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Here’s how much property prices will rise in the next 10 years

by International Commercial Investment on September 1, 2017

Source: City A.M

Property prices are being tipped to soar over the next decade, even if they continue to increase at the sluggish rate experienced since Brexit.

House prices have risen by 0.37 per cent each month since the referendum – compared with 0.67 a month during the preceeding year. If the current rate of growth were to continue over the next 10 years the average UK house would be worth £347,757 – an increase of 56 per cent, Emoov estimates.

Given the extent to which the slowdown has affected London, the capital would see one of the lower rates of growth based on this measure, although properties would still be worth on average 24 per cent more by 2027.

This will result in prices being dwarfed by those in Oxford, where Emoov estimates average property values will jump 115 per cent to £888.542 – compared with a London average of £597,544.

Nottingham is tipped for the highest rate of growth across the UK. Since Brexit, house prices have grown 0.8 per cent. On eMoov’s calculations, this means prices could grow 160 per cent to an average of £346,592 by 2027. Glasgow is the second highest, with an estimated 131 per cent increase to an average of £285,487.

Those at the bottom end of the scale are Newcastle, where house prices will grow just nine per cent, Norwich (15 per cent) and London.

Emoov chief executive Russell Quirk said: “With latest industry figures indicating an end to the post-Brexit market slowdown that has seemingly plagued the market over the last 18 months, many UK homeowners will be breathing a sigh of relief, despite having still enjoyed a notable annual increase in their property’s value.

“Although these recent slower rates of price growth are unlikely to persist, and we are by no means predicting they will, this research demonstrates that the outlook would still be rather positive and far from the apocalyptic prophecy’s many have talked the market down with since the Brexit vote.”

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International Commercial InvestmentHere’s how much property prices will rise in the next 10 years

Housing market speeds towards ‘crisis point’ as average price rises £10,000 in a year

by International Commercial Investment on August 15, 2017

Source: The Telegraph

House prices in the UK increased by £10,000 in the last year on average, according to official figures, with estate agents warning that affordability of houses is reaching “crisis point”.

The average property price in June was £223,257, compared to £214,000 in June 2016, the Office for National Statistics said.

On a month-by-month basis, house prices were up nearly £2,000 on average.

Although the speed of growth has marginally slowed, with house prices increasing by 4.9pc in the year to June compared to 5pc in the year to May, the ONS said growth had remained flat in 2017 at around 5pc.

Paul Smith, chief executive of the UK’s largest independent estate agent, Haart, which is based mainly in London, said the rise in prices had caused a 20pc drop in first-time buyer registrations in its branches in the last year.

“Along with consumer price hikes and falling wage growth, unaffordability is reaching crisis point,” he said.

The biggest rise was in the east of England, where average prices climbed 7.2pc to £286,623. There was similar growth, of 7.1pc, in the East Midlands.

Prices in the North East saw the smallest annual growth, at 2.5pc, while prices in London were up 2.9pc over the year.

On a monthly basis, the average London house price fell by 0.7pc in June, to £481,556. In the City of London, average house prices fell by more than 20pc in the year to June, to £723,576.

The region with the highest growth was the Orkney Islands, where the average price of £147,929 represented a change of 20pc.

“There has been much reflection about the 10-year anniversary of the global financial crisis and housing market performance over this period highlights the disparate performance across different parts of the UK,” said Richard Snook, senior economist at PwC.

The ONS figures, which tend to lag behind data from lenders such as Nationwide, is based on transactions recorded by the Land Registry.

The statistics follow a separate report from the Royal Institution of Chartered Surveyors last week, which found market activity was grinding to a halt as London and the South East pulled down the national trend.

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International Commercial InvestmentHousing market speeds towards ‘crisis point’ as average price rises £10,000 in a year

UK property prices edge up again month on month as lack of supply keeps values high

by International Commercial Investment on August 1, 2017

Source: Property Wire

Property prices in the UK increased by 0.3% in July and at an average of £211,671 are 2.9% higher than a year ago, according to the latest index data to be published.

Even although the annual rate has fallen from the 3.1% recorded in June, annual house price growth is only just outside the 3% to 6% range that it has been for most of the last two years, the data from the Nationwide index shows.

According to Robert Gardner, Nationwide’s chief economist, the figures show that the British housing market is broadly stable and he forecasts that this is set to be the case in the short term at least.

‘On the surface, this appears at odds with recent signs of cooling in the housing market. The number of housing transactions dipped to their lowest level for eight months in June, while in the same month the number of mortgages approved for house purchase moderated to a nine month low of around65,000,’ he explained.

‘But a lack of homes on the market appears to be providing support. Survey data point to relatively sluggish levels of new buyer enquiries, but at the same time surveyors report that relatively few properties are coming onto the market and at a time when the number of homes on estate agents’ books is already close to 30 year lows,’ he pointed out.

