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Property Owners Have ‘Missed The Top Market Prices’ And Will Lose Out If They Sell This Year

Real estate owners selling a property this year may have missed the top of the market and lost out on more than £10,000 compared to if they sold last year, a top lettings agent has warned.

Hamptons suggested propety owners will have made a 10.1% smaller gain by selling their buy-to-let this year compared to those who sold last year.

So far this year, the average landlord in England and Wales sold their buy-to-let for £94,800 more than they initially paid for the property, having owned it for an average of 11 years.

The gain is down 10.1% from a record £105,300 last year and is almost identical to what landlords selling in 2016 achieved, it said.

Property Owners Have 'Missed The Top Market Prices' And Will Lose Out If They Sell This Year

Landlords selling a property this year compared to last year may have missed the top of the market, Hamptons says

Property Owners Have 'Missed The Top Market Prices' And Will Lose Out If They Sell This Year
This chart shows the gap between average landlord purchase and sale price in England and Wales

Hamptons attributed the smaller gains to a slowdown in house prices and the type of properties being sold.

The slowdown follows a sharp rise in mortgage rates, which is leading some landlords to consider leaving the buy-to-let market altogether.

However, Hamptons insisted that landlords are ‘consoling’ themselves’ with record high rents.

Aneisha Beveridge, of Hamptons, said: ‘As house prices start to slip back, there are signs that the landlords looking to sell today may have missed the top of the market.

‘Rather, some investors are consoling themselves with record-breaking rental growth which is slowly ironing out the arithmetic for landlords.’

Property Owners Have 'Missed The Top Market Prices' And Will Lose Out If They Sell This Year
The Hamptons table shows the gap between the average landlord purchase and sale price

Average gains on the sale of a property by a landlord fell year-on-year in every region for the first time since 2020.

In percentage terms, northern regions recorded the largest year-on-year falls. This reflects both slowing price growth and a shift in the type of home being sold.

Smaller terraced houses and flats, which have seen weaker price growth in recent years, made up a higher share of all buy-to-let sales so far this year.

Property Owners Have 'Missed The Top Market Prices' And Will Lose Out If They Sell This Year
Table shows the average landlord profit on the sale of a buy-to-let property in England and Wales

North London estate agent Jeremy Leaf, said: ‘Everyone knows there is a huge shortage of property to rent, particularly affordable, and the private rental sector plays such an important role in providing affordable social housing as well. To see these numbers and the sector in decline is worrying.

‘But the particular statistic which stood out for me is that the average length of time of sale for landlords is 11 years.

“This implies that it is not just accidental landlords who are selling up because they have cold feet but those who have been around for a while who are experienced and should be aware of all the pitfalls. It means supply is reducing just when it’s needed and maintaining upwards pressure on rents.

‘It’s also disappointing that established landlords are selling up in such numbers when you consider that rents have gone up so much. You would think this would encourage more to stay in the business and take advantage of the longer-term gains.’

Northern landlords make more profit

In contrast to 2016, investor profits have risen fastest and furthest in the north of the country, according to Hamptons.

Investors in the North East recorded a 176% increase in the average capital gain on the sale of a buy-to-let between 2016 and 2023, with all three northern regions boasting an increase in gains of at least 50% since 2016.

House prices in Northern England have risen the most in the past seven years, while in parts of London and the South East prices have remained static.

Even so, higher average prices mean that in cash terms London landlords who sold up still saw the largest gross capital gains.

So far this year this figure stood at £308,500. However, this number is down 3.4 per cent from £319,300 last year and 15% down from a peak of £365,000 in 2016 due to slower price growth.

There are just three regions where the average investor profit is still at six figures. These are London, the South East and East.

Property Owners Have 'Missed The Top Market Prices' And Will Lose Out If They Sell This Year
Average gains on the sale of a property by a landlord fell year-on-year in every region for the first time since 2020

The South West fell off that list this year when the average capital gain shrank from £105,000 in 2022 to £95,700 today.

It is likely that the amount made by landlords selling up will fall further on the back of both lower prices being achieved and a rising proportion of sellers having bought later in the house price cycle.

The average landlord selling in 2023 bought 11 years ago. It means 65% of landlord sales this year were homes that had been bought since 2009, after the point where prices bottomed out.

This figure rises to 70% for flat sellers, who typically have shorter holding periods and therefore tend to see lower capital growth.

