Marijana No Comments

Insolvencies among millenials soar as housing costs shred ‘cash cushions’

The number of insolvencies among millenials has climbed rapidly in the past three years, as rising housing prices leave younger people without a “cash cushion” to fall back on.

House price inflation is partially driving the trend, which has seen the number of insolvencies among under 35s rise by nearly a fifth during the past year, according to professional services firm Moore Stephens.

Meanwhile, the number of insolvencies – which can often lead to bankruptcy – among over 55s has dropped, falling by 9 per cent among the baby-boomer category of over 65s.

“The rates that millennials are going insolvent is very worrying, and the problem is worsening,” said Jeremy Willmont, head of restructuring and insolvency at Moore Stephens. “Millennials have more than twice as much of a chance of insolvency than baby boomers; this is a major cause for concern.”

Last year, 4.3 in 10,000 over 65s and 9.6 in 10,000 under 25s went insolvent, the firm found, adding that millennials often have “little left to act as a cash cushion” if they suddenly lose an income stream.

Moore Stephens pointed to older people spending proportionately less on housing, and said many can rely on a partner for emergency money in the event of a job loss of illness. Recent figures from the Office for National statistics showed that 4 per cent of the UK’s net property wealth was held by under 25s, with over 65s holding 41 per cent.

“In addition to high rents and mortgage repayment costs, millennials can often find it difficult to save significant amounts,” said Willmont. “Millennials are at risk of falling into debt through using credit cards and loans to cover living costs such as buying and maintaining a car, which can easily be set up without taking financial advice.”

Source: City A.M.

Marijana No Comments

Hammond says UK will need new Budget strategy in event of no-deal Brexit

Chancellor Philip Hammond has warned that the Government will have to adopt a new economic strategy if Britain leaves the European Union without a deal with Brussels.

On the eve of the Budget, Mr Hammond said he would have to tear up his plans for the economy and set out a new Budget if there was no Brexit deal when the UK leaves the bloc in March 2019.

“If we were to leave the European Union without any deal – and I think that’s an extremely unlikely situation but of course we have to prepare and plan for all eventualities as any prudent government would – if we were to find ourselves in that situation then we would need to take a different approach to the future of Britain’s economy,” he told Sky News’s Sophy Ridge on Sunday programme.

“We would need to look at a different strategy and frankly we’d need to have a new Budget that set out a different strategy for the future.”

He added: “We would want to see how markets and businesses and consumers responded to that.

“Then, as any responsible government would, we would take appropriate fiscal measures to protect the economy, to prepare us for the future and to strike out in a new direction that would ensure that Britain was able to succeed, whatever the circumstances we found ourselves in.”

The Chancellor also hinted he would use his Commons statement on Monday to provide additional funding to smooth the transition to Universal Credit amid warnings low income families are being driven into debt.

“I’ve already put over £2 billion pounds into, over the last two Budgets, into smoothing that transition,” he said.

“We continue to look at how this process is working and if we find cliff edges and difficulties, frictions in the move from the old benefits system to Universal Credit then of course will always try to smooth those out and be pragmatic about it.”

In other measures, the Chancellor is expected to announce £28.8 billion to upgrade England’s motorways and other major arterial roads in a drive to invest in the UK’s infrastructure.

In an interview with The Sunday Telegraph, he also hinted there would be more money for defence and superfast broadband when he sets out his plans in the Commons.

Mr Hammond also signalled his determination to pursue a digital tax to ensure internet giants like Facebook pay a greater share of their profits into the Exchequer.

The Chancellor was handed an unexpected pre-Budget boost by the Office for Budget Responsibility, which suggested stronger than expected tax receipts and slower Government borrowing could hand him an additional £13 billion.

There is a real sense that it is just simply unfair that these very large internet companies are not paying their fair share of tax in the UK

Philip Hammond

As well investing in the road network – with a further £420 million for councils to repair potholes – the Telegraph reported he was preparing to spent at least a quarter of a billion pounds to help connect rural areas to the high speed internet.

After having previously having clashed with Defence Secretary Gavin Williamson over military spending, Mr Hammond indicated there would be extra cash in the Budget for the armed forces.

The Telegraph said there could be a cash injection for the military of up to £1 billion ahead of a long-term spending settlement next year.

“You are looking at someone who was defence secretary for three years. I absolutely get the problems and the challenges in defence,” he said.

Mr Hammond, who raised the prospect of a digital tax on the internet giants in his Conservative Party Conference speech in Birmingham, said the Government still hoped to get international agreement on the issue.

