Tag Archives: real estate
Value of British property owned by landlords set to break £1 trillion mark in 2015
The value of property owned by landlords in Great Britain is set to break the £1 trillion pound barrier next year, according to new research. The inaugural Buy to let Britain report from Kent Reliance shows that the total value of property in the private rented sector has now reached £930.7 billion, climbing by £109.5 billion in the last year alone, a rise of 13.3%. From its recent trough in 2009, the sector has gained £302.5 billion and the financial crisis had little impact on the sector. Even since the 2007 peak of the property boom, it has risen by more than quarter of a trillion pounds. The longer term growth is even more impressive, with the value of landlords’ assets now more three and a half times its level at the start of 2001 when it was £262.1 billion. The report suggests that resurgent property prices have been a key driver in the increasing value of the private rented sector but long term growth has been underpinned by very strong demand from tenants wanting rented homes. Since 2001, the PRS has expanded by nearly two million households, increasing by 71.4% since the start of 2001. There are now more than 4.6 million households in the British private rented sector due to a combination of individuals and families choosing to be flexible, ongoing net immigration, falling real wages, greater indebtedness among younger households, rising property prices and difficulty in securing mortgage finance. The report also suggests that a serious shortfall in house building and regulations requiring developers to build social housing are both pushing up the price of would be starter homes too. While there are signs that the rapid house price growth may be slowing, Kent Reliance’s analysis of current market trends suggests the PRS will break through the £1 trillion barrier in the second quarter of 2015. London currently accounts for 41% of the sector’s value at £377.3 billion while the South East is the next biggest component with its value of £137 billion or 15%. The South East alone has a greater value than that of the four smallest in monetary terms in the North East, Wales, Yorkshire and the Humber and the West Midlands. The disproportionate size of the PRS by tenure inside London’s population, where over a quarter live in privately rented homes, compared to 18% in Great Britain overall, is a major factor in the pace of growth in the overall sector's value, the report says. Rapid London house price growth has much a bigger effect on the private rented sector than it does in the wider housing market. The amount of rent tenants are paying each month across the UK has increased with the PRS. Landlords earned £44.8 billion in the 12 months to June, equivalent to nearly half the UK’s total annual household expenditure on food, and up by £2.3 billion or 5.5% compared to a year ago. However, the increase in rents themselves… Continue reading
Research reveals UK estate agents tactics for making a property more sellable
British estate agents are not always popular but new research reveals the lengths they will go to sell a property by making it more suitable for viewings. They will literally don rubber gloves to clinch a sale with many opening windows to get rid of bad smells, flushing the toilet and hiding inappropriate items on display, according to the research by Big Yellow Self Storage. Many agents have had to clean properties and hide items ahead of viewings. Some 36% said they have had to open windows to get rid of smells, 31% have pushed things under a bed and 29% have tidied up mess. Others have resorted to age old tactics to increase desirability with 22% turning on lights to create the impression of greater brightness and 15% brewing fresh coffee to create a homely atmosphere. The research also shows that 21% have tidied items away into cupboards, 17% have sprayed air freshener, 12% have flushed the toilet before viewers arrive and 10% have encouraged the property owner to get rid of large items. ‘Every agent wants to get the best price they can for their sellers, but many of the ways they do this go unnoticed. Agents get a bad press, but the research reveals that they’re often going above and beyond and undertaking less appealing tasks to make sure a property is presentable at viewing time,’ said property expert Kate Faulkner. The research also reveals agent’s tips on boosting a property’s sale price. Ways that reap particular dividends include clearing kitchen of small appliances such as kettles and toasters which can add £973 in value, creating an open plan living area adding £972 in value and de-personalising the property by removing ornaments and knick knacks adding £948 in value. It also found that in some cases, de-cluttering by removing bulky items to maximise space pushed the sale price up by as much as 11%. In fact, each square foot of floor space freed up is estimated to be worth an average of £238 by agents researched. ‘The UK is in the grip of a housing squeeze with the smallest homes in Western Europe, so space is increasingly desirable for buyers, as agents well know. Our research found that a fifth of buyers wouldn’t make an offer on a property because it was too cluttered, so it’s in the interests of agents to advise vendors on how they can maximise the space in their homes to clinch that sale,’ said Anthony Chenery, Big Yellow spokesperson. Some 95% of estate agents say de-cluttering leads to homes selling for more and 38% insist it increases the sale price 'every time' and yet only 56% have recommended short term self storage to clients as an aid to selling their home. Overall the study found that two thirds of sellers who de-cluttered before viewings received a higher offer than expected of £4,811 more, on average. ‘Self storage allows vendors… Continue reading
General election set to slow UK prime property market
The UK’s prime housing market is expected to slow in the run up to next year’s election and resume steady growth thereafter, but a mansion tax could change the outlook dramatically. According to international real estate adviser Savills in its five year forecast report a mansion tax could negatively impact five year growth by an average of five percentage points. The high value prime markets, that is the top five to 10% of homes by value, have already been impacted by increased stamp duty, the introduction of an annual tax on enveloped dwellings (ATED) and the closure of certain tax loopholes. The rate of price growth has begun to slow, particularly in London. After five and half years of price growth and having absorbed a number of tax rises, London looks fully valued, particularly given the uncertainties surrounding the mansion tax as election year approaches. On this basis, Savills has issued two forecast scenarios: a central scenario and a second based on its estimates of the number of properties in different price bands over £2 million and the scale of possible mansion tax charges given current Labour party proposals. ‘Two out of the main political parties still favour some form of mansion tax so owners and buyers will be rightly factoring it into their decisions as the election approaches,’ said Sophie Chick, senior research analyst as Savills. ‘It would take some time for the markets to accurately price in the impact of a mansion tax, but the threat of it has already slowed the market. If it becomes clear that a mansion tax is to be introduced after May 2015, we would expect an immediate price adjustment before the market more rationally finds its level,’ she added. Without a mansion tax the Savills central forecast would see average prime UK house prices slipping 0.5% in 2015, assuming no further increases in the taxation of high value properties. Growth would be expected to resume post election, averaging 22.7% over the next five years across all prime London markets. Regionally, the recovery is yet to become fully established and the market has capacity for price growth to continue through next year, albeit averaging just 1%, the report says. Five year growth is forecast to average 23.9% across the UK, outperforming prime London, with prime commuter and lead city locations expected to show the strongest growth. Savills believes that a mansion tax, if implemented in the form most recently discussed, would trigger average price falls of 5% across prime London in 2015 and a fall of 3% across the prime regions. In a worst case scenario, the value of prime London properties over £10 million could fall by 10% and homes worth over £3 million regionally would fall 7%. Homes below the mansion tax threshold would not escape its effect, but the proposed progressive structure of the tax would limit the trickledown effect, with small falls of 2% anticipated. By 2017, the top end… Continue reading
