Investment
International students add £600 million to London’s private rented sector
The 107,000 international students studying in London contribute some £600 million in rental income to the capital’s rental market, new research has found. The wealthiest Chinese, Russian and Malaysian students typically spend up to £1,500 per week to live in plush addresses in Mayfair, Knightsbridge and South Kensington, says the report from private rental market lettings firm E J Harris. Using data from their own client instructions over the last three years and drawing on figures from the Government’s Higher Education Statistics Agency (HESA), the firm analysed the number and country of origin of foreign students in the capital, where they choose to live, the type of properties they let and how much they spend in the private rental sector. There are some 107,000 international students studying in London, 40,000 from continental Europe and 67,000 from the rest of the world. Overall they spend £1.32 billion on tuition fees, some £1.36 billion on accommodation and subsistence of which £600 million goes on private lets or halls of residence costs and £121 million through friends and family visiting them in London whilst they study. By country of origin, the largest group of international students studying and living in London come from China who make up 18% of all foreign students in the capital, followed by students from the USA at 9%, India 7%, Hong Kong 5%, Malaysia 4% and Nigeria 4%. Other significant foreign student nationalities are people from Saudi Arabia, Singapore, Pakistan and Canada. On an annual basis some 20% of the firm's clients in inner London are students. Of these 50% are foreign students, the balance are British students. They are normally 18 to 22 years of age from affluent families. The report suggest that the accommodation for these students is predominantly provided by the bank of mum and dad although some receive special grants from their respective countries. The wealthiest overseas students tend to prefer living in Mayfair, Knightsbridge, Marylebone and South Kensington, whilst others and British students tend to live in Notting Hill, Bayswater, Shepherds Bush and Kingston Upon Thames. The most affluent international student clients are from China, Thailand, Russia, Malaysia and Nigeria. The top spenders can afford to pay £1,500 per week for an apartment in Knightsbridge or Mayfair. For example, on Old Brompton Road, just by the underground station, there is an apartment building extremely popular with affluent overseas students. However, the majority of overseas students typically pay £500 to £600 per week for a two bedroom apartment in Notting Hill, South Kensington, Shepherds Bush or Bayswater. In Shepherds Bush the Sinclair Mansions apartment building is very popular with students and whenever a flat becomes available there are up to 500 enquiries from students from around the world wanting to secure the let. 'There are over 100,000 international students studying and living in London and their numbers are rising. University applications from overseas students are… Continue reading
West London prime property market out performs rest of sector in London
Residential property growth in the prime west London market is outperforming the rest of the sector in the city, new research shows. The area starting in Hammersmith and heading west to Ealing saw average property values grow by 4.1% in the second quarter of 2015, leaving annual growth at 0.5% compared to the small falls seen in other prime London markets. The value of properties priced over £2 million, the majority of which are concentrated in Hammersmith and Chiswick, fell 2.2% over the past year, the data from real estate firm Savills also shows. At the top end of the market, buyer caution has been evident, the firm's report says, and the the price falls largely resulted from stamp duty changes announced in the 2014 Autumn Statement and uncertainty surrounding a mansion tax in the run up to the general election. Stronger growth was recorded in the lower value markets, particularly in the £750,000 to £1 million market where buyers benefited modestly from the stamp duty reform. In the prime markets below £750,000 although price growth was positive, it was slower as new mortgage regulations limit the amount buyers can borrow. Average values in Ealing are around 25% cheaper than Hammersmith and Chiswick and consequently saw the strongest growth, of 3.9% over the past year. 'Since the election some of the deferred pent up demand is beginning to flow back into the market, although the new stamp duty rates are still keenly felt by buyers at the top end of the market. This has restricted any significant increases in both prices and transaction numbers and we expect this to continue over the rest of 2015,' the report explains. Nonetheless, Savills is forecasting price growth to return to the market in 2016 and values to rise by 22.7% over the five years to the end of 2019. In the prime west London rental sector average rents increased by 1.2% over the three months to the end of June, leaving rental growth flat on an annual basis. But Savills says that corporate relocations play an important part in the west London prime rental market and are a growing source of demand. Over the first half of 2015 some 67% of tenants were renting due to employment relocation compared to 55% in 2014. 'Over the next five years, the London economy is forecast to continue strengthening, particularly in the technology and telecommunications industries, which will underpin demand for prime rental property over the medium term,' the report points out. However, it also points out that a potential risk to the sector is the level of new stock being brought to the market by overseas investors in certain locations on the fringes of prime London. In west London the largest prime development region is White City, which may lead to rents coming under pressure in the surrounding areas. But, across the prime London markets as a whole Savills expects rents to rise by 17% over the course… Continue reading
Average UK buyer wants a three bed home priced at around £200,000
The average UK home buyer has a budget of £205,221, has owned two properties in their lifetime and is most likely to buy a three bedroom semi in the suburbs, new research shows. Most buy with a spouse or partner with just 18% buying alone and of those aged 18 to 24 some 17% buy their first home with friends, according to the study by Sarah Beeny's estate agency Tepilo. Who people buy with varies from region to region, with those from Wales most likely to buy alone at 35%, followed by those in the South East at 28% and Yorkshire at 27%. Least likely to purchase solo are those from the North East where only 3%do so and London where it is 12%. Location of a property is the most important consideration for buyers with 65% naming it as the top priority followed by 56% stating the number of bedrooms is crucial and 41% the garden. Some 34% believe the layout of the property is important, 29% having a kitchen dining room and 19% want a downstairs toilet as a priority, the research also found. When considering the location of a property, buyer rate good transport links as the most important deciding factor at 56%. Being close to shops and supermarkets is key for 44% and a low crime rate for 39%. A good local pub is an important factor for 23% with 35% of 18 to 24 year olds rating it as one of the top things they look for when buying a home. Those from the East Midlands are most keen on a local with 33% of them saying a good local pub is essential when buying a property. Having family and friends nearby is vital for 36% but this rises to 65% amongst people from the North East and drops to just 22% of those from the South West and 23% in London. Three bed properties are the most popular with 45% of buyers going for this size of property while 27% seek a two bedroom home. Indeed a two bedroom property is the most popular in the North East and Scotland where 48% are after this kind of home. A further 18% opt for a four bed, with less than 5% buying studio and one bedroom properties. The age of 44 is when most buyers think they have moved to their ideal home that they will spend the rest of their lives in, although 20% don't think such a thing exists, which rises to 33% of those aged 55 and over. The research also found that 32% have bought a property as an investment, rising to 41% amongst those aged 35 to 44. Some 45% of buyers who have invested in property bought the home for their children to live in whilst at university. In addition, 24% who invested in property did so as an alternative to a traditional pension. 'We've introduced the Tepilo Buyer Barometer survey to gauge how British house buyers… Continue reading
