TSI
Residential rents in prime central London rising again
After months of decline, rents in prime central London have begun to climb upwards again, according to new research. Rents in many of London's most prestigious locations such as Knightsbridge, Belgravia and Mayfair increased by 4% or more over the final quarter of 2014, the data from lettings firm Benham & Reeves says. Inner suburbs, meanwhile, saw more modest rental increases but indicators suggest the market is still very strong. Agents also report a number of tenants choosing to rent until the sales market stabilises after the general election. However, Chelsea and South Kensington saw significant falls in rents in contrast to neighbouring areas and the firm pointed out that they rely much more heavily on the domestic market so have not seen the same uplift from foreign demand. Most of the inner suburbs saw rents stabilise or enjoy modest growth although the rental market in north London areas such as Hampstead and Highgate continued to cool. The firm also pointed out that fewer new homes are being built in the area so tenants are drawn to newer and often less expensive developments in east London. The two boroughs that reportedly saw the biggest capital growth in London last year, Hackney and Greenwich, also saw large rent increases as new developments came to the market. ‘Prime central London is seen as a blue chip investment for a reason. Capital growth may have slowed but its popularity remains undiminished, especially in the eyes of tenants,’ said Marc von Grundherr, lettings director at Benham & Reeves Residential Lettings. ‘Bearish headlines at the end of last year were cause for concern, but landlords who have kept their nerve in the latter half of 2015 are finally seeing their just rewards,’ he added. Continue reading
UK politians favour council tax change rather than new mansion tax
The majority of MPs in the UK believe additional higher rate council tax bands would be a better way to reform annual property taxes on high value homes than introducing a mansion tax. A survey found 69% back the council tax change while 75% agree with the need for a revaluation of council tax in general. The poll commissioned by the British Property Federation (BPF) also looked specifically at what Labour MPs think as it is the Labour Party that wants to introduce a mansion tax if it comes to power at the general election in May. It found that 39% of Labour Party’s MPs favour additional higher rate council tax bands over a mansion tax, despite the party championing the tax as one of its flagship policies ahead of the election. Just over half, 56%, thought a mansion tax would be preferable. The majority of the Liberal Democrat MPs surveyed, 89%, also prefer additional council tax bands to a mansion tax, as do 92% Conservative MPs. The Liberal Democrats first mooted the idea of a mansion tax in 2012. Asked separately whether they would support a revaluation of all homes to update council tax, 75% of MPs agreed. Support is strongest amongst Labour MPs at 87%, compared to 64% of Conservative MPs. It seems that this is a priority issue for MPs, with the majority, 53%, of those who would like to see reform preferring revaluation during the next parliament. The BPF has long made the case for council tax reform, pointing out that the 24 year old tax is still calculated on house prices in 1991. Since then, house price inflation has varied significantly, ranging from 160% to over 400% across England’s regions. It has urged policymakers to consider council tax revaluation and the addition of more council tax bands as a fairer and more efficient alternative to the mansion tax, which would be unfairly concentrated in London and could act as a deterrent to investment in the UK’s built environment. The BPF says that a council tax revaluation would be very easy to implement in the next Parliament because there is already legislative provision for it in the Local Government Act 2003. It would also accord with the advice of the Lyons Inquiry to Labour in 2007, which amongst its recommendations, suggested that a future government should revalue council tax and add new council tax bands, in order to update the tax base and improve fairness for taxpayers. ‘This poll shows that a full council tax revaluation rightly commands widespread political support, particularly across the Labour party, and that the majority of MPs recognise that basing council tax on 1991 house prices is simply unsustainable,’ said Ian Fletcher, director of policy at the British Property Federation. ‘The mansion tax is a political gimmick that is more about the narrative of rich vs the rest than anything else. Reforming council tax through a revaluation and raising revenue… Continue reading
Property markets in Dubai and Abu Dhabi set for a stable 2015
Property prices in Abu Dhabi are expected to see a gradual increase in 2015 but not on the scale that was seen in 2104, it is claimed. Leading property firm Cluttons believes there is still some great investor appetite in Abu Dhabi and predicts that new residential schemes will still be popular. It also expects that there will be more off-plan housing launches this year, from the leading firms such as Aldar and TDIC as well as some private developers. But William Neil, head of Cluttons in Abu Dhabi warned that there is a danger that residential rents could continue to go up. ‘With no rental cap in place in Abu Dhabi, if there is a lack of supply then the market could face some of the same issues it faced back in 2007 when rents were so expensive that many people were forced to commute here each day from Dubai,’ he explained. He added that the commercial market is waiting with anticipation to find out what the new rules will be regarding the proposed financial free zone on Al Maryah Island. ‘With Yas Mall now open, we are predicting growth for retail rents in the city. However, with more shopping centres being built on Al Maryah Island and Saadiyat Island, there is a danger over the next three years for oversupply,’ he said. Meanwhile, in neighbouring Dubai the New Year is expected to see a mixed outlook with some sectors of residential property selling well but prices and sales varying depending on location. According to Matthew Green, the head of research and consultancy for the United Arab Emirates at CBRE Middle East the residential market has shown signs of stabilisation over the past six months across both sales and leasing markets. ‘We expect this to be a similar outlook for this year, with the scheduled pipeline of 20,000 new units during the year likely to help constrain rental inflation and add more balance to the sector,’ he said. ‘As has been the trend, a fragmented market will continue, with certain products and locations performing somewhat independently from the wider market. For example, the villa market, which has been relatively stable in recent quarters, could be set for rental deflation in certain areas as a substantial supply of new units starts to emerge from locations such as Jumeirah Park, Arabian Ranches, Dubailand and Jumeirah Golf Estates,’ he explained. ‘The demand for mid to low end residential offerings is expected to remain strong in the short term because of limited supply and high demand. Much of this demand is being generated by solid growth in the services sector, particularly from the retail and hospitality industries,’ he added. Dubai’s commercial office sector saw improvement in 2015 and this is expected to continue into 2015 and Dubai’s position as the headquarter city of choice for global corporates in the Middle East looks set to continue. ‘However, with limited good quality and efficient office properties available in the… Continue reading
