Tag Archives: london
US pending homes sales fall month on month after record breaking 2015
Pending home sales in the United States fell by 2.5% in the first month of 2016 following the highest average year in nearly a decade, the latest index shows. On the South saw sales rise, but sales are still 1.4% higher than they were a year ago, according to the forward looking index from the National Association of Realtors. Although the index has increased year on year for 17 consecutive months, last month’s annual gain was the second smallest and NAR chief economist Lawrence Yun said that a myriad of reasons have contributed to the drop in January. ‘While January’s blizzard possibly caused some of the pullback in the Northeast, the recent acceleration in home prices and minimal inventory throughout the country appears to be the primary obstacle holding back would be buyers. Additionally, some buyers could be waiting for a hike in listings come spring time,’ he explained. Existing home sales increased last month and were considerably higher than the start of 2015, but price growth quickened to 8.2%, the largest annual gain since April 2015 when it was 8.5%. While the hope is that appreciating home values will start to entice more homeowners to sell, Yun said that supply and affordability conditions won’t meaningfully improve until home builders start ramping up production, especially of homes at lower price points. ‘First time buyers in high demand areas continue to encounter instances where their offer is trumped by cash buyers and investors. Without a much needed boost in new and existing homes for sale in their price range, their path to home ownership will remain an uphill climb,’ Yun pointed out. Existing homes sales this year are forecast to be around 5.38 million, an increase of 2.5% from 2015. The national median existing home price for all of this year is expected to increase between 4% and 5%. In 2015 existing home sales increased 6.3% and prices rose 6.8%. A breakdown of the figures show that the index in the Northeast declined 3.2% but is still 10.9% above a year ago. In the Midwest the index fell 4.9% but is still 1.4% above January 2015. Pending home sales in the South inched up 0.3% but remain 1.3% lower than last January. The index in the West decreased 4.5% but is still 0.4% above a year ago. Continue reading
Research reveals the extent of sub-letting in the UK without landlords’ permission
One in six tenants in the UK have rented out part or all of their property to someone who isn’t on the lease agreement, new research has found. Some 25% who sub-let their property didn’t check the terms of their lease to see if it was permitted, while 34% had not informed their landlord of the decision, according to the survey by landlord insurance provider Direct Line for Business. Of the sub-letters who did not inform their landlord, 23% got found out in the end anyway and the firm points out that the consequences when landlords catch tenants sub-letting can be severe. Indeed, some 11% of cases the tenants named on the lease were evicted with 6% losing their deposit in the process. Other repercussions include landlords increasing rental charges which happened in 22% of cases, 14% were fined and 8% given a formal warning. In spite of this, Direct Line for Business’s research reveals that 2016 could see an increase in the number of people sub-letting their properties. Some 15% claim they are thinking about sub-letting part or all of their rented property by advertising on property letting websites such as Airbnb. ‘The average monthly rent across the UK currently stands at £739. This means on average, approximately a third of people’s income goes towards accommodation. With the market having seen a five per cent increase in average rents in the last year, it seems that a larger number of renters are tempted to offset this expense by sub-letting their properties,’ said Nick Breton, head of Direct Line for Business . Over the last two years, Landlord Action, a firm that represents landlords, said it has seen an 18% increase in the number of instructions from from landlords with sub-letting cases. ‘Sub-letting is fast becoming one of the leading grounds for eviction, alongside rent arrears and Section 21 for possession only. This has been fuelled by sky high rents preventing some tenants from being able to afford even single-unit accommodation, forcing many to resort to bedsits or shared accommodation,’ said founder Paul Shamplina. ‘Organised sub-letting scams are also becoming more prevalent, where tenants, or sometimes even fake tenants, advertise properties and rooms on holiday/accommodation websites in order to cream a profit without the landlords’ consent,’ he added. The research also found that 28% of tenants who had sub-let had done so to friends or people recommended to them. Family members accounted for 21% while 19% of renters have sub-let to strangers responding to an advert. Sub-letting is most common in the North West and West Midlands with 27% of private tenants say that have sub-let their properties. In London it was 23%, it was 9% in the South East 7% in Northern Ireland. ‘There could be some serious consequences for tenants who sub-let, but landlords need to be aware that in these circumstances there could also be insurance implications. Sub-letting is not covered under… Continue reading
Commercial property rents in London saw average growth of 8.5% in 2015
Growth in commercial property rents across London fuelled average total return of 18.1% from investments in the capital during 2015, new research shows. The London markets analysis report by Levy Real Estate and MSCI examined more than £30 billion of assets across 20 key submarkets and found that rental growth increased year on year from 7.8% in 2014 to an average uplift of 8.5% last year. The strongest rental growth was registered by the Camden/King’s Cross submarket where the continued success of the King’s Cross Central development saw the prevailing level of rents grow on average by 17%. High occupier demand and a lack of space in other submarkets is also driving rents, the report says, adding that Mayfair, for example, where the continued conversion of office property to residential has limited the supply of new space saw rental growth of 11.9% last year. ‘The latest research shows a market which still has significant momentum. Returns are now increasingly being driven by a growth in rents and this suggests that London’s commercial property investment sector can expect further sustainable growth in values,’ said Levy Real Estate Investment Partner, Simon Heilpern The progressive rents in and around King’s Cross also meant that the Camden/King’s Cross showed the highest total return for a single submarket of 27.3%. It was followed in the total return rankings by the Eastern Fringe at 24.7% and Marylebone and Euston at 23.1%. Overall, Mayfair retained its position as the submarket with the most keenly valued property: the average equivalent yield for its property was just 3.7%. The area has also seen a continued conversion of office property to residential which has contributed to an upward shift in rents, the report points out. The biggest inward yield shift during 2015 was in the Western Fringe locations of Clerkenwell, Smithfield and Farringdon where average equivalent yields moved in 80 basis points to 5.2%. However, the general picture is a slowing down in yield shift which illustrates the growing importance of rental growth. ‘The London investment market had another good year in 2015, with strong returns on the back of healthy rental value growth across the commercial property market. As in 2014, fringe markets outperformed last year with locations such as Camden/King’s Cross and the Eastern Fringe remaining attractive to both occupiers and investors,’ said Colm Lauder, MSCI vice president. ‘Pricing in the London market also strengthened further during the course of 2015, but the rate of yield compression has slowed as key market locations begin to reach record yield levels which question price fundamentals,’ he explained. ‘This has resulted in rental growth taking over as the main performance driver, as confident, and expansionary, businesses compete for space,’ he added. Continue reading
