UK house prices are continuing on an upward path, increasing by one per cent month-on-month and 5.8 per cent year-on-year in October.
The Nationwide House Price Index also showed that house prices are now around seven per cent below their 2007 peak and the average UK price is £173,678.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “The UK housing market appears to be following the more resilient upward trend evident in the wider economy in recent quarters. House prices increased by one per cent over the month in October, maintaining the momentum that has been building in the second half of 2013. After averaging less than one per cent in the first half of the year, the annual pace of house price growth accelerated to 5.8 per cent in October from five per cent the previous month.”
The market is also be fuelled by mortgage rates that are close to all-time lows. Also, while employment has been rising steadily for some time, it is only in the last few quarters that consumer sentiment has improved markedly. This may in part be the result of the improved performance of the wider economy. The UK economy expanded at a healthy 0.8 per cent quarter-on-quarter pace in Q3 – the third consecutive increase and the fastest pace of growth for three years.
Added Nationwide’s Robert Gardner: “While house price growth has picked up, at a national level prices remain around seven per cent below their 2007 peak. Moreover, typical mortgage servicing costs remain modest by historic standards thanks to the ultra-low level of interest rates. A typical mortgage payment for a first time buyer is currently equal to around 29% of take home pay, in line with the long term average.”
Richmond in south-west London has been named as the area with the highest concentration of workers in the technology industry in the UK, according to the Tech Monitor UK report from KPMG.
Research showed that Richmond has two and a half times the proportion of people employed by the technology industry compared with the national average, while neighbouring Hounslow has the second highest proportion.
Strong connections to the M25, M3 and M4, as well as Heathrow airport, make the borough an attractive place to live for tech workers – on top of a growing number of technology companies such as eBay and Paypal basing their headquarters in the area. Richmond is just an 18-minute train journey into London Waterloo.
Further research by international property consultancy Savills also shows that 56 per cent of buyers in the area purchase with a view to upsizing, suggesting some workers could be looking to move away from areas traditionally associated with tech companies such as Old Street – in favour of a better quality of life and larger family homes.
Highlighting what’s available in Richmond, Savills is selling a six-bedroom detached family home with all mod cons and landscaped gardens, just off Ham Common for £3.65 million. Alternatively, it is selling a five-bedroom Georgian house, in a prime location and over four storeys, including a cinema room equipped with a 3D projector and a 113” projection screen, plus a Bowers & Wilkins
surround sound system – on the market for £3.95 million.
The £400million Quadrant 3 redevelopment in Regent’s Street, part of The Crown Estate, has been labelled as a model for sustainable development, thanks its sophisticated energy generation system.
The Quadrant 3 is the first development in the UK to install a highly efficient and sustainable fuel cell that draws its power from the same technology used to provide energy to space shuttles during flights.
Emitting 38 per cent less carbon dioxide than a normal system that uses electricity from the grid and heat from gas fired boilers, the 300 KWe molten carbonate cell is the most efficient of its kind in Europe. The fuel cell forms part of one of the world’s most sophisticated central energy systems which serves over 46,500 square metres of offices, retail, residential, restaurant and hotel space in the Regent Street Quadrant area.
Head of Development Alastair Smart said: “Occupiers are increasingly looking to operate more sustainably and this includes factoring in the green credentials of their premises. The fuel cell is a real flag in the sand, demonstrating what is possible in terms of energy efficiency and carbon reduction, and it will only enhance the building’s reputation as a world leading example of sustainable development.”
Al Gore, former Vice President of the USA, currently headquarters his sustainable investment firm, Generation Investment Management at Quadrant 3. The building’s sustainable design was an important factor in the firm’s decision to move to the scheme with Mr Gore commenting that The Crown Estate demonstrated a “sophisticated commitment to sustainability”.
New research from a leading international property consultant shows that London will continue to rank as the top real estate investment target in 2014 amongst High Net Worth Individuals (HNWI) in nine key Eastern hubs of private capital.
According to the Cluttons International Private Capital Survey 2013/14, which assesses HNWIs in Abu Dhabi (UAE), Bangkok (Thailand), Dubai (UAE), Jakarta (Indonesia), Kuala Lumpur (Malaysia), Manama (Bahrain), Muscat (Oman), Singapore and Tokyo (Japan), London is the first choice in four of the nine eastern HNWI hubs and a top three target for investors in eight of the eastern countries.
Dubai came second in the rankings with two top choices – from investors in Muscat (Oman) and Manama (Bahrain), indicating that an improved global economic outlook and local property market corrections are translating into higher levels of investment activity close to home markets. Singapore falls to third place compared to last year’s survey.
Bill Siegle, Senior Partner at Cluttons says: “It is highly encouraging to see London retain its title as the top investment target among High Net Worth Investors in nine of our global offices. The capital has consistently offered strong returns both in the residential and commercial sectors, and our survey indicates that its appeal as in an investment location among Eastern investors will continue into 2014.”
The top three drivers for investment in London property by HNWIs are its perceived safe haven status (26 per cent), followed jointly by capital value growth yields and the exchange rates on offer (22 per cent); the weakness of sterling as an incentive being particularly prevalent in South East Asian markets. While factors considered least influential by investors are financial market performance and transport/infrastructure (4.3 per cent).
However, despite a preference for residential assets and capital value growth, HNWIs are also increasingly looking at alternative investments such as student accommodation, and commercial assets outside of London’s city core which present the opportunity for higher yields than prime residential.
House prices in the UK rose at their fastest annual rate in more than three years during September, with London once again enjoying the biggest jump.
The annual rate of house price increases rose to 5 per cent, marking the strongest uplift seen since July 2010, according to one of the country’s largest lenders, Nationwide. Prices in the UK are also up by 0.9 per cent month-on-month, meaning the typical UK home is now worth £172,127.
Demand has increased against a background of low interest rates and higher consumer confidence fuelled by signs that the economy has begun a sustainable recovery. Official schemes, such as Funding for Lending and Help to Buy, also appear to have boosted housing demand.
Following a subdued pace last year, Nationwide’s chief economist Robert Gardner said the acceleration in house price growth has been “surprisingly quick”.
All 13 of the UK’s regions have seen annual house price growth for the first time since 2007, although prices in most regions are still way off their previous peaks. This is not the case in London though, where the average house price is 8 per cent above its 2007 peak and now at an all-time high of £331,338, thanks to a significant year-on-year rise of 10 per cent.
Looking at the UK as a whole, the gap between average property values in the north and those in the south of England has widened to a new high, topping £100,000 for the first time ever. Prices in southern regions have risen by 6.1 per cent year-on-year, almost double the rate of the 3.1 per cent rise seen in the north, with the typical house price in the south of England now standing 74 per cent above its Northern equivalent.