Tag Archives: real-estate
Property price growth in London now behind five other UK cities
Property growth in London now lags behind five other UK cities as the capital’s house price growth has dropped by two thirds in just three months. Edinburgh, Glasgow, Southampton, Bristol and Birmingham property markets have seen faster growth than London in the last quarter, according to the latest cities house price index from Hometrack. It also shows that while overall UK house prices have risen by 8.9% year on year, the rate of house price growth in the last quarter has slowed across 16 of the 20 cities. The firm is predicting house price growth of 2% in 2015. House price inflation in London at 0.5% was the same average growth as Manchester, Portsmouth. Some key cities saw price growth diminish, most notably Aberdeen down 0.4% and Cambridge down 0.2%. Other cities showed a pronounced slowdown in price growth such as Oxford seeing a quarterly rise of just 0.3%, Cardiff at 0.2% and Bournemouth at 0.1%. But Scottish cities bounced back with Edinburgh at 1.8% growth and Glasgow at 0.9%, both continuing to register above average rates of growth as demand feeds back into the market after the independence. However, house prices are above their 2007 peak in eight cities with London up 30.5%, Cambridge up 28.7% and Oxford up 21.9%, but these are also the markets starting to register the clearest slowdown. This translated to an average annual increase in London property values of £57,000, which is nearly four times the national average of £15,200 and almost twice the UK’s average income. Liverpool recorded the lowest increase in values with just £3,000 added to house prices in the last year. ‘The high growth cities over the last year are now recording the fastest slowdown and this is most pronounced in smaller cities such as Cambridge and Aberdeen. The Aberdeen economy is closely related to the health of the oil industry and a weakening oil price is impacting the housing market,’ said Richard Donnell, research director at Hometrack. ‘The slowdown in London, which we identified in, will act as a drag on the UK rate of house price growth over the next 12 months. The rate of growth in house prices is starting to lose momentum across other cities in southern England, while across the rest of the country modest levels of house price appreciation continue as prices rise off a low base,’ he explained. ‘Overall we expect modest UK house price growth of 2% in 2015, which is more in line with earnings growth. Significant pent-up demand has feed back into the market in the last two years pushing house prices higher in all cities but the underlying rate of growth is now slowing across the majority of markets,’ he pointed out. He also said that the introduction of mortgage market affordability tests in the middle of 2014 has reduced the overall impact of low mortgage rates on house prices. ‘A… Continue reading
Rest of UK expected to catch up with London and South East price growth in 2015
In 2015 UK regions outside of London and the South East of England will catch up on the property price growth that has topped the market this year, according to agents. The National Association of Estate Agents (NAEA) predicts that in 2015 London and the South East will show slower growth in terms of price. With stamp duty reforms now in place, agents are hoping for greater supply in the market nationwide as there's more encouragement for people to buy and sell houses. ‘Areas outside London and the South East, where the market has been slow in terms of volume and price, will hopefully catch up with London and the South East in the next year,’ said Mark Hayward, NAEA managing director. He pointed out that currently supply in terms of construction is too low to be able to meet housing market demands. ‘Although the number of new homes being built has risen, and the three main political parties have created large new build targets, the lack of capacity within the market means that the gap between supply and demand won’t close and we currently don’t have the resources to respond to the problem,’ he added. Agents also believe that the general election will cause uncertainty, whichever party is likely to come in to power and with the housing market being based solely on sentiment, any uncertainty may result in a temporary lull. However, Hayward said the general feeling is that this will have long lasting implications on the market. He also mentioned the expected interest rate rise next year. ‘At present it’s anticipated to rise in the latter part of 2015, and the Bank of England feels this will have little effect on current mortgage holders and first time buyers. However, our research among NAEA members suggests the impending rate rise will influence demand, with 70% of agents already reporting signs of demand dropping. It is likely that the imminent rate rise will continue to affect demand, as well as affordability,’ added Hayward. David Cox, managing director of the Association of Residential Letting Agents (ARLA), explained that supply is also low in the private rented sector. ‘Simply put, we need more houses. Demand continues to outstrip supply. As new homes come on to the market at one end from both foreign investors and landlords in London and South East who are buying up portfolios in the north of the country we’re also seeing accidental landlords leaving the sector at the other end,’ he said. ‘However, even… Continue reading
City apartments set to remain popular buys in Australia in 2015
Investor appetite for city apartments in Sydney and Melbourne will remain strong in 2015, as low interest rates attract first home buyers and investors, according to a new analysis. The outlook for interest rates is mixed but headline indicators such as unemployment, construction activity and GDP point to a period of weaker overall economic growth which will result in interest rates remaining steady in the short to medium term, says the latest property outlook report from Colliers International. ‘This is good news for the residential sector and points to continuing demand side momentum. The low interest rate environment is a key driver of residential activity in the current market, and we anticipate it will provide supportive conditions for strong investment activity in 2015,’ it explains. It predicts that Sydney, Melbourne and Brisbane residential markets will have the strongest residential growth, as weaker economic conditions in Western Australia will lead to a slowdown in development and investment activity in 2015. It also points out that developments in central locations with close proximity to public transport, work and retail amenities will be in higher demand. Consequently, this demand will see the number of apartment developments grow in Melbourne, Sydney and Brisbane throughout 2015. The Melbourne and Sydney CBDs have been the strongest performing markets, with the volume of apartments under construction in the next five years to reach and 18,000 and 6,000 respectively, buoyed by strong offshore demand, and a rapidly rising inner city population, a trend we anticipate will continue in 2015. Next year is set to see Australian property experience a continued increase in investment volumes, improved tenant demand and structural change across various sectors. The analysis also suggests there are two key themes for the year ahead that will see technology continue to change the property industry and investors continue to diversify from core assets to other markets and sectors. According to John Kenny, chief executive of Colliers International Australia and New Zealand, 2014 was the year that investment in property continued to accelerate, New South Wales returned as a growth economy and the market saw signs that leasing demand was on the return. ‘Ownership of Australian property continued to become concentrated amongst fewer owners. Strong flows of capital continued to enter the Australian property market both from offshore and overseas,’ he said. He pointed out that by the middle of November transaction volumes were well up on 2013 levels and although total volumes are still some way off the 2007 peak, some sectors such as the national industrial market and the Melbourne CBD office market have now exceeded volumes in that year. ‘The majority of sales are now to Australian investors. This is not surprising given that Australian investors are now recognised as the most confident in the world, according to our most recent Global Investor Sentiment Survey,’ he added. Offshore investors also continued to enter the market with new groups emerging, particularly from… Continue reading
