Uk
Spain is top target for commercial real estate investors in Europe, new poll shows
Active commercial real estate investors see Spain as the top investment target in Europe for next year as values are still below peak, new research suggests. This is a sign of the Spanish commercial market’s recovery, with Germany following close and Germany is next on the list, according to a poll of investors carried out by international real estate firm Knight Frank. ‘The fundamental rationale behind investing in Spain is even stronger than this time last year. Prime CBD office rents have risen by 20% over the past 12 months, but remain nearly 40% below the 2008 peak, and both footfall and sales have been increasing in dominant shopping centres for six consecutive quarters,’ said Humphrey White, head of Capital Markets at Knight Frank Spain. At the same time some 25.4% chose Germany as their preferred target and Knight Frank says that the results mirror the buoyant investment activity seen in the country, with a total of €30 billion invested in property during the first half of 2015, an increase of 35% compared to the first half of 2014. According to Joachim von Radecke, head of German Desk at Knight Frank in London, the increase is driven by the rising flow of foreign capital into the country and the 50% increase of domestic investor activity. ‘Foreign investors’ share of the German market continues to grow, and now accounted for almost 60% of all transactions in the first half of 2015. We saw the usual trend towards the big five markets of Berlin, Frankfurt, Munich, Hamburg and Düsseldorf, with 78% of total office transactions recorded in these cities,’ he added. The UK also featured strongly in this year’s poll, attracting 17.4% of the votes, on the back of the continuing recovery which has now extended to the UK regions. ‘The UK is well ahead of the rest of Europe in terms of the property cycle and has already seen significant yield compression,’ said Chris Bell, managing director of Europe at Knight Frank. ‘However, it is encouraging that rental growth is beginning to re-emerge more widely across Europe, helped by the strengthening of occupier demand and the steadily falling availability of good quality space exacerbated by the lack of development over the preceding recessionary years,’ he added. Continue reading
Average rent for newly let properties in England reach new record level
The average rent for a newly let property in England has increased by 3.8% in the last 12 months to £946 per calendar month, according to the latest index figures. In August the month on month average increase was 2.5% the data from one of the UK’s largest letting agents, Countrywide, shows and rent levels have reached their highest level since the index began. Annual growth in rent for new let properties was recorded in all regions except central London. The South West saw an increase of 7% and the Midlands and increase of 6.3%, the highest growth year on year. Overall some 45% of tenants renewing their tenancies had rent increases in August, the highest since the index began and in London and the South East more than half of tenants renewing faced higher rents, according to the analysis. The report explains that rents have been growing throughout 2015, driven by a lack of homes available to rent and high levels of tenant demand. The total number of homes advertised to let was down 8% in August compared to last year, whereas the number of registered applicants was up 4%. With fewer options available for tenants looking to move, those choosing to renew their tenancy are more likely to see their rent increase. However, they are still better off compared to those moving home. The average increase in rent of 2.5% for a renewing tenancy is still less than the annual increase in rent for newly let homes, the report points out. It also explained that rental growth remains well above CPI inflation, which slipped back to zero this month. The South West and Midlands saw rents rise faster than anywhere else in the country with growth of 7% and 6.3% respectively. Growth in newly let rents was seen in all regions except in Central London where rents decreased 1.4% year on year. Greater London, although still growing, has seen its rate of growth in rent halve since the start of the year. The South West has seen the highest rental growth in the UK since the start of the year. ‘Falling numbers of homes available to rent and increasing demand from tenants have been the defining features of rental market so far in 2015. Competition for rented homes has intensified and led to accelerating rent growth,’ said Johnny Morris, research director at Countrywide. Indeed, there are now nine tenants are registered for every home available to rent, up from 7.5 in August last year. ‘With pressure on rents and increased competition for homes on the market, the proportion of renewing tenancies seeing an increase in rent has grown. Faced with the choice of staying put or moving in a market with more competition and increasing rents, more tenants are choosing to accept a smaller increase in rent to extend their existing tenancy,’ Morris explained. ‘Rental price growth in the South of England, outside of London is being fuelled by an… Continue reading
RICS backs idea of older home owners downsizing to boost supply crisis
The Royal Institution of Chartered Surveyors has waded into the debate over housing supply in the UK, saying that measures such as downsizing could help alleviate the current problems. Last week the head of mortgages at the Financial Conduct Authority was criticised for saying that older people should move out of family homes to make way for younger families but RICS appears to also back the idea. In its latest policy review RICS suggest it is one measure that could help the current shortage of supply in the housing market and that more downsizing could release almost three million homes. It also suggests other measures such as the expansion of affordable ownership via planning controls insisting developers offer a percentage of new homes for affordable rent, regulations to oblige second home owners to release their properties for rental, and the creation of Self Invested Personal Pensions which would allow investors to put their money into Build To Let schemes. But it adds that downsizing is considered perhaps the most effective way of improving supply in the market. ‘Britain’s older home owners are understandably reluctant to move out of much loved, but often under occupied family homes,’ said Jeremy Blackburn, head of policy at RICS. ‘Clearly, it’s an emotive issue and one that needs to be treated with sensitivity, but we would like to see central and local government provide older people with the information, practical and financial support they need to downsize if that is their choice,’ he added. He explained that this might include offering a fund to support with moving costs and pointed out that Bristol City council is already piloting a scheme along these lines, and another suggestion is a stamp duty discount for retired people who are downsizing. RICS believes that the most consistent feature of the housing market over the last 18 months has been a shortage of homes on sale with stock levels on surveyors’ books dropping to lows not seen for at least three decades. ‘Almost a third of over 55s have considered downsizing in the last five years yet we know only seven per cent actually did. If we are to get to grips with this country’s housing crisis, we need to look at supply-led measures across government and the wider industry in order to get the market moving,’ Blackburn added. Continue reading