Despite the slowing pace of price growth, the number of landlords selling for less than they paid is limited.

Only 6 per cent of landlords sold at a loss so far in 2023, slightly up from 5% last year but down from 10 per cent in 2020.

However, almost one in five – at 19 per cent – of investors who sold a flat did so for less than they paid, alongside slightly more than one in five – at 22% – of investors who sold a buy-to-let in the North East.

Property Owners Have 'Missed The Top Market Prices' And Will Lose Out If They Sell This Year
The average monthly rent and rental growth on newly let properties in July 2023

There are few signs that the pace of rental growth is slackening, with the cost of a new tenancy up 9.9% year-on-year across Britain to an average of £1,282 a month.

On an annual basis, rents have risen more than 5 per cent for 27 consecutive months and above 7% for the last 10 months.

This prolonged period of growth leaves the average rent 28% higher than in February 2020, on the eve of the pandemic.

During the past year rents in London have continued to rise faster than anywhere else in the country, with the average price of a new let up 13.9%.

Annually, rents here have been growing at a double-digit pace for 15 of the last 17 months.

However, the rate of Inner London rental growth has slowed as rents surpassed pre-Covid levels, with growth now broadly on par with Outer London.

However, looking back to the onset of Covid, rents have grown faster in the North than in the South.

While average rents in London and the South East are up 26 per cent and 24% respectively since February 2020.

In the Midlands they are up 31% and in Northern England they are up 33%, where rents have risen on the back of higher house price growth as yields have held steady.

Property Owners Have 'Missed The Top Market Prices' And Will Lose Out If They Sell This Year
A sharp rise in mortgage rates means some landlords may have to consider leaving the buy-to-let market altogether

Ms Beveridge, of Hamptons, added: ‘Lower house prices and higher rents will combine to shore up the rental market as more landlords hold off on the decision to sell.

‘On the flip side, this will also weigh down on the Government’s capital gains receipts handed over by landlords selling up over the next few years.

‘New homes coming onto the market continue to achieve record rents and in the short term it’s hard to see what would put concerted downward pressure on the pace of growth.

‘With around 35,000 landlords coming off fixed rate mortgages each month, the upward pressure on landlords’ costs marches on.

‘In the run up to remortgaging, landlords are fighting to balance the books by paying down debt and hiking rents that have dropped below market rate.’


Culture

Assessing Property Size: What Square Footage Can You Get With The Average UK House Price In Your Area?

Assessing Property Size In The UK

In the United Kingdom, there is a prevailing tendency to gauge the size of residences based on the number of bedrooms rather than square footage. In fact, research indicates that three out of five individuals are unaware of the square footage of their property.

However, a comprehensive analysis conducted by Savills reveals significant variations in property sizes throughout the country. For instance, with the average property price standing at £340,837, this amount would typically afford a studio flat spanning 551 square feet in London, according to the prominent estate agency.

Conversely, in the North East region, the same sum would secure a spacious five-bedroom house measuring 1,955 square feet, nearly four times the size of a comparable property in London.

Best value: Heading to the North East of England is where buyers will get the most from their money

In Scotland, the median house price equates to a sizable investment capable of procuring a generous four-bedroom residence spanning 1,743 square feet. Conversely, in Wales, Yorkshire & The Humber, and the North West, this sum affords a slightly smaller four-bedroom dwelling of approximately 1,500 square feet, while in the East and West Midlands, it accommodates a 1,300 square foot home. In stark contrast, within the South West, £340,837 secures a modest 1,000 square foot property, and in the East, an even more confined 928 square feet.

London presents the most challenging market, where this budget offers the least purchasing power. Following closely, the South East allows for 825 square feet of space or a medium-sized two-bedroom dwelling. Lucian Cook, head of residential research at Savills, emphasizes the profound disparity in purchasing potential across Britain, ranging from compact studio flats in London to spacious four or five-bedroom residences in parts of North East England.

While square footage serves as a critical metric, with a significant portion of Britons unfamiliar with their property’s dimensions, the number of bedrooms remains a traditional indicator of size. Personal preferences, such as a preference for larger kitchens, may influence property selection. For those prioritizing ample space, Easington, County Durham, offers a substantial 2,858 square foot, five-bedroom home, while Rhondda, Wales, and Na h-Eileanan an Iar, Scotland, provide 2,625 and 2,551 square feet, respectively. Conversely, in St Albans, Hertfordshire, £340,837 secures a mere 547 square feet, equivalent to a one-bedroom flat.

