Investment
Peripheral areas in prime central London market set to help prices rise by 3% in 2016
Peripheral areas in central London such as Shoreditch, Kings Cross, Battersea and Shepherds Bush could be the new engine room of the London prime property market in 2016, it is suggested. These locations are likely to contribute to anticipated price growth of around 3% across prime London, according to an outlook analysis from boutique search agent Banda Property. It also suggests that strong competition among British home buyers for middle level housing in the £1million to £2 million price bracket will focus on outer central areas which offer quality flats and family houses with gardens, good schools, transport links and village amenities. Overall, the prime central London market is set to benefit from a surge in demand for investment properties early in the year as buy to let investors and second home buyers rush to beat the April deadline and avoid the new additional 3% stamp duty, the report explains. However, the firm expects that the numbers of new foreign buyers entering the market from Russia, the Middle East and Asia will be smaller than in 2015, as a result of higher costs and unfavourable exchange rates. But despite the Chancellor sending a negative message to investors with further stamp duty increases, Britain is still regarded as the best in Europe if not the world for real estate investment thanks to its tolerant and secure society, stable economy, transparent financial and legal systems and world class education ensuring it remains an attractive option for internationals seeking somewhere to live. ‘If the effects of the last stamp duty rise are anything to go by, we may well see a surge in activity as second home buyers and investors try to close before April. This will temper potential annual capital growth to the relatively moderate level of 3% overall and value will become more important than ever,’ said Louisa Brodie, head of search and acquisitions at Banda Property. ‘I’m confident that the London property market is resilient, as demonstrated this year, when despite hugely negative press and challenging regulation changes, the market has slowed but still remains an attractive proposition to buyers with a long term view,’ she explained. ‘British homebuyers will dominate in 2016, buying up good value properties in the peripheral ring around the prime locations. They are broadening their horizons beyond the obvious areas such as Chelsea and Belgravia, looking instead to places such as Battersea, Kings Cross and Clerkenwell as well as Shepherds Bush and Ealing in the west, in order to secure more square footage for their money,’ she pointed out. ‘With the key sections of Crossrail coming into operation by 2018, we will see particularly strong growth along the corridors of operation in the coming year,’ she added. Continue reading
Bureaucracy preventing small UK building firms from taking on apprentices
A third of small construction firms in the UK are being put off from taking on apprentices because of the bureaucracy involved, according to a new research report. The construction industry is in the midst of a skills crisis which can only be solved if more employers take on apprentices, says the report from the Federation of Master Builders (FMB). The research shows that 94% of small construction firms want to train apprentices but a third are being turned off by a number of serious ‘fear factors’. These include the cost of employing and training an apprentice and major concerns regarding the complexity of the process. ‘There is strong evidence to show that small construction firms need better information and that if they were more aware of the support that’s available, a great number would train apprentices,’ said Brian Berry, FMB chief executive. The research also found that just under 80% of non-recruiters are not aware of one of the most important apprenticeship grants available to them and just over 75% say knowledge of financial support would make them more likely to take on apprentices. ‘Given that two thirds of all construction apprentices are trained by SMEs it is critical that the Government does everything in its power to remove any barriers that might be stopping these companies from training,’ Berry explained. ‘Looking ahead, the Government’s new apprenticeship voucher could be a disaster for small firms unless it is properly road tested and made as simple and easy to use as possible. We’re also calling on the Government to protect our industry training board which is at risk from the new Apprenticeship Levy,’ he pointed out. ‘The Construction Industry Training Board (CITB) needs reform admittedly but without it the very smallest firms would be left with less financial and practical support for apprenticeship training. Remove this lifeline and you risk worsening the skills crisis,’ he added. The report is published at the same time as another piece of research which shows that construction and trade positions make up just 7% of all apprenticeships, down from a high of 12% in 2006. The research from small business insurer Direct Line for Business also shows that while the number of total apprenticeships has increased by 57% in the last five years to 434,630 during 2013/2014, only two construction and trade focused apprenticeships rank in the top 10, construction skills at nine and industrial applications at 10. This is vastly different to 2006/2007 when construction skills apprenticeships topped the table, with more than 20,000 apprenticeships undertaken in this field. ‘Construction and trade based skills are vital to the UK economy. It’s tradespeople who come to the rescue when our boiler fails, and are the ones who are working every day to build homes, offices and help improve our roads,’ said Nick Breton, head of Direct Line for Business. ‘Apprenticeships are important for budding builders, plumbers and electricians to get into the workplace. With fewer people in apprenticeships there is a… Continue reading
England and Wales property prices up 0.4% month on month
Property prices in England and Wales increased by 0.4% in November month on month and are up 5.6% year on year, according to the latest official data from the Land Registry. This take the average property price to £186,325 but there is considerable variations on both prices and price growth across the regions. London experienced the greatest increase in its average property value over the last 12 months with a rise of 11.2% and the greatest monthly growth with an increase of 1.6%, taking the average price to £506,724. Both Yorkshire and The Humber and the North East saw the lowest annual price growth with increases of 1.3% while Yorkshire and The Humber also saw the most significant monthly price fall with a decrease of 0.9%. The South East saw prices rise 0.4% month on month and 8% year on year to £258,137, while the East of England recorded a monthly rise of 1% and annual rise of 9.8% to £214,491. Average prices are lowest in the North East at £100,046 with a monthly and annual rise of 1.3% while it is £115,491 in the North West which saw prices flat month on month and up 3.1% year on year. Three regions saw monthly falls, down 0.3% in the West Midlands, down 0.7% in the East Midlands and down 0.9% in Yorkshire and the Humber, but prices are still up 2.9%, 4.1% and 1.3% year on year respectively. The Land Registry data also shows that the number of completed house sales in England and Wales during September 2015, the most up to date figures available, decreased by 8% to 72,397 compared with 78,877 in in September 2014. The number of properties sold in England and Wales for over £1 million increased by 1% to 1,273 from 1,265 a year earlier. Repossessions in England and Wales decreased by 45% to 406 compared with 733 in September 2014 and the region with the greatest fall in the number of repossession sales was the East with a decrease of 64% from September 2014. While average prices continue to rise in London it is emerging locations that are now overtaking traditional areas like Kensington and Chelsea, according to one agent in the city. ‘We are now seeing emerging districts consistently overtake traditional prime areas like Kensington and Chelsea, which are actually seeing prices fall,’ said Carl Schmid, owner of estate agency Fyfe Mcdade, which has offices in Shoreditch, Islington, Bloomsbury and Waterloo. ‘Buyers are increasingly seeking to make their money go further in areas like Tower Hamlets, Hackney, Lambeth and Southwark, attracted by relative value for money, improving transport connections and capital growth potential, which has already been squeezed out of prime central London,’ he added. According to Jonathan Hopper, managing director of the buying agents Garrington Property Finders, there are some encouraging signs though that the £1 million plus market is emerging from the slump triggered by last year's rise in Stamp Duty. 'Supply of these more expensive homes slowed… Continue reading
