Posts with tag: Knight Frank

Industry predictions for the UK property market

Published On: July 13, 2020 at 8:07 am


Categories: Property News

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This following is a guest piece provided by SevenCaptial.

Although COVID-19 has been affecting the property market for the majority of 2020, we’re still in the early stages of understanding the long-term impact it will have on the global and UK economies.

Following a pause in transactional volume, there has been a surge in listings and enquiries in the sales market over the past month, after record lows in March, April and May.

Despite the lack of data from actual transactions, SevenCapital has gathered insights, forecasts, and opinions from across the industry on what the outlook of the UK property market may be for the rest of 2020 and beyond.

Included in the UK property market update is collated research from market leaders including Savills, Knight Frank, Rightmove, Zoopla, and JLL.

Industry Predictions for the UK Property Market
Industry Predictions for the UK Property Market

Rightmove – Market update

According to a recent release from Rightmove, the average asking price of property coming to market in England is up by an average of 1.9%. 

Over 175,000 missing sellers that couldn’t come to market from 24th March to 12th May have now sprang into action, with a record number of homeowners asking for valuations and daily new listings now up on last year.

Unique price analysis of new sales agreed indicates upwards price pressure, with buyers agreeing to pay 97.7% of the asking price on average, an improvement from 96.6% for sales completed in February this year.

Rightmove originally forecasted a 2% rise in the price of UK property coming to market in 2020. This update from Rightmove shows positive signs but we can assume they are now more modest about price growth for the remainder of 2020.


Long-term, Savills remains more optimistic, with a continued expectation of price growth over the next five years. Furthermore, large parts of the prime market looked good value in the run-up to the current crisis which should underpin those sectors. However, the pace of recovery will depend upon the state of the wider economy.

Interest rates are now expected to be lower for longer. Savills original 2020 forecast of 15% UK house price growth over 5 years included an assumption that the Bank Base Rate (BBR) would rise to 2.0% by the end of that period. Oxford Economics’ current forecast is for it to be 1.0% under both baseline and downside scenarios.

Savills expects a small drop but as the economy opens, we should see a recovery. Low bank base rates and mortgage lending confidence should see the UK market remain relatively stable and will boost a quicker recovery. Mortgage lenders are in a much better state than compared to the last financial crash which means they are more likely to lend as the market unlocks. The time of this recovery will also depend upon wider economic recovery, but government schemes such as furloughing staff have relieved pressure on property prices.


JLL expects real estate activity to be slow for the short term with investor sentiment dampened.

While many investors have paused new acquisitions, select well-funded institutions and high-net-worth investors with longer-term investment horizons will be among the first movers. JLL also states reduced international student intakes pose a risk to student housing.

The COVID-19 pandemic will undoubtedly change the way we live and work for the foreseeable future, and new trends will emerge that will become part of our ‘new normal’.

Although investment into real estate has fluctuated over the years through various downturns, the overall trend has been for higher allocations to real estate, and JLL sees no reason for this trend to reverse. Real estate continues to offer good risk-adjusted returns that are less correlated to other asset classes. This is where the advantage of real estate and a diverse portfolio is emphasized, remaining stable when the equity and commodities markets are seeing increased volatility.

Over the long term, JLL still believes real estate remains an attractive asset class.

Knight Frank – Market update

Knight Frank expects a drop in property prices in the short term with a bounce back of 5% in 2021. 

Knight Frank reduced their forecast to 728,000 sales for this year, a decline of 38% on 2019 levels. Their previous forecast, which was published at the beginning of April, pointed to a 3% fall in UK house prices.

A 20% drop in prime London prices since 2014 would shield this market from further falls.

Knight Frank commented: “Residential will remain a stable asset and may actually become more desirable when compared to commercial, due to changes in way of life and working environments.”

Knight Frank further commented: “If we add into the mix the fact that we have low new-build rates coming through in 2020, low inventory and low-interest rates, it becomes less likely we will see significant further falls from here.”

Zoopla – Market update

Zoopla’s Cities Index in April was conservative due to market activity, but they expect a slow rate of growth to become more marked over the summer. Demand for homes in England rose by 88% after the housing market reopened in England.

House prices will not change significantly in the next two months as most sales agreed before the start of the coronavirus pandemic will continue.

In the long term, house prices will be largely influenced by unemployment rates.

