Tag Archives: london
UK house price fall after 16 monthly rises in a row
UK house prices fell by 0.2% in September, following 16 consecutive monthly price rises but the picture on a quarterly basis is still relatively strong. However, the data from the Nationwide house price index for September clearly shows that the price growth is slowing. It also means that the annual pace of house price growth has fallen to 9.4% from 11% in August. It means the average price of a home is now £188,374 and in the UK as whole, prices are around 2% above their pre-crisis peak. Excluding London they are less than 1% above their 2007 peak. ‘While September saw a slowing in house price growth, the picture on a quarterly basis for July, August and September combined was still relatively strong, with all 13 UK regions recording annual price gains,’ said Robert Gardner, Nationwide's chief economist. ‘There remains significant regional variation however, with the South of England still seeing the strongest rates of growth,’ he added. Gardner said that price growth may soften further in the final quarter of the year, given the high base for comparison from the fourth quarter of 2013. ‘However, the outlook remains uncertain. There have been tentative signs from surveyors and estate agents that buyer demand may be starting to moderate, but the low level of interest rates and strong labour market suggest that underlying demand is likely to remain robust,’ he explained. Nationwide also released its quarterly index for the three months to September which shows that overall prices increased by 1.5%. London is still the most expensive region in the UK with Northern Ireland the cheapest. Prices were up 10.5% compared with the same quarter of 2013 and London did see a slight softening in the annual pace of price growth from 25.8% in the second quarter to 21%. Prices in the capital are now 31% above their 2007 peak, with the price of a typical London property just above £400,000. Annual price growth in Wales slowed from 9.3% to 5.0% while annual price growth in Scotland was similar to last quarter at 5.2%. Northern Ireland saw a 10.2% increase in prices, although they are still nearly 50% below their 2007 peak. Amongst the English regions, the South continued to outperform, with double digit annual growth rates recorded in London, Outer Metropolitan, Outer South East and East Anglia. The North was the weakest English region, with prices up 4.3% over the year. David Newnes, director of Reeds Rains and Your Move estate agents, said that momentum is needed to keep the market going, especially outside of London. ‘Higher LTV lending and the Help to Buy scheme are vital tools to keep firs -time buyers active in areas of the country where the recovery is vulnerable,’ he explained. ‘In London, which sped off of the blocks at the start of the year, the market is composing itself after an energetic few months and we’ve seen house price inflation start to ease back,’ he added. He also warned about the effect of a proposed Mansion… Continue reading
London’s Midtown saw highest levels of commercial rental growth in first half of year
Midtown experienced the highest levels of rental growth of any central London office market in the first half of 2014, according to new research by IPD and Farebrother. Offices rents in Midtown increased 5.9% in the six months to June 2014, ahead of the West End and The City, which posted growth of 5.6% and 4.7% respectively. Data from IPD and Farebrother shows that rents in Midtown, which exceed £70 per square foot at prime buildings, now exceed pre-2008 levels by 1.3%. The unparalleled rental growth in Midtown, driven by a strong occupational market, is pushing capital forwards and the data shows they grew 9% in the first half of the year alone. This was comfortably ahead of the central London average of 8%, albeit marginally behind the West End, where values increased by 9.5% over the same period. Capital values have been the key driver of performance in the Midtown office market, where returns surged to 11.1% in the first half of 2014, almost double the performance posted in the same period last year. This is set against a backdrop of central London Offices delivering a return of 10.6% for the same period, with only the West End, perennially Europe’s best performing market, delivering superior returns at 11.4%. ‘Midtown is central London’s most over-subscribed office market. The demand/supply imbalance means that availability is likely to drop below 4% at some point,’ said Alastair Hilton, head of investment at Farebrother ‘The strength of the occupational market is really driving rental growth, and we are seeing leasing deals being done at unprecedented levels on prime assets. This is really underpinning performance throughout Midtown, where returns have increased significantly since the same period last year. The challenge for investors is the lack of liquidity in the market set against an increasingly competitive background,’ he added. According to Colm Lauder, IPD senior associate, Midtown has proven to be a strong location for investors since the central London office market started to recover, leading investor total returns for six of the quarters in the last two years. ‘Over the past five years, capital values and rents have been on an upward trajectory in Midtown, driven by robust occupier demand across a broad spectrum of industry sectors,’ he pointed out. ‘Given these market fundamentals, Midtown will remain one of central London’s most compelling investment propositions for the foreseeable future,’ he added. Continue reading
Latest data from UK estate agents shows younger buyers priced out of market
People aged in their thirties are dominating the first time buyer market in the UK with those who are younger prices out of the market, according to a new report from the National Association of Real Estate Agents (NAEA). Overall the number of first time buyers is up from previous month sales, from 20% in July 2014 to 28% in August, the highest percentage of FTBs recorded since April 2014 but the number of buyers aged 18 to 30 remains at an all-time low at just 3% of recorded sales for August NAEA agents agree prospective interest rate rises will affect demand in the property market which will not help younger buyers who are already out of the housing market. While the number of sales made to those aged between 18 to 30 remained low, sales to those aged 31 to 40 were the highest recorded for the month, with almost half, 45%, of homes sold being bought by those in this age bracket. The figures suggest that the majority of first time buyers fall into the latter group, as high house prices price the younger generation out of the market. The report also found that most buyers, some 90%, bought as couples, with just 7% buying alone. Although the overall rise in the first time market is a positive, nearly 90% of NAEA agents believe the foreseen rise in interest rates will affect the demand for property in some way, with another 39% of members already claiming to see signs of demand dropping off. ‘Reports from our members suggest that the high house prices of the current housing market are still proving a barrier for the younger generation. It is evident that first time buyers are indeed getting older,’ said Mark Hayward, NAEA managing director. ‘With the majority of home buyers this month aged 31 to 40, this suggests some correlation between the increase in the first time buyer market and this age group. It is concerning at the lack of young people unable to buy their first home before the age of thirty, having to rent or stay at home for longer in order to save,’ he pointed out. ‘While the increase in first time buyers is a positive, what could be a worry for home buyers is the prospective interest rate rise that’s on the horizon. If interest rates do rise, the majority of NAEA members agreed that this will affect the demand for property, as prospective buyers are discouraged by the cost of borrowing,’ he explained. ‘In addition first time buyers need to be careful they can afford their mortgage, as interest rates could significantly push-up repayments, putting pressure on household budgets,’ he added. The report also shows that in terms of housing stock for August, this month saw a decrease in the average number of properties available per NAEA member branch. Available properties decreased to an average of 49 per NAEA member branch, compared to 51 in July 2014. At the same time, the average… Continue reading
