Our monthly property market review is intended to provide background to recent developments in the property markets as well as to give an indication of how some key issues could impact in the future.
INVESTOR DEMAND REMAINS STRONG
The latest review from property adviser, GVA, indicates that mainland European investors appear to remain risk-averse to the UK commercial property market, as a result of the continuing uncertainty surrounding the Brexit negotiations. In contrast, other global investors, particularly those from the Far East and China, remain bullish, with demand from these regions strengthening in 2018. At the same time, UK based investors appear to have returned to the market this year and now account for approximately 12% more acquisitions compared to last year.
ONLINE RETAIL MARKET DRIVES DEMAND FOR LOGISTICS AND INDUSTRIAL SPACE
The bi-annual LOGIC Regional report from Knight Frank, which studies the occupier and investment market trends in the industrial and logistics sector, has revealed that the first half of 2018 saw 17 million sq. ft of industrial and logistical space acquired by participants in these sectors.
SURGE IN DEMAND FOR CENTRAL LONDON OFFICE SPACE
According to estate agents CBRE, central London saw a surge in demand in October for office space, with approximately 1.3m sq. ft of office space let, marking a 30% rise on the same month last year. This was primarily driven by the UK creative sector, who were responsible for nearly 20% of all deals contracted.
SCOTTISH COMMERCIAL PROPERTY RETURNS BEAT UK AVERAGE
Although there is a 1.2% deficit between the Scottish and the overall UK total annual returns, with Scotland showing 7% against the UK average of 8.2%, three sectors of Scotland’s commercial property market, ‘offices’, ‘retail’, and ‘alter natives’, are ahead of the UK average. Notably, the high street retail sector in Scotland shows total returns at 6.4%, against the UK average of only 4%.
“Remortgaging has reached its highest level in almost a decade, as homeowners take advantage of a competitive market and lock into attractive deals. This also reflects the large number of fixed rate mortgages coming to an end, which is expected to continue into 2019.” – Jackie Bennett, Director of Mortgages at UK Finance
HOUSE PRICES HEADLINE STATISTICS
- UK house prices grew by 2.7% in the year to October 2018
- This is the lowest annual growth for the UK since July 2013
- House prices grew fastest in the North West region, increasing by 4.9% in the year to October 2018