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Demand for homes in central London property market picks up
Buyer demand in the residential real estate market in central London picked up during the early months of 2015, according to a new report. The market is still busy below £1 million but has quietened between £1.5 million and £5 million as Stamp Duty changes and the possibility of a mansion tax take their toll, says the analysis from real estate firm JLL. However, underlying demand is still strong and the fundamentals remain the same and an excess of demand over available supply, which continues to support the market. The report also points out that development activity continues to rise with 26,500 units now under construction, a 23% increase during the second half of last year and a 41% rise throughout the course of 2014. The majority of units underway are in outer core locations where there was a 34% increase in the second half of last year with core markets seeing a more modest increment of 8%. The number of units starts during the second half of last year, at 8,700, was a 45% increase compared with the first half of 2014. According to JLL although the general election is now just a month away it has been impacting the central London sales market since 2014. For example, Labour's mansion tax proposal is affecting the market above £1.5 million as people adopt a wait and see attitude. ‘The general election does not seem to have deterred London's developers. The number of units underway has increased significantly over the past couple of years and the election is not halting this,’ said Neil Chegwidden, director in the residential research team at JLL. ‘It is also interesting to see that London's developers believe that the outcome of the general election is more important to their businesses than the Mayoral election next year. So it is good news that new supply is on the rise, but we continue to fall short of London's targets and it will be intriguing to see what impact a new government might have on this vital issue,’ he added. The report also looks at the legacy of the 2012 Olympic Games on the east of London and says that 10 years on from the successful bid the East Village already has its first residents and construction is underway at Chobham Manor, one of five neighbourhoods within the Park. It also says that this part of London has a wealth of development and regeneration potential that reaches far beyond the sphere of influence of the Olympic Park and the raised profile of the area is encouraging developers to bring schemes to the market. Construction levels have escalated in recent years. At the end of 2013 there were just 2,900 private residential units under construction, now there are 6,600, a 125% increase. A quarter of all new residential units under construction are in East London led by the 6,800 units at Queen Elizabeth Park and the close to 6,500 units at Stratford City… Continue reading
House prices in prime central London market largely flat for last six months
Annual house price growth in prime central London declined marginally to 3.3% in March and this could be due to the forthcoming general election, according to a new analysis report. It was the sector’s lowest rate in more than five years and despite a 0.1% rise in March, prices have remained broadly flat over the last six months as uncertainty surrounding the outcome of the election on 07 May intensifies, says the report from real estate firm Knight Frank. ‘Activity is stronger in lower price brackets and where there is a more pressing need to act, though some parts of the market are treading water ahead of the vote and one of the most unpredictable elections in decades has caused some buyers and sellers to postpone decisions until there is clarity around the outcome,’ said Knight Frank associate Tom Bill. ‘As electioneering got underway in March, the polls still indicate a hung parliament is the most likely outcome. However, strong activity in some markets suggests there is a degree of pent-up demand that could be released after May,’ he added. The report says that the top three markets by sales volumes at the start of 2015 have been Knightsbridge, Islington and St John’s Wood. ‘Islington has benefited from the fact property taxes such as stamp duty have affected lower value properties to a lesser degree than higher value areas and annual growth of 7% is the second highest in prime central London after Hyde Park,’ explained Bill. He also pointed out that sales in Knightsbridge have been strong due to a series of high quality new build and newly refurbished properties that are ready for immediate occupation. ‘Buyers in prime central London are increasingly focussed on the quality of the property’s finish and facilities rather than its postcode, though in the case of Knightsbridge both have combined to produce a strong sales market at the start of 2015,’ said Bill. Meanwhile, St John’s Wood is benefiting as more buyers seek better value and more space than markets further south in central London. ‘While the overall picture is subdued, what is happening in these three markets highlights some key trends that could contribute towards driving the market after the general election,’ added Bill. Continue reading
Almost a quarter of UK landlords entered the business accidentally
Some 24% of UK landlords, that’s around 360,000, came into the residential private rental market accidentally or unintentionally, new research has found. The National Landlords Association (NLA) survey asked landlords why they first entered the buy to let market and found that 11% were by chance such as inheriting property. It also found that 5% acquired an extra property such as when they met a spouse or partner, 5% intended to sell a property but experienced difficulties and 3% had to relocate for work, either home or abroad. Central London was found to have the highest proportion of accidental landlords at 31%, followed by Wales at 29% and then the East of England and Yorkshire, both with 27%. The North West had the least with just 15% claiming to have got into the business unintentionally. The research also found that 30% of 10 landlords with a single property only break even or make a loss. ‘The figures show that there are a significant number of people who find themselves as landlords without ever having really planned to enter the market,’ said Carolyn Uphill, NLA chairman. ‘It may be surprising to find that so many single property landlords struggle to make it work, but we often find that this is because so many simply don’t realise what they’re getting themselves into. While a buy to let property can provide a steady return, you’re in business to provide a home for someone else so you need to know your obligations and make sure that you have a plan to make a success of it all,’ she explained. She pointed out that all landlords can sign up to the NLA for free to see how the organisation can help make a success of their business. The NLA offers free best practice tenancy agreements and other sample forms and letters which may be needed during the life cycle of a tenancy. Alternatively, enlisting the help of a letting agent is an option if you prefer a more hands off approach but just make sure they are a member of a reputable trade organisation such as the Association of Lettings Agents,’ added Uphill. Continue reading
