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Average property asking price in the UK hits third of a million pounds

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The average asking price for a home put up for sale in the UK has hit a third of a million pounds, according to a new report.

Asking prices for homes for properties newly listed for sale  across Britain jumped by over £5,700, or 1.8 per cent, over the past month to a new ‘all-time high’ of £333,564, as buyers rushed to snap up homes with more space, according to Rightmove. 

Family homes with three or more bedrooms have become like ‘gold dust’ in many areas, especially in parts of the north, where demand ‘continues to massively exceed supply’, pushing up prices, the property portal said.

Pushing higher: Asking prices for homes have again hit new record highs, Rightmove said

Pushing higher: Asking prices for homes have again hit new record highs, Rightmove said

Average asking prices increased by 6.7 per cent compared to March 2020. This is the closest month for comparison as the property market, and Rightmove’s index, were suspended for most of April and May last year.

The numbers are striking, but average asking prices are very different to the final price a home ends up being sold for. A property is only ever really worth what a buyer is prepared to pay for it.   

Still, with demand from buyers so strong and supply not keeping up, the time taken to sell a home has reached yet another record low of 45 days, according to Rightmove.

The demand and supply imbalance is strongest in northern regions, where a shortage of larger homes is contributing to push prices higher. 

Average asking prices in the North West have climbed by more than 11 per cent since March last year, while in Yorkshire & the Humber by over 10 per cent, shortly behind Wales, which saw the biggest price increase at 13 per cent. 

In previous market upturns London has generally led the way, but prices are now virtually flat in the capital, having risen just 0.2 per cent since pre-lockdown – although, as Righmove stresses, there are widely varying local markets within the capital. 

The time taken to sell a home has reached yet another record low of 45 days Rightmove said

The time taken to sell a home has reached yet another record low of 45 days Rightmove said

The fast rise in prices in the north and languishing valuations in London means that the price gap between these regions has shrunk to its smallest in eight years. 

While the gap remains very large, with average prices in London still 2.9 times higher than those in the north, this ratio is now at its smallest since 2013, Rightmove said.

‘Last year’s unexpected mini-boom is rolling on into 2021, with new price and market activity records again defying many predictions,’ said Rightmove’s director of property data, Tim Bannister.

And added: ‘It is the regions of Britain further north that are leading the way, with some degree of catching up between average prices in London and the north. 

‘The pandemic has given a greater focus on the home, and in 2020 we saw a surge in southern coastal and rural areas. 

‘So far 2021 is proving to be the year of the northern mover, not only satisfying their pent-up housing needs, but in doing so also narrowing some of the huge price gap with London.’  

Family homes are ‘like gold dust’ 

The number of larger homes available to buy has shrunk significantly during the pandemic, Rightmove said.

Rigthmove gives the example of the North East, where agents last month had almost 60 per cent fewer ‘second stepper’ homes – which are mostly three-bedrooms – for sale than in the same period in 2019.

The situation is similar in Scotland, where ‘top of the ladder’ homes with four or more bedrooms is down 65 per cent compared to before the pandemic.   

This has translated in higher asking prices across the country, with top of the ladder homes having increased on average by 10.8 per cent over since March last year, second steppers homes by 7.9 per cent and first-time buyers’ homes by 5.4 per cent. 

Price shifts: 'Top of the ladder' homes have seen the biggest rise in asking prices

Price shifts: ‘Top of the ladder’ homes have seen the biggest rise in asking prices 

In contrast, London’s available stock is down 20 per cent and 24 per cent respectively in these sectors, ‘so while supply is still limited it is more closely matched to demand’. 

‘Another important factor driving the higher demand and quicker average time to sell in the north is that more of their sellers are intending to buy and stay local, whereas many Londoners are looking to move out,’ explains Bannister. 

Rightmove’s research among those intending to sell in the next 12 months shows that an average of 84 per cent in the north are looking to move locally, compared to only 52 per cent in London. 

‘The pandemic has changed many aspects of what people want from their homes, and the pricing pendulum is swinging away from London towards the north,’ Bannister added.  

Tomer Aboody, director of property lender MT Finance, added: ‘Londoners who have always craved city life are now less fussy about being at the centre of things and are willing to compromise on location in order to find that elusive space. 

‘This, in turn, is pushing asking prices up in other regions at the fastest pace in years, exceeding London in terms of percentage increase in values. 

‘Although prices are still much lower in the regions than in London, those averages are rising as demand shifts outwards.’

Regional patterns: Average asking prices in the North West have climbed by more than 11 per cent since March last year, while in Yorkshire & the Humber by over 10 per cent, shortly behind Wales, which saw the biggest price increase at 13 per cent

Regional patterns: Average asking prices in the North West have climbed by more than 11 per cent since March last year, while in Yorkshire & the Humber by over 10 per cent, shortly behind Wales, which saw the biggest price increase at 13 per cent

What next?

In his recent Budget, Chancellor Rishi Sunak extended the stamp duty holiday in its current form until the end of June, and then tapered until September.

That means homebuyers in England and Northern Ireland will pay no stamp duty on properties worth up to £500,000, saving up to £15,000.

The threshold will then drop to £250,000 until the end of September, with buyers saving up to £2,500 per transaction, before returning to its normal level of £125,000.

Since the Chancellor first unleashed the scheme last year, the housing market has seen buyer demand – and prices – rise sharply. 

Jeremy Leaf, north London estate agent and a former RICS residential chairman, believes the tapering of stamp duty to cause a decline in activity.