However, if that proved impossible, he indicated the UK was ready to act alone.

“British people have a really very strong sense of fairness, and there is a real sense that it is just simply unfair that these very large internet companies are not paying their fair share of tax in the UK,” he said.

“And when you get a really strong, across the board, sense of unfairness among the population something has to be done.”

Source: Shropshire Star

Marijana No Comments

Landlords face another Budget tax blow

Landlords letting out their former home face another tax hit from today’s (October 29) Budget.

Philip Hammond announced during today’s speech he would reform lettings relief so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant.

This reform will apply from April 2020 and the final period exemption will also be reduced from 18 months to nine months.

There will be no changes to the 36 months final period exemption available to disabled people or those in a care home.

Lettings relief can reduce the capital gains tax on the sale of a property which was at some point used as the taxpayer’s residence but which has since been let out as residential accommodation.

This is the latest in a number of tax hits which landlords have had to face from recent Budgets.

In April 2016 the government added a 3 percentage point stamp duty surcharge for private landlords and a year later removed tax relief on mortgage interest for higher rate tax payers.

In response to the chancellor’s announcement to make changes to the lettings relief, Lilla Dilliway, director at mortgage brokers BlueWing Financials, said in her experience, most people who share their home with a tenant does not officially admit it, so the rental income is unlikely to make it onto their tax return.

She said: “As a result, I am not sure that people are even aware of this lettings relief, let alone make use of it. Those who claim it will not be happy about any reduction, but overall, I would assume that the changes will only impact a relative minority.

“As a side comment, lenders don’t normally allow tenants in someone’s main residence, but would normally give consent to a lodger.

“The reason being that a tenant has different legal rights from a lodger, so if the landlord had to repossess the property, they would have a hard time kicking out a tenant.”

Source: FT Adviser

Marijana No Comments

Mortgage approvals stall in September

Mortgage approvals slumped in September and gross lending steadied in what marked a turn of events following the strong remortgaging activity seen in the months to August.

In its latest household finance update trade body UK Finance reported gross lending in the residential market had dropped to £21.5bn in September, 1.2 per cent lower than the £21.8bn seen in the same month the year before, with £13.1bn being arranged by high street banks.

The number of mortgage approvals by the main banks was also down 9.1 per cent on last September’s figures, with house purchase approvals down 10.1 per cent from 41,529 to 37,352.

In the month before, August, falling house purchase approvals had been offset by strong remortgaging activity, but approvals in the remortgage market were also down in September.

Year on year they have fallen 7.4 per cent, from 29,899 last September to 27,676 now. Compared with August, the month the interest base rate was raised to 0.75 per cent, figures were down 14.7 per cent.

Eric Leenders, managing director of personal finance at UK Finance, said: “The mortgage market softened slightly in September, following strong remortgaging activity in the months preceding the recent base rate rise.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said the softening of the mortgage market in September had come as no surprise as Brexit uncertainty was causing a number of borrowers to defer making decisions.

He said: “As soon as we have a definite deal, whatever that may look like, we expect to see a bounce as people finally make the decisions they have been deferring.”

John Goodall, chief executive at buy-to-let specialist Landbay, said the slow down in mortgage lending suggested a wider deceleration in the market.

Mr Goodall said regulatory changes, “extortionate” stamp duty, and Brexit had all contributed to a slump in the mortgage market.

He said: “Landlords have historically found themselves targets of the budget, so all eyes are on next week’s announcement.

“It is clear that now is not the time for the Chancellor to make changes or he runs the risk of further damaging the private rental sector. The only sweetener would be a reduction or removal of stamp duty, which would provide a much needed boost for the market.”

Source: FT Adviser

Marijana No Comments

UK budget and Bank of England take back seat to Brexit drama

Britain’s budget announcement on Monday and a “Super Thursday” at the Bank of England would normally be key moments for the world’s fifth-biggest economy, but this time they are likely to be overshadowed by the drama of Brexit.

Finance minister Philip Hammond and Bank of England Governor Mark Carney have little option but to sit on the fence as they wait to see whether a no-deal exit from the European Union, which they warn would harm the economy, can be averted.

Both men have other business they want to get on with.

Hammond is under pressure from Prime Minister Theresa May to end a decade of austerity to see off a rise in popularity of the opposition Labour Party.

At the BoE — where an interest rate decision and economic forecasts are due to be announced on Thursday — Carney and his fellow policymakers want to progress with their plan to raise borrowing costs gradually over the coming years.

That would allow the British central bank to follow the lead of other central banks, especially in the United States and Canada, which are dismantling 10 years of massive stimulus.

