Latest mortgage research shows shift in investors’ choice of property type in UK

Real estate investors in the UK looking to expand their property portfolios are looking to do so with the purchase of more complex property types, new research has found.

In particular 28% of those looking to expand said they were considering purchasing HMOs, up from just 10% six months ago, according to the latest report from Mortgages for Business.

Commercial and semi-commercial property are also interesting of investors but those looking to purchase vanilla property has fallen slightly to 79% from 83% in November.

David Whittaker, managing director at Mortgages for Business, pointed out that with higher yields it is no surprise that there has been a sizeable shift towards the more complex property types.

‘The interest in commercial and semi-commercial property may have also grown as these asset classes do not incur the Stamp Duty Surcharge imposed on residential property,’ he explained.

The report also shows that the number of investors looking to expand their portfolio has dipped slightly to 41% from 46% in November 2015, probably due to the tax change announcement and the introduction of the 3% stamp duty surcharge.

However, the good news is that an even smaller proportion, some 14%, plan to shrink their portfolios, down from 18% in November 2015.

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Miami property market normalising after years of record growth

After eight years of record or near record residential sales, the Miami real estate market is normalising with steady growth, according to various prominent local market experts.

The fast sales growth of Miami middle market properties, the continued high percentage of all cash buyers, preconstruction condo inventory in the rapidly-growing Downtown Miami area and South Florida’s overall population and job increases are boosting the market, they told the recent Real State of the Miami Market event.

According to Anthony Graziano, senior managing director of Integra Realty Resources, 2013 and 2014 were extremely strong for the Miami market for fundamental reasons, including pent-up demand.

‘When we look at our numbers today, we are getting back to normal. It’s okay that our market is not growing 15 to 20% every year. In fact, it’s a good thing. I want to grow 5% a year because at some point our wage growth can’t keep up,’ he told the meeting.

The event hears that single family homes priced between $200,000 and $600,000 saw a 5.8% year in year increase in April, with the sector representing 63% of total Miami single family home sales.

Existing condos priced between $150,000 and $300,000 saw a 2.7% rise in sales in April, representing 39.2% of total existing Miami condo home sales in April 2016.

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Sellers reduce asking prices in Spain as the market become more realistic

Sellers in Spain are becoming more realistic about prices and have reduced asking values which is seen by experts as a good move in terms of keep in the real estate recovery going.

Asking prices fell by 0.2% to €1,624 per meter in April, according to data from property portal Fotocasa, compared to a year ago.

Meanwhile the latest house price index from the Government shows that prices were up 2.4% in the first quarter of 2016 year on year and up 0.2% quarter on quarter.

The Fotocasa asking price index has been fairly stable for the last year, with prices never varying more than 1% either up or down. ‘House prices will continue to go in different directions during 2016,’ said Beatriz Toribio, head of research at Fotocasa.

‘Whilst in some areas of the country prices are stabilising or even rising, in others they continue to fall hard. This is a consequence of the crisis the sector has lived through, which has left a market of two or more speeds that is ever more obvious,’ Toribio added.

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Families pay almost £44,000 extra for home in good primary school area

Families in the UK are having to pay a price premium of almost £44,000 to buy a property near the best performing primary schools, new research has found.

Many parents want their offspring to get the best start in life and they are prepared to move home to make sure they are in the catchment area for those first crucial years at school.

According to the research by online estate agents HouseSimple, the average premium paid is £43,773 to be in the catchment areas for the top 50 state funded primary schools across England that received the highest rating by Ofsted in its latest report.

The research revealed that average property prices in streets that are close to these best schools are 18% higher than average property prices for the area postcode.

Of the primary schools commanding the biggest premiums to live near to, more than half are in the South of England. The schools adding the biggest premium to local property prices are St Luke’s Primary School in Brighton and Hove and Crowland Primary School in Haringey, adding 45% or £151,121 and 44% or £193,816 respectively.

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Property growth sluggish in the US, latest index data suggests

National property growth in the United States increased by a moderate 0.6% quarter on quarter but values are barely rising with variations according to location.

The home data index from Clear Capital shows that in the Northeast and Midwest regional quarterly growth rates were sluggish at only 0.2% while the South saw a 0.7% rise. These rates come with little to no change from the previously reported quarterly growth rates, all within 0.1% of the figures from the previous month.

The firm believes that the current picture is being led by the West where sales have increased 0.3% from 0.9% to 1.2% in a month and it says that this momentum shift is setting the pattern for another strong summer growth season as the region begins to dominate regional performance once again.

The continued dominance of the West is easy to see on the firm’s list of Highest Performing Major Metro Markets, where nine of the current top 15 are in the West.