The disparity continues in central London, where purchasing power diminishes considerably. In Kensington, the budget accommodates a mere 220 square feet, contrasting with the slightly more spacious 236 square feet in Westminster. Conversely, in Dagenham, the same investment translates to 770 square feet. Three properties currently listed on Rightmove exemplify the diversity within this price range across the UK market.

South of the river: This semi-detached house is located near to three different train stations

South of the river: This semi-detached house is located near to three different train stations

2. Lewisham: One-bed house, £345,000

This one-bedroom property in Lewisham, South London, is on the market for £345,000.

The semi-detached house is set over two floors, and has a private patio.

The property is located near to bus links and amenities, as well as Catford train station.

Edinburgh fringe: This three-bed property is located on the edge of the city, near to the town of Musselburgh

Edinburgh fringe: This three-bed property is located on the edge of the city, near to the town of Musselburgh

3. Edinburgh: Three-bed house, £350,000

This three-bedroom detached house in Edinburgh could be yours for £350,000.

The house, which has a two-car driveway, boasts a large kitchen diner, and is within easy reach of Newcriaghall train station.


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Culture

Top 10 Florida Cities Dominate The Business Startup Landscape In The U.S.

Top 10 Florida Cities And Business Startup Landscape In The U.S.

The Voice Of EU | Florida emerges as a hub for entrepreneurial endeavors, with its vibrant business landscape and conducive environment for startups. Renowned for its low corporate tax rates and a high concentration of investors, the Sunshine State beckons aspiring entrepreneurs seeking fertile grounds to launch and grow their businesses.

In a recent report by WalletHub, Florida cities dominate the list of the top 10 best destinations for business startups, showcasing their resilience and economic vitality amidst challenging times.

From Orlando’s thriving market to Miami’s dynamic ecosystem, each city offers unique advantages and opportunities for entrepreneurial success. Let’s delve into the chronologically listed cities that exemplify Florida’s prominence in the business startup arena.

1. Orlando Leads the Way: Orlando emerges as the most attractive market in the U.S. for business startups, with a remarkable surge in small business establishments. WalletHub’s latest report highlights Orlando’s robust ecosystem, fostering the survival and growth of startups, buoyed by a high concentration of investors per capita.

2. Tampa Takes Second Place: Securing the second spot among large cities for business startups, Tampa boasts a favorable business environment attributed to its low corporate tax rates. The city’s ample investor presence further fortifies startups, providing essential resources for navigating the initial years of business operations.

3. Charlotte’s Diverse Industries: Claiming the third position, Charlotte stands out for its diverse industrial landscape and exceptionally low corporate taxes, enticing companies to reinvest capital. This conducive environment propels entrepreneurial endeavors, contributing to sustained economic growth.

4. Jacksonville’s Rising Profile: Jacksonville emerges as a promising destination for startups, bolstered by its favorable business climate. The city’s strategic positioning fosters entrepreneurial ventures, attracting aspiring business owners seeking growth opportunities.

5. Miami’s Entrepreneurial Hub: Miami solidifies its position as a thriving entrepreneurial hub, attracting businesses with its dynamic ecosystem and strategic location. The city’s vibrant startup culture and supportive infrastructure make it an appealing destination for ventures of all sizes.

6. Atlanta’s Economic Momentum: Atlanta’s ascent in the business startup landscape underscores its economic momentum and favorable business conditions. The city’s strategic advantages and conducive policies provide a fertile ground for entrepreneurial ventures to flourish.

7. Fort Worth’s Business-Friendly Environment: Fort Worth emerges as a prime destination for startups, offering a business-friendly environment characterized by low corporate taxes. The city’s supportive ecosystem and strategic initiatives facilitate the growth and success of new ventures.

8. Austin’s Innovation Hub: Austin cements its status as an innovation hub, attracting startups with its vibrant entrepreneurial community and progressive policies. The city’s robust infrastructure and access to capital foster a conducive environment for business growth and innovation.

9. Durham’s Emerging Entrepreneurship Scene: Durham’s burgeoning entrepreneurship scene positions it as a promising destination for startups, fueled by its supportive ecosystem and strategic initiatives. The city’s collaborative culture and access to resources contribute to the success of new ventures.

