Posts Tagged ‘RICS’

ASR Commercial in the News

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We are pleased to report that Ian Ailes FRICS, Commercial Director for Andrew Scott Robertson was featured in the recent RICS Q3 2017 UK Commercial Property Market Survey.

The RICS survey is widely recognised as one of the best indicators of developments in the UK commercial property occupier and investor markets. The results of the Q3 survey show that both investor and occupier demand edged up during Q3 for UK commercial property, but there is still a significant difference between sectors with industrial clearly outperforming.

Survey in brief

  • Rent expectations upbeat for industrial space, but flat for offices and negative for retail
  • Pick-up in both domestic and foreign investment demand at the national level
  • London continues to display more cautious sentiment with 73% of respondents in Central London sensing the market to be in some stage of a downturn.

The view from ASR

Ian Ailes comments in the report “The market is suffering from a negative view and there is nothing on the horizon likely to improve perception. The next event is the Chancellor’s autumn statement but we need something positive in it to incentivise businesses ie less taxation which will generate a larger tax collection. Money is cheap but no one wants to borrow if rates may rise. The Bank of England needs to address this. Threats of interest rate rises are over recessionary. Domestic SDLT needs to be reduced or made fairer to stimulate sales and so new builds from which the economy takes its lead.”

The view from RICS

The feedback to the Q3 survey reflects some of the broader macro issues, with the underlying momentum in the occupier market a little firmer further away from the capital. This is also mirrored in valuation concerns with around two thirds of respondents viewing the London market as being dear.

A key issue going forward will be how the market responds to the likely first interest rate rise in a decade next month. Given that expectations are only for a modest tightening in policy, the likelihood is that it will be able the weather the shift in the mood music. But this remains a potential challenge if rates go up more than is currently anticipated.

To read the survey in full click here.

Sales activity in the UK residential market is increasing, but a slow start to 2017 is expected due to a lack of stock

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The November RICS Residential Market Survey shows sales activity in the UK residential market is increasing, with buyer demand edging upwards for the third consecutive month. As stock continues to dwindle, the headline RICS price balance has risen to 30% in November, which is the highest reading since April, and most of the UK is seeing an increase in prices.

On the supply side of the market, supply shortages remain a constraining feature and indeed, respondents across most parts of the UK highlight the supply shortage as a very dominant feature of the market at present.

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The outlook over the year to come is positive in all areas with 40% of respondents forecasting house price growth, although contributors are less confident in the prospects for London prices relative to other areas over the year to come with larger properties in the capital expected to show the slowest growth. Tax changes over the past couple of years are widely cited by respondents as an impediment to the level of transaction activity at higher price points.

In the Lettings market, tenant demand rose only marginally, as is usual around this time of year, with 15% more contributors reporting a rise rather than a fall. Meanwhile, new landlord instructions fell slightly at the headline level with 6% more contributors seeing a decline rather than a rise. Tenant demand continues to outpace supply across most areas and rents are expected to continue to rise.

The London rental market remains somewhat of an outlier with surveyors continuing to report a decline in tenant demand (a trend that has been visible for most of the last year) and rent expectations in negative territory for the fifth consecutive month.

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At Andrew Scott Robertson, we have noted that sales activity continues to be busy at the lower end of the market for houses up to £1.5m. Activity in flats up to this price range has slowed; a factor caused by the buy-to-let market having cooled. This month has seen a slowdown of instructions while vendors review their plans for 2017, whilst there has been a steady flow of new buyers on the block ready to buy.

Stock levels on the rental side are improving but applicant levels have slowed. Following the Autumn statement, agents letting fees remain topical with both landlords and applicants, and we would predict that rental adjustments are on their way.

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