Investment
UK property prices set to rise by almost 20% or average of £60,000 in next five years
Property prices in the UK are predicted to continue their upward trend, rising by nearly £60,000 over the next five years, according to new research. Prices are expected to rise by 3.5% in 2016 with further annual increases of around 4% in the four years that follow, says the latest analysis from the Centre for Economics and Business Research (Cebr). Indeed, the forecaster says that 2015 annual house price growth has been revised up from 4.7% in June to 5.6% this month and the average price of a UK property is set to stand at a record high of £263,000 this year. The research also shows that the price gap between a terraced house and a purpose built flat in London nearly quadrupled from £46,000 in 2000 to £176,000 in 2014. It points out that a lack of properties coming onto the market is one of the reasons behind the upward revision to the forecast. Households expect property values to keep rising so as such individuals want to sell at the top of the market, but at the moment few anticipate a downturn in prices. Yet overall home ownership has risen dramatically among older households since 1981, but has collapsed among younger households. With retired individuals less likely to move home, this is curbing the number of individuals putting property up for sale, the report explains. It also reveals a substantial increase in the cost of moving up the property ladder, especially in London. Moving up the property ladder has historically been a key reason to sell a home but for many this has become infeasible. The high cost of moving home, with stamp duty costs curbing house moves and the report says this is particularly the case at the prime end of the property market which saw a substantial increase in stamp duty rates in last December’s Autumn Statement. Low levels of housebuilding are also reducing the number of new builds being put up for sale in the UK. The Cebr suggests that the new Housing and Planning Bill will not go far enough in controlling rising home prices. It claims that reconsidering various other housing market features is also necessary. For example, the UK’s population is getting older and with retired individuals less likely to move home, added incentives are necessary to encourage ‘rightsizing’. For example, a stamp duty exemption or reduction for those looking to ‘rightsize’ would encourage pensioners to put larger properties on the market. ‘A reduction in the number of properties being put on the market has placed further upward pressure on house prices in some parts of the UK. This is a result of low levels of house building, but also other factors such as an ageing population and the rising cost of moving up the property ladder,’ said Nina Skero, Cebr economist and main author of the report,. ‘The price gap between a first time home and a larger family home has skyrocketed… Continue reading
Rents in prime Home Counties market in UK down 0.8% in third quarter
Prime rents in the English Home Counties fell by an average of 0.8% in the third quarter of 2015 despite robust activity levels but are up 4.1% year on year, according to the latest data. The prime rental market in these counties around London, tends to be very seasonal and the three months leading up to September are often among the busiest of the year as tenants look to complete moves before the new US and UK school terms start in August or September respectively. This year was no exception, according to the index report from international real estate firm Knight Frank, with the number of tenancies agreed in the three months to September 54% higher than over the preceding three month period. But while activity levels have been robust, rising stock levels across the prime market, have meant that some landlords have been willing to reduce asking rents slightly in order to remain competitive, according to research executive Oliver Knight. ‘As ever, demand from individuals relocating for work continues to form a significant proportion of the market, especially in the prime commuter hotspots of Ascot, Cobham and Esher where corporate tenancies accounted for 42% of all deals agreed over the three month period,’ he said. ‘This corporate demand for rented accommodation has been particularly strong from individuals working in the technology sector. The share price of technology businesses has performed well this year, especially when compared to the banking and oil and gas industries,’ he added. He pointed out that the market continues to attract international tenants with some 38% of new renters across the prime Home Counties market coming from outside of the UK between July and September in Ascot, Cobham and Esher where corporate tenancies are more prevalent this rises to 51%. Individuals from North America were the most active movers during this time, with the start of the American school term in August likely to have been a factor. Continue reading
Some 200,000 new homes announced for the east of London
A new masterplan has been unveiled that will see 200,000 new homes built in the east of London, adding to a number of major developments already taking place in the area. The Mayor of London, Boris Johnson, announced the City in the East masterplan which includes development from London Bridge to the Isle of Dogs and Greenwich Peninsula, right through to Ilford in Essex and Dartford in Kent. He said that it is designed to bring together a vast number of major developments that are already taking place in the capital, known as designated Opportunity Areas, which have been identified as London's major source of brownfield land with significant capacity for new housing, commercial space and other development. In 2004, the Mayor's Office estimated East London had the capacity for 52,000 new homes. But detailed modelling, which includes linking 13 Opportunity Areas, carried out by City Hall but now a minimum of 203,500 homes could be delivered over the next 20 years. The City in the East document also contains a series of maps, which for the first time brings to life how the city is moving eastwards, covering much of the Thames Gateway, and could benefit from improvements to transport infrastructure such as Crossrail and HS1. Plans show an overground extension to Barking Riverside, which will enable the creation of 10,000 new homes and could be operational by 2020. The blueprint also includes longer term potential to place the A13 in a tunnel, deliver a new station and build new homes in the area. These projects are one of a number being made possible by Transport for London's Growth Fund, which is designed to target transport improvements in areas where there is potential to unlock new homes and jobs. It envisages how land across East London could be split up for commercial and industrial use and suggests where new schools, work space and hospitals could be located. ‘East London is already enjoying incredible growth and the City in the East plans reflect how we make the area an even better place to live and work over the next 20 years,’ said Johnson. ‘This blueprint reflects identified areas of land in London to build on and it will allow us to co-ordinate not only housing and commercial developments, but significant transport infrastructure to ensure this part of the capital can continue to flourish with hundreds of thousands of new jobs that will help the capital to remain the best big city in the world,’ he added. According to Alex Williams, director of borough planning at Transport for London, said that east London is expected to be one of the largest growth areas in the capital, with the population set to increase by 600,000 in the next 15 years. ‘Transport schemes such as the Overground extension to Barking Riverside and new river crossings will truly transform the area. London's transport network is vital to the economic and social wellbeing of this city… Continue reading
