This document provides a summary of the UK residential property market for Autumn/Winter 2014. It discusses trends in different London property markets like Prime Central London, Outer Prime London, and the Super Prime market. It also looks at property trends outside of London, in areas like cathedral cities and market towns. The document discusses factors like economic conditions, interest rates, transaction volumes, house price growth, rental values, and supply issues that may impact the market in the coming year.
Please find the latest in our suite of Residential research reports, the Spring 2016 New Home Residential View.
In this edition we include a focus on which of the London Borough’s most need to increase their new home construction rates, and also which local markets in the regions are most reliant on the Help-to-Buy equity loan scheme.
If you have any questions regarding the report, or would like any further information, please feel free to contact me. lee.layton@carterjonas.co.uk
Carter Jonas New Homes Residential View - Winter 2016Lee Layton
What type of new homes are we building, where are we building them and are they the right type of property for their local market? These are three important questions that we
aim to answer in the latest edition of the Carter Jonas New Home Residential View.
Welcome to the Cushman & Wakefield Atlas Outlook 2016,
an update on the International Investment Atlas that reviews
how the market performed last year and, more particularly,
what we should anticipate for the year ahead.
We have examined a series of questions when approaching this publication:
what are the key forces driving and transforming the global market? Who will be
the winners in this volatile environment? How should a subsequent investment
strategy be most advantageously aligned?
Of course, in a highly uncertain but fast changing world, the need for insightful
research is increased – but the task of delivering a robust and well-considered
view is made more difficult. By bringing together expert opinion from across our
capital markets, occupier and research teams around the world, we have sought
to answer this challenge and hope you agree we have delivered a concise but
thoughtful review of the state of the market and the outlook for the year ahead.
Please find the latest in our suite of Residential research reports, the Spring 2016 New Home Residential View.
In this edition we include a focus on which of the London Borough’s most need to increase their new home construction rates, and also which local markets in the regions are most reliant on the Help-to-Buy equity loan scheme.
If you have any questions regarding the report, or would like any further information, please feel free to contact me. lee.layton@carterjonas.co.uk
Carter Jonas New Homes Residential View - Winter 2016Lee Layton
What type of new homes are we building, where are we building them and are they the right type of property for their local market? These are three important questions that we
aim to answer in the latest edition of the Carter Jonas New Home Residential View.
Welcome to the Cushman & Wakefield Atlas Outlook 2016,
an update on the International Investment Atlas that reviews
how the market performed last year and, more particularly,
what we should anticipate for the year ahead.
We have examined a series of questions when approaching this publication:
what are the key forces driving and transforming the global market? Who will be
the winners in this volatile environment? How should a subsequent investment
strategy be most advantageously aligned?
Of course, in a highly uncertain but fast changing world, the need for insightful
research is increased – but the task of delivering a robust and well-considered
view is made more difficult. By bringing together expert opinion from across our
capital markets, occupier and research teams around the world, we have sought
to answer this challenge and hope you agree we have delivered a concise but
thoughtful review of the state of the market and the outlook for the year ahead.
Capital Markets Industry Insights - Q1 2016Duff & Phelps
Prospective middle-market issuers are being greeted with robust demand from both traditional private credit investors and crossover public market participants. While monetary policy concerns weighed heavily on market participants for much of the first quarter, the Fed’s more dovish posture of recent weeks has triggered an increase in risk appetite across the credit markets.
Olivier Desbarres: Sterling: this lady's not for turningOlivier Desbarres
There are multiple factors behind Sterling’s collapse in the past fortnight to decade lows and the question remains whether these factors will reverse any time soon.
At the top of the pyramid of causes for Sterling’s demise, in my view, is not the UK’s large current account deficit or Bank of England (BoE) policy but the stance on EU membership which Prime Minister Theresa May has adopted.
So while Sterling’s greater competitiveness may eventually drive FX inflows into the UK and help Sterling to recover, financial markets and investors are likely to continue to take their cue from the British government near-term.
Simply put, if Theresa May continues down of the path of “Hard Brexit”, however ill-defined, Sterling is likely to remain under pressure.
However, history shows that while EU leaders have a tendency to drag their feet over key issues, they are able and willing to eventually find some kind of compromise.
Moreover, Theresa May will be subject to the will of her own Conservative Party – which on the whole supports membership of the UK or at least a softer form of exit from the EU – and of the people.
While the BoE would prefer a more stable currency and lower yields, there is probably little than it can (or should) do near-term beyond trying to reassure markets, investors and households.
