While London remains the least affordable city for renters, the capital has seen the largest improvement in rental market affordability over the past five years, Benham and Reeves analysis of ONS data shows.

In London tenants spend 35% of their income on rent, however the cost of renting in the capital has fallen from £1,495 in 2017 to £1,450 in 2022, while typical incomes have increased from £2,975 to £4,155 per month over the same timespan.

As a result the current level of income required to cover the cost of renting has fallen from 50% in 2017 to the 35% required today.

Marc von Grundherr, director of Benham and Reeves, said: “Rental market affordability has long been a problem for the nation’s renters and while the percentage of income required to cover the cost of renting may have fallen across a number of regions, it certainly won’t feel like the challenge of renting has become any more affordable.

“Yes, an increase in earnings may have helped to an extent, but there are many who simply won’t have benefited from this increase. At the same time, the cost of renting has climbed across every region but one, putting further pressure on tenant finances.

“With the government doing its best to deter landlords from the sector, a reduction in the level of available rental stock will have also helped to drive up the cost of renting and this is an issue that doesn’t look like it will be easing any time soon.”

Across England as a whole 26% of tenant income is spent on rent, a proportion that has stayed unchanged since 2017.

Improving affordability

It’s not just London that has seen a reduction in the level of income required to cover the average cost of renting.

In the East of England the proportion of income required to cover the average rent has reduced by -4%, as high incomes of £3,560 stood against typical rents of £865 per month.

Affordability also improved in Yorkshire and the Humber (-2%), the North West (-1%), South West (-1%), and East Midlands (-1%).

Worsening affordability

Tenant affordability has worsened in three regions, by 5% in the West Midlands, 4% in the South West, and 1% in the North West.

There’s likely been an influx of tenants moving to these regions in the past five years, shifting the balance of supply and demand.

It’s important to note that all these increases came from a low base.

Even after affordability became tougher for tenants, average incomes made up 29% of rents in the West Midlands, 29% in the South West and 26% in the North West – not far from the national average.

Source : PropertyWire

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London is the top global destination for Gulf Cooperation Council (GCC) property investment despite market headwinds, according to a new report from the UK’s oldest and most successful Islamic Bank, Al Rayan Bank.

The research also found those that invested in London over the period spent more, at an average of $90.8m, with Tokyo ($90.4m) and Zurich ($89.7m​) the next highest.

Almost all (95%) of the respondents have invested in the UK property market over the last five years at an average value of $81.9m, according to the findings.  ​

The research shows that almost nine in ten (89%) view the UK as a strong investment opportunity, with 85% saying their confidence in the market has increased over the last 12 months​, citing surplus demand, reliable investment returns, strong rental growth and the availability of diverse assets.

Maisam Fazal, Chief Commercial Officer at Al Rayan Bank, said, “UK property is the darling of GCC investor portfolios. London, in particular, is seen as a reliable location for safe returns.

“And despite a challenging period for the market, investors know they can rely on the UK’s stable currency, growing demand for housing, rising rental incomes, transparent legal system and its established network of skilled property professionals, which make buying and owning property in the UK a profitable and headache-free experience.

“This is an auspicious time for those with assets to deploy in the UK property market and coupled with those from the GCC considering Britain as a second home, I’d expect this trend to continue.”

Aneel Mussarat, Founder of MCR Property Group, added, “There is undoubtedly a bias towards the UK among GCC investors because of the long-standing relationships that exist with developers and agents across the market, the absence of any language barriers and the surplus demand and strong rental growth that we continue to see.

“London remains the primary focus, but investors are increasingly willing to look further afield. The regeneration that continues apace across the UK’s regions is creating more attractive investment opportunities for GCC investors, and we’re seeing this reflected in our own portfolio.”

The enduring appeal of the UK

The findings show that almost all (93%) of the respondents are planning to make new investments or increase their investments over the next five years, with many looking to invest across the UK’s regions.