‘Ultimately, housing market developments will depend on wider economic performance. The UK economy slowed noticeably in the first half of the year and there has been little to suggest a significant departure from recent trends in the quarters ahead,’ he said.

‘While employment growth has remained relatively robust, household budgets are coming under pressure as wage growth is failing to keep up with the rising cost of living. This suggests that housing market activity is likely to remain subdued, with the balance in the market shifting a little further towards buyers in the quarters ahead,’ Gardner added.

‘Nevertheless, constrained supply is likely to continue to provide support for house prices and, as a result, we continue to expect prices to rise by around 2% over 2017 as a whole, only modestly lower than the levels recorded in recent months,’ he concluded.

Mark Weedon, head of institutional development at buy to let investment platform Property Partner, also believes the figures are a sign of stability. ‘Despite uncertainty across the political spectrum, with the realities of Brexit slowly starting to become more clear, house prices again demonstrate their resilience,’ he said.

‘Simply put this index highlights the strength and stability of the housing market. Mortgages look set to remain good value and the lack of housing stock nationally shows no sign of abating, something which will continue to support house prices,’ he added.

Lucy Pendleton, director of independent estate agents James Pendleton, believes there are signs of continued confidence in the housing market. ‘Prices fell for three straight months between March and May but before that you would have to go back to June 2015 to find the previous monthly fall,’ she pointed out.

‘These slight contractions were not dramatic however, particularly when you consider the traditionally slower summer months have often begun with more severe falls than this. Given there are other factors at play, including a squeeze in consumer spending, this could be seen as a sign of confidence among buyers,’ she explained.

Buyers have returned to the market after the snap election but they are price sensitive, according to Jonathan Hopper, managing director of Garrington Property Finders.

‘Limited supply is propping up prices, while the limited number of buyers is giving the astute house hunter the leverage to negotiate hard on price and secure sizeable discounts. With pragmatic sellers often willing to trade price reductions for the certainty of a sale, the market’s fundamentals remain in place even if the pace is slowing,’ he said.

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International Commercial InvestmentUK property prices edge up again month on month as lack of supply keeps values high

UK manufacturing unexpectedly strong in July boosted by exports, finds latest survey

by International Commercial Investment on August 1, 2017

Source: The Independent

The latest survey snapshot of the manufacturing sector showed an unexpected pick-up in July, powered by exceptionally strong exports.

The Purchasing Managers’ Index rose to 55.1 in the month, higher than the 54.3 recorded in June and better than the 54.4 pencilled in by City of London analysts.

Any reading above 50 signals growth and the long-run average is 51.6.

The data helped lift the pound 0.16 per cent on the day to $1.3232.

IHS/Markit, which compiles the survey, said foreign demand for UK manufacturers’ output rose at the second-strongest rate in the history of the series.

Respondents reported inflows of work from North America, Europe, Asia and the Middle East.

However, the survey data for manufacturing has been notably better than the official data this year from the Office for National Statistics, which recorded a 0.5 per cent contraction in the three months to June.

The manufacturing PMI over that same period was signalling consistent expansion, causing some to question the reliability of the survey as a leading indicator.

Most analysts said the export jump recorded by the survey probably reflected the 11 per cent slump in the pound since the Brexit vote.

“It appears that a combination of the weaker pound and increasing global growth optimism is boosting sentiment amongst firms. It’s also possible that we are seeing a bit of a recovery as the dust settles on the UK election result,” said James Smith of ING.

“The export orders balance tends to lead the official export output data by about six months, so the balance tentatively suggests that net trade will finally start to support GDP growth around the turn of the year,” said Samuel Tombs of Pantheon.

Overall GDP growth was 0.3 per cent in the second quarter of 2017 according to the ONS, only a modest improvement on the 0.2 per cent growth in the first quarter.

The Bank of England will decide on Thursday whether or not to raise interest rates from their current historic low of 0.25 per cent.

Most economists currently expect no change in light of the weakness of GDP growth and wage increases.

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International Commercial InvestmentUK manufacturing unexpectedly strong in July boosted by exports, finds latest survey

Gatwick Airport £1.15bn boost

by International Commercial Investment on July 29, 2017

Source: The Argus

GATWICK Airport is investing £1.15 billion over the next five years with £240 million planned for 2017/18 alone.

This is part of plans for more growth and improved efficiency while also maintaining its record levels of passenger satisfaction.

This 2017 Capital Investment Programme sets out Gatwick’s investment strategy which continues to improve facilities and transform service.

Since the airport changed ownership in December 2009 Gatwick has invested £1.5 billion.

– reconfiguring stands to facilitate a changing aircraft mix

– building a new hangar in partnership with Boeing

– extending Pier 6 to increase pier service levels well beyond its 95 per cent target

– adding a new domestic arrivals facility in South Terminal

– and continuing to roll out its self-service bag drop product.

