LANDLORD NEWS
Prime London rents rose by 10.9% in 2022
Rents at the top end of the London market ended 2022 10.9% higher than when the year started. Demand from tenants is continuing to significantly outweigh supply, according to Savills. The agency said: “The ongoing imbalance between demand and supply is expected to continue to drive rental growth. However, the sheer scale of rental growth over the past two years does somewhat limit the capacity for further significant increases.” Smaller properties in lower price bands now tend to be outperforming larger, more expensive rental homes, Savills added: “The market is certainly less frantic than it was during the middle of 2022, and now prime tenants feel they can bide their time to see how the next couple of months play out.”
City A.M. London Evening Standard The Independent UK
Private rent cap extended for six months
Tenants rights’ minister Patrick Harvie has confirmed that the current cap on private rent increases in Scotland will be extended for at least another six months. Currently, private and social rent increases are capped at 0%, but from April 1 to September 30, private landlords will be able to increase rents, but only by up to 3%, unless defined and limited exceptions apply. The ban on social rent increases will be lifted, after social landlords agreed to keep any increases below the rate of inflation. Eviction enforcement will also continue to be suspended, except in certain circumstances. The rent cap for student accommodation will also be suspended and unlawful evictions will still lead to damages equivalent to 36 months’ worth of rent.
BBC News
BUY TO LET
Landlords move up north
Property investors are eyeing Northern cities in the hunt for larger profits and higher yields. figures from Hamptons reveal. The proportion of sales going to investors in the North East has reached its highest level since 2013. Landlords purchased 35.7% of homes sold in the region during the past six months, up from 26.1% during the first half of the year. Middlesbrough in North Yorkshire, where 55% of sales went to investors, was the most popular area for landlords, followed by Gateshead, where investors purchased 50% of properties sold there last year, up from 27% the previous year. The other popular regions for landlords were the West Midlands and Yorkshire. In contrast, there were slumps in the South East and South West, where higher prices and soaring rates are making the maths of buy-to-let unaffordable for landlords.
Landlord ZONE The Daily Telegraph
COMMERCIAL
Buyers pay more for eco-friendly offices
Eco-friendly offices are achieving “markedly higher” capital values and rents, according to JLL. The property agent examined hundreds of transactions over the past five years and found that offices with better sustainability credentials were valued at a 20.6% premium. There was also a “clear premium” for those buildings with better energy performance certificate ratings. Each step up in the rating added 3.7% to a building’s value. Investors intending to buy UK offices were happy to pay for those with better sustainability credentials, such as any form of Breeam (Building Research Establishment environmental assessment method) rating. Rents for offices with a Breeam rating, which range from “pass” to “outstanding”, are also typically 11.6% higher than for similar buildings without one, JLL’s data shows.
The Times
Hybrid working sees firms hunt for fresh offices
New research points to solid demand for London offices, even if staff will only be in them for part of the week. Property agent JLL calculates around 3.1m sq ft of office space was under offer across central London at the end of last month. There was 2.9m sq ft under offer at the same point in 2021, and 2.5m sq ft at the end of December 2019 before the COVID-19 crisis. Chris Valentine, JLL’s head of central London office agency, said: “We begin 2023 with a significant amount of space under offer and sustained demand for quality space.” The firm’s provisional data also shows City and West End lettings totalled around 10m sq ft last year. That is 23% ahead of 2021, and in line with the 10-year average. There is some 8.6m sq ft of active demand for new office space across central London, with the professional services sector making up the largest share of this at 29%.
London Evening Standard
Pharmaceutical companies eye space in the golden triangle
Analysis by Savills reveals that pharmaceutical and biotech companies agreed deals for 1.4m sq ft of space in the so-called golden triangle of London, Cambridge and Oxford last year, the highest level since 2017. Savills said most of the interest came from big pharmaceutical companies, many of which grew during the pandemic. This includes a major deal by GLAXOSMITHKLINE for its new headquarters in central London. Meanwhile, OMass Therapeutics, a biotech company backed by Google Ventures that is working on finding new drugs, took extra lab space in Oxford last year, in a sign of optimism among earlier-stage companies. Tom Mellows, head of UK science at Savills, said: “Given the level of unsatisfied demand, the delivery of new stock across the golden triangle will be critical.” However, he suggested that the funding market was looking tougher this year, meaning “early stage firms in the science sector will find it harder to raise venture capital.”
The Daily Telegraph
AUCTION NEWS
Landlords urged to act quickly ahead of CGT change
Ahead of the CGT allowance change announced in the Autumn Statement, landlords intending to sell their properties this year are being urged to act quickly. Chancellor Jeremy Hunt announced that the current allowance of £12,300 is being halved to £6,000 from April 2023 and then cut again to £3,000 from April 2024. That could mean an increased tax bill for many landlords planning to sell this year. Andrew Parker, auctioneer and managing director at SDL Property Auctions, explains that CGT is charged on any ‘gain’ or profit you make when you sell or dispose of assets that aren’t within an ISA. So – he says – landlords and second home owners are at risk of paying more come the new tax year. Mr Parker claims that sale by auction can help avoid the current open market completion times which can be as long as six months, and which come with a high rise of falling through. “By selling in an auction, you get a legal binding contract on the fall of the hammer with a fixed completion set for only 30 days later. That means if you sell this month or next, you can hand over the keys and have the proceeds in your account before the end of March – and thus eligible for the currently more generous CGT allowance,” Mr Parker said.
