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Average rental deposits up in the UK but surprising fall in London
London was among the many areas of England and Wales to see quarterly drops in the average deposit amounts needed by tenants at the end of 2014. The average deposit amount protected by mydeposits saw a 1.4% rise between the third and fourth quarter of 2014 but London saw a 2.6% drop equalling to a fall of £49 to a total of £1,811. It means that the average tenancy deposit protected by mydeposits now stands at £1,226, up £52 over the last year. The figures also show a difference of £1,244 between the average cost of deposits in the most expensive and cheapest regions in England and Wales. London stays at the top of the most expensive average deposit paid by tenants around the U.K with £1,811 on average being spent in the capital, which year on year is an increase of £79 or 4.6%. The quarterly contrasts between the north and west in the Midlands and up in the North makes for interesting reading. The East Midlands saw an 11% increase while the West Midlands saw a 5.3% fall. Meanwhile, in the North West there was a 3.9%) increase to £650 compared to the largest monetary drop in value in the North East who saw a fall of 31.6% to £567, the lowest overall across England and Wales. Wales also saw a big drop of 23% in deposit values taking their average total to £657. Deposits in the East of England dropped at the same pace as London at 2.6% for the quarter but saw the biggest increase across the UK throughout the year with a 6.2% rise to £1,021, the third highest behind the South East at £1,203 and London. ‘This the first cycle in which we’ve seen a steady quarter on quarter reduction to average deposit values in many parts of England and Wales. While it’s difficult to pinpoint an exact reason for this, it is most likely to be attributable to rental demand tailing off throughout December,’ said Eddie Hooker, chief executive officer of mydeposits. ‘This is because deposits are commonly set at between four to six week’s rents and landlords and agents are more likely to accept lower than advertised rents in December in order to avoid having vacant properties over the Christmas and New Year period and experiencing a void,’ he explained. ‘Whilst this is good news, 2015 is going to be a big year for housing with the General Election some five months away. We’ve already seen government wide support for the new deposits loan scheme that is set to benefit thousands of tenants and go a long way to creating a better private rented sector for all,’ he added. Continue reading
UK commercial property rental value reaches highest growth since 2007
UK commercial property markets have recorded their highest rental value growth since the third quarter of 2007, a new report from real estate firm CBRE shows. Of 1,022 locations monitored, some 16% showed an increase in rental value but prime yields fell by an average of 8 basis points and the UK All Property average currently stands at 5.6%, with 35% of locations recording falling yields. In 2014 total prime rental value growth was 3.8%, up from 2.8% in 2013, with the rate increasing steadily over the last 12 months. The average prime yield recorded a fall of 41 basis points over 2014, compared to 32 bps in 2013, and the combination of continued falls in yields and strengthening rental value growth resulted in capital value growth of 11.8% for 2014. ‘During 2014 we have seen prime rental growth strengthening across many UK markets. Prime yields also recorded a substantial improvement, reflecting the growth in investment activity over the last year,’ said Michael Haddock, CBRE senior director. ‘At a national level, total transaction volume reached £61.7 billion in 2014 compared to £54.5 billion in 2013 and just beating the total reached in 2006,’ he explained. Within the office sector, central London experienced the strongest rental value growth, at 11.4% in 2014 compared with 8.1% for the UK as a whole. However, yields are showing the reverse of this pattern, with the strongest falls in office yields being recorded in the rest of the UK. Over 2014, the South East and Eastern regions stood out because of the lack of rental value growth. The report explains that yield shift is spreading to the rest of the country meaning that capital value growth has been fairly evenly distributed across the country. In contrast the industrial sector is seeing an even pattern of both rental value growth and yield shift across the country, although the West Midlands, which is experiencing a shortage of good quality industrial space, appears to be leading the way. Yields in the shopping centre and retail warehouse sectors stabilised in the fourth quarter 2014 after sharp declines in the first three quarters. Although, prime yields were flat in these two sectors in the last quarter, they have recorded the highest average fall for the year as a whole, with the average prime yield down by 53 and 63 basis points respectively compared to the all sector average of 41 basis points. ‘Capital value growth in the Office sector has been seen across the whole of the UK. Central London recorded growth of 7.2% for the quarter and 15.6% for the year as a whole,’ said Andrew Marston, CBRE director. ‘However, the gap between London and the rest of the UK is narrowing, with capital value growth of 10.6% for the UK, excluding London, South East and Eastern. In the fourth quarter of 2014 East Midlands and Yorkshire and Humberside recorded the highest capital value growth in the office sector. ‘All Industrials also performed very… Continue reading
UK farm land reaches record price per acre for eleven months in a row
Farm land in the UK continued to outpace supply in the final six months of 2014, with land prices rising by 8.3% over the year, the latest data shows. That took the average price per acre to over £10,067, a record high for 11 months in a row, according to the latest RICS/RAU Rural Land Market Survey. During the same period in 2013 an acre cost, on average, £9,294. Despite anecdotal evidence that the recent fall in commodity prices is starting to temper the pace of demand, particularly for smaller areas of land in all parts of the country, prices are expected to continue to rise over the next 12 months. The increase in demand from lifestyle buyers that began in the second half of 2013 continued throughout the whole of 2014 with this trend being noticed across most parts of the UK. RICS said that this is adding to price pressures and keeping price expectations in positive territory in all areas. Anecdotal evidence also seems to suggest the continued presence in the market of investor purchasers seeing land as a safe haven. Across the UK the supply of commercial farmland has remained flat or decreased in nine of the ten areas, while demand has continued to grow in all but one part of the UK. According to surveyors, average annual arable land rents decreased in the second half of 2014 for the first time in six years but remain 0.8% higher over the year. Pasture lands rents, on the other hand, rose by 3.4% in the first half and by 7.8% over the year to reach £107 per acre. The highest annual price growth in the UK was seen in Scotland, despite uncertainty driven by the referendum and CAP review. Prices in Scotland rose almost 17% over the year, although at just £4,375 per acre, prices in Scotland are still 47% below the national average with the price of pasture land at least 40% cheaper than any other part of the UK. RICS said that it remains to be seen whether the recent announcement on plans to overhaul tenant farming will have any effect on land prices. ‘Although there are a number of potential issues on the horizon which may have an impact on confidence, including land reform and the implementation of CAP review, surveyors remain optimistic that prices across Scotland will continue to rise over the next 12 months,’ said Sarah Speirs, director of RICS Scotland. According to surveyors, average arable land rents in Scotland remained relatively flat in the second half of 2014 at £85 per acre, behind the national average of £158 per acre. ‘Decrease in supply and steady demand has kept prices static. We have seen a very buoyant market for good arable farm land but much slower market for pasture land. There is strong demand for land to rent but very limited supply without grazing licences,’ explained Rod Christie of CKD Galbraith in Elgin. Yorkshire and Humber… Continue reading