Liverpool (34%), Manchester (34%), Birmingham (26%), Brighton (23%) and Newcastle (19%) are the top five destinations outside of London (56%), according to the research.

Of those planning to invest in London, more than half (55%) are targeting Central London, with East London (32%) the next most popular area.​

The type of property respondents are planning to invest in within the UK is mixed, with 59% considering residential apartments, 52% looking at commercial office space and 49% seeking residential housing​.

Sustainability is also a growing consideration for investors, with 58% of respondents stating access to green investments make London an attractive investment target.

Giles Cunningham, CEO at Al Rayan Bank, said, “The GCC barometer has unveiled an encouraging picture for the property market across the UK.

“Investors are also becoming more aware of the real estate opportunities across the regions, which are proving increasingly attractive as regeneration projects accelerate.

“Al Rayan Bank has huge experience arranging Sharia-compliant finance for real estate investors, and we stand ready to support investors with the right real estate financing solutions.”

Source : LondonLovesBusiness

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The posh London mansion that billionaire businesswoman and pop star Rihanna rented for £18,000 (US$21,895) per month while she lived in the British capital has just sold for £27.5 million.

The A-lister called the pad home for some two-and-a-half years—during which the more than 6,300-square-foot home’s contemporary interiors appeared across her social media channels—before moving out in 2020, Mansion Global previously reported.

Fully refurbished and modernized, the eight-bedroom home is St. John’s Wood, a leafy upscale neighborhood north of Regent’s Park that’s full of townhouses and megamansions.

It’s also “the only one of Royal architect John Shaw’s original villas on St. John’s Wood Park to have survived into the 21st century,” said Stephen Lindsay, the head of the North London and St John’s Wood office at Savills, which had the listing with Aston Chase.

The house has a number of reception and family rooms, alongside formal and casual dining rooms, a study, a family kitchen and a gym. There’s plenty of outdoor space too, in the form of a terrace and a sizable rear garden.

There’s also planning permission in place to expand the home to 16,000 square feet, nearly tripling the interior space, and allowing a basement with a pool and spa, according to the listing.

The “We Found Love” singer is not the only notable resident to have called the manse home. Diamond tycoon Daniel Francis, a shareholder at De Beers in the mid-1800s, was the original owner of the five-story mansion.

The house was purchased by a family from overseas, according to the brokerages. Mansion Global couldn’t identify the sellers.

Friday’s sale equated to £3,500 per square foot, a record price for the St. John’s Wood area,” said Mark Pollack, co-founding director of Aston Chase. It reflects “the substantial planning consent obtained, the large plot and the secure carriage drive, which are amenities normally associated with homes further out in the suburbs of London.”

A representative for Rihanna couldn’t immediately be reached for comment.

Source : MansionGlobal

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Luxury property developer Berkeley Group has restated its profit forecast, despite the overall downbeat picture with the UK housing market.

Even though earlier this week, the Halifax house price index reported a 4.6 per cent annualised fall in home prices in August, Berkeley repeated its pre-tax profit guidance of £1.05 billion ($1.3 billion) for its 2024 and 2025 financial years.

Because it favours creating luxury and prime properties and tends to concentrate on London, Berkeley is considered to be in a better position to weather the storm currently blowing the wider UK housing market.

But given that the group reported a 35 per cent fall in private sales reservations between May and August, analysts say it is not totally immune to that tempest.

“Demand in the capital’s likely to remain more robust than other areas of the country, but in the short term, there’s plenty of stormy clouds for Berkeley to weather,” said Aarin Chiekrie, equity analyst at Hargreaves Lansdown.

Berkeley, which specialises in turning industrial sites into high-end property, did not acquire new land in the May-August period, preferring to concentrate on pipeline projects given the gloomy economic conditions

“Considerable uncertainty for the UK economy, with persistent high inflation and interest rates, continues to deter investment into brownfield regeneration and the wider house-building sector,” the company said in its trading statement.

