Tag Archives: london
Slowdown has led to boost for Spain’s long term property rental market
The economic downturn has led to a significant rise in the number of people renting a home in Spain for the long term with strong demand from nationals and foreign residents, new data shows. Overall the Spanish rental sector has doubled in the last five years, according to the data from the country’s National Statistics Institute and figures also shows that yields are up to 7.6% for long term lets. Indeed, improving yields has prompted many investors to turn to Spain as the next buy to let destination of choice with data from Idealista showing that yields have increased from 4.7% a year ago, to 5.3% currently. Popular tourist areas, such as Las Palmas de Gran Canaria offered returns of up to 6%. A modern, one bedroom apartment with sea view can be rented out for €700 per month, while a spacious three bedroom townhouse with sweeping views of the bay and port costs from as little as €145,000. Nor is it just tourist areas that offer strong returns. The highest yielding area, according to the Idealista figures, is the Catalonian regional capital of Lleida, where returns have reached 7.6%. A two bedroom, three bathroom, high spec apartment with balcony there can be picked up for €207,800. The news that Spanish rents rose for the first time in seven years in the first quarter of 2015 is further attracting the interest of buy to let investors with their eye on solid returns. According to Fotocasa, the average price of rental accommodation rose by 2.8% during the first quarter of this year, to €6.96 per square metre per month. Added to all of this is the surge in demand from tenants, with the size of the rental sector more than doubling from 7% just over five years ago to 16.6% in 2014, according to figures from the National Statistics Institute's Continuous Household Survey. ‘The past few years have seen a significant increase in the number of people in Spain looking to rent property on a long term basis,’ said Martin Dell, Director of Kyero.com, the portal which lists property sales, holiday rentals and long-term rentals. He added that Kyero's long term rentals site has experienced strong demand, from Spanish nationals and from foreign residents, while the firm’s sales site has received interest from investors looking to build up buy to let portfolios while property prices remain low. While more than half of rented homes house foreign tenants, Spanish nationals are increasingly looking to rent due to the flexibility that doing so provides. Following nearly a decade of high unemployment, the Profile of the Tenant in 2014 study has revealed that labour mobility is the main reason that many opt to rent a property rather than purchase one. The same study provides an interesting insight into the average tenant, who is aged between 35 and 44 years old, married and with a university education. They are professional tenants with families. Some 22% are looking to rent due… Continue reading
Second steppers in UK housing market get boost, new research shows
Most second steppers in the UK housing market are no longer trapped in negative equity as their position is boosted by rising house prices and an influx of first time buyers, new research has found. This is despite the fact that many face a £128,000 price gap to jump up the housing latter, according to a study published by Lloyds Bank. The research also shows that 33% of second steppers think it will be easier to sell this year, almost treble that of 2012 and 37% are keen to make the move now to take advantage of the more buoyant housing market. Overall first time sellers are in a much better position than they were five years ago which is good news for the housing market as they are the link between first time buyers and the rest of the housing ladder. They are living in the homes that the first time buyers need to buy to keep the market moving. Without movement from Second Steppers, movement on the ladder comes to a standstill on the second rung. Many had previously found themselves stuck in their starter home with little or no equity as the economic downturn took hold. Higher house prices have increased the equity of those still living in their first homes, with 71% feeling that their equity position has improved over the last year. The current crop of second steppers typically would have bought at the bottom of the market in 2009 when prices were at their lowest, with the average price of a typical first time buyer home in 2015 now 31% higher than in 2009. This has led to second steppers now having an average equity level of £87,096, equivalent to 29% of the average price of a typical second stepper home price of £304,963. The estimated average equity level has risen by over £36,000 in the past year from £50,655 due to an increase in the prices paid for first time buyer homes. The research also says that the price paid for a home by a typical second stepper is more affordable now than it was a year ago, when compared with earnings. Their housing affordability has improved significantly in the past year from 7.1 times UK gross annual average earnings in 2014 compared with 6.4 in 2015. Despite increasing house prices boosting equity levels for second steppers, the findings show people living in their first home still have to find an extra £128,390 to plug the gap between the sale price of their current property and the cost of the house they would ideally move to which is typically a detached property. This gap reduces to £17,864 if the second stepper moves to a semi-detached home. Continue reading
Long term outlook for UK prime country market looking positive
The long term outlook for the UK’s prime country property market is positive, but the election result is unlikely to lead to significant price growth, according to a new analysis. The result of the General Election has marked an end to the uncertainty experienced in the UK prime markets in the run-up to polling day, when concerns about taxation and personal finances led to weaker demand at the start of 2015, the Knight Frank report points out. Indeed, it shows that annual price growth had slowed to 2.5% by March, down from 5.2% in the second quarter of 2014 but prices have risen by nearly 1% so far this year and by 2.5% annually. ‘We now expect there will be more positive trading conditions as buyers and vendors return to the market. Transactions, which had been put on hold pending the outcome of the vote or as a result of a wider sense of political uncertainty, will proceed,’ said Oliver Knight of the firm’s residential research unit. However, prices remain below peak levels, creating an opportunity for buyers and prime market activity has picked up over the last 12 months,’ the report also says. ‘With a Conservative Cabinet, the possibility of a mansion tax for properties valued at over £2 million has gone. Now, one of the key questions is what effect a more certain political environment will have on prices,’ explained Knight. ‘While the confidence engendered by political stability is expected to result in a rise in market activity, any expectations that prices will jump significantly as a direct result of the general election may be unrealistic. ‘Any market is based on supply and demand and the number of new properties coming to the market is expected to increase. This rise in supply, together with uncertainty as to the precise direction of fiscal policies of the new government is likely to mitigate significant price rises,’ he pointed out. ‘Additionally, higher purchase costs as a result of the increase in stamp duty announced in December need to be considered. As a result of that change, the up-front cost of buying a property valued at more than £937,500 has risen,’ he added. The report says that overall the long term outlook for the prime country market is positive as for now interest rates remain at record low levels, economic growth is steady and mortgage rates are competitive. ‘As the economy continues to improve the ripples of demand from London will strengthen. Popular commuter locations, within easy reach of the capital, are likely to be the biggest beneficiaries,’ said Knight. ‘There has already been an increase in the number of buyers looking to exploit the relative price gap that has opened up between London and regional prime markets and the expectation is that this will continue,’ he concluded. Continue reading
