European commercial
property markets
suffering from
economic malaise,says RICS
Expectations in both the occupier and investment markets in the real estate sector has improved across much of the world during first quarter of 2012, however more European markets follow the negative trend, according to the latest Global Commercial Property Survey from the Royal Institution of Chartered Surveyors.
Following some positive signs in the global economy and an easing of tension in the eurozone during the first months of the year, rent expectations remain particularly positive in Russia, with respondents suggesting occupier demand is significantly outstripping new supply, as well as in Canada, Brazil, and China, the survey says.
But they have also noticeably improved in Hong Kong and Thailand. Alongside this, sentiment has shifted in the US, Malaysia and, more strikingly, India. All three countries previously reported negative readings on the outlook for rents but this has in quarter one been replaced by a more upbeat set of results.
By way of contrast, the outlook for the occupier market remains quite downbeat across much of the European Union, with the notable exception of Germany and Poland. In Germany a healthy rebound in economic activity is fuelling an increase in demand for space and exerting further upward pressure on rents. With a positive rental outlook (+13), Poland follows two years of rising demand, steady supply and rising rents.
In the rest of the eurozone, weak growth prospects if not fears of outright recession are continuing to weigh heavily on sentiment. Significantly, the soft results extend beyond those economies most exposed to the sovereign debt crisis such as Greece, Portugal, Spain and Ireland, with an increasing negative rental outlook in the Netherlands and France.
On the investment side, demand in these European markets together with Italy and Hungary is also really weak and respondents in the Czech Republic and Belgium anticipate the same negative results. In Germany, investment enquiries and capital value expectations are rising and in Poland, after two years of increase the investment market is stabilising.
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New tax regime could result in
influx of French buyers
in London, agents believe
The London property market could seen an influx of French people looking to rent or buy as a result of Francois Hollande winning the election as he has promised to increase taxes.
London has a sizeable French expat population and an election pledge by Hollande to increase the upper income tax to 45%, bring more people under the annual wealth levy, and introduce a hotly contested 75% super tax band for anyone whose annual income exceeds £1million.
The tax increases could see even more French people seeking to move to the capital, according to real estate agents.
‘We may well see an influx of French investors and tenants. London is already a favourite destination for the French with the Lycées brimming full, so it will be interesting to see what happens,’ said Lucy Morton, senior partner and head of lettings at central London estate agency W A Ellis.
Knight Frank has found that in areas like South Kensington French investors were the second biggest group after British buyers in the first quarter of this year, accounting for 8% of property purchases. So far this year they say enquiries from French clients have increased by 19%.
‘There is anecdotal evidence of increasing interest, both in terms of the number of walk-ins reported by our offices and of prospective buyers searching online,’ explained Knight Frank’s head of residential research Liam Bailey.
‘By looking at search activity on Knight Frank's Global Property Search website, we see that the number of French web users viewing prime central London properties on the site began to increase as the eurozone crisis hit in May 2011,’ he said.
‘Although this activity began to tail off later in the year, there was a significant spike in February with a 68% year on year growth in property searches which coincided with Hollande's proposal for a 75% tax on top earners,’ he pointed out.
‘Interestingly, the year on year change in visits for the three months to April shows that, while French searches in the sub £1 million sector have dropped off over the past year, down 14%, interest in the £5 million plus bracket has surged and is up 30%,’ he added.
Kensington agents Douglas & Gordon have had so much interest from French buyers that they are hiring four French staff. ‘The French have always loved this area and we are seeing more and more,’ said director Ed Mead.
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Landlords welcome squatting
becoming a crimminal offence
in the UK
The Landlord Syndicate, a network of companies providing a complete support centre for UK landlords, has welcomed the news that squatting is to become a criminal offence as of September.
Home owners, and particularly landlords whose properties are not always occupied, can breathe a sigh of relief as reports have revealed the act of squatting, which is currently only a civil offence, will be made a criminal offence from 01 September 2012.
One member of The Landlord Syndicate who has fought for some time to enforce this law, even supporting a campaign presented to Parliament in April 2011, is Paul Shamplina, also founder of Landlord Action. ‘Squatting cases have been on the rise for some time now, many by organised gangs whom have travelled thousands of miles to engage in squatting knowing they will be protected by the law,’ he said.
‘It was only when some high profile cases hit the headlines that people sat up and took notice of the growing injustice on home owners. Squatters will now face up to a £5,000 fine and a six month prison sentence if they take up residence in another person’s property,’ he added.
But the Landlord Syndicate are warning landlords not to be complacent. ‘Enforcing a law does not mean that the activity of squatting will be eradicated, it just means there are tougher measures to deal with it which should prevent landlords and home owners having to enter into lengthy and expensive legal battles,’ said Shamplina.
‘That means landlords still need to avoid void periods and ensure they invest in good preventative security measures,’ he added.