Forward sales

“The cash position remains strong which provides a potential buffer against a punishing background and a progressive dividend policy seems likely to be followed, even if the current yield of 3.2 per cent is pedestrian compared to some of its peers,” said Richard Hunter, head of markets at Interactive Investor.

“The group has also noted that build-cost inflation is at ‘negligible’ levels across the portfolio and that forward sales remain robust.”

Nonetheless, going forward Berkeley’s sales projections illustrated that even at the luxury end, demand is being affected.

The group expects its forward sales by the end of October to be about £2 billion pounds, compared with £2.14 billion at the end of April.

Source : TheNationalNews

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Riyadh, Saudi Arabia: Barratt London and the recently launched Barratt London MENA office, led by UAE-based Hardington Residential, will be targeting Middle East investors with a range of projects offering high yields and impressive projected capital appreciation when the company makes its debut at Cityscape Global, which takes place from 10-13 September in Riyadh, Saudi Arabia.

One project being showcased to investors on Hardington Residential’s dedicated stand at the international property showcase is Barratt London’s award-winning Hayes Village regeneration project, which was recently visited by British Prime Minister Rishi Sunak, where he announced an additional US$250 million (£200 million) of government funding for development of new housing on brownfield areas in the English capital.

Homes at Hayes Village, set on a former Nestlé factory site, range from one-bedroom apartments to three-bedroom family properties, with some still retaining the elegant Art Deco featured in the original factory. Barratt London’s latest offering within the development is the Richart Apartments, a collection of one- and two-bedroom apartments, with prices starting from US$415,000 (£329,000). The development is surrounded by parks and gardens planted with 250 new trees and includes fitness trails, outdoor gym equipment and play areas to improve health and wellbeing.

A footpath also connects the development to Hayes and Harlington train station in less than a nine-minute walk, with high-frequency Elizabeth Line trains into central London in 30 minutes.

Stuart Leslie, International Sales and Marketing Director at Barratt London said: “Similarly to our other major regeneration schemes, Hayes Village is proving popular with overseas buyers, particularly those from the Middle East where we have seen significant interest and sales from individuals and family offices from Saudi Arabia, Kuwait, Qatar and the UAE.

“There has been a significant uptick from buyers in the Middle East looking for a home in London for work or as a home for children who are studying in the capital. With projected capital growth of 19% in the next five years and expected rental yields of up to 5.9%, the development offers great value for money, piquing the interest of Middle Eastern investors keen to diversify their portfolios in a reputable and potentially lucrative market.”

Another Barratt London development making waves amongst Middle Eastern investors is the recently launched Wembley Park Gardens, a new landmark development built in the heart of Wembley Park, an area famous with football fans worldwide as the home of the England national football team.

In addition to football fans, overseas investors have quickly recognised the area’s transformation, following US$3.5 billion (£2.5 billion) of regeneration in the last 20 years. In the previous five years, rents in the area have increased by 49%, compared to the 23% London average. Furthermore, despite benefiting from the regeneration of Wembley Park and the redevelopment of Wembley Stadium, according to research from JLL, the neighbourhood is still 30% cheaper than the Greater London average, further underscoring the return on investment opportunities.

The development will deliver a smart collection of 302 one- and two-bedroom apartments to the market, featuring outdoor private space, with prices starting from US$495,000 (£395,000) and handover for phase one expected by summer 2025.

Residents will benefit from a world-class destination, offering a good choice of shopping, world-class restaurants, picturesque green spaces, highly rated schools and cultural and leisure attractions. Central London is just 20 minutes via the Underground, while overground stations provide easy access to the countryside and key British towns and cities, such as Oxford.

Ian Plumley, Managing Director, Hardington Residential, said: “Investors in the Middle East have been quick to recognise the unparalleled financial opportunities many of the capital’s regenerative areas are offering, including Wembley Park Gardens, where robust yields, impressive return on investment and substantial capital appreciation have resulted in a spike in interest from interested buyers in this region.

