Tag Archives: real-estate
Overseas investment in UK commercial property market set to increase
Overseas investment in the UK commercial real estate market is having a positive impact and is set to increase over the next three to six months, according to new research. There has been a slight tapering in confidence after nearly two years of consistent growth in optimism and fewer property professionals expect investment to increase but around 60% of UK investors believe foreign investment has had positive impact. Increasing numbers expect activity to stabilise and the North West and London based smaller sized operators are more confident about the future, according to the latest confidence survey of real estate professionals by Lloyds Bank Commercial in association with the Investment Property Forum (IPF). Further analysis revealed that nearly73% of larger sized businesses surveyed and 70% of fund managers agreed, though this figure dipped to 60% amongst SME respondents. Given the increased level of foreign investment into this sector, a significant minority, at least 17%, of all respondents said that they had changed their business investment activity as a result of the influx of overseas capital. In particular 42% of fund managers and 30% of larger sized businesses stated that they have altered their business investment plans due to this influx. ‘For many regional commercial property operators the influx of foreign capital has widened the range of exit options and shifted focus away from UK institutional buyers,’ said John Feeney, global head of commercial real estate at Lloyds Bank Commercial Banking. ‘'Further a variety of foreign buyers are now active in regional UK markets including sovereign buyers seeking stabilised assets and more opportunistic investors willing to take asset management risk,’ he added. The latest survey also indicates that confidence in the UK’s commercial property market remains high, with over 60% of respondents believing that activity will continue to increase over the next three to six months. However, an increasing number believe that the market will level out. Around 25% to 36% of respondents now expect activity to remain at current levels for the next three to six months which compares to just under 20% in the CPCM’s last report in April. In line with a slight softening in confidence, the report suggests that prices will begin to stabilise as well. In the Spring 2014 CPCM only 3% of major businesses said prices would stay the same compared to 30% in this latest survey. Investment activity also looks set to increase, with fund managers reporting a slight increase in their investment intentions, rising from 70% to 72%, as did major businesses, with 53% planning to spend compared to 50% in April. ‘The UK’s market has soaked up a lot of capital over a short period of time and some investors, such as private equity funds, are turning their attention to the nascent investment market recovery in certain Eurozone countries particularly in the periphery,’ said Feeney. ‘The UK market is further advanced in… Continue reading
Sales up over 50% year on year in prime Alpine resorts
The prime ski property market in the Alps is continuing on its upward path with sales volumes up 52% year on year, according to the latest index from Savills. More alpine sales are taking place at lower price points as the resilience of the ultra-prime markets starts to ripple down the market ladder, according to the report. ‘A year ago we predicted prolonged periods of sunshine and blue skies for the Alpine property market. This may have been a somewhat easy prediction, given a recovering world economy, increased confidence and job security and in the case of UK buyers, a steady strengthening of sterling,’ said Jeremy Rollason, managing director, Alpine Homes. ‘The Alpine property market however continues its upwards trajectory in terms of increasing sales volumes, up 52% year on year, although this does not necessarily mean rising prices,’ he explained. ‘While buyers are more prolific for the above reasons, prices in the Alps have not generally kept pace with house price increases back in the UK, particularly in London,’ he added. The index report points out that Switzerland’s position outside the European Union cements is appeal as a safe haven for wealth and as such resorts carry a price premium. In the case of Verbier, values can reach €22,400 per square meter or 80% more than the average. It’s therefore no surprise that five Swiss resorts, Gstaad, St Moritz, Zermatt, Verbier and Crans Montana, appear in the Savills Top 10 Ultra-Prime Resorts Index. The family friendly resort of Saas Fee stands out as offering a long season with good quality snow but with comparatively lower priced property at averages of between €4,000 and €8,000 per square meter. ‘Verbier and The Four Valleys remains ever popular and is the destination of choice for many international buyers. Supply restrictions with the new Lex Weber law limiting the number of second homes to no more than 20% of the total will begin to bite in the next one to two years, once existing supply is absorbed. Upwards price pressure in the leading Swiss resorts is inevitable, although there are still deals in the resale market for those that shop around,’ he added. Austria’s comparative affordability, dual seasonality, diverse culture and attractive rental returns make it the country of choice for those chasing bang for their buck. Indeed, rental returns of ski property in Austria are roughly double those of either France or Switzerland, at circa 5% to 7% gross. Kitzbuhel is the only Austrian resort included in the Savills Top 10 Ultra Prime Resorts Index where prices range from €8,000 per square meter to €15,000 per square meter. For buyers seeking value, Bad Gastein and Zell am See offer lower priced property and average ski conditions, although the latter boasts a particularly strong summer season. The resort of Ischgl, the Ibiza of the Alps, is highlighted as one to watch. Prices here are under €4,000 per square meter. Stability is… Continue reading
Half of over 40s think they will still have a mortgage or rent during retirement
Half of people aged over 40 believe they will still be repaying their mortgage or paying rent when they retire, new research has found. The figures from a study by specialist insurer Partnership shows that while people aspire to owning their own home, a significant amount will still be making mortgage repayments when they retire. Some 31% think they will still have a mortgage and 20% will be paying rent when they retire. In addition, with 35% of households in England living in social or private rental accommodation, a number of retirees will need to meet these costs in later life. As people age and either purchase property or repay their mortgage this changes the number who expect to be meeting these costs in retirement but 18% of 66 to 70 year olds still expect to need to make rental payments and 15% expect to be repaying their mortgage. A breakdown of the figures show that of those aged 40 to 50 42% expect to still be paying rent and 26% a mortgage. In the 51 to 55 age group 37% expect to be paying rent and 18% a mortgage while in the 56 to 60 aged group some 22% expect to pay rent and 15% a mortgage. In the 61 to 65 age group 21% say they are still paying rent and 16% a mortgage while in the 66 to 70 age group it is 18% and 15% respectively. In addition to meeting housing costs, these retirees are also likely to be put under financial pressure as they look to meet costs such as council tax, utilities and upkeep of their property. ‘Most people aim to own their own home by the time they retire but the trend towards remortgaging, purchasing later in life and being kept off the housing ladder by high house prices means that this is out of reach for almost a third of people,’ said Mark Stopard, head of product development at Partnership. ‘This may see some people taking advantage of the opportunity to work longer but for some people, especially those with health issues, this is simply not an option. While those in private or social rental accommodation need to focus on securing sufficient income to meet these costs, those who are still repaying their mortgage have more options,’ he explained. ‘Either they can use part or all of their pension to repay the borrowing, although this is likely to significantly impact on their later life income, or they can use equity release which can mean they will leave less to their families but face less financial pressure,’ he added. ‘When people consider their retirement, it is vital that they look to reduce their mortgage borrowing as much as possible. No one wants to worry about cutting back on essentials such as food and heating to meet housing costs when they should be enjoying retirement,’ he concluded. Continue reading
