Tag Archive | "United Kingdom"

United Kingdom Home Prices See First Drop in Five Months

The expiration of the stamp duty exemption continues to take its toll on the residential real estate market in the United Kingdom. Since the exemption ended, housing prices have faltered, though they hadn’t yet declined until this past month. Prices in the UK fell by two-tenths of a percentage point month-over-month in April. They were down nearly one percent from one year ago.

Buyers had rushed to buy homes just prior to the expiration of the stamp duty exemption, providing a false positive boost to the housing market. The market has quickly come back to reality, as factors such as tight lending conditions, declining consumer confidence, and high unemployment rates are negatively affecting the health of the real estate market.

Bank officials had considered offering a stimulus to help get the real estate market back on its feet. However, the stimulus idea led many to fear the possibility of inflation, and it was scrapped as a result. Many had worried that the UK residential real estate market would suffer, as the black debt crisis cloud hovered over the region. The economy is now in a double-dip recession for the first time in nearly forty years.

Economists believe that the residential real estate market in the United Kingdom has already experienced its strongest sales performance and pricing for the year. Lending conditions are expected to remain tight. Demand has declined, and it likely will continue to decline as the year goes on. More than half of economists believe that the housing market is currently overvalued in the United Kingdom, which leads many to believe that the market will see steeper price drops in the near future.

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Commercial Property Values in the United Kingdom Drop Again

For the fourth straight month, commercial property values in the United Kingdom have fallen. The decline in property values in the month of February has many economists concerned that the country is falling into a recession for the second time in three years.

 

Retail properties in the United Kingdom experienced the largest decline, falling roughly four-tenths of a percentage point from one month earlier. Office and warehouse properties experienced a similar decline, dropping three-tenths of a percentage point month-over-month.

 

While London’s commercial market continues to perform well, the rest of the United Kingdom has struggled immensely. Demand in commercial real estate outside of London has weakened over the past year, and things are now looking up for the market as a whole.

 

With demand for commercial properties hitting new lows, unemployment rising in various influential sectors, and credit tightening across the board, the rest of the year may prove to be quite difficult for the UK. Economists had feared that the nation might fall into a double-dip recession, and the recent data indicates that their fears may be coming true.

 

The United Kingdom’s government has yet to address the current housing situation, though they will be left with no choice but to do so if the downward trend continues.

 

Economists have not yet set a particular time frame with respect to when the market might climb out of its current descent. The fact that they haven’t is likely due to uncertainty as to just how long a possible second recession may last.

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Mortgage Approvals Drop in the United Kingdom

As many economists around the world suspected, the number of mortgage applications in the United Kingdom during the month of February took a significant hit. The number of mortgage approvals fell by more than twenty percent during the month of February.

 

Economists believe that the massive decline in mortgage approvals is largely due to the reduction in the number of actual applications. Many first time homebuyers had rushed to beat the stamp duty deadline at the end of January. As such, there were an inflated number of mortgage approvals during the months of December and January. It is for that reason that the corrective decline that took place in the United Kingdom during the month of February does not come as a surprise to most.

 

While the massive decline in loan approvals is certainly disconcerting for economists and officials in the United Kingdom, much of the worry is due in part to declines in other areas of the market.

 

For example, the average loan to value fell yet again for the third straight month. In addition, the number of loans to borrows with small deposits dropped substantially during the month of February.

 

With many first time homebuyers declining since the deadline of the stamp duty, economists now believe that the residential real estate market in the United Kingdom may be facing a more tumultuous year than originally thought. The artificial boost of first time buyers excited many of those in the real estate sector, though the most recent declines have quickly brought everybody back to reality.

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United Kingdom Commercial Market Has Weak Start in 2012

The threat of a European debt crisis is clearly taking its toll on the commercial real estate market in the United Kingdom. The market has struggled thus far in 2012, with property values already dropping by two-tenths of a percentage point in January.

 

With property values down, many analysts are considering the commercial property market to be a buyers market. Whether or not buyers will take advantage, though, has yet to be seen. The decline in values in the commercial real estate market in the United Kingdom has not been limited to just one sector. Instead, the office, retail, and industrial sectors all experienced a decrease.