“Cityscape Global represents an excellent opportunity to showcase the quality of the developments offered by Barratt London while also providing an overview of the potential financial remuneration investors can expect. We will have a team on hand able to outline everything from the areas within London where the developments are located to applying for mortgages, ensuring a confident and informative process.”

Barratt MENA will be exhibiting at Cityscape Global in Hall 1, Stand R64, with Stuart Leslie and Ian Plumley available for interview throughout the show.

Source : Zawya

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More than 70% of “prime central London” properties sold so far this year have been bought entirely in cash, according to a report by estate agents Savills that fuels concerns that rich overseas buyers are snapping up properties at the expense of working Londoners.

A total of 71% of prime central London – an estate agent term for an area that stretches from Chelsea to Camden and Notting Hill to Westminster – have been bought mortgage-free in the seven months from January. That compares with about 35% for the UK as a whole.

It comes as soaring inflation has led the Bank of England to push interest rates to a 13-year high of 5%, which has in turn led banks to raise mortgage rates, making large home loans increasingly difficult to afford.

Frances McDonald, director of residential research at Savills, said: “The established prime markets most synonymous with equity rich buyers are holding up the strongest amid mortgage market turbulence.

“While London’s prime market continues to perform more strongly than expected, the most recent interest rate rises are likely to squeeze buyer budgets and increase price sensitivity, particularly in the more domestic outer prime locations where more buyers are dependent on borrowing. Sellers will need to price pragmatically to align with prevailing buyer expectations.”

The estate agency said that despite concern about the impact of interest rates in the wider housing market, “prime London residential values remained remarkably resilient”.

Prices across London’s prime markets have fallen by 1% compared with this time last year. That compares with a 3.5% fall in UK house prices overall.

Savills said this was because of “a growing divergence between cash and equity rich buyers and other groups in their ability to transact, and between the very top end of the market and lower value segments”.

Prices for the £5m-plus London prime market remain flat (-0.1%), while the £500,000-£1m market has seen some falls (-2.1%), and the under-£500,000 market has fallen further still (-2.5%).

Mayfair, Westminster and Marylebone were the most popular areas with overseas buyers looking for pied-a-terres. “International travel picked up at the start of this year, led by passengers from Asia, the Middle East and the US. While this has translated into increased demand, buyers at the top end remain discerning,” McDonald said.

More than 160 properties worth £10m or more were sold in London in the 2022-23 financial year – the most since 2016 when Brexit spooked the global super-rich from investing in the UK’s “super-prime” market.

A total of 161 such sales – or three a week – were made in the capital in the year to March, according to analysis of Land Registry data by the estate agent Knight Frank and the data provider LonRes.

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Britain’s biggest mortgage lender Halifax said values were down by 2.6 per cent in June, leaving the average price in the capital at £533,057, a loss of around £15,000 over 12 months.

It was the fastest rate of decline of any UK region apart from the south east where prices were 3 per cent down.

However, the long feared full scale crash in London property prices has not yet materialised despite 13 consecutive increases in interest rates from the Bank of England and the cost of average fixed mortgage deals passing the six per cent mark.

Kim Kinnaird, director, Halifax Mortgages, said: “How deep or persistent the downturn in house prices will be remains hard to predict. Consumer price inflation is likely to come down in the near term as energy and food prices look set to reverse their steep rises, but core inflation is clearly proving stickier than originally expected.

“With markets now forecasting a peak in Bank Rate of over six per cent, the likelihood is that mortgage rates will remain higher for longer, and the squeeze on household finances will continue to put downward pressure on house prices over the coming year.”

Market commentators said the impact of higher borrowing costs on house prices has been a “slow burn” because the vast majority of owners with mortgages are on fixed rates that are not immediately hit by any moves by the Bank of England.

Tomer Aboody, director of City based property lender MT Finance, said: “Although we have seen a fall in the demand and pricing, this is far from the expected or predicted downward trend. The sentiment is that the market is keeping a stiff upper lip, with buyers and sellers still out there, making the impact less volatile.

