Fresh evidence indicates that demand for UK commercial property increased in the third quarter of 2016. Richard Carr comments.
Commercial property is becoming increasingly critical to the British economy, now accounting for 10% of the country’s net wealth. Data from PIA (Property Industry Alliance) indicates that the combined value of the UK’s commercial property stock rose by 11% from 2014 to 2015, to reach £871bn. Continue reading →
Recent commentary from a UK-based estate agents suggest that British house prices are experiencing a ‘reverse ripple’ effect, as Central London loses its influence over the rest of the nation.
Traditionally, UK house price rises originate in Central London. The heart of our capital is home to some of the biggest businesses and wealthiest individuals on earth, so demand for Central London property has been high historically. This pushes up Central London residential property values, sparking a ripple which hits outer London, then South East England and finally the rest of the nation. Continue reading →
Recently released statistics indicate that following the fall-out from the UK’s decision to leave the EU (Brexit), demand for Central London office space is now picking back up. Richard Carr comments.
Demand for Central London office space is now picking back up.
Central London is the beating heart of the UK economy. Many global firms have their European headquarters in Central London. This allows global companies to benefit from the UK’s advantageous business laws and taxes, while providing easy access to the EU’s +500m-strong single market.
Experts worried that Brexit would damage Central London’s commercial real estate market, believing that global firms may flee to continental cities like Frankfurt and Paris. These fears were compounded by Prime Minister Theresa May’s announcement that the UK will opt for ‘hard Brexit,’ prioritising sovereignty over the single market. Did this spark an exodus of global firms from Central London?
Leading industry body the Property Industry Alliance (PIA) recently released landmark research. According to PIA, the collective value of UK commercial property climbed to an all-time high last year.
According to PIA, the collective value of UK commercial property climbed to an all-time high last year.
British commercial real estate remains attractive to both domestic and foreign investors. Towards the close of 2015, research carried out by Propertydata suggested that UK commercial property investment would reach record highs of around £70bn. PIA’s recently released figures indicate that high investor demand sent the collective value of British commercial real estate soaring an all-time high in 2015.
New figures from the Office For National Statistics (ONS) indicate that average UK house price growth increased in the year to August 2016, defying expectations. Richard Carr comments.
UK house price growth increased in the year to August 2016, defying expectations
In June 2016, the UK voted to abandon EU membership (Brexit). Many experts believed that Brexit would curtail the British residential real estate sector. ONS figures for July 2016 seemed to validate this concern. According to the agency average UK house prices expanded by 9.3% in the year to June 2016, falling to a growth rate of 8.3% in the 12 months to July 2016, but the market now seems to be picking up.
In April 2016, new tax measures went into effect which were designed to curtail UK buy-to-let activity, imposing higher operating costs on landlords. It appears as though reports concerning the death of the UK’s buy-to-let sector have been greatly exaggerated, new data suggests.
Buy-to-let landlords are now “staging a fight back against government efforts to rein in” the market.
The introduction of specialist buy to let mortgages in 1996, made it easier for people to become private landlords. According to the Telegraph by 2014, one in five UK homes were owned by private landlords, with this figure expected to increase to one in three by 2032, exacerbating the UK’s ongoing housing shortage. The UK’s property supply is rising, with the number of new homes available climbing by 41% in August 2016, but even now, there is a strong shortage, forcing more people to rent rather than buy.
Hometrack, a research group which analyses the UK’s property market, has released a ground-breaking new study, showing where British residential real estate values have climbed over the past year and decade. Drawing on this research, Richard Carr asks: where are the UK’s next property hotspots?
The UK’s residential property market is going from strength to strength. Despite the UK’s recent decision to leave the EU, which many experts believed would dent market activity, the sector kept on growing. In a survey of Royal Institution of Chartered Surveyors members, 8% said they saw buyer enquiries increase since September 2016. In June, before the vote, 34% said that they experienced a fall in enquiries.
Some experts believed that the UK’s decision to vote to leave the EU, would damage London’s commercial property sector. The theory was that overseas investors, who are critical to the market, would begin to shy away from London, as it would no longer be able to serve as a springboard to the EU. New figures have shown Richard Carr that this theory does not seem to hold water.
Overseas investors comprised 78% of commercial real estate bought in Central London
In the aftermath of the referendum, the value of the British Pound dropped to its lowest point since the 1980s. Prime Minister Theresa May recently announced that the UK will adopt a ‘hard Brexit’ policy, potentially cutting it off from the EU’s single market and costing the UK up to £66bn per year. After this, the value of the Pound dropped to a lower point against the dollar.
This has been good for foreign investors, as they now receive more Pounds for their currency, increasing their buying power. A recent report from Arcadis suggests that current market conditions are great for overseas players looking to invest in London’s commercial and residential property sectors. Figures from Savills shows that investors are now flooding into London’s commercial real estate market.
London’s housing crisis continues to worsen as the latest research suggest that the majority of housing in the least affordable areas of London is on average eight times the cost of the average UK wage, writes property developer Richard Carr.
The housing value vs wage ratio continues to grow
According to eMoov, London as a whole has average house prices which succeed the average wage by 14 times!
Unsurprisingly, both London and Kensington top the list with the average property price at £1.2m. The price of property in the borough is a ridiculous 46 times the average wage of £26,624 and the nation’s biggest gap in wage to property ratio by a long way.
Following eight months of steady progress the UK’s residential property market is picking up with prices and buyer demand rising, writes property developer Richard Carr.
Property market enjoying post Brexit growth
According to the Royal Institution of Chartered Surveyors (RICS), 8% of surveyors reported an increase in buyer enquires in September 2016, which is a significant turnaround based on June when a net balance of 34% of respondents report a drop.
Despite this small positive there’s still the major use around the supply of new homes. As a result, the number of new instructions being received by agents fell once again meaning the average level of stock on estate agents books remains close to historic lows at just over 45 properties.