Increase in students = good news for local landlords

An increase in students going to university is boosting the local housing market, a research study has shown.

A report by high street bank Lloyds TSB found that of ten universities studied, six were found to be witnessing dramatic increases in house prices.

Interestingly, the largest increases in house prices are in towns that have also experienced a surge in student populations.

Aberdeen experienced the largest increase in real estate, with the average cost of a property in the city rising by nearly 40 percent since 2005. This rise coincided with a 54 percent increase of higher education students arriving in the city.

A similar pattern has developed in both Northern Ireland and Wales. Coleraine saw a 34 percent increase in house prices, while Carmarthen grew 29 percent in the last five years.

However, an increased student population in an area did not always indicate a rise in house prices, researchers said.

Winchester saw a 30 percent increase, compared with only 2.5 percent with the remainder of the South East, even though its student population grew by 78 percent over the last five years.

Edinburgh only had an 11 percent rise in house prices during the same time period, despite having the eighth highest student population in the UK.

2010 will be the last year for rental declines

The first signs of occupational recovery have been shown in 2010, according to a national commercial property consultancy report.

Lambert Smith Hampton’s (LSH) National Office Report 2010 found that while demand for office property has reduced significantly over the past two years, there are now signs the market may be recovering.

LSH predict that although rental values will fall by around three percent in 2010, this will be the last year of declines for the market as a whole. It expects only weak growth next year, followed by a stronger recovery in 2012 and 2013.

It expects rental growth to return to 2006 and 2007 levels by 2014, with the Central London market leading the rest of the UK out of the current downturn.

This sense of optimism should prove encouraging for the occupational market in Berkshire, which has struggled over the past 15 months.

Indeed, take-up in Reading reached its lowest total in more than ten years last year, with total occupational market activity only equalling 185,764 sq ft.

Furthermore, the first quarter of 2010 has got off to a similarly slow start, with only 22,260 sq ft let, through two transactions at Plaza West in Reading town centre.

Office Property Market Recovering

The first signs of occupational recovery have been shown in 2010, according to a national commercial property consultancy report.

Lambert Smith Hampton’s (LSH) National Office Report 2010 found that while demand for office property has reduced significantly over the past two years, there are now signs the market may be recovering.

LSH predict that although rental values will fall by around three percent in 2010, this will be the last year of declines for the market as a whole. It expects only weak growth next year, followed by a stronger recovery in 2012 and 2013.

It expects rental growth to return to 2006 and 2007 levels by 2014, with the Central London market leading the rest of the UK out of the current downturn.

This sense of optimism should prove encouraging for the occupational market in Berkshire, which has struggled over the past 15 months.

Indeed, take-up in Reading reached its lowest total in more than ten years last year, with total occupational market activity only equalling 185,764 sq ft.

Furthermore, the first quarter of 2010 has got off to a similarly slow start, with only 22,260 sq ft let, through two transactions at Plaza West in Reading town centre.

Stamp duty holiday for first time buyers should be kept

Stamp duty holiday for first-time buyers should be retained by the new Conservative-Liberal Democrat coalition – that’s the view held by a group of surveyors.

A poll by the Royal Institution of Chartered Surveyors (RICS) found that 89 percent of its members believe the measure, introduced in Alistair Darling’s pre-election Budget, should be kept.

Mr. Darling suspended stamp duty for first-time buyers purchasing residential property valued at under £250,000. The measure, which came into effect on March 25, is set to run until 2012.

In their latest survey, RICS asked specific questions on stamp duty to assess the potential impact stamp duty exemption may have on property transactions.

Eighty-five percent of those surveyed said the incentive could boost transaction levels by as much as ten percent, while one in ten felt the increase could be between 11 and 20 percent.

Latest figures from HM Revenue & Customs show that 76,000 property sales took place in June, bringing the total for the second quarter of the year to 225,000. That’s up from 216,000 deals between January and March.

Meanwhile, the average price paid by first-time buyers in the UK during May was £154,738, according to the Department for Communities and Local Government.

More evidence of falling house prices

House prices fell in July for the first time since February, according to a survey by the Nationwide building society.

Its figures showed the average price of a UK property dropped from £170,111 to £169,347 last month, a reduction of 0.5 percent.

This monthly fall means the annual rate of house price inflation dropped to 6.6 percent in July from 8.7 percent in June, Nationwide said.

Demand from homebuyers in 2010 remains subdued and has made little progress in building upon the recovery seen during much of 2009.

Furthermore, the number of properties changing hands in the UK is only at half the rate seen prior to the recession, despite the introduction of second stamp duty holiday for the vast majority of first time buyers and record low interest rates, it said.

And unfortunately for those people earning only a modest income, restrictive credit conditions coupled with the bleak economic outlook has left only wealthier buyers in the market, with many first time buyers lacking the confidence to purchase as uncertainty over employment prospects remain.

Meanwhile, IHS Global Insight said the figures support their view that prices will fall between three and five percent during the second half of 2010.