“Of course, the continued interest rate rises are impacting buyers, as people wait to see where the new norm settles, but we are not seeing the ‘crash’ that many were expecting because proportionately very few people are being affected by the rate hikes, since most are currently on fixed mortgages.

Source : EveningStandard

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UK property markets will hopefully flatten out in 2023, according to a property expert as the country left behind an unsteady year in which prices went up and down.

In the last year, rising mortgage rates and costs of living added to the enduring effects of the coronavirus pandemic, not only on house prices but on the entire property market.

Though the housing shortage and demand are still high, this year is expected to at least not be as bad as 2022.

Speaking to Anadolu, Shadot Miah, lettings director at Hunters Estate Agents in London, said the property market was “up and down” last year for them

“Last year, we experienced a very quiet first quarter. The second quarter, it was picking up and the last quarter was absolutely busy.”

He said that the main problem was stock issues, especially towards end of the year, as people were coming back to Britain after easing the pandemic measures.

“Everyone started to come back in London,” said Miah, who has 20 years of experience as a real estate agent.

Another factor in the shortage was the longer-term contracts made during the pandemic, as uncertainty drove agents to make contracts of two or three years between tenants and landlords.

In October 2022, private rents in the UK hit record highs, with rises of up to 20% in some areas, while the total number of available properties fell by 9%.

‘Rising expenses hit hard’

“It was an all-season market … I’ve been through Brexit stamp duty, I’ve seen that market. I’ve seen the market with the credit crunch in 2007. I’ve experienced that all in one year last year,” added Miah.

Describing 2022 as an “unprecedented year,” however, Miah said he expected the market to flatten out and see “a bit more consistency” in 2023.

“I think rentals will be coming back to normality. I think we’re possibly coming back on the market,” he said, adding that the seller’s market would remain “tough.”

Comparing the effects of Brexit, the pandemic, and the ongoing economic turbulence on property market, Miah said all these went hand-in-hand but that rising expenses was a serious issue as they “hit people hard.”

Touching on rising in rent caused by a surge in inflation and mortgage rates, he said it may drive people to move to different areas if living costs continue to climb.

Miah said that “a lot of tenants who can’t afford to live in (central) London, who don’t need to live in London,” would likely leave the city center in favor of the suburbs.

According to the Office for National Statistics (ONS), more than 1.4 million households in the UK are facing the prospect of interest rate hikes as they renew their fixed-rate mortgages in 2023.

Source: aa

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Connect Underwriting Ltd., a London-based specialist reinsurance managing general agent, announced the availability of new capacity via Pixel Re, a new dedicated, monoline reinsurance vehicle for global property and downstream energy risks.

With exclusive Lloyd’s and London-market sourced capacity, Pixel Re will provide facultative reinsurance for large multinational risks on an excess-of-loss basis with immediate effect.

For attachment points of typically $500m and above, Pixel Re aims to meet growing demand for high quality capacity for larger line sizes, driven by inflationary pressures on insureds’ assets across the globe.

“We are excited to announce the addition of Pixel Re, which provides new capacity for property and downstream energy risks,” commented Jamil Elbahou, CEO and chief underwriting officer, Connect Underwriting.

“This is available immediately to select distribution partners that have a regular requirement for these attachment levels globally. Pixel Re is very much part of our commitment to leverage our expertise to bring more to the market and to fulfil the need for additional high-quality capacity in what is fast becoming an underserved area of the market,” Elbahou added.

About Connect Underwriting

Connect Underwriting Ltd, a managing general agent and Lloyd’s coverholder, is a specialist, London-based re/insurance underwriting group with operations in the UK and Europe. Founded in 2017 by Jamil Elbahou, ConnectUW is a rapidly growing business, underwriting on behalf of Lloyd’s and other first-class securities and providing capacity via the leading intermediaries of the world.

Source : InsuranceJournal

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