Technology, Business Services, Industrials, Financial Services and Transportation & Logistics were the most active sectors, accounting for 65% of total deal volume.
Autumn Buyers Guide
Do your property buying research without having to spend your whole weekend searching the web. This reference guide for home buyers and investors from ING Direct will quickly bring you up to speed on house and unit prices and suburb affordability across Australia.
Another Year Another Medal
U.S. industrial absorption is on track to finish 2018 with its third
strongest net occupancy growth, behind only 2016 and 2014.
Considering the strong economic fundamentals, there is no
indication that demand will soften in the final quarter of 2018.
This means that the three strongest years of industrial
occupancy growth since the 1980s will have occurred in the last
five years. Looking forward, the combination of limited new
product and high utilization rates of existing footprints will
translate to strong performance for Class A product and
improved performance for Class B and C product.
During the second quarter of 2016, acquisitive middle-market issuers capitalized on lenders’ increased risk appetite by entering into attractively priced and structured financings. The dramatic rally in Treasury yields (and other safe haven assets) triggered by the “Brexit” referendum at quarter’s end, augurs well for further improvement in domestic credit market conditions.
Looking Ahead... Webloyalty's Easter Retail Research 2014Webloyalty UK
The latest research report from Webloyalty and Conlumino looks at Easter retail trends, and what we are planning for the Easter break. The report also reveals the nation's favourite chocolate Easter egg!
-U.S. Office Market Was Driven by the Tech
Sector in the Fourth Quarter of 2018
-Absorption exceeds construction completions, vacancy
declines and the pipeline grows
-Tech markets tighten
-Rents rise, but the pace slows:
Retail Lives
Economic fundamentals continue to strengthen in the
U.S., a trend that is expected to endure through
mid-2019. With continued wage growth acceleration
and consumer confidence near an 18-year high, the
retail marketplace has registered solid spending.
Inflation-adjusted consumer expenditures show a
steady 2.5-3% year-over-year (YOY) growth pattern
since the beginning of 2016. eCommerce sales
accounted for approximately 11.5% of retail sales
(excluding auto sales) in 2017. While we expect that
penetration rate to climb to 14.0% by 2019, physical
stores remain vital to retailer survival in this evolving
retail climate. Despite what the media would lead you
to believe, the overall retail industry is still posting
gains even while it faces secular challenges.
In this special edition of Valuation Insights, we discuss some of the key valuation and compliance impacts that will likely result from Brexit. Specifically, we review the short-term and long-term economic implications, as well as compliance and regulatory considerations. We also highlight valuation issues, including how companies and investors determine cost of capital and measure risk in the current environment, and discuss implications for transfer pricing with respect to EU Directives. While all industries will be impacted by Brexit, in this issue we focus on the banking and financial services sectors, which stand to be the most heavily affected.
Capital Markets Industry Insights - Q1 2016Duff & Phelps
Prospective middle-market issuers are being greeted with robust demand from both traditional private credit investors and crossover public market participants. While monetary policy concerns weighed heavily on market participants for much of the first quarter, the Fed’s more dovish posture of recent weeks has triggered an increase in risk appetite across the credit markets.
Olivier Desbarres: Sterling: this lady's not for turningOlivier Desbarres
There are multiple factors behind Sterling’s collapse in the past fortnight to decade lows and the question remains whether these factors will reverse any time soon.
At the top of the pyramid of causes for Sterling’s demise, in my view, is not the UK’s large current account deficit or Bank of England (BoE) policy but the stance on EU membership which Prime Minister Theresa May has adopted.
So while Sterling’s greater competitiveness may eventually drive FX inflows into the UK and help Sterling to recover, financial markets and investors are likely to continue to take their cue from the British government near-term.
Simply put, if Theresa May continues down of the path of “Hard Brexit”, however ill-defined, Sterling is likely to remain under pressure.
However, history shows that while EU leaders have a tendency to drag their feet over key issues, they are able and willing to eventually find some kind of compromise.
Moreover, Theresa May will be subject to the will of her own Conservative Party – which on the whole supports membership of the UK or at least a softer form of exit from the EU – and of the people.
While the BoE would prefer a more stable currency and lower yields, there is probably little than it can (or should) do near-term beyond trying to reassure markets, investors and households.
Technology, Business Services, Industrials, Financial Services and Transportation & Logistics were the most active sectors, accounting for 65% of total deal volume.
Autumn Buyers Guide
Do your property buying research without having to spend your whole weekend searching the web. This reference guide for home buyers and investors from ING Direct will quickly bring you up to speed on house and unit prices and suburb affordability across Australia.