Landlord Today
Christie’s International Real Estate selects Carter Jonas as UK affiliate
Carter Jonas has been selected by Christie’s International Real Estate as its exclusive affiliate in the UK. Carter Jonas has 34 offices throughout the UK handling private lettings, Build to Rent and new homes, plus residential sales, as well as on planning, development, commercial, property management, building consultancy, and rural matters. The Christie’s International Real Estate affiliation will be exclusively linked with the consultancy’s residential departments. The Christie’s International Real Estate brand will offer Carter Jonas agents and clients increased international exposure for luxury properties; a global referral network; a marketing platform; and exclusive partnerships, including with Christie’s auction house.
Letting Agent Today
Norfolk farmhouse most popular on the market
A three-bedroom farmhouse near the Broads is the most popular house on the market in Norfolk. Zoopla records how many people have viewed the listing for each home in the past 30 days. Topping Norfolk’s rankings this month is County Farmhouse which is up for auction with a guide price of £180,000.
Eastern Daily Press
PROPERTY FINANCE
UK house prices show first monthly decline since October 2021
Office for National Statistics data showed on Wednesday that UK house prices fell 0.3% between October and November, their first monthly fall in more than one year. This brought the annual growth rate to 10.3% in November, down from 12.4% in the previous month. The average UK house price was £295,000, slightly down on October’s record high of £296,000. Average house prices increased 10.9% over the year to £315,000 in England, 10.7% to £220,000 in Wales, 5.5% to £191,000 in Scotland and 10.7% to £176,000 in Northern Ireland. Prices fell most sharply in regions where they had risen the most over the course of the pandemic. For example, average prices in northeast England fell by 2.6%. At £163,000, the northeast also continued to be the location of the lowest average house price in England. London remains by the most expensive place to buy a house, with the average home worth £542,000 in November. That is only 6.3% more than the average value a year before, the lowest rate of annual inflation of any region. By contrast, average prices in the northwest were 13.5% higher in November 2022 than in the same month of 2021.
Financial Times The Times City A.M. Daily Mail The Independent UK
Research reveals high-earners making a huge impact on house prices
New research from Savills reveals the England and Wales hotspots where high-earners are making a huge impact on house prices. Analysis finds that four London locations – the City of London, with 65% of residents classed as high-earning, paying an average of £828,113 for a home; Richmond upon Thames (55%, £976,160); Kensington and Chelsea (54%, £2,409,454); and Westminster (53%, £1,746,404) – top the locations with the largest concentration of wealthy residents. Lucian Cook, the report author and Savills’ head of residential research, highlights the Greater Manchester borough of Trafford – home to Altrincham, Hale, Hale Barns and Bowdon – which is bringing together high-earners and impressive growth; 44% here are top-flight professionals, a figure that has risen 28% in a decade, underpinning a 73% increase in house prices to an average of £417,306. Savills has also identified locations experiencing “entrenched challenges”, meaning less than 25% of occupations are classed as high earning, leading to subsequent low growth in house prices. Nowhere has fewer high earners than northeast Lincolnshire, where only 21% of residents are high-earning. This is followed by Bolsover in Derbyshire (23 per cent high-earners; £171,895 average house price) and Walsall in the West Midlands (25%; £213,391).
The Sunday Times
LENDING CONDITIONS
Mortgage rates fall to their lowest in almost three months
High street lenders are slashing mortgage rates with HSBC reducing rates on 100 of its deals by up to 0.1 percentage points on Tuesday. Yorkshire Building Society cut its fixed-rate mortgages by up to 0.75 percentage points while Santander also slashed some of its fixed-rate mortgages by up to 0.59 percentage points. The bank also launched a new two-year deal at 4.84%, one of the cheapest on the market. Borrowing costs rose dramatically after the mini-Budget at the end of September, peaking towards the end of October, before gradually falling to today’s three-month low. The average two-year fixed rate now stands at 5.58%, down from its peak of 6.65%, while the average five-year rate has dropped to 5.39%, the lowest level since the start of October, when it was priced at 5.23%.
The Daily Telegraph
ECONOMY
EY: Recession will be deeper than expected
The EY Item Club has doubled its prediction for how much the UK economy will shrink in 2023. The forecasting group believes the economy will contract by 0.7% this year, up from 0.3% predicted in October. “The UK’s economic outlook has become gloomier than forecast in the autumn, and the UK may already be in what has been one of the mostly widely anticipated recessions in living memory,” Hywel Ball, EY’s UK chairman, said. The forecaster has also downgraded the growth outlook for 2024 from 2.4% to 1.9%. Despite this, inflation is expected to fall back rapidly and the externally driven nature of the recession means it should be shorter and less damaging than other down turns, the group said. “The economy is still expected to return to growth in the second half of 2023,” Mr Ball added.
The Times The Daily Telegraph The Guardian The Independent UK
