Welcome to today’s email of UK property news and views…
Savills Q4 Residential Focus makes interesting reading. The headline has to be that the South East of England is expected to do the best over the next five years, rising a total in value of 31.9 per cent which compares with 24.4 per cent in London.
Their Lucian Cook explains, ‘Though we expect London to continue to outperform in the short term, it is unlikely to continue to do so indefinitely. The capital has already been the strongest performing region of the UK since the middle of 2005 during which period prices have risen by 37 per cent compared to just 8 per cent across the country as a whole. As a consequence, the gap between London prices and the rest of the UK, including the South East, is as wide as it has ever been. As confidence improves, buyers are likely to look to markets beyond London that offer better relative value, though it will be later in the cycle before the North feels this benefit.’
‘We see no evidence of an imminent housing bubble and think it an unlikely prospect. For a bubble to occur we would need to see five year price rises of 35 to 40 per cent and/or mortgage interest rates of around 7 per cent, which seems improbable. On balance, an earnings-led price recovery remains the most likely outcome, with a continued squeeze on mortgaged owner occupation continuing to limit the recovery in market turnover and house price growth potential.’
If you want to know why London is a sure-fire investment success – generally – you just need to look at the supply side. At present, some 24,000 units a year are being built- it needs to be at least 50,000.
We are raising money this Christmas for Martin House – the hospice for young children – and I thank those of you who have donated. So far we have raised £385 which, excluding the £100 I put in, means that the average member has contributed two pence. The average member has been with us for about four years, subscribes to three services and has received something like 1500 emails and 40 odd newsletters over that time. Is that worth more than two pence? I hope so! Please make a donation today: www.justgiving.com/iain-c-maitland
We have been offered modern flats in Salford, Manchester. They are modern, high-spec units and only six years old with 244 year leases. They are being sold complete with furniture and are already tenanted so there are no voids and no initial letting fees. These are from £89,995, with 7+ per cent yields and a 2 per cent finder’s fee. Email for details.
Assetz’ Stuart Law is in the news this week, saying, ‘Property investment has become mainstream again in the last year and, with interest rates so low, people cannot see a downside to buy-to-let. However, we are now at a critical point where property prices will start to rise faster than rents; this will happen first in Greater London, which has seen tremendous price increases in recent months.’
‘Investors who are keen to not miss out on property price growth and stunning yields, currently achievable in the rest of the country, ought to invest there now. In the current climate, by investing in the North, it is difficult to lose out. Property prices are yet to experience the headline-inducing giddy heights of London and the South East, but it is important to focus investment on the in-demand city centre and suburbs clustered around cities like Manchester, Leeds, Birmingham and Liverpool where employment is high. The potentially lucrative yields of the North are now starting to enter many landlords’ consciousness. The savviest investors will start to look away from London and head north to really make their money work.’ We have a ‘where to invest’ report coming soon.
All for now but, if you are buying into the UK from overseas please note we have the monthly currencies review coming in at any moment. Email for that.