In a recent survey by Zoopla, around 60% of would-be movers across England say they plan to go ahead with their property plans, although 40% have put their plans on hold because of COVID-19 and the uncertain outlook.

The number of property sales agreed is also steadily rising since the market reopened. But it will take some time for these numbers to rise significantly.

Zoopla also forecasts a post-COVID-19 bounce and expects a clearer picture to emerge when more sales are completed.

Andy Foote director at leading UK property developer SevenCapital commented: “These are unprecedented times. However, property is again proving its stability and strength as an investment vehicle. What is important now more than ever for investors continuing with their investment strategy is remembering the core principles of property investment which are buying in the right location, working with trusted developers and investment partners with a strong track record and buying with a long-term mindset.

“Property, particularly now, should be considered a long-term investment and then no matter at which point of the property cycle you buy, providing you invest in a quality product in the right area with strong, sustainable tenant demand, your property should pay dividends over time.”


Andy Foote, SevenCapital Director. 

During the past 22 years, Andy has successfully built five businesses within the Motor Finance, Residential Property, Recruitment, and Charity Sectors. He currently sits on the boards of Seven Invest, The Brain Tumour Charity, Alexander Daniels, and University of Nottingham Impact Board. Along with his co-directors, Andy has built the distribution channel at SevenCapital which offers investors a unique 360-degree service, including sales, mortgages, furniture, property management, rental, and exit.

Make landlords exempt from Stamp Duty surcharge to ‘help breathe life into housing market’

Published On: May 5, 2020 at 8:29 am


Categories: Landlord News

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Property management company Ringley believes that making buy-to-let landlords exempt from the Stamp Duty surcharge on second homes will help to kickstart the housing market post-coronavirus.

Mary-Anne Bowring, group managing director at Ringley, believes this could boost transactions and increase the supply of available rental properties at a time of growing demand.

The UK private rented sector has grown significantly in size in recent years, jumping from 2.8 million households in 2007 to 4.5 million in 2017, according to the Office for National Statistics. Ringley also highlights that Knight Frank has predicted nearly six million households– approximately a quarter of all households – will be privately renting by the end of 2021.

Despite this demand, the government has introduced regulations that make it more difficult to invest in the private rental sector. High Stamp Duty and reduced mortgage relief are a couple of examples. Now that COVID-19 has caused even more disruption and uncertainty, Mary-Anne warns there will be a spike in rental demand. Households are likely to put off major financial decisions, such as buying a home, and opt to rent for longer, underlining the need for more rental homes.

Mary-Anne of Ringley says the government should encourage BTL investors to return to the rental market to help meet the rising demand for rental homes and drive transaction levels. 

The Royal Institution of Chartered Surveyors has called for a Stamp Duty holiday once lockdown restrictions are eased and a number of volume housebuilders have announced they intend to reopen construction sites.

Mary-Anne says in addition to short-term help such as a Stamp Duty holiday, the government should also consider long-lasting structural reforms that reflect changing housing needs.

Bowring comments: “A stamp duty holiday would no doubt cause a rush of transactions and help breathe life into a housing market that has been put into deep freeze in an effort to battle coronavirus. 

“The government should be looking at long-term solutions as well as short-term sticking plasters when it comes to fixing the UK housing market.

“Millions of Brits were already renting, and that number was predicted to grow anyway with or without coronavirus. The disruption caused by coronavirus will likely see rental demand grow, as banks squeeze potential buyers with tighter lending restrictions and people put off buying or selling a home as it becomes clearer COVID-19 will cause continued uncertainty and disruption in the medium term.

“Eliminating additional stamp duty for buy-to-let investors would help stimulate the supply of rental homes while also driving wider activity in the housing market. Landlords are a crucial source of development finance through off-plan sales and will help support getting Britain building again.”

Tenancy renewals have increased but renters begin to plan for future

Published On: April 28, 2020 at 8:12 am


Categories: Tenant News

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Demand for lets with gardens may be on the rise, but the number of tenancy renewals agreed since lockdown began has increased by 15% compared to this period last year.

This also shows the highest figure for renewals in 10 years, according to Knight Frank.

The estate agency found this figure based on renewal agreements for tenancies that are due to end in May and June.

Gary Hall, head of lettings for Knight Frank, said: “While demand is rekindling, more people are also opting to go with the status quo, particularly if there is no pressing need to move.”