10. St. Petersburg’s Thriving Business Community: St. Petersburg rounds off the top 10 with its thriving business community and supportive ecosystem for startups. The city’s strategic advantages and favorable business climate make it an attractive destination for entrepreneurial endeavors.

Despite unprecedented challenges posed by the COVID-19 pandemic, the Great Resignation, and high inflation, these top Florida cities remain resilient and well-equipped to overcome obstacles, offering promising opportunities for business owners and entrepreneurs alike.


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European Startup Ecosystems Awash With Gulf Investment – Here Are Some Of The Top Investors

European Startup Ecosystem Getting Flooded With Gulf Investments

The Voice Of EU | In recent years, European entrepreneurs seeking capital infusion have widened their horizons beyond the traditional American investors, increasingly turning their gaze towards the lucrative investment landscape of the Gulf region. With substantial capital reservoirs nestled within sovereign wealth funds and corporate venture capital entities, Gulf nations have emerged as compelling investors for European startups and scaleups.

According to comprehensive data from Dealroom, the influx of investment from Gulf countries into European startups soared to a staggering $3 billion in 2023, marking a remarkable 5x surge from the $627 million recorded in 2018.

This substantial injection of capital, accounting for approximately 5% of the total funding raised in the region, underscores the growing prominence of Gulf investors in European markets.

Particularly noteworthy is the significant support extended to growth-stage companies, with over two-thirds of Gulf investments in 2023 being directed towards funding rounds exceeding $100 million. This influx of capital provides a welcome boost to European companies grappling with the challenge of securing well-capitalized investors locally.

Delving deeper into the landscape, Sifted has identified the most active Gulf investors in European startups over the past two years.

Leading the pack is Aramco Ventures, headquartered in Dhahran, Saudi Arabia. Bolstered by a substantial commitment, Aramco Ventures boasts a $1.5 billion sustainability fund, alongside an additional $4 billion allocated to its venture capital arm, positioning it as a formidable player with a total investment capacity of $7 billion by 2027. With a notable presence in 17 funding rounds, Aramco Ventures has strategically invested in ventures such as Carbon Clean Solutions and ANYbotics, aligning with its focus on businesses that offer strategic value.

Following closely is Mubadala Capital, headquartered in Abu Dhabi, UAE, with an impressive tally of 13 investments in European startups over the past two years. Backed by the sovereign wealth fund Mubadala Investment Company, Mubadala Capital’s diverse investment portfolio spans private equity, venture capital, and alternative solutions. Notable investments include Klarna, TIER, and Juni, reflecting its global investment strategy across various sectors.

Ventura Capital, based in Dubai, UAE, secured its position as a key player with nine investments in European startups. With a presence in Dubai, London, and Tokyo, Ventura Capital boasts an international network of limited partners and a sector-agnostic investment approach, contributing to its noteworthy investments in companies such as Coursera and Spotify.

Qatar Investment Authority, headquartered in Doha, Qatar, has made significant inroads into the European startup ecosystem with six notable investments. As the sovereign wealth fund of Qatar, QIA’s diversified portfolio spans private and public equity, infrastructure, and real estate, with strategic investments in tech startups across healthcare, consumer, and industrial sectors.

MetaVision Dubai, a newcomer to the scene, has swiftly garnered attention with six investments in European startups. Focusing on seed to Series A startups in the metaverse and Web3 space, MetaVision raised an undisclosed fund in 2022, affirming its commitment to emerging technologies and innovative ventures.

Investcorp, headquartered in Manama, Bahrain, has solidified its presence with six investments in European startups. With a focus on mid-sized B2B businesses, Investcorp’s diverse investment strategies encompass private equity, real estate, infrastructure, and credit management, contributing to its notable investments in companies such as Terra Quantum and TruKKer.

Chimera Capital, based in Abu Dhabi, UAE, rounds off the list with four strategic investments in European startups. As part of a prominent business conglomerate, Chimera Capital leverages its global reach and sector-agnostic approach to drive investments in ventures such as CMR Surgical and Neat Burger.

In conclusion, the burgeoning influx of capital from Gulf investors into European startups underscores the region’s growing appeal as a vibrant hub for innovation and entrepreneurship. With key players such as Aramco Ventures, Mubadala Capital, and Ventura Capital leading the charge, European startups are poised to benefit from the strategic investments and partnerships forged with Gulf investors, propelling them towards sustained growth and success in the global market landscape.


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