Prices cutting seen across the housing markets in England and Wales
Price cutting is widespread in the housing markets in England and Wales as they adapt to reduced demand and increasing supply, according to the latest asking price index. The property downturn that began in London continues to creep across the rest of the country, heading North and West and prices have hit new euphoric highs and then begun the inevitable correction, according to the index report from Home.co.uk.Overall, prices in England and Wales fell by 0.3% in October, dragged down by regions in the South and East of England where supply has overwhelmed demand and was up by just 0.6% year on year to an average of £308,524.
In Scotland asking prices are rising slowly, up 1.8% year on year although the data shows that marketing times have edged down 5% compared to a year ago despite rising supply. Month on month asking prices fell everywhere apart from the North West of England and Wales which also saw year on year growth of 4.5% and 7.4% respectively.
Other regions with strong annual growth included the West Midlands up 4.9%, Yorkshire and Humberside up 4.6% and the East Midlands up 3.4%. The index report says that supply increases across the UK indicate a worsening market for vendors, up by 14% year on year, the highest October total since 2011. The largest rises were 24% in the South West and 21% in the West Midlands. The number of properties that had their asking prices reduced last month at 80,291 was slightly lower than the total for September but remains very high. Meanwhile, rents are rising by 2.3% nationally and by 5.8% in Greater London, the index also shows.
Typical time on the market increased by 12% in London, by 14% in the South East and by 16% year on year in the East of England while for England and Wales as a whole it increased to 94 days, five days longer than in November 2017.‘With growth over five years of 37%, the East looks set to undergo the most severe correction. The Midlands will most likely suffer the same fate, while the South West is looking much less overvalued, hence a smaller correction may be expected,’ said Doug Shephard, director of home.co.uk‘Scotland, Wales and the North have enjoyed relatively moderate growth and look less prone to a major correction. The North East, on the other hand, has yet to show any significant growth post-crisis but perhaps growth will pick up in 2019,’ he added.
November 14 ,2018
London World's Most Active Cross-Border Real Estate Investment Market in 2018
London with its stability, transparency, and liquidity remains the compelling destination for international capital. Knight Frank’s Global Wealth Report shows that many ultra high net worth individuals – which will see a further rapid growth of in the next five years globally – rank London as their first port of call for their maiden overseas property investments.”
William Matthews, Head of Capital Markets Research, Knight Frank commented, “As a home for international capital London increasingly enjoys another benefit over its global city competitors, in the form of relative value. One corollary of rising demand for European real estate is that capital has been funneled into continental markets that are traditionally nowhere near as liquid as London, and this has quickly led to exceptionally low yields – 3.00% is a common prime yield across many European cities, not just capitals.
“In a comparative sense at least, London office prime yields can therefore seem good value to overseas investors, particularly given prospects of modest rental growth, and the recent movements in Sterling, which provide an added currency advantage.
“Longer-term, this could prove the right mix of attributes to attract global capital targeting Europe, a significant proportion of which comes from experienced overseas investors who are less singularly focused on capital preservation and value the prospect of comparatively healthy income returns”, concluded Matthews.
September 25, 2018
UK GDP growth lifted to 0.6% due to summer heatwave and World Cup
The UK economy picked up speed in the three months to July, boosted by warm weather and the World Cup. The Office for National Statistics reported on Monday that GDP expanded by 0.3 percent in July, better than the 0.2 percent expected by City of London analysts and up from the 0.1 percent growth rate in June. The dominant services sector, powered by retail sales and wholesale trade, grew by 0.3 percent in the month after stagnating in June. Construction expanded by 0.5 percent, a slight cooling after the sector’s boom in May and June when builders caught up on work postponed due to the snowstorms in the first quarter of the year. However, manufacturing contracted by 0.2 percent in July, after growing by 0.4 percent in June.“Growth in the economy picked up in the three months to July. Services grew particularly strongly, with retail sales performing well, boosted by warm weather and the World Cup. The construction sector also bounced back after a weak start to the year,” said Rob Kent-Smith of the Office for National Statistics. Since July the ONS has been publishing a monthly GDP estimate, replacing its traditional quarterly release. The UK’s GDP growth comes in the context of a growing global economy, fuelled by Donald Trump’s tax cuts in the US and a cyclical recovery in the eurozone. The Bank of England has estimated that the level of the UK’s GDP is still set to be around 2 percent lower by the end of 2018 than it would have been in the absence of the 2016 Brexit vote, which pushed up inflation and hit consumption. That translates into a hit of around £900 per UK household. However, the growth recovery this year since the slump to zero in February appears to vindicate the view of the Bank that the weakness in GDP was predominantly due to the snow disruption, rather than an underlying slowdown.
September 10, 2018