Tag Archives: real estate
Over half of UK home owners think EU vote will affect property prices
The UK referendum on the country’s future in the European Union is still years away but already home owners think it will have an impact on property prices. Some 55% believe that leaving the EU will have an impact on house prices in the UK. Of these 34% think leaving the EU would actually strengthen the value of their home, with 21% believing it will lead to a decrease in their property price, according to the poll by eMoov. It is thought the economic impact of leaving the EU will be felt hardest in London, however some 52% of those surveyed in London think it will push up the price of their property, with just 23% thinking the opposite. When Britain first joined Europe in 1973, the average house prices was just £9,045. Despite a post legislative referendum in 1975, UK house prices continued to increase for another 16 years to 1989. During Britain’s tenure as a member of the EU the average UK house price has increased by more than 2,000%. Based on these figures, it would seem the EU has been good for the UK property market, but Britain’s future in Europe still remains uncertain. ‘The consequences of exiting the European Union stretch far beyond its effect to UK property prices, however homeowners across the nation are understandably apprehensive as to the impact it could have on their property price, as our research shows,’ said the firm’s chief executive officer Russell Quirk. Pro EU campaigners have forecast central London will be worst hit if Britain does choose to leave the EU. ‘We saw how pre-election uncertainty froze property demand in the prime central London market. The uncertainty of Britain’s future in the EU could result in a similar effect on a much larger scale, but 52% of home owners in London seem confident a Brexit will only strengthen the value of their home,’ he explained. ‘This said, post-election stability failed to revive the high end London market, so who’s to say the same won’t happen if we do come out of the EU,’ he concluded. Continue reading
Prime central London prices still falling
Prices in central London’s prime residential market fell 0.3% in October, the steepest monthly decline since the summer of 2010, and annual growth slowed to 1%, the lowest rate since October 2009. This latest data from real estate firm Knight Frank means that the firm has revised 2016 forecast for the sector down to 2% from 4.5%. According to Tom Bill, Knight Frank’s head of London research, even although it has been 11 months since the Chancellor raised stamp duty for properties worth more than £1.1 million, the consequences have only come into sharper focus in recent weeks. ‘The spring selling season was overshadowed by the general election and, after a seasonal lull in the summer, the autumn market has been the first reliable test of sentiment since the stamp duty increase. Autumn is typically a more active time of year but the final months of 2015 have been marked by a standoff between buyers and sellers,’ he explained. ‘There is a degree of nervousness around global economic events such as the China slowdown and the fact some markets have experienced strong price growth in recent years, but the stand-off primarily comes down to the arithmetic of higher stamp duty rates,’ he said. ‘Buyers calculate it will take them longer to recover the extra stamp duty expense in house price inflation and expect a lower asking price, something vendors are not always willing to concede,’ he added. The figures also shows that the number of exchanges in the three months to September was 17% lower than in 2014. Meanwhile, the number of new prospective buyers was 30% down on the same period in 2014. ‘However, despite the stand-off, there are signs some vendors have realised demand has cooled since the stamp duty increase and where asking prices have come down the market is operating in a normal manner and tapping into underlying demand that remains resilient,’ Bill concluded. Continue reading
A rent freeze in London could seriously reduce number of properties available, study finds
Some 60% of London landlords would reduce the size of their property portfolios in the event of a rent freeze, new research has found. The report commissioned by the London Assembly Housing Committee carried out by the Cambridge Centre for Housing and Planning Research (CCHPR), surveyed amateur landlords with just a few properties as well as commercial build to rent landlords and investors. CCHPR put forward six potential scenarios of rent stabilisation, from a one off rent freeze for three years, through to linking rent rises to wage rises. The study found that the majority of landlords would continue as they are if rents could only be increased in line with inflation, although 40% of participants stated that they would sell some or all of their properties if this measure was introduced. What's more, the report claims that on the whole landlords taking part are not keen to offer longer tenancies but 52% said they would be more inclined to do so if tax incentives were available for doing so. ‘Much has been said from all sides about rent controls but the debate has been sorely lacking in facts, so it's incredibly useful to have these set out in this report,’ said Tom Copley, chair of the London Assembly Housing Committee. ‘The choice is not simply between regulating rents and not regulating rents. There is no one size fits all system of rent control, with many cities around the world adopting different models. Each system has upsides and downsides,’ he explained. ‘In terms of what would work for London we need solutions that work for the millions of Londoners, especially families, in the rental sector. For families, the prospect of having to up sticks with very little notice often means disruption to many aspects of their lives, including schooling and employment,’ he added. According to David Smith, policy director for the Residential Landlords Association, it is clear that the country will need more homes to rent, if it is to address the housing crisis. ‘This report reminds us of the dangers of rent controls which would in fact reduce supply, thereby increasing rents. Rent controls would also severely reduce standards in rented housing as investment dries up,’ he said. Continue reading
