There’s no denying that Brexit has been a divisive issue since the referendum vote of June 2016. And while we don’t formally leave the EU until March 2019, there have been various effects on the economy and, of course, property.
While the initial burst of doom and gloom predictions surrounding the economy didn’t come to fruition, there has been a surge of interest in property around the UK which has boosted regional areas. Continue reading →
The uncertainty surrounding Brexit and the ongoing negotiations has led to questions over the future of every sector of business. And commercial property is no different.
Following the vote in June 2016, investment in commercial property did fall somewhat. Hotels, office space and retail properties took the biggest hit. However, there is still plenty of demand from tenants and, while initial numbers suggested tentative behavior, it could be a market correction, not a crash. Continue reading →
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.
Developers and the construction industry are continuing to do their upmost to lift the country from the housing crisis with the latest figures revealing that new house building increased in July, up 5.6% on the previous year.
Output is increasing
The amount of orders being placed for new homes increased by a massive 25% between the first and second quarter of 2016, which is the highest increase since 1967 when growth rose to 44.1%.
A major factor in the increase was the amount of new orders being received in the second quarter of the year for private new houses, which increased by 28.2% to a level of £3.5billion. That level is the highest second quarter for nine years when, back in 2007, it was £3.6billion.
Once again, the quarter on quarter increase highlights that the gloomy Brexit predictions are yet to be realised.
Richard Carr comments on recent reports, which suggest that Asian investors are increasingly expressing interest in the British property market. Asian investor interest, these reports indicate, has climbed in the wake of Brexit.
Before the referendum, many experts raised fears that Brexit would dampen UK real estate sector activity. However, recent research indicates that the number of residential properties advertised for sale in the UK rose following Brexit, while average British house prices decreased by 0.2% on average. Meanwhile, mortgage availability remains mostly unchanged after the vote.
Previous research shows that despite Brexit, the UK’s housing market remained strong in June 2016. A new study from CBRE, a leading commercial property adviser, indicates that sturdy economic fundamentals will support British house price growth throughout 2016.
Encouraging price growth
Property Wire writes that CBRE sees current British house value growth of 5.1% as encouraging. The commercial property adviser added that UK residential property prices should expand by an average of 3% in 2016. In the second quarter of 2016, house price growth was strongest in the Outer Metropolitan area (12.4%) and London (9.9%), but weakest in the North (1%), year-on-year.
Despite the many warnings and concerns that were raised ahead of the UK’s referendum in June about a possible collapse of the housing market, the industry has remained strong according to the latest analysis.
There has been more good news for the property market this week with new data showing that the number of planning application approvals for new homes in London has increased by 46% on last quarter, writes property developer Richard Carr.
Planning approvals on the rise in the capital
Richard Carr believes this rapid increase shows that there is plenty of confidence in the market at the moment with planners putting more applications in and authorities working quicker and more effectively to get them approved.
If the government are to have any chance of getting the country out of the current housing crisis this has to continue.
In the second quarter of 2016 some 6,310 new homes were approved out of a possible 8,280 applications, an approval rate of 76%, according to the London New Homes Monitor from estate agents Stirling Ackroyd.
As property developer Richard Carr predicted, much of the post-Brexit gloom is lifting and many markets are predicting positive outlooks heading into 2017.
Brexit looks set to offer new opportunities
The fluctuations in many markets following the UK’s decision to leave the European Union are beginning to right themselves with the real estate market uncertainly appearing to be shorter lived and less severe than many investors first feared, according to new analysis.
LaSalle Investment Management’s mid-year Investment Strategy report said that the correction in real estate pricing is expected to be largely restricted in the next 18 months, whilst medium term capital inflows into real estate will only be interrupted, not reversed.
Also, besides from the country’s slightly unclear political landscape, given the UK’s ultra-low interest rate and bond yield environment, real estate yields are only expected to increase by 40 to 50 basis points by the end of 2017.