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UK’s South East office market makes strong start to 2016
Office market in the South East of the UK has seen the strongest start to a year since 2008, according to new research. Overall take-up in the South East Office market increased by 30% in the first quarter of 2016, according to the latest M25 Offices report from Knight Frank. A total of 973,000 square feet of space was let or acquired during the quarter, 10% above the 10 year average. The high level of take-up ensured that overall supply remains historically low with availability across the South East markets 25% to 30% below the long term trend. The report says that following record investment volumes in 2015, the first quarter of this year has recorded £494 million of investment, which is consistent with the 10 year average. It points out that the £325 million acquisition of SEGRO’s 972,000 square foot office portfolio in Slough by AEW was significant representing, not only the largest transaction in the South East market for two years, but also further evidence of overseas purchasers becoming more active and widening their UK focus beyond Central London. With stock levels improving in the second quarter of 2016 Knight Frank predict an increase in transaction volumes from the middle of the year and expect investment volumes to be close to £2 billion by the end of the year. Emma Goodford, head of National Offices at Knight Frank, said that overall take-up in the first quarter has been encouraging, particularly set against increased market anxiety relating to the forthcoming referendum on the future of the UK in the European Union. ‘Although, some decision making will clearly be deferred until after the vote, we continue to see interest rise from diverse array of occupiers with active named demand topping 6.6 million square feet. With this in mind, we are predicting strong rental growth in key locations, particularly where new development is accompanied by infrastructure and amenity improvements,’ she explained. According to Tim Smither, head of National Offices Investment at Knight Frank, the weight of capital targeting opportunities in the South East remains robust. ‘Whilst some investors pause to await the outcome of the EU referendum, others are seeing opportunity. In particular, high yielding, asset management opportunities remain keenly sought after, supported by a strong rental growth outlook for the region,’ he said. Continue reading
More people in UK want to buy a home but are concerned about rising prices
More people dream of becoming home owners in the UK with new research showing 73% aspire to owning a property, up from 65% four years ago. However some 78% of aspiring home owners are concerned about the availability and quality of homes, up 6% from last year, and house prices, the ability to get on the property ladder and saving for a deposit continue to top the nation’s list of housing concerns Overall the 2016 home owner survey conducted by YouGov for the HomeOwners Alliance and BLP Insurance suggests that the housing crisis is deepening as concerns mount about the availability and quality of homes. While the desire to own is rising, the ability of first time buyers to get on the housing ladder and saving for a deposit remains the top concerns nationally, at 82% and 80% respectively. On top of this, the proportion of aspiring homeowners who say that the availability of housing is a serious problem has increased to 78%, up from 72% last year. Aspiring home owners are also increasingly concerned about the quality of housing, with 60% saying it is a serious problem. The survey shows that the housing crisis is most acute in the capital, as Londoners head to the polls to elect a new mayor. However, there is a noticeable drop in concern about the rates of stamp duty, in the wake of the government’s reforms of the stamp duty system. Concern about negative equity has slumped among the UK overall to 44% from 64% two years ago, as house prices have continued to rise. ‘Despite government initiatives aimed at helping home owners, the housing crisis is deepening across the country, with ever more non-home owners wanting their own home, and ever greater concern about the lack of housing,’ said Paula Higgins, chief executive of the HomeOwners Alliance. ‘Many government policies have boosted demand for homes, but what this survey shows is that the real problem is the desperate shortage of houses. Until the government tackles the fundamental issue that we just don’t have enough good quality homes, the housing crisis will continue to deepen and a generation will continue to have their dreams of homeownership crushed,’ she added. According to Kim Vernau, chief executive of BLP Insurance, the current situation is a critical juncture for the construction industry and housing market. ‘The government urgently needs to speed up the delivery of new homes for aspiring first time buyers. Tenures of all types are required across the country and affordable housing and social housing should also be a priority,’ he said. ‘Balancing these competing demands is a challenging task, particularly given the shortage of labour skills that we are currently witnessing in the construction industry. This is likely to get worse in the absence of key initiatives to help address this critical issue and the new Housing and Planning Bill and threat of… Continue reading
Property prices in metro areas in the US continue their upward trend
An uptick in sales activity amidst meagre supply levels upheld the trend of unwavering property price gains in an overwhelming majority of metro areas in the United States during the first quarter of 2016. It means that the median existing single family home price increased in 87% of markets with 154 out of 178 metropolitan statistical areas showing gains based on closed sales in the first quarter of the year compared with the same quarter of 2015, according to the latest data from the National Association of Realtors. Some 24 areas or 13% recorded lower median prices from a year earlier but there were more rising markets in the first quarter compared to the fourth quarter of 2015, when price gains were recorded in 81% of metro areas. The data also shows that 28 metro areas or 16% experienced double digit increases in the first quarter of the year, a slight decrease from the 30 metro areas in the fourth quarter of 2015 while 51 metro areas or 28% experienced double digit increases in the first quarter of last year. Lawrence Yun, NAR chief economist, pointed out that home prices chugged along at a robust pace in most metro areas during the first three months of 2016. ‘The solid run of sustained job creation and attractive mortgage rates below 4% spurred steady demand for home purchases in many local markets,’ he said. ‘Unfortunately, sales were somewhat subdued by supply and demand imbalances and broadly rising prices above wage growth. As a result, the path to home ownership so far this year remains strenuous for a segment of prospective buyers in the most competitive areas,’ he added. The national median existing single family home price in the first quarter was $217,600, up 6.3% from the first quarter of 2015 and the median price during the fourth quarter of 2015 increased 6.7% from the fourth quarter of 2014. Total existing home sales, including single family and condos, rose 1.7% to a seasonally adjusted annual rate of 5.29 million in the first quarter from 5.2 million in the fourth quarter of 2015 and are 4.8% higher than the 5.05 million pace during the first quarter of 2015. ‘In spite of deficient supply levels, stock market volatility and the paltry economic growth seen so far this year, the housing market did show resilience and had its best first quarter of existing sales since 2007,’ Yun explained. ‘The demand for buying is there, but unless the stock of new and existing homes for sale increases significantly especially in several markets in the West, the housing market will struggle to reach its full potential,’ he pointed out. At the end of the first quarter, there were 1.98 million existing homes available for sale, which was below the 2.01 million homes for sale at the end of the first quarter in 2015. The average supply during the first quarter was 4.3 months, down from 4.6 months a year ago. ‘Current home owners… Continue reading
