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Average prime property prices in London up £260 a day in 2014
Average prime London property values rose by £260 a day over last year, and Balham saw the biggest leap as prices jump by 21% over the 12 months period, new data shows. Overall the majority of property market gains in London were made in first half of 2014, and prices dropped 1.6% during the final three months of the year, the first quarterly fall since the second quarter of 2011. The data from the latest London Property Monitor report from Marsh & Parson, also shows that supply of Prime London property for sale increased by 26% in last three months of 2014 and the New Year has seen an uplift in demand, with 13 buyers to every available property in January. The average Prime London home has risen in value by £95,000 in the past year but in Balham they have jumped £152,000 over the same period. With property prices in outer prime areas of the capital typically 25% lower than the wider prime London average, stronger demand for more affordable homes has pushed the rate of house price inflation up in these kind of suburban areas. Indeed, house prices in outer prime London climbed 9% during 2014, compared to a 4.3% annual increase in prime central areas. Balham is favoured by first time buyers and young families and the growth in this area was followed by Brook Green where property values are now 19% higher than a year ago. In contrast, average prices in exclusive prime central enclaves of Kensington and Holland Park have grown 8% in the past 12 months. ‘The prestigious prime property bastions of Kensington, Chelsea and Holland Park will always command worldwide appeal from buyers, however, everyday demand for more affordable homes has catapulted Balham and other outer prime corners of the capital onto the map,’ said Peter Rollings, chief executive officer of Marsh & Parsons. ‘Londoners are increasingly willing to compromise on a central location in return for more living space and manageable price tags, and as a result the price growth seen in these green village suburbs has overtaken the Goliaths of London property this year,’ he added. So, a breakdown of the figures show that throughout prime London prices now average £1,572,342, up 6.4% year on year but down 1.6% month on month. In prime central London they are £2,199,531, up 4.3% annually but down 2.1% month on month. And in outer prime London average prices are £1,180,348, up 9% year on year but down 1.1% month on month. However, the majority of this house price growth occurred in the first half of 2014, and in the last three months, prime London property values declined 1.6%. This is the first quarterly price drop witnessed for three and a half years, as the market corrects after remarkable growth seen throughout the first half of 2014 . A 26% uplift in the supply of prime London properties… Continue reading
UK buyers less concerned about interest rates, survey suggests
The drop in inflation in the UK to 0.5% in December 2014 has corresponded with a steep drop in the proportion of consumers viewing interest rates as one of the main barriers to buying a property, it is claimed. According to the latest Halifax Housing Market Confidence Tracker index over the last 12 months, the proportion of consumers citing concern about rises in interest rates as a barrier to buying property rise steadily from 14% in the fourth quarter of 2013 to 19% in the third quarter of 2014, the highest since the Tracker began at 22%. However, this fell back to 13% in the fourth quarter of 2014, the lowest level in over a year, at the same time as inflation began to fall sharply in the last few months of the year. ‘Speculation over a potential rate rise was high on the news agenda at certain times in 2014 and the Housing Market Confidence Tracker showed consumers becoming increasingly anxious about interest rate rises,’ said Martin Ellis, housing economist at the Halifax. ‘But with inflation falling sharply in the last few months it’s taken away some of risk of an imminent rise and worries have fallen accordingly. While a rate rise will happen eventually, lenders take this into account as part of our affordability checks in the mortgage application process. Going forward the key factor in how they adjust to any changes in rates will be the way in which borrowers manage their disposable income,’ he explained. It is not only interest rates that consumers perceive as being a barrier to buying a property. The largest single barrier is perceived to be the ability to raise a deposit, cited by 61% in the fourth quarter of 2014. However, in the last few years there have been a number of schemes launched specifically aimed at supporting borrowers with smaller deposits such as the Help to Buy scheme, which has loaned buyers deposits and guaranteed loans. ‘Mortgage affordability has improved significantly in recent years with record low mortgage rates a major contributor behind this improvement. Figures from the 2014 Halifax First Time Buyer annual review show that the number of first time buyers is at its highest level since 2007 and last year the number of first-time buyers increased by 22%. This was the third successive annual increase with a 50% rise in the past two years,’ Ellis pointed out. Continue reading
European commercial property sales set to continue with growth in 2015
European commercial property transaction volumes for 2014 are likely to exceed the €160 billion mark, up 10% on 2013, new research shows. A significant amount of capital continues to target commercial real estate and forecasts from real estate firm Knight Frank suggest a similar rate of growth in 2015, with total volumes expected to be in the range of €175 to €180 billion. All the main commercial sectors are attracting strong interest, while specialist sectors such as hotels, healthcare and student accommodation are becoming increasingly part of the mainstream property market, the firm’s report shows. ‘The really good news for both occupiers and investors is that rents in most markets remain lower than their pre-recession peaks, in some cases significantly below,’ said Darren Yates, head of Global Capital Markets Research. ‘This should provide a further boost to activity in 2015, with more occupiers looking to take advantage of good deals, while investors will seek to cash in on better rental growth prospects as the economic outlook continues to improve,’ he added. According to Andrew Sim, head of European Capital Markets, the forecast 10% rise of commercial investment volumes is a positive start for the first quarter of 2015. ‘We have witnessed a strong recovery in cities such as Madrid and Dublin and we are expecting demand to generally broaden out to smaller cities,’ he said. ‘Investors are looking to move increasingly up the risk curve to target good quality secondary stock, in addition to development opportunities,’ he added. While there are some lingering doubts about the strength and uneven nature of Europe’s economic recovery, both the European Union and the Euro area are poised for positive growth in 2014 and 2015, the report points out. Occupier markets are likely to continue to move in line with wider economic trends, with the Nordic countries and the Baltics currently seeing a significant improvement in occupier sentiment, while the UK is finally seeing a pick up in its regional city markets. However, the firm says that perhaps the most encouraging trend is the rebound in some of the peripheral markets, notably Ireland and parts of Southern Europe, with Dublin and Madrid in particular recording solid rental increases in 2014 and further growth expected in 2015. Despite the recent dip in economic performance, major French and German cities are also expected to perform well on the back of limited availability, with development yet to accelerate significantly in either country. The Russia-Ukraine crisis meanwhile continues to weigh heavily on those countries and, while property markets in the wider Central and Eastern European region have remained relatively untouched by the conflict, plentiful supply has constrained rental growth in key cities such as Prague and Warsaw. Continue reading
