Tag Archives: real-estate
Modest price growth predicted for UK residential post general election
Continuity and stability has returned to the UK residential property market following a period of uncertainty where the threat of mansion tax amongst other measures caused a pause in activity. According to the latest market analysis from JLL the prime London market in particular breathed a sigh of relief as the prospect of mansion tax evaporated when the Conservative party won the general election last month and modest price growth is predicted in the short term. ‘Whilst in the six month run-up to the election the number of transactions recorded in some areas of the prime market cooled by a third. The question now is how strong the demand bounce will be and if we will return to the heady unsustainable rates of growth that fed the market in the 2009,’ said Adam Challis, head of residential research at JLL. The real estate advisory firm believes that whilst there will be a renewed level of demand in the prime central London market, underpinned by a more balanced supply backdrop, this will take some time to have an impact. ‘We have seen strength in activity resume in the prime central London market but we predict this to stabilise as the industry settles down and the new Government beds in,’ Challis explained. The report says that in central London new build activity, off-plan sales remained robust in the first half of 2015, with some sensitivity for high value property. Development activity has been shifting towards outer areas over the past 12 months, with annual starts up by 59.3% in contrast with central London, which is down by 43.2% over the year. Looking forward the firm believes that the focus needs to be on supply solutions that will tackle the real issue facing the UK housing market. ‘Policies to date have been about the demand-side solutions but Government needs to concentrate on policies that can drive a step change in supply solutions. Whilst these will take some time to bed-in and manifest themselves, they will be the solutions that ultimately provide the help where is it needed most,’ said Challis. JLL predicts that with five years’ worth of clear runway to aim at, it expects to see a continued rate of growth in housing market transactions that have been slowly gathering momentum since the Conservative majority victory on 08 May. The firm predicts that pricing is likely to remain under upward pressure, in line with a healthy, stable economic backdrop, real income growth, near term political risks subsiding and a sclerotic housing supply response will all play out. ‘Political risks are always present in residential markets. The UK needs a Government that actively seeks to provide certainty so that markets can behave efficiently for the benefit of the economy,’ Challis explained. However, the firm points out that with certainty and stability resuming, there are, however, three political changes that may create renewed tensions in the housing market; the European Union referendum, regional devolution driven by Scotland… Continue reading
Prime London rental values up but price growth remains muted
Rental values in prime central London continued to climb in May, and annual growth of 4.2% was the highest figure since December 2011, the latest published data shows. It compares to a decline of 1.4% in May 2014 and the positive upwards momentum over the last year has been driven by the recovering UK economy and the transfer of demand from the sales market ahead of last month’s general election, according to the report from Knight Frank. A mood of hesitation around the election, combined with the two bank holidays, meant activity in May was slower compared to last year in what was a stop start market, the report says. Indeed, the number of new prospective tenants was down 12% in May compared to the same month in 2014, while the number of viewings declined 18%. In spite of the recent dip, new prospective tenants and viewings in the 12 months to May 2015 are up by 12% and 7%, respectively, and activity is expected to increase over the summer as part of a seasonal trend among students, families and corporate tenants. Demand has remained strong in markets including Marylebone and Hyde Park, particularly in lower price brackets, suggesting companies and private renters are still cost conscious despite the improving economy. Prime gross rental yields edged upwards to 2.96% in May, their highest level since August 2013, widening the spread between the risk free rate on a 10 year government bond. Meanwhile, in the prime central London sales market annual growth is lower than at any time since the last general election in 2010. Although prices grew 0.3% in May, an annual increase of 2.3% is the lowest since November 2009. ‘This relatively low level of growth underlines the gap between the expected impact of the result and the reality of a property market still digesting a series of tax changes,’ said Tom Bill, head of London residential research at Knight Frank. Continue reading
Demand for high end properties in Venice up 20% year on year
Enquiries for prime real estate in Venice have increased by 20% year on year with demand particularly for centrally located properties, according to a new report. The market in Venice is very active at the moment, especially at the top end with rich buyers seeking prestige properties finished to the highest of standards, says Ann-Marie Doyle of Sotheby’s International Realty. Buyers increasingly favour turn-key solutions over restoration projects and those from the UK, France, Germany and Austria have been key players in the Venetian market for years and this international interest has remained strong. ‘However, this year we have seen a noticeable rise in demand for prime properties priced between €3 million and €10 million. Notably, US buyers are now returning to the market due to the advantageous exchange rates,’ she explained. An example is Palazzo Molin, a 15th century residential conversion which has been converted into 17 highly specified apartments that combine classic Venetian architecture with contemporary design located minutes from landmarks such as Piazza San Marco and the Fenice Opera House. Apartments in the historic palace have been bought as second homes and buy to let investments with 50% now sold. ‘Whilst Venice is not a traditional buy to let location, it is a city where buyers can have the best of both worlds in terms of a second home in one of the most beautiful cities in the world, as well as strong rental investment potential,’ said Doyle. ‘There is an ever-increasing demand for prestige short term rental apartments in Venice and this, coupled with the shortfall of top quality apartments that appeal to a sophisticated international clientele, is driving the high end rental market,’ she explained. ‘Visitors, and indeed buyers, come to Venice for its rich cultural offering, and events such as the Biennale reaffirm its timeless global appeal,’ she added. Continue reading