Expectations of another rate hike by the U.S. Federal Reserve in December are likely to grow if the monthly payrolls report on Nov. 2 shows further jobs growth and rising pay.

In the euro zone, data on economic growth and inflation on Tuesday and Wednesday will show whether the recovery in the single currency area has kept pace.

But in Britain, with Brexit just five months away, things are much less clear cut.

BREXIT FOG

There is no sign of a Brexit breakthrough with Brussels, in large part because May’s Conservative Party is riven over how close Britain should remain to the European Union after it leaves the bloc.

“The budget is likely to be something of a holding exercise until the Brexit fog clears and the MPC is likely to remain in a state of inertia until there is a bit more clarity on the state of the Brexit negotiations,” Ruth Gregory, an economist with Capital Economics, a research firm, said.

When he stands up in parliament on Monday afternoon, Hammond is expected to use his high-profile budget speech to try to cool the Conservative rebels by dangling the prospect of higher spending in the future, as long as a Brexit deal is done.

Britain’s economy has slowed since the 2016 referendum decision to leave the EU. But it has not suffered as badly as many forecasters expected, giving Hammond some fiscal wiggle room to fund higher health spending already promised by May.

Hammond might get further help if Britain’s budget forecasters scale back their estimates of future deficits, as they have suggested they will.

But his ability to ramp up spending in other areas depends most on avoiding a new shock to the economy.

A no-deal Brexit would slash economic growth to just 0.3 percent a year in 2019 and 2020 compared with 1.9 and 1.6 percent if there is a deal, the National Institute of Economic and Social Research estimated on Friday.

Britain’s budget deficit would stop falling and would rise under a no-deal scenario, according to its forecasts.

Looking further ahead, Hammond has suggested he will need to raise taxes to help fund higher public spending.

SIGNS OF PAY “NEW DAWN”

But the prospect of getting controversial measures passed in parliament, where the Conservatives have no outright majority, is probably too daunting at a time of heightened Brexit tensions.

For the BoE, the Brexit stakes are high too.

It has begun raising interest rates from their crisis-era levels and its chief economist has said he sees signs of a “new dawn” for British workers’ pay, long the missing link in the country’s recovery from the financial crisis.

But most economists think it will wait until May to raise rates again, assuming Britain leaves the EU with a deal.

“In any other situation, we suspect the Bank of England would be looking to increase interest rates pretty soon,” ING economists said in a note to clients on Friday.

“But inevitably, Brexit remains policymakers’ number one consideration, and given that there may still be some time before we know for sure whether a deal will be in place before the UK formally leaves the EU, there is a risk growth slows as businesses and consumers grow more cautious.”

Source: UK Reuters

Marijana No Comments

Government Grants for SMEs in the UK – A Hands-on Guide

Winning a government grant can be a real boon for SMEs looking for funding, technology or expertise. In this post, we will discuss everything an SME needs to know about such grants.

Running a successful business is all about pre-empting, overcoming – and, at times – walking around hurdles. These hurdles come in every shape and size you can think of – from HR and compliance to marketing and branding. But if there’s one common denominator among all the problems businesses face, it has to be the money.

Take funding, for example. SMEs around the world and across the board are known to struggle when it comes to raising money. SMEs in the UK are no exceptions to this. In fact, so difficult is raising money via traditional, mainstream and high-street lenders that SMEs have gradually started thinking beyond banks and towards alternative funding channels.

In such times, the role played by the government becomes more crucial than ever. Government grants are, without a doubt, the face of this role. This is the reason why understanding how these grants work and how your SME can give itself a good shot at winning one are important. In this post, we will try to cover what government grants for SMEs are, how they work and how to find and apply for a grant that is suitable for your business.

What is a Government Grant?

A government grant is essentially an incentive package made available by various government bodies and organisations to individuals as well as businesses. Government grants (barring the finance grants) are usually non-repayable.

Depending upon the nature of the grant body and the grant objective, these grants can come in a variety of sizes and formats. As far as small businesses are concerned, such grants range from £1,000 to £500,000. Some of the bigger and more prized grants can go even higher.

Why Are Grants Given to SMEs?

Government grants have been there for a long, long time. The names and forms they have taken may have changed over time – from business subsidies to business support – but the objectives haven’t. If you were to analyse government grants across business sectors and districts, two things become very clear:

  • Most government grants have a singular objective – to keep the economy growing. This objective takes many avatars such as employment generation, sectoral development, regional development and so on. Grants that have these objectives are more or less permanent fixtures.
  • Other grants aim to follow, aid and complement ongoing policies of the government. Such grants typically reflect the incumbent government’s views in regard with trade, environment, social welfare, technology etc.

