LANDLORD NEWS
Rents outside London surpass £1,000 for first time
Average monthly rents outside London have hit a record high of £1,002, according to research by Hamptons. The figure is for agreed rents rather than asking rents and marks a rise of 7.8% over the past 12 months. The average rent now exceeds £1,000 a month in three of the 10 regions outside London. In London, rental growth continues to surge, rising 17.2% since April 2022 and passing an average monthly cost of more than £2,000 for the first time. Since the start of the pandemic, rents across the entire nation have risen 25%, costing the average tenant an extra £2,962 each year. The South West, North West and North East have seen prices rise the most in the past three years, all recording 31% increases. Rents in Wales and the East have grown at the slowest pace. Across Britain as a whole, typical rents rose 11.1% in the year to April 2023, reaching a new high of £1,249 a month.
London Evening Standard The Independent
London’s prime locations see 50% rent increase
The London housing market is straining even the wealthy, with rent in prime locations such as Chelsea and Mayfair rising 50% in just two years due to a lack of supply. Even tenants who looked to move to the slightly more affordable prime outer London regions saw rent increase by 41%, according to new data by Knight Frank. New lettings listings in prime central London and prime outer London were 2.3% higher in the six months to April compared to the equivalent period a year ago. The supply/demand imbalance is slowly improving, but the market has lived through a general election, a global pandemic, a stamp duty holiday, and the mini-Budget.
City A.M.
COMMERCIAL
Commercial property market stabilises after mini-budget chaos
The commercial property market has been hit by the effects of the mini-budget, with property yields following bond yields, causing a rapid and sharp devaluation of property values. However, there have been murmurs from some property bosses that the market is beginning to stabilise. Commercial property values fell by about 17% in the year to the end of March, according to MSCI, the global index provider. Investors will have a better idea as to whether the worst of the pain in the commercial property market has passed when Land Securities and British Land, the pair of FTSE 100 landlords, report their annual results.
The Times
Landsec to triple size of flexible office brand in London
Landsec, one of the UK’s largest commercial property developers, plans to triple the size of its flexible office brand, Myo, in London this year. The expansion will include three new locations totalling 139,000 sq ft, with fully serviced offices and shared meeting and event spaces available for companies looking for 10 desks or more on one to five-year terms. A 45,000 sq ft building at New Street Square in the City and 48,000 sq ft at The Forge in Bankside will be branded as Myo, as will 46,000 sq ft at One New Change by St Paul’s. The move comes as more employers seek flexible workspace as they embrace a mixture of home and office hours.
London Evening Standard
PROPERTY FINANCE
House price inflation eases in April
Annual house price inflation has slowed to its weakest level in more than a decade, according to figures from Halifax. The average house price in Britain is now 0.1% higher than a year ago, having fallen by 0.3% to £286,896 in April. The price drop recorded last month followed three successive months of increases. Annual house price inflation, which peaked at 12.5% last year, is now at the lowest rate since December 2012, when the average UK house was worth less than £167,000. Despite the fall, Halifax said the housing market was now “more stable” than it had been for some time. The lender said the gradual easing of mortgage rates in recent months had given “important certainty to would-be buyers.” Kim Kinnaird, Halifax’s director of mortgages, said: “House price movements over recent months have largely mirrored the short-term volatility seen in borrowing costs.”
The Times
UK house prices falling less rapidly as pessimism eases, say estate agents
A poll by the Royal Institution of Chartered Surveyors found an easing of pessimism in the housing market with prices falling less sharply and price expectations for the year ahead rising. The Government must reinstate housebuilding targets and rethink proposed rental market reforms if it is to improve the supply of houses, the Rics said. The majority of lettings agents surveyed by the institution – a net balance of 40% – have seen demand from would-be tenants increase over the past three months. A similar number reported a fall in the number of new instructions from landlords. Separately, plans being drawn up by the Labour Party would increase the stamp duty paid by foreign buyers of UK property while also restricting the sale of new-build properties to overseas investors.
Financial Times Financial Times
Super-prime property market recovers
More than 160 properties worth £10m or more have been sold in London over the past year – the most since 2016. A total of 161 such sales – about three a week – were made in the capital in the year to March, according to analysis of Land Registry data by Knight Frank and the data provider LonRes. The combined sum spent on the £10m-plus properties came in at £3.1bn, which works out to an average of just more than £19m a sale, and was up from the £2.5bn total spent on 144 properties in the previous year. However, super-prime sales are expected to drop by at least 10% over the next 12 months as the global super-rich and their advisers worried about the prospects of Labour winning the next general election and fulfilling the party’s pledge to scrap a tax loophole for non-doms.
The Guardian
Buyers seeking smaller and more affordable homes
Some property professionals are seeing home buyers looking for smaller, more affordable homes and people moving out of older homes to buy more energy-efficient new-builds. Overall, there are signs that buyer demand remains subdued in the face of relatively high borrowing costs, the Royal Institution of Chartered Surveyors (Rics) said. Its April market survey of the UK property market found that a net balance of 37% of professionals reported demand from buyers falling, rather than rising. A net balance of 19% of surveyors reported seeing house sales falling rather than rising, although this was an improvement compared with a balance of 30% who saw this the previous month. It represented the least negative reading on the sales measure since July 2022, Rics said. Most notably, buyer demand still appears to be subdued in the face of relatively high borrowing costs.
London Evening Standard The Independent UK
LENDING CONDITIONS
Deposit-free mortgages return to UK market
Skipton Building Society has launched the Track Record mortgage, which does not require a deposit, to help people who have proved they can pay their rent but do not have access to the large sums needed for a deposit. However, experts have highlighted that the product is “niche” in scope, only really working for those who live in the north of England where house prices are lower, and where borrowers earn between £40,000 and £60,000. Borrowers are locked into a five-year fixed-rate deal at 5.94%, far higher than the average five-year deal at 4.97%. Richard Donnell, executive research director at Zoopla, said: “Ultimately, the product will help middle-income households. It’s not really going to help a big proportion of first-time buyers. It works where house prices are low, but the product is unaffordable in areas where house prices are high.”
The Daily Telegraph
ECONOMY Bank lending to rise in 2023
Lending is expected to rise this year, with total bank loans expected to increase by 1.2% in 2023, reflecting an extra £29bn in lending. The EY Item Club predicts that bank lending will rise by a further 2.1% in 2024 as confidence among businesses and consumers continues to improve. The combination of stronger economic growth, falling inflation, and the sharp drop in wholesale gas prices has boosted optimism among businesses that conditions will continue to improve this year. The Item Club also expects mortgage lending to rise by 1.2% this year, climbing to 1.8% in 2024 and to 2.7% in 2025. Its previous quarterly forecasts, published in February, projected a marginal rise of 0.4%.
The Times
