Tag Archives: london
US home prices up 0.3% nationally in May
The median US home value increased 0.3% in May compared to the previous month but overall prices are still 8.8% below the peak of the market in April 2007. This takes the median price to $179,200, according to the latest Zillow Real Estate market report which tracks 514 areas around the country. The data shows that 64% or metropolitan areas saw prices rise month on month and 67.3% saw annual price rises. In May the four fastest growing markets among the nation’s 35 largest all experienced double digit annual home value appreciation; Denver, San Jose, Dallas-Fort Worth and San Francisco. In all four of these markets, home values have already surpassed their bubble-era peaks. The most sluggish large markets in May were Boston were prices increased by just 0.2% annually, New York where prices were down 0.1% and Baltimore down 0.3%. All three are in the north east of the country. According to Stan Humphries, Zillow chief economist, the market isn’t back to normal. ‘Low inventory, persistent negative equity and still low mortgage interest rates continue to distort the market in various ways,’ he said. ‘But the fact that local markets are once again largely rising and falling on their own merits and continuing to find some kind of equilibrium based on real market fundamentals like household formation rates and job and wage growth is encouraging. A truly normal national housing market is one in which local conditions rule,’ he added. Over the next year home value growth is expected to slow even further to 2.2%, according to the Zillow Home Value Forecast. This will be some way below 2014 when home values rose 4.9%. ‘The country by and large rode the same big roller coaster through the housing bubble, bust, and recovery. May’s report shows local markets diverging, with some chugging along, some stalled out and some continuing to accelerate amid rising prices and competition. This is a positive sign that the market is returning to full health,’ Humphries pointed out. ‘In general, as mortgage rates begin to rise and incomes and household formation rates slowly increase, the baton is being passed in housing from a stimulus driven market to one driven by fundamentals. This transition from housing recovery to a more normal market is a good thing long term, but we can expect some bumps along the way. In the end, increasing household formation and stronger income growth should overcome the headwind of rising mortgage rates,’ he concluded. Continue reading
UK commercial property sales reach highest level since the economic downturn
The number of UK commercial property transactions has reached its highest level since the credit crunch, with 115,400 sales in the last year, a 6% jump, according to the latest figures to be made available. Data from HMRC shows that the number of transactions is up 24% from a low of 92,900 in 2008/2009, but still significantly below 2007/2008 when there were 139,000 sales. An analysis of the figures by commercial law firm EMW, suggests that England is dominating the country’s market. There were 97,500 commercial property transactions in England last year, accounting for 85% of the UK total, this figure is also the highest since 2007/2008 when there were 115,700, 83% of the UK total. The report explains that the relatively high yields on property when compared to other investments, continues to attract both UK and, increasingly, overseas investors. ‘Commercial property assets are proving increasingly attractive to investors looking for higher yields in an environment with record low interest rates and this is driving activity towards pre-credit crunch levels,’ said Nick Marshall, principal at EMW. ‘There has also been a surge of interest from overseas investors, with the UK offering investor friendly lease terms. The relative shortage of vacant prime office space in central London is also making the market more attractive to investors,’ he explained. ‘Bank lending has also picked up which has led to more activity in the market and lenders are now happier to fund purchases at higher loan to value ratios. Without higher LTVs, many property investors were finding it hard to get the economics of their investments to work,’ he added. Meanwhile, according to the latest Commercial Market in Minutes report from Savills, downward pressure on prime yields is set to resume across six sectors of the market while income and rental growth will begin to drive the total return. Savills expects downward movements in prime yields to return across M25 offices, provincial offices, high street retail, shopping centres, industrial distribution and industrial multi-let, largely driven by a lack of new stock coming to the market. Also, West End and City office prime yields are at an all-time low at 3% and 4.25% respectively, compared to 3.25% and 4.25% in May of last year. However, unlike the early phase of the UK’s economic recovery which saw investors rely on an uptick in capital value to produce total returns, Savills says the market will have to focus more on income return and rental growth. The firm suggests this shift is a clear indicator that the market has moved on as the rate of capital value growth begins to slow from its peak of 12.95% in October 2014 compared to a current level of 11.04% for the year to the end of May 2015. ‘Rental growth is no longer just a London story and while office and retail in the Capital remain at the top, an outward ripple of recovery suggests strong… Continue reading
Rise in people looking to rent their property on a short term let
Just over a quarter of letting agents in the UK have seen a rise in the number of inquiries for short term lets, according to new research from the Association of Residential Letting Agents. The latest report from ARLA reveals that 26% of letting agent members have reported a rise in this sector where lets are classed as under 90 days. Such a tenancy is regarded as having many perks such as offering landlords a quick income and providing people with an alternative to hotels. However, there are legal requirements involved in the process and ARLA says it is easy to get it wrong. Homeowners, who are looking to let their property out short term should ensure they’re complying with the law, ensuring best practice and making the most of their property. ARLA advises landlords to check mortgage or tenancy agreement to ensure you are permitted to rent out your property and to use a reputable agent. For example, an ARLA Licensed agent will not only help with marketing and finding tenants for your property, but also ensure that all legislation is being met, whilst you happily benefit from the income. If you go through an agent, using them to manage the property as well means you don’t have to worry about maintenance on the property as the agent will do that for you. For landlords who are letting their property out because they’ve had to move away or are abroad, this will be invaluable in making the process as pain free as possible. Landlords also need to ensure the property is in a decent condition including being clean and tidy with little clutter. Also, all of the furniture in the property needs to comply with the relevant safety legislation and vital safety checks will need to be carried out before you make the property available for a short let. If you are only letting your property for a couple of weeks, for example during Wimbledon or whilst you go on holiday, ARLA’s advice is to make sure someone visits it regularly. Consider having someone come in every day to clean and change the bed sheets. This will mean your property is kept in a good condition for when you return and also ensure that a short term license does not become a full statutory tenancy. ‘Short term lets can be hugely beneficial for both tenants and landlords, offering freedom and convenience for both parties. A short let can also be a more profitable option as you may be able to charge a higher rent than you would if you were letting a property out full time,’ said David Cox, ARLA managing director. ‘We’ve already seen a massive rise in the number of enquiries for short term lets and with the rising popularity of websites like Airbnb this is only going to continue. Landlords looking to let their property out short term should follow our simple tips to ensure they’re… Continue reading