The commitment in this Capital Investment Programme will bring Gatwick’s total investment plans, since change of ownership through to 2022, to £2.7 billion.

Gatwick’s construction director Raymond Melee said: “Since coming into independent ownership Gatwick has delivered record growth in passenger numbers and long haul services while also taking passenger satisfaction levels to an all-time high.

“As we plan to grow towards 50 million passengers per annum, we will focus on efficiency and service so that our passengers continue to receive the airport experience they expect, in the most sustainable manner possible.

“We will continue to develop the airport to meet the needs of our airlines and passengers with improvements to the way we operate on the airfield and the service we offer in our terminals.

“These projects will be delivered in a way that will help us realise our ambition to become the UK’s most sustainable airport.

“Regarding future runway expansion, our financable and deliverable scheme for a second runway remains on the table.

“We will deliver a new runway for Britain in addition to or instead of Heathrow, should the government give us its support now or in the future.”

Other new projects include:

– a new arrivals facility including a new baggage reclaim, in South Terminal

– a suite of IT projects supporting core airport functions

– expanding the departures lounge in both terminals

– extra car parking

– improved access to South Terminal for passengers and staff using local buses to travel to and from the airport

– projects to support greater use of electric vehicles, continuing to reduce the airport’s environmental impact.

The Capital Investment Programme is a rolling five-year plan which is published annually. This allows the CIP to be refreshed regularly as market conditions and operational needs change.

Gatwick Airport is the UK’s second largest airport and the most efficient single-runway airport in the world.

It serves more than 228 destinations in 74 countries for 45 million passengers a year on short and long-haul point-to-point services.

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International Commercial InvestmentGatwick Airport £1.15bn boost

House prices remain strong : Property and mortgages remain stable, says expert

by International Commercial Investment on July 27, 2017

Source: The Express

PROPERTY, mortgage loans, house prices and the UK housing market and how they would be affected after the General Election in June was at the forefront of many house buyers minds. But new data from Mortgage Advice Bureau reveals the real impact.

Despite the political whirlwind over the last few months with the General Election, there has been little movement in the UK housing market, according to Mortgage Advice Bureau’s latest data.

And Average First Time Buyer property purchase price was mostly unchanged on May 17 with 0.8 per cent increase.

Brian Murphy, Head of Lending Mortgage Advice Bureau, said what they’ve observed from the data for June is the market held up well and mostly showed no sign of a slow-down int terms of consumer appetite for mortgages – either to purchase or to remortgage.

He added: “Clearly, consumers are making decisions based on their individual circumstances and generally seem not to be taking any notice of what goes on in the headlines, or at least taking them with a hearty pinch of salt.

“The reality is, for most of those moving currently, it’s not a discretionary decision; there are lifestyle drivers which are forcing them to move. For example a growing family or a need to relocate to get children into a certain school or due to a new job.

“In these circumstances, regardless of political or economic climate there is a need to move home, and that is driving activity, rather than a sentiment-based market which we’ve seen in previous years where buying decisions are fuelled by a desire to ‘not miss out’ if hours prices are on the increase.

“It’s a very difficult buying process now, and those who are currently transacting are, in the main, motivated due to circumstance and not speculation.”

The ongoing imbalance of stock versus demand in many area of the country, together with mortgage rates close to historic lows have meant what could have been a fallow month for UK property was actually one of the busiest months of the year so far, according to residential property transactions in June noted by HMRC.

Brian said: “While the majority of these deals will have been started before the start of the month, doubtless most would have been instigated post the Election being called on April 18, which further evidences the fact that UK consumers are apathetic to political conjecture because, frankly, it makes little difference in reality to their day to day decision making process.”

But the Mortgage Advice Bureau can not predict at this point in time what the full impact of the election and its outcome has had.

Brian added: “There are some signs of softening home mover activity, however, in terms of the levels of people who’ve applied for a mortgage since the election, either in terms of buying a home or remortgaging an existing one, the immediate evidence points to current market momentum being maintained, which is encouraging in tempers of the start to the second half of 2017.”

London, the North East, the North West, Wales and the South West did show a decrease from the previous month in Mortgage Advice Bureau’s Regional Purchase Loan Analysis.

Louisa Fletcher, Property Expert, explained: “The figures from Mortgage Advice Bureau overall reflect a generally steady picture, although some parts of the UK saw prices cooling last month. That’s to be expected, given that in Greater London for example, there is an increased sensitivity to economic and political factors, mainly due to the potential impact on employment in certain sectors, which of course in turn has a knock on impact with regards property decisions for those living and working in the Capital.

“In other areas, for example the North East, a slight cooling in prices is more likely indicative of the fact that potential buyers are doing their legwork and ensuring that they have a mortgage agreement in principle in place before they start their property search, meaning they are aware of their upper limit in advance and therefore are negotiating within their budget, rather than stretching to meet asking price.

