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Home leasing market in Hong Kong stable but flat
The residential leasing market in Hong Kong remained largely stable in the first quarter of 2015 but is experiencing low demand and slow take-up, according to a new research report. Average luxury apartment rents have now bottomed out, and the vacancy rate has fallen to a new low, the latest residential leasing report from Savills World Research. It shows that rents on Hong Kong Island rose by 2% in the first quarter of the year amid the bottoming out of luxury rents. Leasing was mainly active in the rental range of HK$50,000 to HK$80,000 per month. Townhouse rents also stabilised, down about 30% since their peak in 2011, with fewer vacancies and the report says that landlords have been very flexible in terms of lease renewal and are generally not willing to let units stand vacant. ‘Whilst this has attracted some new tenants to the townhouse market, few transactions have been reported and leasing volumes in the townhouse market remain thin,’ said Simon Smith, senior director for Savills Asia Pacific. The report suggests that leasing activity has been driven by a variety of sectors setting up new or additional offices in Hong Kong, mainly in retail and IT services. ‘Landlords are utilizing the stable rental renewal growth rate in prime areas to maintain occupancy levels,’ added Smith. On the demand side, Savills does not note any large expansion from the financial sector, where demand is largely flat, however, the report says that some new small to medium sized financial tenants have set up office in Hong Kong, which increases slightly the demand in the leasing market. New residential developments, such as Azura in Mid-Levels, are gradually entering the market for lease which the report says will gradually help to ease the tight stock situation. In Kowloon, rents are supported by local families who are looking to traditional districts such as Kowloon Station and Kowloon Tong. Vacancy rates in these traditional areas are also falling as vacancies are being filled quickly. Indeed, rents in Kowloon rose by 4.5%. ‘Looking ahead, we expect that the leasing market has now bottomed out, and luxury apartment rents are likely to see 0% to 5% growth in 2015, supported by tighter availability,’ said Smith. The report also says that in the serviced apartment market occupancy is rising alongside tightening vacancy rates in the luxury leasing market. Rents for serviced apartments rose by around 2% in the first quarter of 2015. Continue reading
UK first time buyers waiting longer to get on housing ladder, new research suggests
First time buyers in the UK are having to wait longer than planned to take their first step onto the property ladder according to new research. Some 65% have had to wait longer than they hoped to move into their dream home, while only 8% managed to become a home owner quicker than planned, the first time buyer’s survey from Clydesdale and Yorkshire Banks shows. The figures show a slight improvement on the previous 12 months when 68% had to delay getting on the property ladder, however the largest percentage, 17%, of those who are unable to meet their home ownership deadline are waiting between one and two years longer than planned. The challenge to get on the property ladder means that the majority of new home owners plan to stay in their first property for a number of years. Some 21% plan to stay for between four and five years with 19% having no intention of moving from their home for nine to 10 years. In both the Midlands and the North East the largest percentage plan to stay in their first home for between nine and 10 years in comparison to London, South West and Wales where the highest number aim to keep the keys to their first home for between three and four years. ‘Clydesdale and Yorkshire Banks have extensive experience of helping first time buyers get onto the property ladder and we know how difficult it can be to buy your first home,’ said Steve Fletcher, director of retail banking. ‘It is positive that our research shows that there is a small improvement on the previous year, however almost two thirds of first time buyers still face challenges in meeting their own timescales for being a home owner,’ he added. Clydesdale and Yorkshire Banks are currently offering a range of first time buyer mortgages with a £1,000 cashback. These include a three year fixed rate mortgage with a 90% LTV with a rate of 3.59% and a three year fixed rate mortgage with a 95% LTV and rate of 4.89%. Continue reading
Lending to first time buyers in the UK falling, latest CML data shows
First time buyer and house purchase lending in the UK has slowed, according to the latest figures from the Council of Mortgage Lenders. The figures show the full impact of new mortgage rules introduced a year ago and suggests that people are staying put for longer with mortgage pricing at record lows. The total number of loans advanced to first time buyers in March was up 20% compared to February but 5% down compared to March 2014. First time buyers borrowed £3.4 billion, which was up 21% on February and 3% up on March last year. Loans to home movers increased by 14% compared to February but was down 3% year on ear. These loans were worth £4.9 billion, up 17% on February and 7% compared to March 2014. Remortgage lending increased 19% month on month and 6% year on year. The value of these loans at £4.2 billion also increased month on month by 24% and was up 14% year on year compared to March 2014. Buy to let loans also increased month on month and year on year, up 12 compared to February and up 21% compared to March 2014. These loans were worth £2.7 billion, up 13% compared to February and up 35% on March 2014. The quarterly figures show how much lending has slowed. First time buyers took out 61,300 loans in the first quarter 2015, down 24% on the fourth quarter of 2014 and 11% down on the first quarter of 2014. They borrowed £9 billion, down 23% on the fourth quarter of 2014 and a year on year decrease of 5% compared to the first quarter of 2014. Home movers took out 70,400 loans, a decrease of 25% compared to the fourth quarter 2014 and a decrease of 11% year on year. These loans totalled £13.5 billion, down 22% on the previous quarter and 5% down year on year on the first quarter of 2014. Remortgage lending increased quarter on quarter with 75,400 loans advanced, up 3% on the fourth quarter 2014 but down 5% on the same quarter last year. The value of these loans at £11.8 billion also increased quarter on quarter by 6% and was up 2% year on year compared to quarter one of 2014. There were 52,300 buy to let loans advanced in the first quarter of 2015, down 3% on the previous quarter but up 15% on the same period in 2014. These loans were worth £7.8 billion in value, up 1% compared to the first quarter and up 28% on the first quarter of 2014. ‘It was a slow start to activity in the first couple of months of 2015 but the market started to get out of the dip in March, a trend that we think will continue as the year goes on,’ said Paul Smee, director general of the CML. ‘We will have to wait and see how the housing market reacts to the general election result and the… Continue reading