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Monaco has the second most expensive ultra prime property in the world

Ahead of the Formula One annual Grand Prix in Monaco new research shows that the price of ultra prime property per square metre is the second most expensive in the world with only Hong Kong more costly.

Last year was a strong one for Monaco with a total of €2.25 billion sales with new builds making up just 7% of total sales but 20% of total sales value.

The data from Savills World Research also shows that prime two bedroom apartments on the Grand Prix track are nearly nine times the cost of comparable properties on the Singapore race track and if the track was measured as dwelling floor space, it would be worth €3 billion

The report points out that Monaco is a small market and average prices are prone to fluctuation depending on the sample of properties sold in any one year. In 2015 the average resale price in Monaco stood at €3.5 milion, down 4.8% on the previous year, while the median price at €2.1 million was up 5%. The long term median price trend shows
consistent growth, averaging 5.8% per annum since 2010.

‘Monaco continues to be an exceptionally attractive location for the global wealthy and has all the key ingredients for real estate price growth’ the report says.

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New homes sales in Australia bounced back in March after a decline the previous month

Total new home sales in Australia bounced back in March with growth of 8.9% following February’s sharp decline of 5.3%, the latest housing data shows.

Sales of detached houses increased by 7% and sales of multi-units were up 16.3%, according to the new home sales report from the Housing Industry Association which covers the country’s largest volume builders.

The data also shows that new home sales increased by 2.8% in the first quarter of the year but were 1.7% lower than the same quarter in 2015.

It is another positive update for the residential construction sector, according to HIA economist Diwa Hopkins and she pointed out that the bounce in March has moderated the downward trend that emerged in the second half of 2015.

‘The current level and trajectory of new home sales and approvals provides a strong signal that new home building activity in 2016 will remain strong,’ she added.

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New research reveals lack of affordable homes in London

With the average price for a property in London now exceeding £500,000 new research shows that just 46% of home listed matches this price or less.

The analysis from fixed fee estate agent eMoov examined current stock levels across all of the major portals, recording the total levels listed for each London borough, before comparing this to the level of stock listed for £550,000 or less.

The research then took the total stock under £550,000 and recorded it as a percentage of the total level of stock across the capital.

The worst location for affordability was Kensington and Chelsea with just 6% of properties for sale at £550,000 or less, followed by Westminster at 7%, Hammersmith and Fulham at 14%, Camden also at 14%, Wandsworth at 22% and Islington at 25%.

A further 13 of London’s boroughs had just 50% or less of its stock listed for the average price of £550,000 or under.

The boroughs that did offer more for those with a budget of half a million were Hounslow at 57%, Bromley at 61%, Waltham Forest at 64%, Enfield at 65%, Hillingdon at 65%, Lewisham at 66%, Redbridge at 72%, Greenwich at 72%, Newham at 78%, Croydon and  Sutton both at 79%, Havering at 84%, Bexley at 91% and Barking and Dagenham at 97%.

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Residential property market in Abu Dhabi slow in first quarter of 2016

In Abu Dhabi real there was a slight decrease in demand for higher priced residential units but sales activity was slow although relatively stable except for a handful of transactions concluding at below market rates.

A fee of 3% on home rentals was announced as a Municipality Contract Fee, which will be applied to all Abu Dhabi’s expat residents and this could affect the market, according to the latest UAE property review from Asteco.

Rental rates for prime and high quality residential apartments fell 2% compared to the fourth quarter of 2015, the report data shows. However, apartment rental rates remained, on average, 4% higher than the previous year’s rates.

Mid and low quality units, in contrast, recorded stable rates with only a slight decrease for larger units, as tenants moved to newer developments offering similar or lower rental rates.

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UK equity release going from strength to strength

Looming interest only mortgage due dates have driven a surge in sales of lump sum equity release plans to 40% of the market in the UK in the first quarter of 2016, according to a market monitor report.

Some 40% of people are taking a single lump sum advance to reduce their debts, up from 30% for the same period in 2015, the data from the report from Key Retirement shows.

The firm believes that the surge is largely being driven by customers who need the maximum cash available rather than drawdown as they are using the lump sum to pay off shortfalls in interest only mortgages. Average amounts released through equity release are now £76,000 and as high as £134,000 in London.

The Market Monitor, which analyses data for Equity Release Council members and non-members, for the first three months of 2016 shows record growth with total property wealth released rising to nearly £415 million, up from £341 million last year.

The detailed report by the over 55’s specialist shows rising numbers of retired home owners using their property wealth to pay down increasing debts including loans, credit cards and mortgages.

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