He said: ‘These figures confirm what we’ve seen ‘at the sharp end’. Some sellers have taken the opportunity to raise asking prices, making home buying less accessible even for those able to purchase the dwindling stock of properties. 

‘On the other hand, we’re finding faster rollout of the second jab, in particular, is helping to encourage older homeowners to put their homes on the market but not fast enough yet to keep prices in check.

‘We expect the imminent tapering of the stamp duty concession to prompt a reduction in activity and softening rather than a correction in prices as longer-term market sustainability is driven by economic recovery and availability of competitively-priced finance.’

Matthew Cooper, founder & managing director of Yes Homebuyers, believes prices will fall once the stamp duty holiday ends.

‘It’s clear that sellers are attempting to cash in on the stamp duty holiday themselves by reaching new highs where unrealistic asking price expectations are concerned,’ he said.

‘It certainly doesn’t help when this hysteria is being driven by the likes of Rightmove, who continue to pull ‘record’ market statistics out of their hat on a monthly basis, much like a cheap magician at a children’s party.’

He added: ‘When the end of the stamp duty holiday does come and causes buyer demand to evaporate, we’re likely to see property values fall at pace.’

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IHG to open new hotel in Brussels (BE)

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IHG Hotels & Resorts (IHG) announced the signing of voco Brussels City North, marking entry into a new market. Due to open in autumn 2023, the 92-key voco Brussels City North property will be operated by Prem Group, a strong partner for IHG in the region. The state-of-the-art hotel will feature a restaurant and conference centre and will adjoin the Innovation Centre, which is already open on the site, to create a hub for hospitality innovation and a truly stimulating environment.

 

Located to the north of the city, the hotel will feature a striking 50-metre tower with huge glass windows providing panoramic views of the Brussels skyline. The site itself will be Europe’s largest experimental lab for creating ideas and a vision for the future. In line with voco hotels ethos, voco Brussels City North will stand out from the crowd and give guests a different choice.

 

Willemijn Geels, VP Development Europe, IHG Hotels & Resorts, said: “I’m delighted to announce that we are partnering with Living Tomorrow to bring voco hotels to Belgium. We know that Brussels is a strong market for branded properties, and we are confident that the voco hotels’ brand will fit well with the goal of creating a truly innovative hub on this unique site.”

 

Yin Oei, CEO, Living Tomorrow, said: “Living Tomorrow is focused on driving the future and we’re excited to partner with IHG to develop this exciting hotel – the first voco in Belgium. The values of voco hotels fit well with our desire to innovate and push boundaries and we know that the strength of the IHG systems will provide a stable platform from which to innovate.”

 

 

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Mitheridge and London Green unveil plans for Lambeth mix-use scheme (GB)

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Mitheridge Capital Management and London Green have unveiled plans for a residential-led, mixed-use development in Lambeth, south London. The project will make use of a former industrial site in Loughborough Junction, Lambeth, while also protecting the adjacent intersecting Victorian railway viaducts which remain a rich heritage asset.

 

Managing Partner of Mitheridge William Yerburgh said: “London desperately needs more homes. We believe strongly in an approach to housing provision that is affordable but also enhances the character and vibrancy of local communities. Our partnership with London Green will show that new housing provision can deliver for everyone.”

 

Daniel Rastegar, Investment Director at Mitheridge commented: “We are excited to work with London Green to deliver a scheme that will contribute positively to this area of Lambeth, both by providing highly sustainable, high-quality homes as well as new industrial space for SMEs.”

 

Harry Green, Director at London Green added: “This represents yet another opportunity to develop an underutilised site into a mixed community of sustainable homes and workplaces. We look forward to working with best-in-class consultants and contractors to deliver the vision that we share with Mitheridge Capital Management”.

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IIProp grows its presence in Spain

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IIProp (International Industrial Properties) has successfully delivered the initial phase of its built-to-suit project in the Spanish city of Murcia. The joint venture has also launched a new development project at a prime location in Nadarzyn, Warsaw South, Poland. The scheme is located in Murcia’s San Andres industrial park and offers 22,346m². The project is set to add another building of over 23,000m², bringing the total development area to 46,600m² GLA. Construction of a 23,000m² follow-on component is under way and scheduled for completion in January 2023. The project marks an important milestone for the IIProp’s expansion in Spain, where the platform has secured pipeline for development of some 63,000m² GLA in the Murcia and Barcelona regions. The development comes with excellent connectivity and visibility as it sits alongside the A7 highway, part of the Mediterranean transit corridor that links Spanish and Portuguese ports with mainland Europe. The project is set to obtain “Very Good” BREEAM certificate, which will be supported by green solutions such as solar panels, charging stations for electric cars, power sockets for electric bicycles and scooters as well as bicycle parking space and a bee shelter.

 

Nebil Senman, Managing Partner at Griffin Capital Partners, said: “The logistics market in Europe experienced an unprecedented growth during the pandemic and despite the geopolitical turmoil the tenant demand remains strong. We selectively are developing projects in Murcia and Warsaw with highest ESG standards and securing highest tenant covenants to fulfill core investor’s requirements. We plan to continue to build up carefully our European logistics footprint by selectively adding projects in core European markets as well as through converting our well-positioned land bank into standing assets.”

 

Maciej Dyjas, Managing Partner at Griffin Capital Partners, commented: “The projects in Murcia and Warsaw are another success stories in our strategic partnership with Panattoni. We continue to screen new European markets for entry and already begun working on potential development projects in countries like France, Italy, and Austria. In parallel, the IIProp’s pipeline stands at ca. 430,000m² GLA, despite latest disposals completed in Germany.

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