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Price growth for central London prime market revised down
Property price growth in the prime market in central London is likely to be less than expected due to a slowdown in the sector, a new analysis suggests. Leading real estate firm Knight Frank has revised its 2016 forecast for annual price growth in prime central London to 2% from 4.5%. The firm pointed out that the prime London property market has faced a number of headwinds in 2015, which reduced annual price growth from 5% at the end of last year to 1.3% in September. ‘These challenges have been led by the increase in stamp duty at the end of 2014, a factor that will continue to weigh on transactions and price growth into 2016 as the market absorbs the new rates,’ the report says. It also explains that global economic uncertainty centred on China has also dampened demand to some degree. ‘However the strength of the UK’s economic recovery, employment growth in London and the likelihood of continued low interest rates mean price growth will remain positive next year,’ it adds. It also points out that activity in September and October has increased following a subdued summer and the appearance of some high quality stock has driven demand. However, buyers have become more circumspect and stringent in their requirements due to the stamp duty increase. ‘It has resulted in a flight to quality, meaning demand is particularly strong for properties in the best condition and on a prime floor, street or square,’ the report adds. ‘While the anticipated gear change materialised as summer moved into autumn, there has been no sense the market is entering full-blown recovery mode after what has been a subdued 2015,’ it concludes. Continue reading
UK residential rent growth slows to match pace of house price growth
Rent price rises in the UK have slowed to match the pace of house price growth in the country after nine months of sustained faster growth, the latest index figures show. It means that rent prices are now 8.5% higher than a year ago for the three months to September 2015 after six months of annual rises over 10%, according to the data from HomeLet. The average rent in the UK for new tenancies in the period was £995 per month but in Greater London it was £1,555 per month although rents dropped here on a month on month basis for the first time since February 2015. The index report suggests that deflation across the economy, and rising real incomes, mean the slowdown in rents could be temporary. A breakdown of the figures shows that nine out of 12 UK regions are still seeing rent prices rise on an annual basis, with the largest increases seen in Scotland at 8.4%, the East Midlands at 7.7% and Greater London at 6.6%. The figures also show three regions in negative annual price movement, with prices in the North West 4.6% lower than a year ago, 2.2% lower in East Anglia and 1.4% lower in Northern Ireland. Comparing September figures to the previous month, the index reveals that only three regions have seen rent prices rise since August. In the three months to September 2015 only Scotland, the East Midlands and West Midlands have seen prices rise by 1.2%, 1.4% and 1.4% respectively. Every other region of the UK has seen rent prices fall modestly in the three months to September 2015, with the largest price reductions seen in the South West, the North East and North West with a fall of 2.4%, 2.3% and 2.2% respectively. ‘The UK economy has dipped into negative inflation which is a boost to consumers' spending power and, ultimately, their real income. Affordability is an important factor in determining rents,’ said Martin Totty, chief executive of Barbon Insurance Group, owners of HomeLet. ‘Depending on what happens with inflation and real incomes over the coming months, could have a bearing on future rental price trends especially where, in certain areas of the country, the supply of rental properties is not keeping pace with demand from those wishing to be private sector renters,’ he added. Continue reading
Data shows foreign buyers are back in the Spanish property market
The number of international buyers back in the Spanish property market is rising with British people now representing almost 20% of foreign sales, new data shows. In absolute terms, the number of purchases by foreigners is increasing to over 42,000 in a year with close to 11,000 transactions quarterly, and over 42,000 in a year. According to figures from the Ministry of Public Works sales to foreign residents in Spain increased year on year in the latest quarter by 17.2%, the 16th quarter on a row of growth to this sector of buyers. The nationality with the greatest volume of home purchases is the British, amounting to 19.8%, and it is suggested that this is due to the UK’s economic recovery and currency rates which give buyers more euros to the pound. French buyers accounted for 8.1% of sales to foreigners, Germans 7.6%, Belgians 6.4%, the Swedish some 5.5% and Italians 5.3%. But sales to Russian buyers have dropped from 9% during 2012 and 2013 to less than 4% currently, and this is likely due to the fall of the rouble and the price of oil. Asian buyers still only account for a small percentage of sales. Quarter on quarter sales to foreign non-residents reached 17,307 while sales to foreigners who are not residents increased by 5% to 1,244 transactions. A rise in foreign demand has also been recorded by the Association of Registrars whose latest data suggests that while there was a slight decline in the first quarter of the year, in the second quarter sales reached 12.8% of the total home transactions. In the first half of the year, foreign home buyers accounted for between a third and a quarter of all the home purchases in some regions. For example, in the Balearic Islands, some 33.5% of all the home purchases in the second quarter were made by international buyers, while in the Canary Islands they accounted for 27.5%, and in Valencia some 25.7% of all transactions. The regions of Murcia, Andalucía and Catalonia recorded percentages of home purchases by international buyers of between 12% and 15%, while in Madrid they accounted for only 4.7% of sales. The data also shows that in Aragón foreigners bought 4.5% of homes, in La Rioja it was 2.8%, in Navarra 2.3%, in Asturias and Cantabria 1.9%, in Castilla-La Mancha 1.8%, in the Basque Country 1.7%, in Castilla y León 1.1%, in Galicia 0.6% and in Extremadura just 0.4%. Meanwhile, the latest house price data suggest the housing market in stable with average national prices down by just 0.8% in the 12 months to the end of September, according to data from appraisal company Tinsa. A second set of figures from Idealista suggests year on year property prices fell 1.6% to a national average of €1,574 per square meter. According to Mark Stucklin of Spanish Property Insight, these latest figures back an overall trend of stabilisation in the country’s real estate market. But he is sceptical about official figures from… Continue reading
