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London prime property rent rises set to outpace house growth in 2015
London prime property prices are expected to grow by 3% to 5% in 2015 but strong tenant demand is expected to boost rental prices by 10% over the next year, the latest forecast suggests. Uncertainty over the outcome of the general election is likely to boost the corporate lettings sector in particular and London property prices will ease into a slower rate of growth, according to estate agent Marsh & Parsons. They expect prime London house prices to rise up to 5% in 2015, compared to the 11.4% increase witnessed over the past 12 months. Annual growth is forecast to be strongest in outer prime London where typical house prices are 25% lower than across prime London as a whole, fuelling higher demand. But in the most expensive prime central areas of the capital, prices will climb by 3%. Marsh & Parsons expects the feel good factor to remain into 2015 for sellers and with mortgage rates as competitive as ever, it is also continues to represent a good opportunity for buyers too. ‘The London housing market gave a stellar performance in the first half of 2014, but there won’t be quite the same encore next year. However, the curtain certainly isn’t going down on price growth. After touching the brakes in recent months, property values will continue to climb steadily again in 2015, albeit at a more modest and orderly pace,’ said Peter Rollings, chief executive officer of Marsh & Parsons. ‘Demand for prime London property remains stable, and after adapting to the mortgage market reform (MMR) changes and tighter affordability measures introduced this year, buyers are more motivated than ever, maintaining sales momentum and ensuring that property prices will not stand idle,’ he explained. ‘The general election will act to stimulate the market, removing much uncertainty and drawing a line under any hesitation from buyers and sellers, but this isn’t to say that the first five months of the year will be a write off as London won’t stop working,’ he added. Marsh & Parsons expects more vigorous growth in prime London rents, forecasting increases of 10% throughout 2015. The firm points out that following a period of largely stagnant rental prices, rents in prime London have climbed steadily during 2014, and the pace of growth will pick up over the next 12 months. Corporate tenancies have grown 14% in 2014 compared to the same period in 2013, and burgeoning demand for corporate lettings and relocations will ensure continued expansion of this sector next year. ‘The rental market will be where much of the action takes place in 2015. Those relocating to the capital for work are now biding their time before purchasing their own portion of London property, until question marks surrounding additional property taxes are erased,’ said Rollings. ‘This will push demand in the corporate lettings sector even further, and the biggest rental increases are predicted to be among one or… Continue reading
UK house prices predicted to rise by 6% in first quarter of 2015
UK house prices are predicted to rise by up to 6% in the first quarter of 2015 but then start slowing as the May general election approaches, according to one forecast. Prices could even start to drop by around 2% in the last half of the year and it could be a worse scenario if the current opposition Labour party wins, says the prediction report from low cost online estate agents Hatched. Hatched also predicts growth to continue at somewhere around 4% to 5% in 2015, whilst warning home owners to be prepared for a rocky spell around April, May and June, with the uncertainty that a general election inevitably brings. According to Adam Day, the firm’s managing director, a Labour victory in May could potentially have a hugely disruptive effect on the property market as the party is known for surprising voters with unexpected measures and excessive red tape. He pointed out that the last Labour win led to the introduction of Home Information Packs which then had to be scrapped. ‘The way they were introduced wasn't thought through. The government announced the specific date that HIPs were to become a legal requirement, which led to hundreds of thousands of home owners rushing to put their house on the market in an attempt to avoid the cost and bureaucracy associated with their production,’ he explained. ‘It was this slapdash strategy, which consequently led to an oversupply of properties that brought on the beginnings of the crash in 2008,’ he added. Interest rates are also expected to rise in 2015, although for many home owners it will not have a huge impact. But it is likely to affect first time buyers who tend to spend a higher percentage of their income on home costs. However, Hatched expects interest rate rises to be a contributor to the slowdown for the housing market in the final half of the year. Day also expects there to be a significant reduction in high street agents. ‘Many agents will have over staffed themselves this year because it has been so busy, so when the property market does begin to slow in the middle of the year, they will have over extended themselves,’ he suggested. He believes that 2015 will see online estate agencies continue to prosper and traditional agents who decide to join the online revolution and thus respond to customer demand by driving efficiencies with the aim of lowering their fees, should also enjoy success and stand out in a market which is likely to get tougher as the year progresses. Continue reading
Spanish properties prices up 1.15% in third quarter
Residential property prices in Spain rose 1.15% in the third quarter of 2014 compared to the same period last year, according to the latest index published by the Property Registrars. That is the first time this index has edged clearly into positive territory since the Spanish housing bubble burst, and according to real estate expert Mark Stucklin it means the market could be turning. On a quarterly basis prices were basically stable, with a decline of just 0.08% between June and September and the peak to present fall in house prices is 32.4% according the Registrars’ figures. It says that these figures paint a picture of stable house prices. The registered number of homes sold also shows a favourable evolution with transactions up 1.4% to 79,561 sales in the third quarter compared to the second. The market bottomed out with 72,560 sales in the fourth quarter of 2013. The improvement was driven by resale properties with 52,127 sales, practically double those of new builds at 27,434. Resale transactions were up 4,268 on the second quarter, meaning a quarterly rise of 8.92%, against a fall of 10.36% in new builds. Cumulative sales over 12 months were 313,607, up by 2,743 on the second quarter of the year when a record low of 310,864 was reached. Andalucia saw the most sales with 16,006 transactions, followed by the Valencia at 12,189, Catalonia at 11,975 and Madrid at 10,883. The data also shows that the proportion of Spanish property sales involving a foreign buyer has hit a new high of 13.1% market share, an annual rise of 19% and year to date, foreign buyers bought 30,708 properties, up 23% on the same period last year. British buyers were the strongest nationality buying 1,886 Spanish properties in the third quarter, up 37% on the same time last year, followed by the French, Russians, and Germans. In terms of foreign market share, the British represented 18% of total purchases by foreigners, and 20% of key markets. France was next with 12%, Russia with 8%, and Germany with 7%. Stucklin pointed out that in the boom years foreign buyers, led by the British, accounted for between 8% and 9% of the market. That fell to a low of 4.24% in 2009, at the nadir of the financial crisis. Since then foreign demand has increased in market share whilst local demand continues to shrink. ‘For the last year or more it has been possible to buy new property in Spain for less than it costs to build, thanks to a housing bust that has forced banks to take over thousands of new developments, and repossess hundreds of thousands of new or recently built homes. Such low prices are a once in a cycle situation that will not be repeated again, at least not until the next boom and bust, which could take decades,’ he said. He also explained that there are bargains, especially when it comes to property owned by the Spanish banks. ‘Not only are there thousands of… Continue reading
