Tag Archives: shows
British prime farm land values continue to rise, but at a much slower pace
Prime farm land values in Great Britain increased by 0.5% to £9,900 per acre, much slower than previous quarters in recent years, the latest available data shows. According to the Farmland Value Survey from Savills it suggests that the ‘bull run’, driven by the top end of the market, in average capital value growth is slowing. In the first quarter of 2014 and 2013 the corresponding figures were 1.4% and 1.8% respectively. Quarter one growth was principally concentrated in the southern regions of England and in the East Midlands, where quality farms and estates dominated the market. Average prime arable farmland growth in these regions was 0.4% in the South East, 3.5% in the South West and 0.6% in the East Midlands. All other regions recorded zero growth and the data also shows that values continue to be highest in the East of the country. It points out that average values continue to mask the diversity in the market with sales at values in excess of £15,000 per acre being achieved for the right farms. ‘This end of the market continues to be driven by quality and location with large commercial arable farms and high quality estates attracting the strongest demand,’ the report says. ‘The trend of limited supply continues and, whilst remaining historically low, shows a slight increase on the first quarter of 2014. Supply remains at close to the lowest levels ever recorded, similar to 2001 during the foot-and-mouth outbreak and 2004 during the run-up to the introduction of the Single Farm Payment Scheme,’ the Savills report explains. It also points out that the lack of clarity surrounding the potential outcome of the general election coupled with pressure on farm incomes is creating some uncertainty. Overall just over 15,250 acres of farmland were publicly marketed across Great Britain during the first quarter of 2015, a 9% rise, amounting to 1,320 acres, on the same period of 2014. In the first quarter of this year the increased activity was concentrated in England with 26% whilst the levels of supply continued to fall in Scotland by 10% and Wales by 53%. Across England there were some significant regional differences during the quarter. Large increases in supply were recorded in the East Midlands at 280% and the South East of England at 362%. In the South East of England activity was boosted by two large properties in Hampshire at 1,600 and 1,000 acres. In contrast, decreases in the supply of farmland were recorded in the East of England with a fall of 30%, the North of England down 37% and also in the South West of England with a fall of 11%. Although activity in the South East of England was dominated by two large farms the market in the first quarter predominantly consisted of a larger number of smaller farms suggesting that pressure on incomes and cash flows may be having some effect Savills does not expect a significant change in the overall levels in the… Continue reading
US rents starting to outpace house price growth, new analysis shows
Residential rents in the United States are continuing to rise, up 3.7% year on year to $1,362 a month and keeping pace with house price growth of 3.9% over the same period. The latest data from real estate firm Zillow shows that in 17 of the nation’s 35 largest metro areas, annual rental growth exceeded annual house price growth in March. This is in line with expectations as the firm predicted at the end of 2014 that annual rent growth would outpace house price growth by the end of 2015. It now says this will happen well before the end of the year. But while overall home values in the nation as a whole may still be growing more quickly than rents, in many large metro areas, rental growth has surged ahead over the past year. Of the 17 metro areas where rents are growing more quickly than home values, the biggest differences are in San Francisco with rents up 14.8% year on year and home values up 9.6%. While in Kansas City rents are up 8.6% and price up 4%, and Pittsburgh it is 6.3% and 4.3% respectively. March represents the first month in two years in which annual home value growth was less than 4%. For 24 months, home owners have watched their homes appreciate at a pace well above historic norms at around 3% annually. According to Zillow rising rents themselves are a double edged sword for the purchase market. As current tenants see more and more of their income going to landlords that keep raising the rent, many are likely to opt for the relative stability of homeownership. And home ownership, in addition to offering stable payments over many years, is also an incredible bargain right now. Current US renters making the median national income can expect to pay about 30% of their income to afford the median US rental property, up from about 25% historically. Buyers, on the other hand, thanks to very low mortgage interest rates and home values that, for most local markets, remain below their pre-recession peaks and should expect to pay only 15% of their income on a mortgage, down from about 22% historically. The Zillow analysis also points out that homes to buy remain scarce, and those homes being built are often focused at the high end, and not at current renters that are likely looking to buy more entry level homes. Continue reading
Prime London market sees more first time buyers
More first time buyers are active in the prime London property market with fewer real estate investors in the sector in the first quarter of this year, new research shows. While investors continue to account for the majority of house purchases made across prime London, this margin has narrowed significantly, according to estate agent Marsh & Parsons’ latest London Property Monitor. Some 29% of prime London property purchases were made by an investor in the three months to March 2015, down from 37% at the end of 2014 but first time buyer sales increased from 21% of all purchases in the last quarter of 2014 to 28% in the first quarter of this year. The rise in first-time buyers has caused the number of prime transactions funded by mortgages to jump 17% in the past three months and over the past three months, demand for prime London homes has risen by 20%. As a result, heightened competition for available homes on the market has pushed the ratio of registered buyers per property up from 10 in December 2014 to 12 in March 2014, the data also shows. ‘First time buyers have been riding a wave of fortuitous circumstances recently with almost unheard of mortgage rates, reduced up-front stamp duty costs, and support schemes like the Help to Buy ISA inflating confidence,’ said Peter Rollings, chief executive officer of Marsh & Parsons. ‘Combined with a more accessible pace of property price growth so far in 2015, many more have been able to take the plunge into the property market. Prime London property has always been a bastion of investment, but it’s encouraging to see the drawbridge being lowered for everyday Londoners who live and work in this city,’ he explained. ‘However, there is, and has always been, some aspirational prime central areas that are out of grasp for new buyers, and will remain an investment stronghold. Addresses like Kensington and Chelsea resonate around the world, and will forever entice buyers looking for unparalleled capital returns,’ he added. The report reveals that as a result of this strong demand for starter homes, one bedroom properties in prime London have seen the biggest increase in value over the past 12 months with average values up 5%, compared to 1.7% annual growth across the market as a whole. This means the price of a typical one bedroom property in London has risen by £75 a day over the past year. Similarly, one bedroom properties are highly sought after as buy to let investments, with rents appreciating at the fastest rate of all property types across the capital. The average weekly rent for a one bedroom property has risen 5.8% year on year in more affordable outer prime areas of London, popular with young professional renters. ‘With more and more young professionals climbing onto the property ladder, one bedroom properties have outperformed the market across prime London…. Continue reading
