Tag Archives: london
Property price growth in Sydney and Melbourne to slow in 2016
Property price growth in Sydney and Melbourne is expected to slow in 2016 as prices have peaked, according to an outlook report from the Housing Industry Association (HIA). It points out that as of November pries had increased in Sydney by 12.8% year on year and in Melbourne by 11.8% year on year. Then there was a huge gap to Brisbane where prices increased by 4% year on year. ‘The aggregate price cycle, heavily masked by Sydney and Melbourne, will continue to experience decelerating growth. Sydney and Melbourne are the two biggest markets and it is appropriate that price growth is slowing,’ the HIA report says. It points out that variable mortgage rates are on the rise and this is likely to dampen price growth. Overall the market was busy in 2015 for residential construction with new home commencements reaching a record high of nearly 212,000 in 2014/2015 and are forecast to exceed 200,000 in 2015/2016. ‘If we can progress right through 2016 with commencements holding up at an annualised level above 180, 000, and we forecast that will happen, that outcome should be regarded as a healthy one,’ the report explains. Indeed, new dwelling commencements increased for a third consecutive year in 2014/2015, only the fifth time in the past 60 years that housing starts have seen three straight years of growth. The record level of nearly 212,000 starts is 13% than the previous high of 187,000 in 1994. It adds that new home building is set for another healthy year ahead. Continue reading
Downsizing is seen as too expensive for many retired home owners in UK
Downsizing is not an option for many home owners in the UK, with stamp duty, legal costs and move costs discouraging people from moving to a smaller property, new research shows. The average equity release customer has lived in their home for 21.8 years before cashing in on their property wealth, says the analysis from over 55s retirement specialist Key Retirement. But pensioners in London own their homes for nearly 26 years before accessing the wealth and the report also reveals that nearly one in three who release equity have lived in their homes for 30 years or more. The firm believes this illustrates why, for many, downsizing is simply not an option. Indeed, home owners who bought in early 1993 have seen average UK prices rise from £60,850 to around £203,800, a rise of nearly £143,000, while Londoners buying in 1989 will have seen average prices rocket from £96,130 to around £408,000 giving them gains of around £312,000. Retired home owners trying to downsize to release wealth typically face stamp duty of 2% on the proportion of a home’s value over £125,000, rising to 5% for the proportion over £250,000. ‘Stamp duty, legal and removal fees and the cost of turning their next house into a home make downsizing an expensive option for many,’ said Dean Mirfin, technical director at Key Retirement. ‘The upheaval and risks of losing touch with friends and family as well as local services, including healthcare, can all impact negatively on the decision to move, as well as the fact that these homeowners are very attached to their homes, which they have invested in for many years,’ he added. Cost and other issues aside, the difficulty of finding a suitable home to move to is cited by many as a key driver in them wanting to stay put and reinvest in their current property, many choosing to future proof their home to be suitable for them as they age, the research also suggests. Market analysis shows the number of homes for sale has slumped to a record low in November adding to the struggle for older homeowners to find a suitable home to move to. ‘Downsizing is logical and sensible and should work in theory for many but turning the theory into practice is tougher than it seems and the theory overlooks a wide range of issues that are important to retired home owners,’ said Mirfin. ‘Equity release customers are accessing an average of nearly £75,000 from their property wealth without having to tackle the financial and emotional issues involved in moving home. The average customer has owned their home for nearly 22 years and has clearly benefited from house price growth but prefers to stay in their house rather than going through the upheaval and costs of moving,’ he explained. ‘Until we are building the right sort of properties and in the right quantities both the math and availability to facilitate downsizing remain a huge challenge,’ he added. Continue reading
Shard creating a mini property boom in SE1 area of London
London's Southbank around the Shard, which includes riverside Southwark, Borough and parts of Bermondsey, is experiencing a mini property boom, it is claimed. This is being driven by extensive regeneration, infrastructure improvements and residential development, drawing in young professionals and experiencing rapidly rising prices, according to letting and estate agents Chestertons. The firm’s latest market report points out that prices in the SE1 postcode have risen by 106% in the five years since the lowest point of the downturn, surpassing pre-crash prices by and far outstripping the London average increase over the same period, which is 51%. It suggests that the Shard development has proved a beacon for commercial regeneration, attracting investment and jobs to the area, while the number of new homes in the area, coupled with ongoing improvements to London Bridge station, is attracting young professionals, many of whom work in the booming tech, creative and financial services industries. ‘The residential sales market has not been without its challenges this year, the number of transactions has fallen slightly in fact when compared to 2014, and we've seen slower price growth than last year. But owners are still enjoying average sales values in SE1 that are 70% above their pre-global recession peak in 2008,’ said Matt Johnson, sales manager in the Tower Bridge office of Chestertons. ‘When it comes to the new homes sector, however, there's no sign of a slowdown. Coming into the final quarter of the year, a total of 2,916 homes in 21 schemes were under construction and a further 4,146 homes in 22 schemes had planning permission,’ he added. The report shows that One Tower Bridge (Berkeley Homes), NEO Bankside (Native Land) and One Blackfriars (St George) have all achieved strong off-plan sales. Investors have also been very keen to buy partly due to the rising demand from young professionals moving to the area. Indeed, according to Laura Kitts, lettings manager at Chestertons Tower Bridge, the lettings market in SE1 has really picked up in 2015, displaying continuous signs of growth and confidence. ‘Tenant demand was nearly 8% higher in the first three quarters of the year compared to the corresponding period of 2014, and the number of homes available for let was up by more than half. The wider choice of lets available hasn't dampened rental growth, either, with the average rents on new tenancies having risen by around 5% over the past year alone,’ she said. Continue reading
