Posts with tag: central London property

Rise for Rents in London since December 2016, Landbay Index Reveals

Published On: July 9, 2018 at 7:59 am

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Rent prices in London have increased by 0.1% in the past year to June 2018, according to the most recent Landbay Rental Index. This is the first annual rental rise in the capital since December 2016.

There has been a lot of conversation concerning slowed rental growth in the capital which has dragged down the national average. However, rental growth finally returned to a promising territory this month.

Results provided by the index reveal that rent prices have soared in 25 of the 33 boroughs over the last six months.

The average rent paid for a property in the capital now stands at £1,884 per calendar month (PCM). This is still double the £764 per calendar month (PCM) in the remainder of the UK despite the vigorous market in London forcing rents down in recent years.

In other locations of the UK, rental development persisted to slow, with rents increasing by just 0.4% in the first half of the year.

Landlords have witnessed rental prices increase by 0.95% in addition to 0.70% respectively.

Contrastingly the northeast has lagged behind, with rents dropping by -0.08% this year.

In regards to a county level, Nottingham experienced the fastest rental increases this year, at 1.43% and 1.25%.

CEO of Landbay, John Goodall comments: “While there remains a huge degree of regional variation, the overall trend has been a slowing of rents across the UK in the first half of this year. However, much of this has been London weighing down heavily on otherwise resilient growth across the UK. Now that London rents have bounced back to growth this could all be about to change.

“Wherever they’re based, landlords have had to face a myriad of challenges over the past two years, with regulatory and tax changes reshaping the sector. Despite this, there has been little sign of them passing on additional costs to tenants. However, with a rate rise on the horizon, meaning a rise in the cost of borrowing for landlords, we may well start to see landlords increasing rents in the coming months to stay afloat.”

 

 

 

 

East-West Divide Growing in Central London Property Market

Published On: October 5, 2015 at 11:58 am

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Property sales in the prime central London market increased in the month to September, but the general slow mood of the year is continuing, as higher Stamp Duty costs are causing buyers to become more reserved.

These are the messages arriving from Knight Frank’s latest sales index for the capital.

For the whole region, annual price growth dropped to 1.3%, the lowest rate since October 2009. However, prices fell by over 3% in some areas to the west of central London.

East-West Divide Growing in Central London Property Market

East-West Divide Growing in Central London Property Market

The data also reveals that new prospective buyers decreased by 34%, but viewings dropped by just 4%.

An east-west divide appears to have manifested around Hyde Park, with prices rising to the east, in Islington, the City of London, Marylebone and Mayfair, but falling in the west, in Notting Hill, South Kensington and Knightsbridge.

The report states that the divide is possibly due to a greater proportion of larger homes in the west, which are now affected by higher Stamp Duty.

Head of London Residential Research at Knight Frank, Tom Bill, comments: “Underlying demand remains strong but buyers have become more circumspect and stringent in their requirements due to the Stamp Duty increase.

“This heightened price sensitivity among buyers has resulted in a flight to quality, meaning demand is particularly strong for properties in the best condition and on a prime floor, street or square.

“So, while the anticipated gear change materialised as summer moved into autumn, there was no sense the market is entering full-blown recovery mode after what has been a subdued 2015.”1

Director of W.A. Ellis, Richard Barber, adds: “Transaction levels have been down throughout the spring and summer months and, whilst some of this reduction may have been due to election jitters, it is now apparent that the increase in Stamp Duty is the main driver behind this trend.

“Whilst the Government may not wish to admit that HMRC’s Stamp Duty revenue has diminished by £1.5 billion in the first six months of 2015, compared with the previous six months, it is unlikely that George Osborne will reduce the new levy at this stage in the political cycle.

“With lower transaction levels across prime central London, it is clear that quality is a priority for buyers, notably, the most recent transaction within our prime central London postcodes have all been properties of the highest quality with exceptional attributes.”1 

In the lettings sector, Knight Frank reports that annual rental growth fell to 2.4% in September, the lowest figure since September 2014.

This decline is thought to be the result of contagion from the Chinese economic crash, with firms more hesitant to recruit or spend on relocation for senior executives.

This has caused the number of agreed tenancies in the three months to August to fall by 5.9% over the year and the amount of viewings to decrease by 10.2%.

Knight Frank expects this trend to continue in the short term.

