Tag Archives: london
US home owners more confident than those who rent, new analysis suggests
Home owners in the United States are generally more confident than renters in their local housing market’s performance, according to the latest research from Zillow. But this confidence gap is widening in areas with rapid home value growth and narrowing in areas with more restrained growth, the firm says. Overall home owners have become more confident about their decision to invest in a home where home values in their area have increased more rapidly. By contrast, renters feel that they cannot escape renting and have lowered their aspirations for homeownership in areas where home values have increased more rapidly. Rapidly rising home values have powerful psychological effects on both home owners and renters and research has shown peoples’ expectations about the future are strongly anchored in recent experience. Rapid asset price growth can contribute to what has sometimes been labelled ‘irrational exuberance’, or overly optimistic and self-perpetuating positive feedback in price trends. Zillow’s Housing Confidence Index (ZHCI) is designed to be a forward looking measure of housing market health by gauging the beliefs and aspirations of home owners and renters towards the future state of the housing market. There are two groups, those that have experienced rapid recent home value growth in excess of 9% annually between July 2013 and July 2014, when the survey was last conducted, and those that have experienced more restrained growth of less than 9% over the same period. By this classification, nine metro areas have experienced rapid home value growth and in general, the ZHCI is higher for home owners than for renters. The firm says this is not surprising since, relative to renters, home owners typically have higher incomes and a more optimistic perspective about the economy and housing market. But as the economy has improved, the gap between home owners’ and renters’ confidence index levels has widened in metros where home value growth has been rapid, and narrowed in metros where home value growth has been more restrained. Home owners and renters have very similar perspectives on the overall housing market and the ZHCIs for both groups tend to move together. A larger improvement in outlook among renters is the primary driver of converging optimism levels in slow home value growth markets. But the opposite is true in markets where home values are growing more rapidly. In these markets, optimism levels are diverging. Because home owners’ wealth is largely tied to the value of their home, slower home value growth results in a smaller change in home owners’ housing market outlook. In markets where home values are appreciating at a slower pace, renters have become increasingly optimistic about their potential for future home ownership. The Home ownership Aspirations Index, which measures how optimistic owners and renters are about their future home ownership prospects, increased more for renters in slow growth markets than for home owners. But in markets where home values are rising rapidly, renters are becoming increasingly disillusioned, as they likely see the possibility for future… Continue reading
Special development corporation set up for strategic west London site
Plans for a major development in West London with up to 24,000 new homes have moved another step closer with the creation of a development corporation at a time when the city needs new housing. The Mayor of London has written to the Secretary of State for Communities and Local Government Eric Pickles confirming his plans to establish the Old Oak and Park Royal Development Corporation (OPDC). The Secretary of State will now lay an order before Parliament in early 2015 to create the OPDC. It is expected that the new body will come into existence with full planning powers over the entire site on 01 April 2015. A vast High Speed 2 (HS2) and Crossrail Station is due to be constructed at Old Oak Common by 2026. The new station will be the size of Waterloo, handling 250,000 passengers a day and acting as a super hub between London and the rest of the UK, Europe and the world. This represents an opportunity to bring unprecedented regeneration to the area and the Mayor believes that the OPDC is the best way to unlock the enormous potential of the site and deliver a £15 billion boost to London's economy over 30 years. The Corporation will act as a single, transparent and robust body to spearhead the regeneration of the 950 hectare site that straddles the boroughs of Hammersmith and Fulham, Brent and Ealing. ‘By 2030 the sprawling industrial land at Old Oak Common could be a thriving new district teeming with tens of thousands of new homes and jobs and a rail station the size of Waterloo. This is a once in a lifetime opportunity to transform this site and there is no doubt that a Mayoral Development Corporation is the best way to unlock its enormous potential,’ said Mayor Boris Johnson. The OPDC will look to emulate the success of the London Legacy Development Corporation that continues to lead the post-Olympic regeneration of Stratford and East London. The Mayor's Office believes that the regeneration opportunity could provide almost 14 per cent of Greater London's employment needs up to 2031. Five of the nation's airports will be linked to the high speed rail network for the first time through the Old Oak Common Station. Central London and Heathrow will be just 10 minutes away, Birmingham will be 40 minutes direct from Old Oak Common and Luton, Gatwick and City Airport will all be within 45 minutes. As well as promoting and delivering physical, social, economic and environmental regeneration, the Corporation will also safeguard and develop Park Royal as a strategic industrial location and attract long term investment to the area, including from overseas. Once established, the proposed OPDC would take on various statutory powers relating to infrastructure, regeneration, land acquisitions and financial assistance. It would also take on planning powers across the Old Oak and Park Royal area, including determination of planning applications. The Corporation will also be able to set a Community… Continue reading
London residential property investors looking north for better rental yields
Almost two thirds of buyers of investment property in the North of England are from the South East, with over a third from the Greater London area, new research has found. The study from buy to let specialist Sequre Property Investment, suggests that prices are too high in the south for landlords who may be looking north for bargains. According to the firm they are being enticed out of their own back yard to cities such as Manchester, Liverpool, Preston and Salford by stronger returns and lower entry level prices. Average gross yields of 8% in Manchester compare to 4.5% in London, while a typical two bed investment property costs in the region of £90,000 versus £300,000 in the capital. It also says that speculation of a cooling property market in London and the South East is impacting on investor confidence and driving them to seek alternative locations such as northern cities, where prices have risen at a more sustainable rate and demand from tenants, particularly young professionals, remains strong. The relocation of the BBC and developments such as MediaCityUK have also helped boost the profile of the North and attracted investors from outside the region. Of those London based investors buying in the North, a significant proportion, 42%, are cash buyers. The firm says this is largely due to the lower entry point which means that many investors don't require borrowing. They are keen to de-risk the investment and avoid overleveraging, particularly as many are approaching retirement age and are looking to boost their retirement income One, two and three bedroom buy to let properties in new build developments of up to five years old are most popular, offering a low maintenance and hassle free investment. ‘The buy to let market in the North of England, particularly in hubs such as Manchester and Liverpool, is now being driven largely by money from London and the South East,’ said Graham Davidson, director of Sequre Property Investment. ‘Investors have benefited from huge house price growth in the south over the last few years which has sent the equity in their homes and buy to let portfolios soaring. Now they are seeking new investments which will deliver strong rental returns as well as steady capital growth, at a time when doubt is being cast over the future of the London market,’ he explained. ‘These are mainly professional investors who are comfortable with a 'hands off' approach and are unconcerned about owning property in different locations. It's all about the rental returns and delivering a secure monthly income,’ he added. An example is IT consultant Matthew Earle, 35, who lives in south west London and is currently in the process of adding a number of new investment properties in the north of England to his portfolio. These are spread across northern cities including Manchester, Hull and Sheffield. ‘My main focus is on generating a strong rental income and there's no doubt that yields are much higher in the… Continue reading