Another Year Another Medal
U.S. industrial absorption is on track to finish 2018 with its third
strongest net occupancy growth, behind only 2016 and 2014.
Considering the strong economic fundamentals, there is no
indication that demand will soften in the final quarter of 2018.
This means that the three strongest years of industrial
occupancy growth since the 1980s will have occurred in the last
five years. Looking forward, the combination of limited new
product and high utilization rates of existing footprints will
translate to strong performance for Class A product and
improved performance for Class B and C product.
During the second quarter of 2016, acquisitive middle-market issuers capitalized on lenders’ increased risk appetite by entering into attractively priced and structured financings. The dramatic rally in Treasury yields (and other safe haven assets) triggered by the “Brexit” referendum at quarter’s end, augurs well for further improvement in domestic credit market conditions.
Looking Ahead... Webloyalty's Easter Retail Research 2014Webloyalty UK
The latest research report from Webloyalty and Conlumino looks at Easter retail trends, and what we are planning for the Easter break. The report also reveals the nation's favourite chocolate Easter egg!
-U.S. Office Market Was Driven by the Tech
Sector in the Fourth Quarter of 2018
-Absorption exceeds construction completions, vacancy
declines and the pipeline grows
-Tech markets tighten
-Rents rise, but the pace slows:
Retail Lives
Economic fundamentals continue to strengthen in the
U.S., a trend that is expected to endure through
mid-2019. With continued wage growth acceleration
and consumer confidence near an 18-year high, the
retail marketplace has registered solid spending.
Inflation-adjusted consumer expenditures show a
steady 2.5-3% year-over-year (YOY) growth pattern
since the beginning of 2016. eCommerce sales
accounted for approximately 11.5% of retail sales
(excluding auto sales) in 2017. While we expect that
penetration rate to climb to 14.0% by 2019, physical
stores remain vital to retailer survival in this evolving
retail climate. Despite what the media would lead you
to believe, the overall retail industry is still posting
gains even while it faces secular challenges.
In this special edition of Valuation Insights, we discuss some of the key valuation and compliance impacts that will likely result from Brexit. Specifically, we review the short-term and long-term economic implications, as well as compliance and regulatory considerations. We also highlight valuation issues, including how companies and investors determine cost of capital and measure risk in the current environment, and discuss implications for transfer pricing with respect to EU Directives. While all industries will be impacted by Brexit, in this issue we focus on the banking and financial services sectors, which stand to be the most heavily affected.
Archive issues of The Brief produced by IPIN Global - https://www.ipinglobal.com/join.aspx - a regular member-only newsletter with the latest commentary on the property investment markets.
Archive issues of The Brief produced by IPIN Global - a regular member-only newsletter with the latest commentary on the property investment markets.
To get the latest copies as they are produced - become a member at https://www.ipinglobal.com/join.aspx
The UK housing market is in a period of transition. The decline and stagnation of the last five years is in reverse and we are seeing the definite signs of a recovery.
This housing market update deals with the key indicators of UK housing including the most recent data from Q2 2013.
A PowerPoint Chart Pack covering all aspects of the Northern Ireland Housing Market. It covers house prices, mortgage activity, housing starts and completions, affordability etc. Comparisons are made with the UK, Republic of Ireland and UK regions.
Ruth Barr, Head of Wimbledon Lettings, discusses which price brackets are most active, how recent performance has affected yields, and why winter could be a good to time to let your property.
http://www.knightfrank.co.uk/contact/wimbledon-estate-agents/lettings/
The world’s dominant commercial real estate markets have moved into 2014 in better shape than at any time since the Global Financial Crisis of 2008-2009.
Capital markets are exhibiting remarkable strength and the disconnect, that has emerged over the past two years between a more cautious occupational market, is showing signs of narrowing.
Since 2009, the value of UK housing stock has risen by £1.3 trillion (28%) with capital values heavily supported by ultra-low interest rates and increased mortgage lending.
In this report, we look at the current residential market and how investors can capitalise on opportunities.
Since 2009, the value of UK housing stock has risen by £1.3 trillion (28%) with capital values heavily supported by ultra-low interest rates and increased mortgage lending.
In this report, we look at what's happening in the market this month and how investors can take advantage of opportunities.
Archive issues of The Brief produced by IPIN Global - https://www.ipinglobal.com/join.aspx - a regular member-only newsletter with the latest commentary on the property investment markets.
To get the latest copies as they are produced - sign up on site.
