Strength of rental market causes bidding wars

The gap in the UK property market is widening – while low activity is driving prices down in many areas, quality property in sought-after locations is now instigating bidding wars, lock outs and time limits on exchange.

That’s according to the County Homesearch Company. It says a select few locations, including areas of Kent and London, have witnessed a sudden increase in activity and competition.

A mini surge in top-end homes coming on to the market has led to fierce competition among buyers, with clients being strongly advised to offer additional non-returnable deposits to secure their property.

Such is the competition for luxury properties, some prospective buyers are paying fees of up to £10,000 to demonstrate they will not pull out of the deal.

County Homesearch Kent said activity is buoyant in some niche areas of Kent, adding that high levels of competition has also been extended to the rental market, with clients being advised to offer six months rent up front to secure a rental property.

London’s rental market is also at its strongest for years, meaning that investors can expect a healthy return, not only on their original investment, but on the rental yield too, its London division said.

Rural house price increase greater than urban properties

Houses in rural areas of the UK have increased in price by an average of £200 per week over the past 10 years, a greater climb than their urban counterparts, according to research by Halifax.

Homes in towns and cities have increased by 91 percent over the same period.

Buyers looking to purchase a property in the countryside can expect to pay a 20 percent premium, compared to one bought in an urban area. This difference has increased over the past decade with buyers in the countryside paid a 17 percent premium ten years ago.

The number of first time buyers in the countryside is much less than in urban areas with 27 percent of sales in rural areas being to first home owners, compared to 45 percent in towns.

The lifestyle benefits associated with living in the countryside still resonates with homebuyers, so rural properties continue to trade at a significantly higher premium to homes in urban areas, Halifax said.

However, as a consequence of rising property prices and generally lower average earnings, the housing market in rural areas has become more challenging over the past decade, particularly for those looking to get on the property ladder, it added.

Commercial Property Market Still Growing

The UK commercial property market continued to see positive capital growth this month, with values up by 0.2%, according to the CB Richard Ellis’ UK Monthly Index.

This is thanks to the Central London office market, which unlike the rest of the market, is enjoying strong growth because of the increasingly restricted supply and a positive rental growth outlook.

All property saw capital growth of 0.2% and a total return of 0.7%, with offices once again the top performing sector, with capital growth of 0.5% and total returns of one percent. All property rental values fell by 0.1% in October, with growth in Central London offices countering weakness elsewhere.

CB Richard Ellis said the surprising positive total property returns for this month is because capital values are continuing to defy weaker sentiment. But it also said the market continues to lack direction, and Central London aside, other subsector offices may be nearing an inflection point.

Contrary to the wider market slowdown, investment volumes are picking up, with total turnover for 2010 likely to surpass 2009’s £25bn, it said. Furthermore, UK institutions and foreign investors have been among the most active, accounting for around two thirds of the total investment so far this year.

Hungerford property is best waterside home

A Hungerford property has been named the best waterside home on the property market by the Telegraph newspaper.

Eddington House and Mill, located by the River Kennet, was rated number one on the Telegraph’s list of the top ten waterside properties for sale, beating off competition from British properties in Thornborough, Devon and Perthshire.

The Berkshire home is available for only the second time in 90 years. It has six-bedrooms and is in a secluded area on the edge of Hungerford. It’s only a few minutes’ walk from the town centre but is surrounded by an area of Outstanding Natural Beauty and the Freeman’s Marsh.

The newspaper describes the idyllic property as having ‘beautiful gardens with gigantic trees’ and office space in the original four-storey mill. It also offers ‘light and spacious living accommodation’ with muted colours and wooden floors.

The property is on the market for a cool £1.8 million. However, despite its top billing, it’s not the priciest house on the list. The most expensive is a trendy home in Carcassonne, France. Located in the fashionable Languedoc region, its gardens border the Canal du Midi.

The 11-bedroom property landed at number five and is valued at £1.9 million.