“A slight reduction in asking prices isn’t necessarily a bad thing, as it will help to enable affordability. However it would appear from this latest set of data it would appear that, overall, the market is ticking over for now, although of course it will take a few months for the data to reflect any major changes in direction of travel in terms of house prices as a consequence of the Election result and ongoing Brexit negotiations.”

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International Commercial InvestmentHouse prices remain strong : Property and mortgages remain stable, says expert

Commercial property markets back on firm ground after Brexit

by International Commercial Investment on July 3, 2017

Source: The Express

Commercial property is set to continue its recovery one year after the EU referendum result panicked investors who rushed to dump funds targeting the sector.

FTSE 250-listed St Modwen Properties and Great Portland Estates both deliver updates next week amid continuing uncertainty over the impact of Brexit.

Shares in St Modwen, the UK’s largest brownfield property developer, have bounced 45 per cent since its post-referendum dip and Ben Maitland, securities analyst at Beaufort Securities, expects to see healthy growth in net-asset value per share in next Tuesday’s half-year results.

“St Modwen has just sold its stake in the New Covent Garden Market development at Nine Elms Square in Battersea, south-west London, for £190million, which puts it on a sound financial footing,” said Maitland, adding that the land sale significantly reduces the company’s debt and balance sheet risk.

“The outlook for commercial property for industrial, logistics, private rental and student accommodation is good.”

Graham Spooner, investment research analyst at The Share Centre, said St Modwen is a buy as its debt has been reduced and the shares trade at a large discount to net-asset value.

Great Portland Estates will publish a trading update after May’s full-year results showed a pre-tax loss of £140.2million, with analysts forecasting profits of £58.2million in 2018 amid market resilience.

Hargreaves Lansdown senior analyst Laith Khalaf said it is now a year since open-ended commercial property funds were forced to suspend withdrawals after investors withdrew billions in a post-Brexit panic: “The sector has regained its poise as economic data has proved more robust than expected.

“Commercial property remains sensitive to a UK slowdown. London property is particularly vulnerable as the capital relies so heavily on financial services, which are considered a flight risk if Brexit talks go badly.”

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International Commercial InvestmentCommercial property markets back on firm ground after Brexit

London is the gateway to the world for EU business

by International Commercial Investment on July 3, 2017

Source: City A.M.

I write this article having just returned from a four day sprint through Europe, visiting the Czech Republic, Poland, and Romania.

A City business delegation joined me and showcased the best of the UK’s offer to the world, with companies such as the LSE, Smart Pension, Accenture and Comply Advantage.

The focus of this trip was to speak to senior business and government representatives in these key growth markets about the UK’s financial and professional services offer, and how we can help drive this growth in the years to come. I was also able to listen to their concerns and thoughts on the City and how we service their economies, and hear their thoughts and desires on Brexit.

It was universally acknowledged in these three countries that London is far and away Europe’s largest and most important centre for financial and professional services.

Businesses told me that they want to have the closest possible relationship with London once we exit the union, and its associated Single Market, as this would be the best outcome for them and their clients. This message from European businesses seemed to be making it through to government, I am happy to report.

I emphasised to those with whom I spoke that the upcoming negotiations are not binary and zero-sum. With political will from both sides, a broad, mutually beneficial deal can be reached to foster business growth, and ensure continued investment on both sides of the English Channel.

When I met with our European friends I stressed that the City of London is not just an asset for the UK, but a European one as well, as it is the only global-scale financial centre on the continent of Europe.

Having this centre on their doorstep allows European businesses efficient and cost-effective access to the world’s markets, driving growth, investment and prosperity.

Europe has a long and prosperous history of global trade and business, but in today’s world that is rapidly rebalancing towards the Eastern Hemisphere. We must work to protect and grow Europe’s global-scale assets, whether it is our unique cultural offer across the continent, our established products such as Scottish Whisky and Champagne, or our expertise in financial services, centred in London, that is unmatched across the world.

London serves not only as a gateway to Europe for global investors, but also a gateway to the world for European businesses looking to expand and invest overseas.

In Poland, I was given a tour of a tech incubator focused on up-scaling businesses from startups to regional – and eventually global – companies. The City of London is the natural partner for work such as this. When companies have access to the UK, they have access not only to London’s deep pools of capital and business expertise, but the world’s as well.

There must be an ambition across Europe to create an outward facing “Global Europe” not focused on protectionism, but based on a desire to grow global trade and the spread of European products and services across the world.

The City of London, as the world’s leading financial centre, is the ideal partner for this ambition, and I look forward to deepening relationships across Central and Eastern Europe as friends and business partners.

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International Commercial InvestmentLondon is the gateway to the world for EU business