TSI
UK farm land reaches record price per acre for eleven months in a row
Farm land in the UK continued to outpace supply in the final six months of 2014, with land prices rising by 8.3% over the year, the latest data shows. That took the average price per acre to over £10,067, a record high for 11 months in a row, according to the latest RICS/RAU Rural Land Market Survey. During the same period in 2013 an acre cost, on average, £9,294. Despite anecdotal evidence that the recent fall in commodity prices is starting to temper the pace of demand, particularly for smaller areas of land in all parts of the country, prices are expected to continue to rise over the next 12 months. The increase in demand from lifestyle buyers that began in the second half of 2013 continued throughout the whole of 2014 with this trend being noticed across most parts of the UK. RICS said that this is adding to price pressures and keeping price expectations in positive territory in all areas. Anecdotal evidence also seems to suggest the continued presence in the market of investor purchasers seeing land as a safe haven. Across the UK the supply of commercial farmland has remained flat or decreased in nine of the ten areas, while demand has continued to grow in all but one part of the UK. According to surveyors, average annual arable land rents decreased in the second half of 2014 for the first time in six years but remain 0.8% higher over the year. Pasture lands rents, on the other hand, rose by 3.4% in the first half and by 7.8% over the year to reach £107 per acre. The highest annual price growth in the UK was seen in Scotland, despite uncertainty driven by the referendum and CAP review. Prices in Scotland rose almost 17% over the year, although at just £4,375 per acre, prices in Scotland are still 47% below the national average with the price of pasture land at least 40% cheaper than any other part of the UK. RICS said that it remains to be seen whether the recent announcement on plans to overhaul tenant farming will have any effect on land prices. ‘Although there are a number of potential issues on the horizon which may have an impact on confidence, including land reform and the implementation of CAP review, surveyors remain optimistic that prices across Scotland will continue to rise over the next 12 months,’ said Sarah Speirs, director of RICS Scotland. According to surveyors, average arable land rents in Scotland remained relatively flat in the second half of 2014 at £85 per acre, behind the national average of £158 per acre. ‘Decrease in supply and steady demand has kept prices static. We have seen a very buoyant market for good arable farm land but much slower market for pasture land. There is strong demand for land to rent but very limited supply without grazing licences,’ explained Rod Christie of CKD Galbraith in Elgin. Yorkshire and Humber… Continue reading
Tenant survey reveals the secrets they keep from landlords
The most common secret that tenants in the UK don’t want revealed is making excuses to try and avoid paying the rent, followed by keeping pets without permission, a new survey has found. Some 63% said they have tried to avoid paying rent and 45% have pets without letting the landlord know while 45% have damaged walls by knocking nails into them, according to the report from online letting agent Property Let By Us. The research also reveals that nearly a quarter of tenants confessed that they have rarely, or never cleaned their oven, 18% haven’t mowed the lawn regularly, 11% have dumped rubbish at the front and in the garden and 6% have sublet a room. When it comes to expensive damage to property, 4% admit to burning holes in floor coverings and concealing them with mats. ‘Our research shows that large numbers of tenants have made excuses to avoid paying the rent, which is worrying. The latest industry figures show that tent arrears are on the rise again, up by 7.2% in 2014, an increase of 4,600 tenancies compared to the same quarter in 2013,’ said Jane Morris, the firm’s managing director. She pointed out that one way that landlords can ensure they protect themselves from arrears and potentially bad tenants, is by conducting thorough tenant reference checks. ‘These background checks on tenants are so important. Picking the right tenant can save a long, costly eviction process further down the line,’ said Morris. ‘Landlords need to be thorough in conducting background checks and reference gathering, including bank statements for the past three months, previous landlord references to check the tenant paid rent on time, credit checks, incorporating fraud indicators and employer references. It’s important to also check identity and proof of current address, ideally tax or insurance documents, and talk at length to a prospective tenant,’ she explained. She added that landlords should also make regular checks on their property during the tenancy, so they can spot any breaches. In addition, landlords should also check each rental property thoroughly for signs of common damage, which can often be missed at the end of the tenancy, potentially costing landlords hundreds of pounds. Continue reading
Economy driving Dublin office market recovery
Strong economic fundamentals are set to drive continued recovery in the Dublin office market in 2015, according to a new analysis. Overall the performance of Dublin’s office investment market will be increasingly linked to ongoing economic performance rather than dramatic change in capital market expectations, says the report from Knight Frank. It predicts that rents will grow to between €55 and €57.50 per square foot in 2015 and political risk is the greatest cause for investment uncertainty in 2015. However, the critically low availability of prime city centre space will induce increased take-up in the suburbs this year and the rise of the concept of the Global City will play an ever increasing relevance for Dublin in 2015 and beyond. Office take-up reached 2.48 million square feet in 2014, a 28% increase on 2013 and the highest level seen since 2007. An increase in the number of deals was the main driver of the increase in take-up with 228 agreed over the course of the year, compared to 190 in 2013. The Dublin market is now dominated by the Technology, Media and Telecommunications (TMT) sector which accounted for four of the five top deals and for approximately half of take-up in 2014. Tenant demand continues to be concentrated in the city centre and with a Dublin wide vacancy in the order of 12.9%, the suburban market was disproportionately affected by the economic downturn, although the critically low availability of prime city centre space will induce increased take-up in the suburbs in 2015, the report explains. It points out that this should help build on the recent recovery of suburban rents to levels in excess of €20 per square foot, up from €12 to €15 per square foot at the bottom of the market. The lack of new office supply, combined with strong occupier demand, has put severe upward pressure on prime city centre rents in 2014, increasing from €35 per square foot to €47.50 per square foot over the course of the year. ‘We expect the pace of rental growth to moderate somewhat with rents forecast to be between €55 and €57.50 by year’s end which would represent a year on year growth of at least 16% in 2015, down from the 36% witnessed in 2014,’ the report says. Further speculative office development is due to come on stream in the second half of 2016. ‘Due to the lack of supply coming on stream in the short term, it is likely that a significant amount of pent-up demand will have emerged by then, providing plenty of scope for further development potential,’ the report adds. ‘Dublin has a compelling global identity that has allowed it to punch above its weight on the global stage, enabling it to successfully pivot to the world’s leading companies. With the continued rise in importance of the concept of the Global City, the global challenges and opportunities that face the Dublin office market have never been greater,’ the report says. ‘With… Continue reading
