Tag Archives: real estate
Houses in areas of low unemployment in UK have seen biggest property rises
British home owners in local authorities with the lowest levels of unemployment have seen the value of their property rise by almost £65,000 since the trough of the last housing market cycle in 2009, new research shows. The average house price in the 20 local areas that recorded the lowest unemployment rate between 2009 and 2015 rose by 25%, or £64,783, according to new research by Lloyds Bank. In contrast, the 20 areas with the highest unemployment experienced an average house price increase of just £4,100 or 3%. The report says that there is a clear link between levels of unemployment and house price performance in recent years. Those areas with the lowest average levels of unemployment since 2009, as measured by the claimant count, have, on average, recorded bigger house price gains. For example, the 20 local authority districts with the lowest unemployment have experienced average house price rises of 25% since 2009 compared with an increase of 17% for Great Britain as a whole. The outperformance is more marked once the impact of London is removed from the calculations with Great Britain excluding London recording an 11% price increase. The capital has seen the biggest price gains in recent years but none of the lowest 20 unemployment areas are in Greater London. The position for the 10 areas with the lowest levels of unemployment is even more marked with an average house price rise of 28% for these areas since 2009, more than 60% higher than the Great Britain gain and 150% more than Great Britain excluding London. Hart and Winchester, which have had the lowest average unemployment rates since 2009, have recorded house price gains of 33% and 37% respectively in the last six years. Similarly, those areas with the highest levels of unemployment have typically under performed compared to the Great Britain average. The 20 areas with the highest levels of unemployment have recorded an average house price gain of 3%. Hull and Middlesbrough, the two areas with the highest unemployment, have seen house prices increase by only 2% and 1% respectively over the past six years. ‘There has been a very clear relationship between conditions in the local jobs market and house price performance during the period since the housing market downturn between 2007 and 2009,’ said Andy Hulme, Lloyds Bank mortgages director. ‘Those areas with low unemployment and high levels of employment have tended to record above average house price growth. Areas with high unemployment and relatively low employment have, on the other hand, typically under performed,’ he explained. ‘The past few years have underlined the importance of local economic health in determining house price behaviour. Other factors, however, are also key drivers of house price trends including the strength, or otherwise, of housing supply,’ he added. The 20 local areas with the highest employment rates have experienced average house price rises of 19% since 2009 compared with an increase of 17% for Great Britain as a whole,… Continue reading
Office rental growth hits record highs in South East of England
Vacancy rates across the South East of England office market are at their lowest since 2001, driving rental growth to hit record highs in towns across the region, new research shows. The M25 vacancy rate stood at 5.9% in the first three months of 2015 but this falls to 4.2% when only new and Grade A space is analysed, low by London, UK and global standards, says the data from the latest office leasing report from Knight Frank. It also shows that availability fell by 13% compared to a year ago, across all grades of stock, moving the market back towards the landlord’s favour. Following the re-election of a Conservative led Government and financial market rally, economic performance of the region is improving and there is an expectation of a further boost to demand, it points out. Strong investor demand and a lack of deliverable product is holding back stock volumes in the investment market, where we are seeing a hardening of yields across the spectrum, with investors increasingly factoring in likely rental growth during hold periods. Prime yields now stand at 5.00% NIY and the combination of weight of money and lack of product is expected to drive yields down further moving forward in 2015. ‘2015 has started positively supporting our view that take up in the M25 will be almost 30% ahead of 2014, and above the 10 year average,’ said Emma Goodford, head of national offices leasing team, Knight Frank. ‘Vacancy levels are heading towards crunch point in combination the market seeing rental growth across a growing number of key centres. In some cases rents are now at an all-time high- motivation for occupiers to identify and secure the best space now. The election has removed uncertainty and will drive demand,’ she added. According to Tim Smither, head of South East investment, Knight Frank, the investment market continues to strengthen, with prime yields standing at 5% NIY. ‘We expect this yield compression to continue for the rest of the year, driven by a combination of a lack of stock, significant levels of equity looking to be deployed and anticipated rental growth in most core markets,’ he said. Continue reading
English regions start to outpace house price growth in London
House price growth in the South East and East Anglia has overtaken London for the first time in four and a half years, according to the latest index covering England and Wales. Overall, across England and Wales, house price growth picked up on a monthly basis in April, climbing 0.2% but the annual rate of property price growth has halved since last summer, down to 5.3% in April. The data from the LSL index shows that the average house price is now £275,961, a new high for this year and excluding London the annual growth is 4.1%. The data also shows that in the first quarter of the year sales were down 10% but the firm expects that to change as the political uncertainty that affected the market in the run up to the general election disappears. ‘Annual price growth is still cooling, but mainly due to some recent negative monthly price rises. The direction of travel is clear and accelerating and most importantly, momentum is picking up where it was lacking before,’ said Richard Sexton, director of e.surv chartered surveyors. ‘By contrast, annual price rises in London have fallen sharply. As a result, the capital has been knocked off its perch by the South East and East Anglia, who have now edged ahead of London with the strongest year on year increase in property values of all regions across the country, at 7.1% and 6.9% respectively. In contrast, annual growth in London has shrunk from 9% in February to just 6.8% in March 2015,’ he pointed out. ‘This is the first time for nearly four and a half years that London has not been leading the pack in terms of regional house price growth, as higher stamp duty rates take some of the shine off high end properties in prime central areas,’ he added. The data shows, for example, that in the City of Westminster, where the average property is now worth £1,382,965, prices dropped 5.2% during the month of March, as pre-election speculation of a mansion tax put a dampener on enthusiasm for the most exclusive London homes. London also saw the sharpest decline in completed home sales between the first quarter of 2015 and the same period a year ago, falling 16.5%. ‘Election uncertainty has now vanished, so arguably London’s unique property market could see a fresh boost. But this mansion tax effect is one for the very top of the market. Away from the prime hotspots, affordability is still the biggest factor holding back further price rises and owning a London home is still more of a dream than even an aspiration for millions,’ said Sexton. ‘The head start that the housing market in London has traditionally exercised over the rest of the UK is retreating, and more of an even playing field is emerging instead. Average property values also hit new highs in greater Manchester and Birmingham, as demand in… Continue reading
