contributing to a robust employment growth outlook, while Warrington is benefitting from a strong nuclear research and technology cluster,’ he said. ‘The devolution agenda provides an opportunity for more decision making to be taken at local level, which could help drive improvements to transport, infrastructure and public realm that will help attract people and businesses, and thereby drive future growth,’ he pointed out. Cities identified in the report as… Continue reading
UK buy to let landlords increasingly looking for semi-detached properties
There has been a big jump in UK landlords looking to buy semi-detached property with demand for terraced houses almost half previous levels, new research shows. Landlords are also planning for steady growth in the buy to let property sector as optimism rises, according to the latest landlord research by Paragon Mortgages. The data shows that landlords on the lookout for a semi-detached property amongst those expecting to purchase buy to let property soon, have increased from 23% in the fourth quarter of 2014 to 35% in the first quarter of 2015. The specialist lender’s Private Rented Sector Trends survey, which has been tracking landlord confidence and views on the buy to let market for 13 years, also shows that the proportion of landlords looking to buy terraced property had fallen from 67% to 35%. The lenders says that this sharp turnaround in demand for these two different property types results in a more even distribution of interest across the broad spectrum of property types from landlords than previously. Overall, among those looking to buy, 30% of landlords expressed interest in adding a flat to their portfolio, 35% were on the look-out for a semi-detached house, 35% for a terraced house and 22% said they were considering more specialist units such as multi-unit blocks and HMOs. The report also finds a higher proportion of landlords are optimistic about the prospects for their property portfolios, with 27% feeling positive about the future and an increase in those expecting to buy sometime soon, up from 15% to 18%. ‘The growing proportion of landlords looking to purchase buy to let property sometime soon points to continued, steady growth in the private rented sector,’ said John Heron, the firm’s director of mortgages. ‘Meanwhile, a closer look at interest levels for different property types suggests landlords are taking a broader perspective in order to cater for the wider range of households looking for a suitable home in the rental sector,’ he added. Continue reading
UK property redress scheme for lettings dealing with increased number of complaints
The UK’s Property Redress Scheme (PRS) has now processed its hundredth complaint six months since it became mandatory that all lettings and property management agents join a consumer scheme. The PRS is one of three consumer redress schemes authorised by the Department for Communities and Local Government (DCLG) and National Trading Standards whose role it is to provide fair and reasonable resolutions to disputes between members of the public and property agents. Since the October deadline last year, the PRS team have seen complaint numbers increase daily as awareness of the scheme becomes more widespread. Certain patterns are already emerging that indicate that agents should be consciously aware of documentation and communication. The PRS says that clear and unambiguous documents, in particular those that relate to terms and conditions, charges and management agreements, are essential to ensure that the customer is fully protected. This also protects the agent, defines the business relationship and manages customer expectations. Communication is also essential and agents should ensure that they do everything to keep the channels open even when the relationship is breaking down. Not doing so inevitably leads to the situation deteriorating and by the time of scheme involvement, the consequences have moved far beyond the initial dissatisfaction. ‘Agents should not assume the customer is trying it on, is wasting your time or will go away if you refuse to engage with them. Treat the complaint seriously and professionally and above all learn from your mistakes,’ said Sean Hooker, head of redress for the PRS. With this in mind, the PRS have begun to build up the resources pages on its website to help educate and support agent members. It has seen nearly 3,400 agent offices register with the scheme. But it points out that although membership numbers and consumer awareness has been positive, there is still further work to be done. The PRS would like to encourage agent organisations and landlord groups to continue to spread the word about redress schemes and report agents that have failed to comply. ‘It is still, in my view, the duty of the industry to help police this legislation. There are a number of agents out there who either through ignorance or wilful defiance have not signed up to a scheme. We are therefore working with local authorities to ensure the law is enforced as vigorously as possible and consumers remain protected,’ added Hooker. Continue reading
