|
Welcome to the periodic update on LONDON RESIDENTIAL & COMMERCIAL PROPERTY trends & issues.
|
London House Prices: Bottom of Market Very Near Sales: Nationwide Index Up 4.4% Since February: London Leads Recovery |
Nationwide has released figures showing that UK house prices rose for a third month in a row. July was up 1.3% following a 1% rise in June and a 1.3% rise in May. Prices are up 4.4% since February.
UK Land Registry data which is more comprehensive UK-wide but tends to lag a few months behind other indexes, shows that for June UK prices rose by 0.1% across the country the first increase in 18-months.
Prices in "prime" London locations appear to have pretty well stabilized. London is a very different market from the rest of the country. The UK at large still looks much more patchy in terms of recovery compared to the capital.
Prime London locations such as Chelsea, Kensington, Knightsbridge, Belgravia, Holland Park and Notting Hill Gate are seeing much greater market activity than over the previous quarter and appear to be leading the market back. In some "prime suburbs" - Hampstead, St Johns Wood and Fulham - data has been released by Knight Frank showing as much as a 3.7% increase in prices.
Prices and values have come down, in some instances by as much as 28% since the peak in 2007, but now there is a supply shortage and an increasing pent up demand is being reported from some leading London agents, keeping prices stable.
London is only second to New York as a global financial center. It is a low rise city with strict planning restrictions - quality stock is very limited and will remain so. As the recovery slowly gathers pace prices will stabilize and will for a while run along the bottom. Once the banks start lending again, the market will start to rise. It is simply a question of when - and when may not be so far off. |
|
London Rents Stabilize As Stock Levels Start To Fall
Lettings: UK Rents Rise For Third Month Running |
|
Data released by FindaProperty.com, one of the UK's leading property portals, saw rents across the UK rise for the third month in a row to an average of £825 per month.
 In prime Central London rents have fallen by as much as 28% in the Royal Borough of Kensington & Chelsea and more in other London boroughs, since their peak in 2007. Market evidence strongly suggests that rental levels may now be stabilizing. However there is still a problem of over supply.
Supply data released shows that rental stock levels have fallen for the second month running, but remain 68% higher than in July 2008. Over supply has been fueled by a combination of "accidental landlords" - those caught out holding properties when the market fell off the cliff - together with a major drop in the volume of corporate relocations, which tends to drive the mainstream London and UK rentals sector.
 The drop in the number of corporate relocations in the UK is very hard to assess. The fall in activity across the leading UK and Global Management Companies (GMC's) would suggest that a drop of 50% or more in the number of new relocations in to the UK over the last 12 months.
There has also been a big increase in Departure Services to employees being repatriated back to their home country. |
Commercial Property Collapse: Tenants Market Commercial: Curzon Acquires Prime City Offices For Clients - "Great Deal!" |
|
Acting on behalf of a leading US Corporate client Curzon has advised on the acquisition of 1,000sf of "state-of-the-art" air-conditioned offices in the heart of the City of London, EC4. Over a 30% rent reduction was negotiated with a very substantial "rent free" period, capped service charges and a flexible 5 year lease with a Tenant only "break option" mid-term, together with a further rent free period to the Tenant in the event that the Tenant does not exercise their break option.
 Applauded by our client as "a great deal!" this transaction demonstrates the excellent terms and low rents that are available to potential Tenants in London as Landlords become increasingly desperate to get their vacant properties income producing.
YIELDS UPDATE: In terms of rental yields, data released from Auctions Results Analysis (ARAS) shows that the average initial yield for shops (retail) is 7.27%, for offices 8.26% and for industrial 8.84%. Secondary yields rose to 9.1%, a level last seen in 2003. All-property yields (commercial) in 2008 ended the year at 8.6%, the highest level since the 1990's. (data:CBRE monthly index).
OFFICE RENTS UPDATE: West End and City office rents fell nearly a third over the last year (data: NB Real Estate). Prime rents fell from £120psf at the end of 2007 to £85psf by the end of 2008, a fall of 29.1%.
Total returns and capital values for UK commercial property in 2008 fell by 27.1% and over 18 months since the peak by 35.5% (data: IPD). |
|
US Case-Shiller Index Shows First Rise In Three Years
Finance: Key Index To UK Mortgage Trends & Recovery |
| The Case-Shiller Index in America is a highly respected housing index measuring property prices in 20 US cities. It's most recent survey in May showed a prices rise of 0.5%. Seasonally adjusted this is a very small drop of 0.2% opposed to the 2% monthly falls recorded earlier. This indicates that US house prices may be beginning to reach the point of levelling out.
This always takes much longer in the US than in the UK. Once this starts to happen then those sub-prime "toxic assets" can be gradually cleared out by the banks. This will then enable for the securitisation of mortgages to start which has been historically a key source of UK mortgages.
The model may not be quite the same as last time, however the importance of this US finance structure on the UK housing market cannot be understated. The recovery of the US housing-finance market will be yet another major contributor to the sentiments of the UK lenders and the eventual re-emergence of liquidity in to the UK housing market. | |
|
Curzon Property Consultants are "local" prime London real estate brokers covering both the Residential & Commercial property sectors in Central London from our Knightsbridge offices.
Residential: Sales, Lettings, Management, Investment & Development, Coroporate Services
Commercial: Offices, Retail, Leisure, Industrial, Management, Investment & Development.
Please contact us directly for further information.
Sincerely,
James Moss MRICS, MCIArb
Director
Curzon Property Consultants |
|
|
 |
NEW CURZON WEBSITE
(click here!) |
| Sales
Please visit our newly relaunched website |
|
GLOBAL INTEREST RATES |
|
UK 0.5%Euro 1.0%Swiss 0.25%USFed 0.25%Canada 0.25%Australia 3.0%Japan 0.1% |
|
|
|
|