However, the report found that the trend is less clear in the lower and higher price ranges, with demand among young professionals remaining strong, but demand in the super prime market of £5,000 per week and over has “been buoyed by the fact tenants have moved across from the sales market due to the Stamp Duty increase”1. 

1 http://www.propertyindustryeye.com/stamp-duty-changes-create-eastwest-divide-in-prime-central-london/

 

Mayfair Sets New Record High Monthly Rent

Published On: September 27, 2015 at 12:39 pm

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Mayfair Sets New Record High Monthly Rent

Mayfair Sets New Record High Monthly Rent

The London property market is split between those struggling to save a £50,000 deposit for their first home and those spending more than this on their weekly rent.

Now, a property in one of central London’s most exclusive neighbourhoods has set a new record high rent price, according to Knightsbridge-based letting, management and advisory service, Tunstall Property and property data analysts, LonRes.

The house, on Brick Street in Mayfair, is being rented for over £216,000 per month, surpassing the record set last year by One Hyde Park, a luxury apartment block in Knightsbridge.

Mayfair is famous for being a property hotspot for the super-rich. With its Michelin star restaurants and designer boutiques, mansion owners are in their element.

Managing Director of Tunstall Property, Mark Tunstall, says: “Prime central London has a lot to offer and each neighbourhood has a distinct appeal to certain ultra-prime tenant groups.

“The ‘Golden Triangle’, formed by the neighbourhoods of Mayfair, Belgravia and Knightsbridge, commands the highest rents.”1

1 http://www.homesandproperty.co.uk/luxury/property/londons-most-luxurious-rental-homes-mayfair-sets-new-record-ultra-prime-rents-top-ps216k-month

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Central London Property Prices Drop by 12%

Published On: August 14, 2015 at 1:04 pm

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Prime central London house prices have dropped by around 12% in the second quarter (Q2) of this year, according to the Land Registry.

Asset management firm, London Central Portfolio (LCP), has analysed the data. It says that the central London market is “fragmenting” due to higher taxes in the upper end of the market, such as increased Stamp Duty for homes worth over £1.125m and the annual tax for enveloped dwellings, which now applies to properties worth more than £1m.

Despite annual growth of 6.6%, prices have dropped by 11.9% from Q1 2015.

Prime Central London Property Prices Drop by 12%

Prime Central London Property Prices Drop by 12%

However, flat and maisonette prices in this sector have grown at above average rates, rising 1.7% on Q1 and 11.9% over the past 12 months.

Chief Executive of LCP, Naomi Heaton, comments: “The new quarterly Land Registry results confirm the current state of play in the market, where there is a fast lane and a slow lane, with the brakes firmly on at the more expensive end.

“This comes as no surprise. Pre-election clouds loomed over central London for many investors at the beginning of the year, suppressing buyer activity. Ramadan and the traditionally quiet summer period has held back any conspicuous recovery.

“Coupled with some hard to swallow taxes for higher end properties, this period of subdued sales and price growth was anticipated.

“However, those targeting the mainstream private rented sector, ducking under the £1m mark, are still making sound investment decisions. As a commercial asset class, this market tends to be far less volatile and we anticipate a strong performance as investors return to the market.

“One word of warning: current annual growth levels of nearly 12% for flats and maisonettes are unlikely to be sustained. For the last four decades, average growth has been 10.4% per annum, so a tapering off of quarterly growth rates is still likely, to bring prices back in line with long-term trend.”1

Overall house prices in prime central London have risen by 8.3% in the last year, to an average of £1.509m.

Transactions dropped by 21% in the same period, to 5,170 for the year. This is the lowest figure since 2009. An annual fall of 27.6% in the houses sector worsened the fall.

The average property price in Greater London is now £537,308, an annual rise of 6.7% and up 2.2% on Q1. Transactions in Greater London dropped 9% over the past 12 months.

Across England and Wales, the average price in Q2 was £265,776, up 4.4% on the year and 1.4% on Q1.

There were a total of 844,030 sales in the last year, up 18.4% on Q1 2015.

Excluding the capital, the average price is £227,871, according to the Land Registry’s quarterly data. This is much higher than the £181,619 reported in the Land Registry’s most recent monthly house price index for June. The two figures were calculated using different criteria.