 

As can be expected, offices outside of London experienced greater declines than those in the city. Offices outside of London dropped by nearly a half percentage point. The weakest market thus far in 2012, though, has been the retail sector, which saw a decline greater than 0.5 percent in values and in overall returns. Because the retail sector is very much dependent on the state of the economy, it is likely that it will continue to struggle as long as the debt crisis looms overhead.

 

It is not clear as to whether or not values will improve at some point in 2012. Analysts are not incredibly optimistic about the state of the commercial real estate market in the United Kingdom due to the weakened state of the economy in Europe as a whole. Commercial real estate investors are approaching the United Kingdom market with great caution, which does not bode well for potential growth.

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First Time Buyer Demand Picks Up in UK

The residential real estate market in the United Kingdom is strongly benefitting from the increased demand of first time buyers. The number of first time buyers entering the market is up by more than forty percent from where it was last January. First time buyers have played a significant role in driving growth in the housing market thus far in 2012.

The number of first time buyers did actually drop month-over-month, but it is important to note than the UK’s residential real estate performance in December was its strongest in over five years. One of the primary factors in driving demand among first time buyers has been the overall affordability of the market. Residential real estate prices and mortgages have never been more affordable, and banks continue to work with potential buyers to provide optimal mortgages.

Another factor that has played a major role in the sudden surge is that many first time buyers are looking to purchase a home before the stamp duty holiday takes place in March. The surge will likely subside following the holiday, though the government’s NewBuy program may help keep the numbers fairly high.

Refinancing has also increased significantly in the United Kingdom. Refinancing applications are up by almost fifty percent when compared to last year’s numbers. Many current homeowners are taking advantage of the low interest rates, so as to cut down on their monthly costs.

The overall performance of the residential real estate market in the United Kingdom is certainly good news for the country, as it has been among those that could possibly be negatively impacted by the looming European debt crisis.

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Housing Prices Increase in United Kingdom During Month of January

Residential real estate prices in the United Kingdom rose just under one percent during the month of January, defying the expectations of market experts. The increase in pricing brought the average cost of a home in the United Kingdom up to just under one hundred and sixty one thousand pounds.

Over the last few months, residential real estate market expects have debated the overall health of the property market in the United Kingdom. They believe that the performance of the market largely depended on the impact that the debt crisis across Europe would have on housing prices in the UK.

Prices had fallen the last few months, but the increase experienced in January gives hope to those investing in the market. Economic experts believe that the performance of the housing market largely depends on the United Kingdom’s ability to hold off a prolonged recession that may come as a result of the European debt crisis.

Housing market analysts attribute the current gain to low interest rates and limited supply. Even with the increase in pricing, there was a massive gap between the performance of properties in the north and the south. That gap is expected to continue throughout the next year, as areas that are hit hardest by the economy will experience further struggles.

The boost in housing prices has given citizens in the thriving areas of the United Kingdom hope that they will be able to avoid the pending recession. As such, they are far more confident about the residential real estate market than those living in areas that are struggling.

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Home Prices in the U.K. Drop for Second Straight Month

The United Kingdom housing market experienced yet another setback in January, as reports indicate that the average home price declined for the second straight month. Housing prices fell two-tenths of a percentage point in January.

While two-tenths of a percentage point may not seem overly disconcerting, the drop put housing prices at their lowest level in a year. The housing market is suffering greatly from the weakening economic outlook and a rise in unemployment. With economic uncertainty rising daily, it is unlikely that the housing market will improve any time soon.

Although the outlook certainly is not positive, the residential real estate market in the United Kingdom may benefit, though, from the limited number of new supply hitting the market. As long as the supply of homes available for sale remains remotely low, analysts do not believe that the nation will experience a tremendous housing crash. Rather, prices will remain stagnant, or will face a very minimal drop.

The latest drop and the current state of the housing market are not at all surprising to analysts in Europe, There has been talks for months of a potential recession in the United Kingdom. Unemployment has risen substantially over the past year, and is now at the highest rate it has been in over fifteen years.