Jones Lang Lasalle Report on Global Real Estate Prospective for Third quarter of 2014.
World GDP output is now forecast to rise by 3% in 2014. The prediction has been revised lower this quarter largely as a consequence of the steep U.S. downgrade, and GDP growth now stands at a similar rate to last year.
Even before this change, emerging markets had the most dynamic outlook, continuing the post-crisis trend. But the balance is still slowly tipping back towards the developed world, where a steady upturn is in prospect.
3. Hello and welcome to the
second edition of Residential
View: your indispensible guide
to the UK’s Residential property
market for Autumn/Winter 2014.
carterjonas.co.uk 3
There’s no doubt that the economy is improving but what does this
mean for the national residential property market? Indeed, the next
12 months are going to be interesting with potential interest rate
hikes and the General Election fast looming.
So in this issue, we consider the London market: Super Prime,
Prime Central London and Outer Prime. Three markets where we are
reporting differing house price and rental growth rates.
Outside London, we use our Farmhouse and Country Cottage Indices
to show key trends and issues which are evident within the market
and prove interesting reading if you own, or are thinking of buying,
such a property in the next year.
Anyone who has missed the phenomenon of Airbnb might be
interested to read our special feature about Short Let Regulation and
how London is locked in a battle with Paris to become the world’s
most popular overseas tourist destination.
We also look at the draw of Cathedral cities and market towns. The
demand for living in these desirable locations has reached such
heights, the transaction figures have now eclipsed even the previous
peak market averages.
I hope you enjoy reading our research and features. Should you
require any help with your property asset, please do get in touch,
and we would be delighted to help.
Gregory Besterman
Partner, Head of Residential
020 7518 3216 | 07774 911981
gregory.besterman@carterjonas.co.uk
5. carterjonas.co.uk 5
average value change, sales volume
and average detached property value
across England and Wales
Average capital value change - June 2013/June 2014
Average detached property value
Market health (0-5)
%
6.2%
4
4
5
3
£303,540
4
3
4.2%
6.8%
-0.2%
-1.2%
8.8%
2.9%
6.1%
4.5%
7.4%
4.8%
7.5%
5%
6.6%
6%
£
Source: Land Registry
Cumbria
North Yorkshire
Leeds
York
Northamptonshire
Shropshire
Cambridgeshire
Suffolk
Oxfordshire
Hampshire
West Berkshire
£371,050
Wiltshire
Somerset
Bath & NE Somerset
Gwynedd
£231,830
£188,830
£243,931
£240,110
£286,888
£419,962 £257,995
£406,786
£364,864
£277,093
£269,995
£251,720
£277,859
1.5
3.5
3.5
3.75
2.75
1.75
1
1.75
3.5
The Carter Jonas Market Health Check is calculated
by comparing current Land Registry transactional and
average house price data with levels during the peak
market (1998-2007).
7. Marylebone
Figure 3
Carter Jonas Rent Value Index
Jun 06 Apr 14
carterjonas.co.uk 7
CAPITAL VALUE PERFORMANCE AND RENTAL
YIELD IN Prime AND OUTER PRIME LONDON
Figure 2
Carter Jonas Capital Value Index
Mayfair
Chelsea
Holland Park
Marylebone
Hyde Park & Bayswater
Knightsbridge
Fulham
Wandsworth
300
250
200
150
100
50
Fulham
Jan 05 Mar 14
Jan 2005 = 100 Source: Carter Jonas
Knightsbridge
Mayfair
Chelsea
Marylebone
Holland Park
Hyde Park & Bayswater
Fulham
Wandsworth
PCL as a whole
220
200
180
160
140
120
100
80
Jan 2006 = 100 Source: Carter Jonas
Capital value performance H1 2013 - H1 2014
Gross rental yield
%
%
22.8%
10.4%
13.8%
11.1%
11.9%
8.9%
3.2%
3.6%
2.2%
19.6%
8.4%
4%
2.9%
2.8%
2.7%
4.4%
Hyde Park &
Bayswater
Mayfair
Knightsbridge
Chelsea
Wandsworth
Holland Park &
Notting Hill
rent and capital value indices
Our indices track the performance of both capital value
movements and rental prices within our key markets.
They are created using data taken from achieved sales
and rental values and exclude anomalies such as the
sales of properties with short leases and ‘one-off’ sales
such as One Hyde Park.