1 http://www.propertyindustryeye.com/prime-central-london-house-prices-drop-by-12/

 

Central London Prices to Grow by 18% in Next Five Years

Published On: June 10, 2015 at 3:39 pm

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Property prices in central London are expected to increase by 18% in the next five years and rents will rise by 19.5%, as the market picks up after the general election, a report suggests.

The recent analysis claims that the uncertainty surrounding the election last month caused a stagnant housing market in London, with the rate of house price growth at under 4%, compared with the 9.6% rise seen in 2014.

The capital was preparing to be most affected by the proposed rent caps and mansion tax. However, neither of these pledges will be followed through after the Conservatives surprisingly won a majority.

Central London Prices to Grow by 18% in Next Five Years

Central London Prices to Grow by 18% in Next Five Years

However, the research from international real estate consultant, Cluttons, indicates that the damage to both domestic and international buyers’ confidence was seen in a drop in demand during the first quarter (Q1) of 2015. Vendors were withdrawing properties from the market and buyers were waiting to see the outcome.

Cluttons’ International Research and Business Development Manager, Faisal Durrani, says: “There is no doubt that the results of the general election have helped to re-inject confidence into the market that had receded early on this year.

“The outlook for the London housing market has stabilised, while buyers and vendors have returned to the market following a conspicuous absence of activity. Our outlook for the rest of the year is for increased stability in the market and a return to a more normal state of activity.”

The report also revealed that, despite the Mortgage Market Review (MMR) causing a 16% annual fall in mortgages in Greater London to March 2015, affordability seems to be improving slightly, with the average home loan size declining to 3.86 times annual income in Q1.

However, internationally there are still risks. Durrani explains: “International risks, such as the threat of another Scottish referendum, a disorderly Greek exit from the European Union and a potential Brexit, mean that the market has moved from a situation of having several unknown unknowns to being left with a handful of known unknowns. A Brexit remains the biggest threat as the impact on the economy is the biggest unknown at this stage.”

Cluttons predicts slight central London house price growth of between 2-3% in 2015, before rising to almost 5% in 2016 and steadying at around 4% per year between 2017-19. Cluttons believes this level of growth will deliver cumulative capital value appreciation of around 18% in the next five years.

Expectations for the prime central London rental market are stable, at 4% per year for the next five years.

Cluttons says that affordability and the desire to buy a home are still key challenges for the capital’s renters and although supply is increasing, the strong rate of job creation in London will complement this.

Durrani comments: “The more subdued growth forecast by a number of factors, but the propensity of tenants to show less geographic loyalty now means that households are not put off by the idea of moving out of the prime core in search of lower rents.

“The key driver of course for this behaviour is the desire to purchase. The breach of affordability thresholds now means that the rippling out of buyer activity from the prime core markets has meant that Greater London boroughs such as Newham, Lewisham and Enfield have all emerged as the capital’s three best performing markets over the last 12 months, according to data from the Land Registry.”1 

1 http://www.propertywire.com/news/europe/central-london-property-market-2015060910608.html

 

Garden square view houses in value boost

Published On: May 21, 2015 at 10:37 am

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An interesting new home value survey has suggested that a property with a view of one of London’s many garden squares inflates prices by as much as 10%.

The report from letting agent Knight Frank studied the performance of thousands of properties in central London between 2008 and 2014. Findings indicated that houses in addresses such as Kensington Square with garden views performed better than other nearby properties without views.

High-performers

Strong performances were recorded in the SW3 Chelsea and SW7 South Kensington postcode areas, where outperformance was found to be 16.2% and 15.1% respectively.[1]

It was also found that garden squares houses faired better after the downturn caused by the financial crash. Prices for these properties fell by an average of 18%, in comparison to the 24% recorded for prime central London locations as a whole.[1]

Garden square view houses in value boost

Garden square view houses in value boost

 

Liam Bailey, global head of research at Knight Frank, commented that, ‘ prime property across London has performed strong over recent years.’ He went on to say that, ‘it is still notable however how much more resilient property near garden squares have shown itself to be through the recent circle. It is also instructive to note how one of London’s most iconic urban forms adds value to property.’[1]

The survey from Knight Frank was carried out in conjunction was Earls Court developers Capital and Counties, who are building a new garden square as part of their Lillie Square project.

[1] http://www.standard.co.uk/news/london/view-of-a-garden-square-boosts-london-house-price-by-ten-per-cent-10257436.html