Tag Archives: investment
UK equity release market sees record start to the year
The equity release market in the UK has seen a record start to 2016 with lending reaching £393.9 million, the highest for a first quarter on record. This kind of lending is now up 21% compared with last year and new equity release plans have reached over 5,000 for the first time since 2009, the data from the Equity Release Council also shows. This year is the 25th anniversary of the first industry standards being developed for equity release and now drawdown popularity is continuing to increase its market share. With new loans rising, they have now reached the highest amount ever recorded as home owners make use of their housing wealth to supplement their monthly income, make home improvements, support younger family members with buying a property or pay for the trip of a lifetime. The data also shows that the market share of drawdown lifetime mortgages products has increased slightly year on year and it remains the most popular product. The value of drawdown products accounted for 60% of all loans, while the volume of loans was 67%, up 1% and 2% respectively from the first quarter of 2015. There were 3,450 drawdown loans agreed in the first three months of 2016, up 9% on the same period in 2015. Their value was £234.5 million, up by 22% in the same period. The value of lump sum mortgages accounted for 40% of total lending in the first quarter and 33% of the total volume of loans. The value of lump sum mortgages was £158.8 million, up 19% from the first quarter of 2015 and the value of home reversion plans sold remains less than 1% of the market. ‘These latest figures represent a strong start to the year for the equity release market, and place housing wealth centre stage in financial planning for later life. In a year that marks the milestone of 25 years of safe equity release, the market is continuing to build on the momentum of recent years,’ said Nigel Waterson, chairman of the Equity Release Council. ‘The recent decision from the Financial Conduct Authority to reduce affordability assessments for Lifetime Mortgages is a positive development that will help more people benefit from all that equity release has to offer. For a generation that are often asset rich and cash poor, their home is likely to be their greatest asset and should form part of everyone's planning for retirement,’ he pointed out. ‘As we look forward to the next 25 years, it is important now to maintain expert adviser support for customers as the sector grows, as well as continuing to innovate to satisfy customer demand, all the while preserving standards and consumer protections,’ he added. According to Alice Watson, product and communications manager at Retirement Advantage Equity Release, the figures highlight more clearly than ever how equity release is now an integral part of financial planning for retirees across the UK. 'The sector is… Continue reading
UK’s Home Counties prime property rents seen as competitive
Prime rents across the Home Counties in the UK rose by 0.9% in the first three months of 2016, and on an annual basis rents were 1.7% higher than a year previously. The annual figure is down from 4.7% in March 2015, according to the latest Knight Frank index report which says that this moderation in annual rental growth reflects a desire from landlords to remain competitive in what is increasingly becoming a tenant’s market. The index report also shows that the number of tenancies agreed between January and March was nearly 10% higher year on year and there was a 31% rise in enquiries from individuals relocating for work both from London and internationally. However, the rental market has continued to be location specific with Guildford and Beaconsfield seeing the highest levels of rental growth so behind these headlines a number of submarket trends exist. While activity has been focused on the sub £4,000 per month price bracket so far in 2016, with such tenancies accounting for over 50% of deals over the year to date, there has also been a pick-up in interest for lets of £10,000 and above after a fairly subdued 2015. The report says that landlords of larger properties have been more willing to negotiate on rents which reflects the relatively high levels of prime stock on the market, and a desire to keep void periods to a minimum. ‘This greater flexibility at the top end of the market, and the continued demand for smaller family homes close to good schools, underpinned a 9% increase in the number of tenancies agreed across the Home Counties between January and March compared to the first quarter of 2015,’ said senior analyst Oliver Knight. He pointed out that there was also an uptick in demand from individuals relocating for work both from London and internationally, with 31% more corporate enquiries compared to the previous three months. ‘However, more volatile economic conditions and a weaker financial services industry mean corporate budgets have been reduced. The European Union referendum in June is likely to heighten this mood of uncertainty in the short term,’ he added. Continue reading
Prime property prices in New York driven by strong demand and limited supply
A global powerhouse, domestic and international wealth has fuelled the expansion of New York’s prime residential real estate markets, according to a new analysis report. New York is one of the most diverse, globally connected and high performing cities in the world and alongside London, it stands apart from any other city as a true global powerhouse, says the prime residential report from international real estate firm Savills. It points out that as a world leader in financial services, technology and media, New York hosts a large number of global company headquarters, is an important centre of education and a tourism destination. Download the full PDF report > > The sheer diversity of factors in the city’s success make New York’s residential real estate highly sought after, from the international wealthy seeking a foothold in a global city through to local young families realising the appeal of urban living. It explains how strong occupier demand and limited supply has pushed up prices so affordability is a growing issue for many. However, although costly by US standards, prime New York residential real estate is still relatively good value by global levels . For example, prime property prices in New York are 35% less than London and 61% below Hong Kong. But prices are rising, up by 42% from $1,200 per square foot in 2008 to $1,700 per square foot in 2015. The longest established prime residential markets are in Manhattan on the Upper East Side and Upper West Side, bordering Central Park. The Upper East Side is known for its large, classic New York apartments, while the Upper West Side is a somewhat more relaxed and accessible alternative. Together, these two large neighbourhoods accounted for 38% of all $1 million plus transactions across Manhattan and Brooklyn in 2015, and 47% of all $5 million plus transactions in 2015. The report explains how the generation of new wealth in the city has pushed the prime markets into new neighbourhoods. The Financial District saw 385 deals over $1 million in 2015, more than 10 times the 35 deals recorded in 2005. Harlem, Williamsburg and Park Slope all saw increases of a similar magnitude and even Downtown Brooklyn, a market where no deals over $1 million were seen in 2005, recorded 64 such deals last year. At the upper end of the prime market, Chelsea, Greenwich Village, Tribeca and Midtown have all seen rapid growth in the number of $5 million plus sales. From just a handful each in 2005, all these neighbourhoods recorded more than 50 in 2015. This comes as new condominium stock is delivered to appeal to the super prime market, the report says and price growth has been especially apparent in Midtown where many super prime condo schemes are concentrated. The average sales price here rose by 193% to $3.8 million in the 10 year period. New York’s prime residential market is dominated by two property types: cooperatives and condominiums (condos). Condos have… Continue reading
