I hope you have had an enjoyable week. Q2 2022 is proving to be one of the most productive and fastest-paced quarters we have had to date, with a record number of transactions following a number of excellent new products on our UK portfolio.
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Now, let’s take a look at all the headlines that caught our attention this week. I always try to summarise the links to save you from having to click through.
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Property News This Week
- Falling Supply Results in London Rental Increases – The London private rented sector is continuing to experience heavy demand and all-time low supply, causing rental amounts to rise dramatically, according to new figures from Knight Frank’s Prime Global Rental Index. The report records the movement in luxury residential rents across ten global cities and recently reveals that prime central London areas have experienced an average of 26.4% increase in rent throughout the first quarter of the year in comparison with the same time frame in 2021. It does have to be said that this increase largely represents a return to pre-Covid levels but also does indicate that there simply isn’t enough affordable housing to match demand as the economy tightens its belt and people cannot meet the rising costs. Knight Frank has commented that supply may be on the increase in central London, which will have a dampening effect on rental asking prices as competition builds.
- Key Salford Regeneration Scheme Gets £30M Boost – The UK government’s housing and regeneration agency, Homes England, has provided a £30 million cash loan to aid in the transformation of Middlewood Locks in Salford. The plan is already well underway, with over 1,300 people living and working in Middlewood Locks. Phases one and two are already complete and sold out, reportedly contributing an estimated £260 million to the Greater Manchester economy to date. The agreement between Homes England and Middlewood Locks KLM will see the third phase through to completion, where 189 new homes will be built across a 25-acre brownfield site. The full plan will result in over 2,000 homes delivered, as well as 900,000 sq ft of commercial space, including a hotel and leisure amenities all set in a canal-side environment with 4.5 acres of public realm and event space.
- Knight Frank Pushes Up 2022 House Price Forecasts – Knight Frank has analysed its previous residential forecast and decided that a revision is necessary, based on the data collected in 2022 so far. The property expert says that the supply for housing has not built as quickly as was first projected, keeping upward pressure on demand and enabling further house price rises which are now expected to end the year in high digits rather than mid-single digits. The 40-year high inflation and 13-year-high interest rates, combined with the follow-on effects of last year’s stamp duty holiday and the pandemic, have created a distorted market that Knight Frank states will take longer to re-balance than first anticipated.
Its UK house price forecast has therefore been revised from 5% growth to 8% in 2022. For the prime outer London area, the company has adjusted its prediction for price growth to 5%, with the prime central London growth estimate now sitting at 4%. Strong domestic demand and interest from international buyers are keeping the market buoyant and strong.
- Large-Scale Investors Increasingly Attracted to Private Rental Sector – As the world economy continues to take major hits in both traditional stocks and cryptocurrency, many big businesses are looking for a safer way to grow their money. In order to diversify their portfolio, an increasing number have decided to enter the residential space, attracted by the promise of steady returns and comparative safety of bricks and mortar. Last week, Citra Living – sister company to Lloyds Banking Group and first established in July 2021 – confirmed its purchase of 110 properties at the Riverside Park development in Ashford, Kent. Ashford is well-positioned, with high-speed rail links to Stratford and Central London, and is predicted to experience the highest population growth in Kent in the next 10 years. The area is within attractive proximity to both the coast and the fast rail link into London. Citra says that the Riverside Park apartments will help to meet the growing demand for high-quality, great-value homes in the area.
That is all we have for you this week. If you have any comments or questions on this week’s news summary then please feel free to send us an email at [email protected] – if not, see you next week.