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Research reveals the UK’s property blacks spots where prices are falling
Property buyers, sellers and investors are usually eager to hear about the latest real estate hot spots but now new research reveals the UK's property investment black spots. Property prices in some of the worst performing areas are falling by more than 7% per year with popular areas in London featuring prominently in the top 20 black spots compiled by Home.co.uk. The firm’s research also shows that landlords' return on investment is also on the slide, with 11 locations recording negative real percentage yield, which occurs when the value of the property depreciates by more than the annual rent. Moreover, it's not just the North that is suffering price falls. The figures for the 12 months to September this year show Belgravia has seen a slump of 7.6% in annual house prices and the real percentage yield in the same month was down 4.4%. In Soho, another popular London borough, property prices over the same period fell by 6.8% and the real yield for September was minus 3.5%. Meanwhile in Westminster, the annual property price fall recorded in September was -5.2%, with landlords facing a real yield of -1.8%. Seaside towns are another casualty of the cooling property market. Prices have fallen by 7.1% over the 12 months to September in Poole, Dorset, where the real yield for landlords is -2.5%. In Margate, property prices fell by 6% over the same period and the real yield was -2.1% in September. Towns and cities in the North East of England have also been badly affected as austerity measures and joblessness continue to bite. Property price falls in the 12 months to September have been recorded in Newcastle upon Tyne, South Shields, Gateshead, Middlesbrough, North Shields, Hartlepool and Stockton on Tees. Of these, the coastal town of Hartlepool has suffered the most, with annual property prices dipping by 7.5% and the real yield for landlords standing at -1.8% in September. The figures show that, whilst overall the UK property market still has considerable momentum, property investments can suffer significant losses in certain locations, at least in the short term. According to the firm’s October Asking Price Index, property prices across the North East of England fell by 0.1% between September and October this year, and Wales saw the biggest monthly slump over the same period, of 0.4%. Meanwhile, despite falling prices in central London, London and East Anglia both saw rises in average property prices of 1.1% between September and October. Outside of such property hot spots, vendors' expectations are clearly being moderated. The total number of properties that are on the market at a reduced price has risen to a two year high and now represents 13% of the total stock of property for sale. According to Home.co.uk director Doug Shephard price falls in the super rich suburbs of central London have come about for very different reasons to the falls observed in the North. ‘Prices soared in central London post financial crisis as foreign investors sought safe haven investments. Such… Continue reading
Average prices in England and Wales down 0.2%, land registry data shows
Average house prices in England and Wales fell 0.2% in September compared with the previous month, according to the latest index from the Land Registry. But property has experienced year on year growth of 7.2% with the average price now £177,299 compared with the peak of £181,324 in November 2007. The data also shows that there were over 93,350 residential properties in England and Wales lodged for registration in September. The region in England and Wales which experienced the greatest increase in its average property value over the last 12 months is London with growth of 18.4% while the East experienced the greatest monthly rise at 1.4%. Yorkshire and the Humber saw the lowest annual price growth at 1.4% and the region also saw the most significant monthly price fall of 2.2%. The most up to date figures available show that during July 2014 the number of completed house sales in England and Wales increased by 7% to 79,214 compared with 73,749 in July 2013. The number of properties sold in England and Wales for over £1 million in July 2014 increased by 19% to 1,439 from 1,207 in July 2013. David Newnes, director of Your Move and Reeds Rains estate agents, said the figures show the market has experienced ongoing steady growth. ‘Property prices slowed down slightly compared with the previous month, but the annual picture is still stable,’ he pointed out. ‘There are regional differences with some regions doing better than others. Property prices in London have been steadily marching forward and have experienced the strongest recovery in the UK, whereas areas like the North East and Yorkshire and Humber still have some catching up to do,’ he explained. He also pointed out that there were 11% more first time buyer completions than a year ago. ‘These robust figures are in part due to the Help to Buy scheme which has crucially assisted first-time buyers get on to the property ladder. The scheme has made higher LTV lending much more accessible and first-time buyer deposits have fallen by 8%,’ said Newnes. ‘However, more geographical targeting of the Help to Buy scheme would help rejuvenate struggling areas in the UK, particularly those outside London and the South East. And with many regions still in a delicate balance of recovery, the government should be mindful of heeding any calls to curtail the scheme,’ he added. Despite the increase in property values in the capital, market conditions in London are now more sustainable, according to Nick Leeming, chairman of national estate agents Jackson-Stops & Staff. ‘London is seeing a greater balance in supply and demand, which is more sustainable in the longer term. With the London effect and buoyant local markets, the Home Counties remain relatively active and do not yet reflect any reduction in market activity. However many Jackson-Stops & Staff offices report that the top end outside London is seeing continued resistance to high pricing levels and, in many areas, sales at above £1 million remain hard to secure,’… Continue reading
Prime arable farm land prices in parts of UK up almost 18% year on year
Prime arable farm land prices in Britain have increased by 17.9% year on year but this substantial growth land masks some early signs of potential change to the market. According to the latest quarterly report from Savills the average rate of growth during the three months to the end of September for prime and average quality land across England slowed as the implications from weak commodity prices dawned for many potential purchasers. However, as with all averages these figures hide some exceptional sales where the right product in the right location, which often represent a once in a lifetime opportunity for a purchaser, buck the trend. Conversely, higher average growth rates were recorded for some of the poorer quality land, according to Alex Lawson head of Savills farms and estates team. ‘The range in values for farmland is now so significant that there are buyers who are choosing to take advantage of the relatively good value poorer quality livestock land,’ he said. The research from Savills shows that just over 120,500 acres of farmland were publicly marketed across Britain during the first three quarters of 2014, a fall of 7% compared with the same period in 2013. However there are significant differences between countries with Scotland seeing a 28% fall, Wales a 22% fall while in England the acreage increased by 4%. Supply across England continues to be historically low and our records highlight that this year the volume of publicly marketed farmland is the second lowest since 1995 as 2004, the year before Single Farm Payment, being the lowest with 114,400 acres being advertised to end September. Savills says it is worth noting that the private market accounts for some of the shortfall, which this year includes the sale of the substantial Co-operative Farms portfolio. Moving into 2015 there are a few factors that might increase supply and affect ongoing growth in values. These include pressure on farm incomes and political uncertainty. At a national level Savills is expecting some growth in average values, but this will be more muted than in 2014, with a continued diversity in the ranges of values achieved. ‘Clearly an understanding of local market conditions will be critical to both buyer and seller to ensure realistic expectations,’ said Ian Bailey head of rural research at Savills. Continue reading
