TSI
Prime central London rental market see increased demand
Interest in the prime central London rental market has intensified in recent months as buyers become cautious prior to the election, and regulations surrounding mortgage lending take hold, a new report suggests. The proportion of those living in private rented accommodation has risen in recent years and this is partly a reflection on affordability, with rents increasing by just 1.4% when the effects of inflation are removed, according to the analysis from Kay & Co. It found that Bayswater and Marylebone offer family homes at significantly lower prices than other prime London locations and says that a family living in these areas could save over £44,000 a year on a 2,500 square foot home. Overall the prime central London lettings market experienced a relatively strong year in 2014. Annual growth in average rents returned to positive territory, recording the highest increase in rental values since 2010. However, the level of demand for rental properties was more subdued than in 2013 but there was certainly more interest in the latter half of the year. This could have been a result of households who were in the market to purchase a home awaiting the outcome of the general election and lenders becoming more cautious, the report explains. Weekly rents achieved averaged £882 per week across prime central London in 2014, an annual rise of 7% and, compared to the 2008 peak in the sales market, average weekly rents were 11.9% higher in 2014. The average weekly rent in the fourth quarter of 2014 had risen to £904 per week for prime central London. In comparison, the neighbourhoods of Bayswater and Marylebone offer more affordable rental stock within prime central London, with weekly rents in 2014 averaging £676 and £789 per week respectively. The performance of the lettings market in prime central London, including Bayswater and Marylebone, vastly outperformed Greater London as a whole in 2014. Average rental values across the capital registered 2.4% growth over the year based on the revised index of private housing rental prices by the Office of National Statistics. A breakdown of performance by property type in 2014 shows that flats performed better than houses across prime central London in 2014 in terms of rental growth. Average weekly rents for flats increased by 7.8%, compared to 5% for houses. The number of properties let in prime central London fell by 5.4% in 2014 compared to the previous year. A quarterly breakdown, however, reveals that it was the start of the year that saw considerable reductions in the volumes of properties let and this became less severe as the year progressed. By the fourth quarter of 2014, the annual change in the number of lets had increased by 6.7%. This coincided with increased uncertainty regarding the outlook for capital values in the prime central London sales market. There was also a simultaneous and continuous increase in average rents achieved each quarter in… Continue reading
Farm land in England breaks the £8,000 an acre barrier
Even the impending general election in the UK has failed to pull back the farmland market in England, with prices continuing to rise in the first quarter of the year. The farmland market in England has gained further ground this year with the average price of bare agricultural land rising by almost 2% between January and March to break the £8,000 an acre barrier for the first time. An acre is now worth £8,059, according to the Knight Frank Farmland Index. Values have risen by 10% over the past 12 months and by 192% over the past 10 years. This compares with 10 year capital growth of 138% for the prime central London residential market, 40% for the FTSE 100, despite the index hitting its own record high earlier this year, and 250% for gold. An imminent General Election, particularly one with so many possible outcomes, might have been expected to cause the market to pause for breath, but it appears the appeal of farmland is overriding the uncertainty, according to Andrew Shirley, head of rural research. But he pointed out that the market continues to separate into two clear sub-markets, each with their own distinct performance trends. Large blocks, ideally over 1,000 acres, of arable land are being eagerly sought after by investors and demand is so strong that prices upwards of £12,000 an acre are regularly being paid and even £15,000 an acre has been achieved on a number of occasions. Although East Anglia has traditionally been the main source of investment farmland, buyers are now looking across the country and exceptionally strong results have also been recorded in counties such as Hampshire. Continue reading
Survey finds home owners think peer to peer lending is risky
Almost half of home owners in the UK who have not invested in peer to peer finance are put off by a perceived risk, new research has found. Some 42% who took part in a new survey feared it was too risky, 22% had never heard of it, 17% do not understand how it works but 5% had invested on at least one peer to peer platform. Younger generations however are more open to risk, with just 28% of those aged 25 to 34 citing risk as a factor for not investing in peer to peer, compared to 46% of 55 and overs, according to the YouGov poll commissioned by buy to let peer to peer platform Landbay. Some 30% of those home owners who do use peer to peer platforms invested moderate amounts of £1,000 or less. However at the opposite end of the spectrum, 18% invested larger sums of over £5,000. Investment in peer to peer finance appears to be divided into consumers trying out platforms with small amounts of cash invested, and those who regularly invest larger sums. ‘We’ve gone out of our way to be open and up front about the risks involved on our platform, but we’re equally open about the unique range of protections our model offers. We’ve based our proposition around creating the most risk proof peer to peer platform, in an industry sometimes reluctant to mention the risk,’ said John Goodall, cofounder and chief executive officer of Landbay. ‘These research findings highlight the need to debate the merits of risk more in financial planning. We need an open and proper discussion on whether more people should consider moving a small proportion of their savings into an investment,’ he pointed out. ‘Of course risk is not for everyone, but it appears too many hoard large amounts of money in cash savings when it might be wise to consider putting a small amount of those savings at risk in exchange for better returns as part of a balanced approach,’ he explained. ‘The question is whether too many people see it as a binary choice between keeping all their money safe in the bank or putting it all at risk. Instead it should be about finding the right balance to achieve what you want to with your hard earned cash,’ he concluded. Continue reading