It was during the first week of lockdown that the number of new prospective tenants registering in London and the Home Counties dropped by 59%. This is compared to the five-year average. However, this decline was at 28% in the week ending 18th April, which could suggest tenants are beginning to make future plans yet again.

Jon Reynolds, head of lettings for the City and East region of London at Knight Frank, said: “In the early stages of the lockdown people froze. That has changed as time has gone on. People now know whether they’ve been furloughed or not and some are starting to plan for life after the lockdown.”

David Mumby, head of central London lettings at Knight Frank, said: “It [the letting sector] is the most nimble area of the UK housing market and we trade by the day with a product that can come on or off the market. 

“Small variations in currency or tax policy can produce sudden changes in demand and the infrastructure is now in place that means we can move people quickly.”

What’s important for older renters choosing a property?

Published On: October 25, 2019 at 9:36 am


Categories: Tenant News

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Location is by far the most important factor when choosing a property to live in, according to Knight Frank’s survey of homeowners and renters over the age of 65.

56% of these respondents highlighted this as a priority.

When it comes to choosing a location, 28% responded that their decision was guided by whether the rent or purchase price of the area was within their budget. This was followed by living close to family and friends (17%), proximity to transport links (13%) and access to green space (10%).

The survey also found that 37% of those aged over 65 find the prospect of living in a senior living community attractive.

Commenting on the survey, Jamie Turnbull, Business Director at Girlings Retirement Rentals says, “This survey reveals what’s important for older people when considering a move in later life and shows that location, affordability and being close to family and friends are the most important factors.

“Interestingly the survey also shows that people are open to the idea of living in a retirement community. This mirrors our experience and we are finding more older people are choosing to downsize and rent in a specialist retirement development in their 60s and 70s.

“Benefits include freeing up capital in their home and being able to move somewhere they have always wanted to live. It also enables people to move to a more manageable and age-appropriate property, and no longer have the worry about the upkeep and ongoing maintenance of a home.”

Knight Frank says that the number of people aged 65+ living in the UK is forecast to increase by 20% (12 million in total) by 2027. The need to provide suitable housing options for these people is more important than ever, it says. In particular, they have highlighted an existing senior’s rental market.

The survey found that a fifth of renter respondents aged 65+ said they are renting privately because they downsized due to life events or changes in household composition. 17% also stated that they are renting because they don’t have enough for a deposit.

The responsibility of owning a home is the reason 14% decide to rent, and 13% do so because it allows them to live in locations where they couldn’t afford to buy.

Prime rental values fall in Home Counties during 2016

Published On: January 17, 2017 at 2:29 pm


Categories: Property News

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Rents in prime locations of the Home Counties fell by an average of 0.8% last year, according to the latest Knight Frank rental index.

This fall has been attributed to a higher number of homes available at the top-end of the market pushing down prices.

Higher Volume

The rise in the volume of properties available in higher price brackets was primarily driven by larger uncertainty in the sales market after a number of tax alterations during 2016.

In the final quarter of 2016, prime rents in the Home Counties fell at twice the annual rate at 1.6%. Additionally, Knight Frank was instructed to let 39% more properties during the same quarter. Market appraisals also increased by 45% in the same period.

As such, Knight Frank feel that the market remains favourable to tenants, particularly those living in regions with high price brackets. Landlords in these areas have to be flexible in regards to asking rents, to try and stay competitive and keep void periods down.

Prime rental values fall in Home Counties during 2016

Prime rental values fall in Home Counties during 2016


Jemma Scott, partner at Knight Frank, said: ‘The latest figures show that the rental market in the Home Counties is equally affected by the global markets as prime central London, which is reflected in the marginal decline in rents.’[1]

‘However, the surge in activity in the last quarter of 2016 and the significant increase in new tenant registrations suggest that the gap between available stock and tenant demand is closing, so our outlook for 2017 is very positive,’ she continued.[1]

The number of viewings actually rose by 17% in the same period compared to 2015, with the volume of would-be tenants also rising by 28%. Knight Frank agents attribute this demand mostly under the £4,000pcm price bracket. These properties usually sell quicker than those in higher brackets, driven by an increase in corporate enquiries from executives moving to the Home Counties for work.

‘Already in the first week of trading for 2017, the sub £4,000 per month market remains busy and we have seen an encouraging number of international corporate enquiries as families and businesses plan for relocation to the UK,’ Scott concluded.[1]