Uk
Global business putting investment in UK commercial property on hold due to Brexit concerns
International businesses are postponing investment in the UK in the wake of uncertainty about the country’s membership of the European Union ahead of a referendum in June. The latest UK Commercial Market Survey from the Royal Institution of Chartered Surveyors (RICS) indicates that demand for UK commercial property among international investors has stalled. It says that short term uncertainty has contributed particularly to falling international investment demand in central London and rental and capital value projections have been scaled back since the announcement last year that a referendum would be held. On top of this only 6% of the RICS survey respondents believe that Brexit, the term given to a UK decision to leave, will have positive impact on the country’s commercial property sector The demand indicator among international investors for UK commercial property is now at its lowest level since RICS records began in 2014 with just 5% of members surveyed reporting increased interest from overseas companies over the last three months. This is a considerable drop from 36% in the second quarter of 2015 Uncertainty caused by the EU referendum has been cited by 38% of RICS members working within the sector as the reason why major international retailers and other businesses have been nervous of investing in Britain. Should Britain leave the EU, some 43% of respondents feel that it would have a negative impact on the commercial property sector and only 6% said a Brexit scenario would have a positive impact on the commercial property sector. RICS says that some international firms are drawing up contingency plans to shift their headquarters in the event of Brexit. Overseas firms based in the UK occupy large swathes of real estate, and their departure could harm office occupancy rates, and the local economy. Likely beneficiaries of a Brexit are Paris, Frankfurt and Dublin, although the report said London was likely to remain a magnet for investment. The report points out that while investment rates have eased, they are not frozen. ‘There is no doubt that since the EU referendum became a certainty following the general election last May we have seen a decline in interest from overseas investors in UK commercial property,’ said RICS chief economist Simon Rubinsohn. ‘At least in the short term, we know that international retailer and service providers are finding the UK market less attractive,’ he added. The report also suggested that British farmers, many of which rely on payments from the EU’s Common Agricultural Policy to pay their rents, would take a big hit if the UK leaves the EU. The RICS EU Referendum Paper shows that a range of key industries from residential housing to construction and rural have been hit by short term uncertainty. However, across the board, in the longer term steady growth is still predicted across rural, land and built environment sectors. It suggests that in the event of Brexit, farmers will most likely lose access to the EU single market and CAP. The question… Continue reading
Official figures show fewer residential properties are lying empty in the UK
The number of empty homes in the UK is now at its lowest level since records began with a drop of over a third from 318,642 in 2004 to 203,596 in 2015. Figures also show an increase in the number of owner occupied homes in the past year, after seven years of decline, starting in 2007. The downward trend in ownership is continuing to level out after a fall from a peak of 69.5% in 2002 to 62.5% in 2015 and 62.8% in 2014. Data from the government also shows that the number of new homes up by a quarter in the last year alone, the highest annual percentage increase in net additional homes for 28 years. ‘We are turning around the housing market and making sure the best use is made of all housing including empty homes. We are very clear that a house should be a home which is why we have taken action to stop homes being bought up and left as an empty investment,’ said Housing and Planning Minister Brandon Lewis. ‘And we’ve taking forward the boldest ambition for housing in a generation, doubling the budget so we can help a million more people into home ownership, while delivering a bigger, and better private rental sector,’ he added. He pointed out that the government has introduced a number of measures to get homes back into use that have stood empty for years including rewarding councils for bringing empty homes back in to use through the New Homes Bonus and since April 2011, councils have been allocated over £4.846 billion for providing new homes. Other measures are providing over 704,000 additional homes, bringing over 106,000 empty homes will be back into use and providing 271,000 affordable homes and giving councils the power to increase Council Tax on empty properties. Alongside this charges have been introduce on certain ownership to prevent residential property being held through companies left empty and move to ensure that Capital Gains Tax is due on gains made by foreign owners who sell residential property in the UK, much of which is left empty. This means the same rules apply to residents and non-residents. Lewis added that the government is determined to provide more homes and has committed more than £20 billion over the next five years to help meet its ambition to provide a million new homes. He also pointed out that Right to Buy is being extended to 1.3 million people, shared ownership properties are being made available to a much larger number of people and 200,000 Starter Homes are being provided at a minimum 20% discount for first time buyers. Continue reading
Research shows US first time buyers battling against less choice and higher prices
First time buyers in the United States are facing a lack of affordable homes to buy and higher prices, according to new research. Home values are rising the fastest among entry-level homes in more than half of the largest housing markets, according to latest real estate market report from Zillow which covers the first quarter of 2016. It says that rising home values in this segment of the market can be attributed to a lack of supply, with 10% fewer homes for sale this year compared to last. The median value of entry level homes, that is those in the bottom third of the market, have increased the most over the past year in Denver, up 20%, followed by Portland and Dallas. The report also shows that there are 13% fewer entry level homes available in Denver than there were a year ago. The number of entry level homes available declined the most in Portland where there are 40% fewer entry level homes available than there were a year ago. The findings signal difficult times ahead for first time buyers looking to enter the market. Going into home shopping season this spring, buyers will find fewer homes in the bottom and middle of the market which are the properties most affordable for first time buyers. The trend also highlights the different experiences buyers are having in the recovering housing market. Buyers looking for the most expensive homes will find slower price growth, a larger selection, and less competition this spring than entry level buyers who are likely to face stiff competition, bidding wars, and very few homes to choose from. ‘It's going to be a tough home buying market this spring, especially for first time buyers or even people looking to move up into a slightly more expensive home,’ said Zillow chief economist Svenja Gudell. ‘In order to stand out in a competitive market, buyers should get pre-approved for a loan, find an agent who has experience with bidding wars, and consider coming in at the asking price, so the seller knows they're serious,’ she added. In all of the largest US housing markets, more than a third of the homes available for sale are in the most expensive segment in the top third of the overall housing stock in the market. In nine markets, top tier homes make up more than half of the inventory. The most expensive homes on the market are more likely to have a price cut, a signal that there's less demand for top tier homes. The share of top tier listings with a price cut has increased 1.6% over the past year. Continue reading
