Weekly Property Round Up
Nick Sissling rounds up this week's property news, including where the most desirable and affordable UK property locations are, news of record highs in the London property market and consequently, reports that recent graduates are now being priced out of the capital completely.
US Real Estate Tops Influential Savills Report
Savills World Residential Investability Report rank US real estate top with the UK coming in fourth behind the UAE and Singapore.
The report highlighted low interest rates and improving economic conditions as the main factors for the improved confidence in US property. For the UK, investment returns are expected to approach 6% in 2015 – nearly double initial forecasts made at the start of the year.
Savills' research identified economic challenges in the far east as a main determinate of Central Banks holding off on interest rate rises until 2016 at the earliest. These low rates are expected to continue to attract foreign investors into markets such as the UK and US further pushing up yields on residential property investments.
The report also identified the Spanish real estate market as one area of main land Europe that should be viewed with some optimism. The growing feeling is that the trend towards forced sales and repossessions is coming to an end and the market will now begin to recover.
Property Week – Hot Housing Index 2015
Property Week has just released their annual index of the most desirable and affordable UK locations with Chester, Beverly and Crewe topping the list.
Areas that topped the list won points on factors such as affordability, job prospects, local amenities, connectivity to cities and school provisions. The top five places had average property values of around £200k and average household incomes of around £40k. This is in stark contrast to the top London location, Barnet, where despite average incomes being £10k higher at £50k, average property values stood at £580k.
Alongside Barnet, Croydon and Bromley were other areas of London that scored highly earning points for levels of internet connectivity, schooling and local amenities.
London House Prices Hit Record Highs
Average house prices in the Capital are now at a record high of £525,000. This new record for average house prices has meant that in 2015 prices have increased by 5.5%, far outstripping both forecasts and London wage rises.
The OFT has reported that in July alone a £12,000 rise in the average price was recorded. These figures have reiterated the resilience of London's housing market despite fears that increases in stamp duty will suppress and growth in the market in 2015.
The average price for first time buyers has risen from £405,000 to record high of £412,000. In 2015 estate agents have identified a shift in demand from more centrally located, high value properties to less expensive areas further from central London. Many agents have commented on a severe slowdown in the number of deals over £1 million as international investors have been put off by high tax incurred when purchasing high value real estate.
The market is expected to continue to be very active in the coming months as buyers and sellers look to finalise deals prior to the slow down over Christmas. It is therefore not impossible to conceive that a new record for prices to emerge before the end of the year.
Graduates Priced out of London
A study from the London School of Economics has found that a large number of graduates are staying away from London due to the huge costs of renting property and the enormous difficulties in finding affordable housing to buy.
Despite the dramatic rises in prices being great news for London home-owners, these findings are a threat to business owners as talented graduates are looking to other cities to start their career.
The report warns of a growing barrier to social mobility, with graduates from poorer backgrounds being less likely to migrate to the Capital to begin their careers. Deloitte has echoed this concern following research of their own that has identified 'prohibitive' costs of housing disincentives a large number of graduates from moving to London.