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Average house prices in UK’s biggest cities up 6.4% in first half of 2015
House prices across the UK’s 20 largest cities increased by 6.4% in the first half of 2015, led by Oxford, London and Glasgow, the latest index data shows. Oxford was the fastest growing city with a ride of 8%, followed by London with house price growth of 6.6% and Glasgow with growth of 6.4%, according to the Hometrack UK Cities House Price Index. Aberdeen was the weakest performer with house prices flat in the first half of the year, while northern cities like Leeds, Manchester, Liverpool and Sheffield, while seeing growth, still have average prices below the peak of the market in 2007. The data also shows that on a quarterly basis prices in these top cities increased by 4.3% while Oxford and Cambridge continue to perform overall like direct extensions of the London market. On a year on year basis growth across all 20 cities covered by the index is 8.4% with an average price of £226,200. At a city level this ranges from 11.6% in Cambridge to 2.9% in Liverpool. Looking to the second half of the year, the index report suggests that the headline rate of growth across the 20 cities index looks set to move higher as continued growth in house prices pushes the year on year rate towards 10% as the recovery spreads and households continue to price low mortgage rates into house prices. The greatest risk on the horizon is an increase in interest rates, recently highlighted by the Bank of England Governor. The report points out that 57% of outstanding mortgage debt is on variable rates, which is lower than the 73% high registered in the middle of 2012. While a year’s worth of new buyers have been subject to tougher affordability tests, the majority of mortgagees have not, Hometrack director of research Richard Donnell pointed out. Donnell explained that many home owners have continued to pay off debt while rates have been low, so any increase in mortgage rates is likely to impact market sentiment which, given the shortage of supply, would result in a marked slowdown in the rate of house price growth. ‘Rising demand for property against a backdrop of low supply continues push city level house prices higher. At 8.4%, city level house price inflation is running higher than the overall UK rate. While house price growth might moderate slightly in the second half of the year, it looks increasingly likely that city level house price growth will return to double digits by the year end,’ said Donnell. ‘The greatest risk facing the housing market is an upward movement in interest rates which would check market sentiment, cool demand and result in a marked slowdown in house price growth,’ he added. Continue reading
New committee formed to promote Build to Rent sector in UK
The British Property Federation (BPF) has announced the creation of a new committee that will focus on promoting the emerging build to rent sector. At a time when the housing crisis is acute and private renting has overtaken the social housing sector as the second largest tenure in the England, the committee will reinforce the important role that build to rent can play in increasing housing supply and tenant choice. It will work to ensure that both local and central government continue to support the sector, and create the right conditions to encourage investment and speed up delivery of this new housing product. The committee, which will be formed as a sub-set of the BPF’s residential committee, will be chaired by Andrew Stanford, UK residential fund manager at LaSalle Investment Management and former head of the government’s Private Rented Sector Taskforce. Adam Russell, acquisitions manager at FizzyLiving, will act as vice-chair. ‘Build to rent fits so well with so many of the new government’s priorities, delivering new supply of quality rented homes, accelerating the speed of housing development, making good use of brownfield sites, supporting place making and meeting customer needs,’ said Stanford. ‘There are many innovators in this new market and I am so pleased we have brought many of them together, in this new group, to drive that important dialogue with local and national government forward,’ he added. Continue reading
Firm identifies trend for changing commercial buildings for residential use
There is a growing trend in the property market in Scotland for empty commercial buildings to be changed into residential use, according to real estate consultants. Many commercial properties have recently being sold with a view to being occupied for alternative use, according to CKD Galbraith, which is increasingly being asked to evaluate the future potential of a building when valuing the property. The firm says that within the commercial sector, a number of buildings utilised as commercial properties are now being marketed with a view to change of use to residential and offering opportunities for private individuals and property developers. ‘We have been involved in many sales of commercial properties where we have determined that demand for commercial uses was limited and that a property’s prospects were greatly enhanced by promoting them for alternative use, in particular residential,’ said Harry Stott, of CKD Galbraith’s commercial team. Many present fantastic residential opportunities for developers or potential home owners alike to create some unique and stunning homes full of character and history,’ he added. This trend also particularly applies to town house properties in Edinburgh, according to Katie Gibson, a commercial agent within CKD Galbraith’s Edinburgh office. The firm was recently been involved in the sale and purchase of Edinburgh Townhouse Commercial properties in Gayfield Square and Chester Street, which again were of more interest to the residential market. ‘Whilst there is greater demand in Edinburgh for commercial use of town house buildings the potential returns and demand are often far greater for residential conversion particularly in the New Town,’ she explained. ‘We also get a number of private client requests looking to purchase town houses and commercial buildings that have outlived their current usage and offer fantastic opportunities for residential conversion,’ she added. Other examples include the former Ballathie Estate Office which offers limited demand as a commercial property, but presents a prospect for residential purposes subject to consent. Situated in a rural location in Perthshire, it is a single story U-shaped stone building arranged around a private courtyard with feature archway. The property was constructed in 2001 and has been utilised as a farm shop and café and estate office. The internal accommodation comprises two self-contained units which could be used as two separate residential units or linked to form one larger property. North Range, East Lodge at Stanley Mills is another such commercial property which lends itself well to potential residential use. Formerly used as office space it is part of Stanley Mills, a listed complex of buildings established as a cotton mill in the 1780s. However, restricted demand in the area for office use has resulted in CKD Galbraith applying for a change of use consent on North Range, East Lodge to residential which is where the firm believes the principal demand lies. Continue reading