There is hope that the second half of 2012 will bring better results for the housing market, though there is no guarantee that any kind of improvement will be seen that soon. Banks in the United Kingdom are calling upon the government to act proactively to thwart off any further loss, but it has yet to be seen if the government will respond to those calls to action.

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More Asian Investors Buying Offices in Central London

More Asian Investors Buying Offices in Central London

London office properties are looking more attractive than ever to many Asian investors. Asian buyers have more than doubled the amount the amount of money that they have invested in the past year. In 2011, they spent roughly one billion seven hundred million pounds on office property investments, up one billion dollars from the total figure of six hundred sixty-eight million pounds that was spent in 2010.

The large increase in spending played a role in the increase in the group’s market share. Asian buyers accounted for sixteen percent of total investment volume in 2011.

International investors dominated the Central London office sector, as sixty percent of investment volume came from buyers outside of the United Kingdom. Analysts believe that the surge in Asian investment volume is largely due to capital coming from pension funds in Malaysia and Ultra High Net Worth investors from various Asian countries.

The growing interest of Asian investors in the central London commercial real estate sector is expected to continue into 2012. Analysts believe that investment volumes in such markets will further increase beyond twenty percent of total market share.

The majority of these Asian investors believe that central London offers a safe long-term investment that will provide high-income returns. There are already reports circulating that large offers for properties under the ownership of other foreign investors have been made in 2012. More of such offers can be expected throughout the next year.

The surge in Asian investors has played a major role in separating the central London office market from the struggles faced by commercial real estate properties outside of the city.

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UK Housing Prices Finished 2011 Strong

Despite the uncertain outlook for the residential real estate market in 2012, housing prices finished 2011 at an eight-month high in the United Kingdom. Housing prices increased after many homebuyers expedited their home purchase to make sure it was finalized before the end of the year.

Both the total number of sales, and average prices experienced an increase in England and Wales. In both countries, the average price hit two hundred and twenty thousand pounds. The increase in pricing and sales defied the expectations of analysts, as most believed that the growing instability of the UK economy would have had detrimental effects on the residential real estate market performance.

The prime market in London once again boosted the market performance. Only London and Wales had an overall increase in value over the last three months when compared to the previous year. Thanks in part to the success of those two regions, the United Kingdom’s housing market performed better than the overall economy as a whole throughout the past year. As such, many analysts now wonder if the same can be expected for 2012.

Most reports have predicted that 2012 will be a rough year for the residential real estate market in the United Kingdom, as economic uncertainty will grow even more apparent. However, the housing market has thus far separated itself from the rest of the economy in terms of performance.

One major factor that will likely impact the housing market’s performance in the next year is the tightening of lending standards. Banks have made it clear that lending terms will become more restrictive in the coming months, making it very difficult for homebuyers to secure mortgages. Although the uncertainty that exists within the UK economy has not yet had an adverse effect on the housing market, the toughening of lending standards will likely change that.

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United Kingdom Property Prices Hit Lowest Level Since 2009

Housing prices have hit their lowest levels in nearly three years, as residential real estate market uncertainty and a weakening economy have caused consumer confidence to substantially drop.

The average housing price in the United Kingdom fell to roughly one hundred and sixty thousand pounds, which is roughly equal to two hundred and forty-eight thousand dollars in the United States. That price is more than two percent less than it was last January.

Rising unemployment and the European debt crisis have played a major factor in the overall housing decline, as many potential homeowners have become hesitant to buy in the current economic state.

Lending restrictions have also been a contributing factor to the decline, as tension and uncertainty continues to increase in the funding markets of banks. As such, it has become increasingly more difficult for potential homebuyers to secure the mortgages that they need to go through with the purchase.

Record-low interests rates have done little to prevent the decline of the housing market in the United Kingdom. Banks have said that they will keep their interest rates at their low level, though that action will likely contribute very little to recovery. The rates have been at their record-low level for more than two years.

Analysts believe that avoiding a recession will play a major role in the stabilization of housing prices in the United Kingdom. If government officials are somehow able to avoid an economic meltdown in 2012, the housing market will likely remain at its current state. However, if the economy takes a turn for the worse, the housing market will most certainly suffer.

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