Tag Archives: real estate
UK regional office market recovery strong with take up highest for four years
The recovery in the UK’s key regional office markets is proceeding apace with take up in the third quarter of 2014 at its highest in four years and 40% above the five year quarterly average. The latest research report from Knight Frank shows that the majority of the 10 cities covered in its regional report saw take up ahead of their averages, although Aberdeen and Glasgow were the standout performers despite the uncertainty surrounding the recent referendum. Glasgow saw 219,241 square feet of take up underpinned by a flurry of key deals including Network Rail at 151 St Vincent Street and Clydesdale Bank at Granite House while Aberdeen saw a record 647,874 square feet of take up which included two substantial pre-lets. Collectively, 2014 is set to be the most active year for the regional markets since 2008, the report says, adding that for the majority of markets, 2014 take up to date is already above or close to the annual average for each of the previous five years. Aberdeen has already achieved a record year while Manchester is certain to break the one million square feet mark for 2014. Birmingham, while arguably the one underachiever thus far in 2014, saw a substantial 80% rise in demand in the third quarter of the year. Leeds is also expected to end 2014 strongly. ‘Developers are responding cautiously to the growing shortage of Grade A supply which characterises the majority UK’s key regional markets. Collectively, speculative development activity climbed to a six year high of 2.2 million square feet by the end of the third quarter,’ the report says. It also shows that prime headline rents remain under upward pressure. Two markets saw headline rents increase during the third quarter, with Glasgow rising to £29.50 per square foot and Leeds to £26.00 per square foot. Rental growth is expected to take place across the majority of markets over the next 18 months, with new development completions securing higher prime rental levels in Bristol, Birmingham and Manchester. The report describes investment activity in the regional office markets as ‘exceptional’ in the third quarter with £1.3 billion of assets changing hands, the highest seen in a single quarter since the third quarter of 2007. Total volume for 2014 to date now stands at £3.1 billion, already eclipsing the annual total for each of the last six years. ‘The third quarter’s impressive turnover reflects an increase in buying opportunities since summer, as some investors have sought to capitalise on significant price increases over the past 12 months,’ the report explained. ‘While major lot sizes were key to turnover with the largest 10 deals accounting for 75% of turnover, the quarter saw 40% more transactions than the five year quarterly average and this is indicative of the ongoing depth of investment demand,’ it adds. Despite a substantial weight of money continuing to target regional office stock, evidence in the market suggests that pricing was broadly stable in the third quarter. Across the 10 key regional markets,… Continue reading
Million pound plus home sales reach record high in the UK
The number of property sales worth at least a million pounds in the UK is at a record high, according to latest research from Lloyds Bank. There were 6,143 million pound property sales in the country in the first half of 2014 which is equivalent to 33 transactions everyday over the period. The 6,143 million pound property sales in the first half of the year represented a 46% increase compared to the same period in 2013 when sales totalled 4,198. Indeed, million pound home sales have grown by 345% since the first half of 2009, when sales in this market segment were at their lowest point in the past decade. However, while million pound home sales outperform the rest of the market, they are still a very small share of the overall market. The 46% increase in million pound home sales in the first half of the year significantly outpaced the 26% increase in the sale of properties below a million pounds over the period. Despite this large increase, the sale of million pound properties accounts for just 1.3% of all national residential sales although this share has more than doubled since 2009. But even in London, million pound sales account for just 7.6% of all sales. There were 1,360 homes sold for at least two million pounds in the first half of 2014, some 43% higher than over the first six months of 2013 when the number of sales totalled 949. Homes selling for at least two million pounds accounted for 22% of all million pound plus home sales in the first half of 2014. This proportion had edged down marginally from 23% in the same period a year earlier. As a proportion of all sales, homes sold for over two million pounds account for just 0.22%. Some 70% or 4,259 of all million pound home sales in Britain during the first half of 2014 were in London. The capital is followed by the South East with a share of 16% or 1,096 and the East of England at 6% or 109. All regions have recorded an increase in sales in 2014 compared to the same period a year earlier. The largest percentage rises in million pound home sales were in the North East with a rise of 150%, the West Midlands with an increase of 100%, South West up 87% and the East Midlands up 80%. In the two regions with the largest concentration of million pound sales, London and the South East, transactions rose by 47% and 41% respectively. The research also shows that close to a quarter of all million pound homes sold in Britain during the first half of 2014 were in the prime property locations of Kensington and Chelsea and Westminster at 13% and 10% respectively. Cheshire East and the City of Edinburgh recorded the highest number of million pound sales outside southern England. ‘The number of homes sold for at least a £1 million is at a record high, with this sector… Continue reading
Worrying number of home owners plan to use pension to pay off mortgage
More than half a million 40 to 70 year olds in England intend to use part or all of their pension to repay their mortgage, according to new research. While 58% take a more traditional approach to managing their mortgage by making monthly repayments until it is paid off and 22% making lump sum payments in addition to monthly contributions some have other ideas. One in 10 intend to use their tax free pension lump sum to repay the outstanding balance on their mortgage and 5% plan to use their pension to repay the outstanding balance on their mortgage. In addition, 7% claim to have savings or investments set aside to meet this cost which suggests that they may hold one of the estimated 2.2 million interest only mortgages outstanding on lenders books. The firm says that it is worrying that 6% plan to use an inheritance to repay their mortgage and 3% to take in a lodger to help them meet this cost, neither of which are guaranteed sources of finance. ‘It is worrying to see that over half a million people in England plan to use all or part of their pension to repay their mortgage. This suggests that the number of people who actually need to do this is likely to be far higher as unexpected events such as redundancy, illness or family financial emergencies cause issues,’ said Mark Stopard, head of product development at Partnership. ‘While it is natural for people to want to retire debt-free, the purpose of these savings is ideally to provide an income for their retirement which can last up to 30 years or more. Although the state pension will provide a very basic safety net, it is unlikely to be sufficient for people to have as comfortable a retirement as they might wish,’ he explained. ‘This research clearly highlights that people need to focus on repaying their mortgage as early as possible and avoid traps such as remortgaging for the full period each time they take out a new deal,’ he pointed out. ‘Even those who are currently retiring have options such as working longer, downsizing or taking out an equity release plan, all options that will help to keep their pension funds intact,’ he added. Continue reading
