Tag Archives: middle-east
Supply of homes to rent falls in UK as demand rises
The supply of rental accommodation in the UK is the lowest since records began a year ago, while demand for accommodation rose slightly in January 2015, the latest data shows. After a period of gentle decline, the number of properties registered per letting agent branch dropped by 5% to 172 in January, some 10 fewer than in December, according to the report from the Association of Residential Letting Agents (ARLA). A breakdown of the figures shows that supply in Scotland stands above the national average, with 280 properties available per member branch, while the supply of rental properties in London is 59% with only 116 properties per branch. However, London has seen a slight increase in the number of properties available over the last month, rising from 108 in December 2015. Demand for rental accommodation picked up in January following a seasonal lull in December, with an average of 31 prospective tenants now registered per branch. However, it has not returned to the high levels reported in January and February last year, when there were 38 and 40 tenants registered per branch respectively. In line with growing demand, the number of agents reporting rent increases for tenants increased in January, with 30% reporting an increase in rent, the highest since September 2015. ‘Supply of housing continues to be a problem and tenants bear the brunt of this with more people competing for properties at higher prices. The majority of tenants find that it is impossible to save very much at the end of the month to put towards buying their own home,’ said David Cox, ARLA managing director. He pointed out that ARLA’s recent Cost of Renting report found that a fifth of those renting in the UK do not expect to ever be able to afford to buy a home, and unless we act soon to build more properties, this number will only get higher. The report also reveals that 63% of ARLA members think the Chancellor’s stamp duty reforms for buy to let properties will push landlords out of the market, which will in turn cause supply to drop further and 58% believe the reforms will push up rent costs. However, 47% of ARLA agents reported that they have seen an uplift in interest from buyers looking to invest in buy to let properties before the 01 April, a rise from 24% from last month. ‘A few weeks into the new year and the April deadline for the stamp duty surcharge is looming and interest from buyers looking to invest in buy to let properties and beat the deadline is ramping up,’ said Cox. ‘The final details of the new tax will be revealed at the Budget in March but we are not expecting to see the Government back down on this policy. The findings from our members echo our concerns that efforts to penalise… Continue reading
Urban development land outperforms greenfield in the UK
Urban development land values across the UK have continued to increase more than those for greenfield land, according to the latest research. Urban land values increased by 1.5% in the fourth quarter of 2015, up from 0.2% in the third quarter, taking annual growth to 7.1% while greenfield land values increased by 0.7%, up from a fall of 0.1% in the previous quarter and year on year by 2%. The latest residential development report from real estate firm Savills says that the increase in urban land values reflects a rise in demand due to an improved economy, stronger markets and increased viability. Additionally, the report says that urban values have greater scope to increase than greenfield values because they are further below their 2007 peak, an average of 42% below peak compared to 21% below peak for greenfield land. In general, development land values are linked to the supply of land and the demand from developers. The largely stable values of development land are in part due to the increase in supply of new permissions with the annualised number of planning permissions in Great Britain up by 21% in between 2010 and 2015. And it adds that a lack of new players in the market and 46% fewer house builders registered with NHBC in 2015 compared to 2005 has reduced competition for sites. Savills agents report that there is increasing demand for land in urban locations close to good transport links on which, more commonly, apartments are built such as Birmingham and Coventry in the Midlands. This is reflected in the shift in the type of new homes built. Between 2008 and 2014 houses accounted for an increasing proportion of new build homes, however, since March 2014 this trend has been reversed and we are seeing flats accounting for higher proportions of delivery at 35% in the year to March 2015 up from 29% the previous year according to data from the Department of Communities and Local Government. The report explains that the change in type of home being built reflects the improving viability and ability to finance denser sites. Immediately following the economic downturn, housebuilders focused more on developing houses because they require less upfront capital, can be built one at a time and sold as they are finished. However, now that market strength is picking up, there is greater appetite to take on the risk required to build a block of apartments where, apart from off-plan sales, flats are sold only when the whole block is complete. But not everywhere is seeing growth. For example, sentiment for development land in Aberdeen has become less positive and has impacted negatively on the overall Scottish greenfield development land index which was down 0.5% in the final quarter of 2015. Indeed, land values in Aberdeen have fallen 2.9% in the year to quarter four of 2015 for greenfield land and this is due to the continued low oil price and uncertainty over the future of the… Continue reading
House purchase lending fell in London in 2015, latest CML data shows
London is often regarded as the powerhouse of the UK property market but new data shows that house purchase lending in the city fell in 2015 in comparison with the previous year. But remortgaging increased, according to the latest data from the Council of Mortgage Lenders covering the fourth quarter of 2015. There were 21,800 home owner house purchase loans, down 4% on the third quarter but up 5% compared to the fourth quarter 2014. These loans were worth £6.7 billion, down 7% quarter on quarter but up 16% year on year. First time buyers took out 12,000 loans in London, down 2% on the previous quarter but up 1% on the fourth quarter in 2014. These loans totalled £3.2 billion, down 4% on the third quarter but up 11% on the fourth quarter of 2014. Home movers in London took out 9,800 loans worth £3.6 billion, down 7% by volume and 9% by value on the previous quarter. Compared to the fourth quarter 2014, this was up 11% by volume and 22% by value. Remortgage lending increased 5% by volume and 8% by value compared to quarter three totalling £3.8 billion with 13,100 loans, up 34% in number of loans and 53% in amount borrowed for remortgage compared to the fourth quarter of 2014. The number of loans for home owner house purchase in London decreased year on year to 81,600 loans at £24.5 billion, down 5% by volume but up 1% by value on 2014. First time buyers took out 45,600, worth £11.6 billion, down 6% by number of loans and 1% by amount borrowed compared to 2014. Home movers took out 35,900 loans worth £12.9 billion, down 3% by volume but up 4% by value year on year. Remortgage lending totalled 48,600 loans worth £13.7 billion, up 14% by volume and 25% by value on 2014. ‘House purchase lending in London fell in 2015 due mainly to a slow start. Later months of the year saw activity pick up again. Persisting supply and affordability issues, alongside the introduction of the Help to Buy London scheme, means there will be some uncertainty around how the market will perform going into 2016,’ said Paul Smee, director general of the CML. ‘By contrast, remortgage activity, which has been consistently flat for the past few years, appears to be on an upward trend. Competitive mortgage rates appear to have sparked this activity and we have not seen quarterly volumes at this level since 2009,’ he added. Continue reading
