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London prime rental market see strong demand, new research reveals
London’s prime rental markets of London saw annual growth of 1.4% on the back of strong demand for one and two bedroom flats over the past three months in particular, new research shows. Similar rental growth of 1.3% has been seen for prime properties in the commuter zone, however a significant value gap remains, with the average pound per square foot less than half of that in prime London, according to the report from Savills. In London, strong demand for smaller properties resulted in the highest quarterly rental growth in prime central London, prime North London and East of City locations, albeit from different tenant groups. ‘As is typical at this time of year, when the University year begins, wealthy international students drove the demand most evidently in prime central London due to the proximity of world class universities,’ said Lucian Cook, director of residential research as Savills. ‘In contrast, young professional sharers or couples are drawn to less expensive prime locations such as Canary Wharf, Wapping or Islington. This reflects the fact both areas provide easy access to the financial services centres of Canary Wharf and the City, as well as the emerging tech centres in East London,’ he pointed out. ‘As a result of a younger generation driving prime rental growth, landlords may have to be prepared to adapt to their changing requirements. Being able to compete with new build developments which provide on-site facilities such as a concierge will become increasingly important, particularly in PCL and in the East of City where our data shows the largest proportions of renters under the age of 29 choose to locate,’ he added. Among 30 to 60 year olds, Hampstead and St John's Wood in the North West and areas such as Fulham and Richmond in the South West have more appeal. Although rental growth here has been weaker over the past year than in the student/sharer markets, families continue to be attracted to the stock on offer and relative value for money achievable, particularly in the South West where the average pound per square foot is just £29, the lowest across all prime London. The research also shows that across London's commuter belt, the strongest annual growth was seen in the outer commuter zone, with average rents rising 2.5%. Cambridge, Farnham and Winchester, all particular favourites with families, saw the highest growth, due to their popularity for schooling and easy access to London. Regardless of location, since the peak of the prime rental market in 2008, three bed properties have seen the strongest growth with average rental values across the prime commuter zone 3% above their peak. However, over the past three months, one and two bed properties have seen the strongest growth, at 1.3%. This has been driven partly by young sharers unable to afford to buy, but the most significant factor is young professionals relocating for work as the economic recovery outside of London continues to strengthen. ‘As demand for rental properties continues to grow due to affordability… Continue reading
New research reveals how expensive homes are in UK National Parks
Home buyers would pay over £125,000 extra to live in some of the UK's most beautiful landscapes, according to new research. House prices in the National Parks of England and Wales in 2014 are, on average, £125,796 higher than their county average. In percentage terms, this represents a premium of 58%. The research from Lloyds Bank also shows that the New Forest commands the highest price premium whilst Snowdonia has the smallest and is the only National Park with an average price below £200,000. All National Parks have higher house prices than the average for their county, with four of the 12 National Parks attracting a house price premium in excess of £125,000. Homes in the New Forest command the largest premium relative to the average for the surrounding area in both monetary terms at £259,066 and a difference of 101%. The next highest percentage premiums to the surrounding area are in the Peak District at 94% and the Lake District at 84%. Homes in Snowdonia command the smallest premium, with property prices only 5% above the average for the surrounding area. Overall the average house price in National Parks has risen by £91,265 or 36% over the past ten years, from £251,269 in 2004 to £342,534 in 2014. This was £10,000 more than the £81,269 increase in the average price for all properties in England and Wales over the period. Exmoor recorded the biggest percentage increase with a 47% house price rise, closely followed by the South Downs at 45%. In contrast, the North York Moors at 17% and the Yorkshire Dales at 18% recorded the smallest gains in house prices over the last decade. The research also shows that the increase in house prices outpaced the 25% of average earnings across England and Wales’s National Parks, resulting in a deterioration in home affordability over the past decade. The average National Parks house price of £342,534 in 2014 is, on average, 11.3 times higher than average gross annual earnings. This is up from a multiple of 10.3 in 2004. The New Forest is both the most expensive and the least affordable National Park with an average house price of £516,479 that is 14 times local gross average annual earnings. The South Downs at 12.3 times average earnings is the second least affordable National Park. Exmoor, Dartmoor, the Lake District and Peak District also have average prices that are more than 10 times local average annual wages. Snowdonia is both the least expensive and the most affordable National Park with an average house price of £173,779, which is 6.5 times local average annual earnings. Snowdonia is the only National Park with an average price below £200,000. Seven of the 12 National Parks surveyed have an average house price that exceeds £250,000. ‘The high quality of life associated with living in some of the country's most beautiful areas attracts many homebuyers to our National Parks. They are also increasingly popular with those purchasing a second property. These factors mean that homes in National… Continue reading
UK house prices set to fall in 2015 after rising too much this year
UK house prices are set to fall next year as price growth as got ahead of itself in 2014, but they will start rising again in 2016, according to a new analysis. According to the Centre for Economics and Business Research, house prices are about to hit a turning point. It’s report says that so far 2014 has seen largest rise in home values since the Prices this year are expected to rise by 7.8%, more than double the 3.5% national average increase last year. But now young buyers risk being priced out of the rising market, while an expected rise in interest rates will ‘startle’ prospective home owners, the report says. Scott Corfe, a director at the CEBR, pointed out that leading indicators already point to price declines in some parts of the UK, alongside falling new buyer enquiries and properties staying on the market for longer before they sell. ‘Affordability has become such an issue in the more expensive regions of the UK that buyers are starting to baulk at high prices. New mortgage rules, introduced in April, have also led to a slowdown in lending that will ‘curb demand for property in the short term’, he said. A rise in interest rates from the Bank of England next year is also expected to cool house price growth in the short term. ‘Although rises are expected to be very gradual, with rates remaining much lower than before the financial crisis, prospective buyers are likely to be startled by the first such increase, leading many to hold off from making purchases. This too will lead to lower prices,’ he explained. But he stressed that the CEBR is not anticipating a crash as the market is adjusting after getting ahead of itself at the start of 2014. It predicts that, after slipping in 2015, prices will start to rise again, growing by 2.6% in 2016, 3% in 2017 and another 2.7% in 2018. Howard Archer, an economist at IHS Global Insight, has previously said he expects house prices ‘to rise at a more retrained restrained rate over the coming months’. Continue reading