9. carterjonas.co.uk 9
COUNTRY
Farmhouse and Country Cottage Indices:
The objective of the indices is to monitor
the value of both property types across
the UK and identify the key trends and issues
evident within the market. The indices are
based on theoretical properties located
within a five mile radius of each of the
sixteen Carter Jonas country offices.
Values within the farmhouse market have proved
resilient, albeit stable, with the average value of the
theoretical farmhouse increasing by a minimal 0.3%
during the six months to September 2014. Values
in the Central region rose by 1.7% over the last six
months, driven by price rises recorded in Oxford and
Northampton due to an improvement in activity levels,
primarily driven from purchasers exiting London. All
other values of farmhouses recorded across our network
of offices remained constant.
Figure 4
Regional average farmhouse capital values
The Southern region recorded the highest average
farmhouse value of £2.4 million, with values for the
Eastern, Central and South West regions clustered
between £1.5 - £1.6 million. Average farmhouse values in
the Northern region stood at £1.2 million and £920,000
in the Western region at the end of September.
Despite the majority of values remaining flat over the last
six months, an improvement in buyer confidence and an
increase in the number of committed purchasers have
been witnessed across the majority of our office network
which, in a number of cases, have already converted into
an increase in trading activity. Realistic pricing remains
key as purchasers continue to remain price sensitive,
although achieved prices have edged closer to guide
prices during the summer months.
In terms of forecasts, an increase in the supply
of farmhouses coming to the market, albeit on a
comparatively small scale, has recently been witnessed in
a number of our offices. This combined with the caution
aligned to the General Election and a rise in interest rates
is expected to suppress values moving into 2015.
Farmhouse Market
The notional farmhouse comprises:
5 bedrooms
Approximately 5,000 sq ft
A range of domestic outbuildings
Stables
A three-bay garage
Approximately 5 acres of land
£ million
2.5
2.0
1.5
1.0
0.5
0
Southern Central Northern Western South
Source: Carter Jonas
West
Eastern
March 2014
September 2014
11. carterjonas.co.uk 11
Regional lettings market
The regional lettings market continued to remain strong,
as increasing numbers of young people having to wait
longer to become homeowners ensured high levels of
demand. Southern England continued to witness the
highest rental growth, with average annual increases
of just over 2.5% for the previous three years. Although
these figures fall some way short of the anecdotal rises
discussed in the media, they do still represent a growing
affordability issue as real wage growth lags well behind.
When figures for Q3 2014 are released later in the year,
we expect average all-residential property rents to have
continued to rise in most areas, breaching the £700 per
calendar month mark in both the Eastern and South
Western regions.
Figure 6
Average monthly rents (all residential property types)
The country cottage market
remained marginally ahead
of the farmhouse market
in terms of its position in
the market cycle
1,000
900
800
700
600
500
400
300
200
100
0
North
East
Source: VOA
North
West
East
Midlands
West
Midlands
East South
West
South
East
Yorkshire
& The
Humber
Q3 2011
Q1 2012
Q3 2012
Q1 2013
Q3 2013
Q1 2014
Hampshire, Near Nether Wallop
£2,850 per month
Berkshire, Newbury
£1,550 per month
13. overview of Airbnb
Market leading online only short/holiday let company
Not long after the company’s sixth birthday it was valued at $10bn
Fees are between 6-12% and paid by the guest, but hosts
(the landlord) are also charged a service fee of 3%
carterjonas.co.uk 13
Figure 7
Comparison of short-let policies in global cities
City Number of foreign
tourists (annual)
Number of hotel
rooms (approx)
Current regulation Policy/approach to short letting
London 16.8m 100,000 Planning permission
required for sub 90
day letting
Eric Pickles and ex-housing minister Kris
Hopkins both referred to the relaxation of
legislation as “allowing Londoners to earn
some extra cash”, whilst Airbnb founder
Nathan Blecharczyk was invited to Downing
Street to discuss short-let reforms
Paris 15.5m 80,000 Lettings of less than
a year are prohibited
unless the property
is classified as
commercial
Have employed a 20-strong team of
enforcement officers to police short-let
violations. In the first six months of 2014 they
handed out €250,000 worth of fines with
potential further fines of €325,000 waiting for
landlords currently under investigation
New York 11.4m 100,000 Permission required
for lettings under 30
days
Conducted a probe into Airbnb, ending
with the company agreeing to provide host
(landlord) data to the state
Barcelona 5.8m Unknown Licence from Town
Hall required – varies
from region to region
Fined Airbnb in July for breaking short-let
regulations. City Hall have also announced
that they are in the process of creating a
door-to-door short-let inspection team