Tag Archives: housing
Demand for UK farmland falls as supply rises, says RICS report
The supply of farmland in the UK increased sharply during the first half of 2015, as demand growth moderated, according to the latest report from the Royal Institution of Chartered Surveyors (RICS). An increase in the supply of commercial farmland, coupled with a tailing off in demand growth across many parts of the country, has resulted in a significant reduction in price growth expectations, the report says. Meanwhile, demand from lifestyle buyers continued to increase, and a net balance of 18% of respondents said that they expect the price of residential farmland to continue to rise over the year to come. During the first half of 2015, a net balance of 51% of respondents reported an increase in the supply of commercial farmland while demand for these blocks declined, albeit very modestly, for the first time since 2008. Scotland and the North East of England saw a reduction in demand not just for commercial but also residential farmland, while the results for South West and the East Midlands suggests demand is still edging upwards. Simon Rubinsohn said it is significant that the headline transaction based measure of farmland prices fell by 2.5% during the first six months of the year and by 1% over the course of the year to reach £9,692 per acre. Average rents also slipped during the first half of the year both for arable and pasture land, reflecting the weaker to many commodity markets. ‘We are seeing a considerable divergence in the outlook for commercial farmland compared to land with a significant residential component,’ Rubinsohn pointed out. Annual average arable land rents fell by 7% during the first half of the year and by 9.7% over the year, with anecdotal evidence suggesting the recent falls in commodity prices are the primary cause of this decline. ‘Despite this, the lifestyle market remains relatively strong across much of the country with the price of land with a large residential component generally expected to continue moving higher,’ said Rubinsohn. ‘Political uncertainly leading up to the general election is likely to have had some further impact on the results in the survey, however market conditions look set to remain challenging notwithstanding the outcome with the global economic environment set to remain a drag on commodity prices,’ he concluded. Continue reading
New home building in the UK up by 15% year on year
There were over 131,000 new homes completed in the UK in the last 12 months, some 15% higher than in the previous year and the highest annual total since June 2009, the latest figures shows. Housing Minister Brandon Lewis welcomed the figures but promised that the rate of new building would keep rising to meet the government’s target of 275,000 per year by 2020 which he said would represent the fastest rate of building for 20 years. ‘This has provided a real boost to the UK’s construction industry and is delivering the homes that hard-working people rightly deserve. However, we know there is more to do,’ he said. Part of that will be to boost the number of starter homes for first time buyers and he pointed out that some £10 million has been made available to bring forward brownfield sites to build new home which will be available to young first time buyers at a 20% discount. The latest figures from the Office of National Statistics have shown that output in the construction industry increased by 2.7% in June compared to the same month last year. Work on private new housing between April and June rose by nearly 3.9% on the previous quarter. Lewis said that the government has also given local people the powers they need to drive forward housing development with the number of homes in locally led plans up by a quarter. Before March 2012 the average number of homes planned for by local authorities stood at 573 per year. But he explained that radical reforms put Local Plans and housing delivery at the heart of the planning system and this has helped expand the housing pipeline with those Local Plans published after the reforms containing on average 717 homes per year. Continue reading
Prime residential development land prices in Asia slowing
The price of prime residential development land in Asia slowed to 1.1% in the first half of 2015, down from 3% in the previous six months, but prime office land increased to 3.6%, up from 2.5%. The latest prime Asia development land index from international real estate firm Knight Frank also shows that Phnom Penh in Vietnam recorded the strongest increase in both prime residential and office land price. Prime residential and commercial land prices surging by 14.1% and 9.7% respectively. The report says that foreign investment continued to fuel strong performance in the residential sector but growth decelerated in the second quarter, suggesting that prices are peaking and the momentum will likely moderate in the second half of the year. Land sales in China plummeted by 54.8% year on year at a time when local governments in the country reduced land supply and maintained aggressive pricing as this is their main source of revenue. ‘As a result, developers in China face a double whammy of high land prices and weak sales. With the recent stock market crash, their ability to raise capital is further restricted. Anecdotally, more developers are partnering other firms to pool financial resources and pursue an asset light strategy,’ the report explains. ‘However, there is a silver lining as a recent survey conducted by China Household Finance and the Survey Centre registered signs of capital leaving the stock markets for the housing sector in the second quarter of 2015,’ it says. ‘Against this backdrop, along with a nascent recovery in the residential markets, land prices rose moderately in Beijing, Shanghai and, to a lesser extent, Guangzhou. Moving forward, land prices will continue to be supported by these factors,’ the report adds. Both residential and commercial land enjoyed robust capital appreciation in Hong Kong. The report explains that in addition to the existing healthy demand extra cooling measures, such as a lower maximum loan to value ratio and debt servicing ratio introduced in February 2015 targeting the mass residential market appeared to have channelled demand to the luxury sector. Office space continued to see strong leasing demand from financial institutions amid limited supply. Demand for land is set to increase when the ASEAN Economic Community (AEC) gets underway at the end of this year. The report explains that as a result of a freer flow of goods, services and skilled labour could encourage the movement of industries, driving demand for both commercial and residential space. In Bangkok, the price index for office land stalled in the first half of 2015 as developers turned their attention to the luxury condominium market, where continued capital appreciation afforded them higher profit margins. Even so, the prices of residential land grew at a slower but more sustainable pace. Jakarta saw a similar deceleration in price index movements. The economic slowdown has hurt both business and consumer confidence in the country, according to the report. ‘In addition, the government lacks the room to manoeuvre,… Continue reading