To put things in a more sweeping perspective, we can say that government grants have three clear objectives:

  • Boost economy through regional and local development
  • Generate employment by supporting businesses
  • Create an economic environment that encourages innovation, entrepreneurship and ‘home-grown’ research

As of 2018, nearly 200 government grants are available for SMEs in the UK.

Why SMEs Should Take Government Grants More Seriously

Even though government grants are incredibly appealing, very few SMEs actually realise the potential of such grants. Here are some features of government grants that SMEs can’t afford to overlook:

Government Grants Are Diverse

Very specific grants are available across all business sectors. This allows SMEs to compete more fairly for similar grants.

Grants Are More Than Just Money

As we will discuss in the next part of this post, government grants offer much more than just money.

Winning a Grant Validates Your Business Idea

A large number of SMEs are stuck in the validation loop that stops them from expanding or trading more confidently. Inadequate funding makes matters even worse. A grant can be a good way to turn the corner in such times and receive external recognition and validation.

Government Grants: Shortcomings & Drawbacks

While the features associated with government grants are certainly attractive, there exist shortcomings and drawbacks you should be aware of:

The Competition Is Fierce

The competition for government grants is fierce to say the least. Since young businesses, start-ups and established businesses all tend to spill over into the space that’s reserved for SMEs, the competition can become entirely off-putting.

It Can Take Months Before You See the Money

Applying for a government grant isn’t always the smoothest of processes. It can take many months for the assessment process to conclude, making grants irrelevant for businesses that require urgent funding.

Grants Can Never Replace External Funding

Given their limitations in size and scope, government grants cannot replace external, third-party funding channels – not in the long run, anyway.

Types of Government Grants for UK SMEs

In our guide to start-up funding, we have already discussed the various types of government grants. In the context of SMEs, these types remain more or less the same.

Direct Grants

A direct grant is a project-specific and objective-driven cash reward to businesses that meet the criteria. This is what most businesses think of when they think of a government grant.

Despite being the most popular and sought-after type, these grants come with a host of limitations and riders. As things stand today, direct grants focus more on young SMEs (trading for 5 years or less) in economically disadvantaged regions and districts. Furthermore, the grant amount is usually on the lower side. Given these facts, one would be forgiven to think that direct grants are good for encouraging businesses, but not necessarily supporting them.

  • Direct Grants Are Not Free Money!

It’s a common misconception among business owners and operators that winning a direct grant is just like winning a lottery. The fact is direct grants are nothing like free money.

Almost every direct grant scheme requires you to match the grant amount – a pound for a pound.

In other word, a direct grant of £10,000 will need you to raise £10,000 on your own before you see any of the grant money.

We, at Commercial Finance Network, have helped numerous SMEs raise the capital required to win direct grants. You can learn more about our services here and request a free quote here.

  • Most Direct Grants Are Project-Based.

Unlike other grant types, direct grants are almost always project-based. The grant objective clearly tells you what you’re expected to spend the money on. Some grant bodies go so far as to monitor the spending.

  • Example

A good example of an SME direct grant is the Business Energy Efficiency Programme organised by various local councils in the West Midlands. This direct grant offers rewards up to £20,000 for the qualifying businesses that implement energy saving technologies in their operations.

Finance Grants

If you are looking for a well-meaning financing support for your SME, finance grants should always be the focus of your search.

A finance grant combines the features of grants and loans. Also known as ‘soft loans’, such grants are an excellent way of raising a significant sum of money for SMEs. Typically, the loan amount can go from as low as £5,000 to as high as £250,000. Finance grants are usually available around the year. Unlike direct grants, however, finance grants are repayable. The terms of repayment are subsidised through public funding. So, you may either get a loan that’s fully free of interest, or you may get a lenient repayment schedule with generous repayment holiday months/years.

  • Soft Loans Are Not Always Project-Based

Unlike direct grants, finance grants (soft loans) aren’t always project-based. The grant objectives can be wide-ranging to allow you more control over the spending.

  • The Qualification Criteria Can Be Stringent

Quite a few finance grants require you to prove that your SME is unable to secure funding from other mainstream lenders. This translates into additional documentation and longer processing times.

  • The Grant Amounts Are Flexible

The biggest advantage that finance grants offer is their flexibility. You can negotiate the loan terms and amounts with the grant body (much unlike direct grants that leave no room for negotiation).

  • Example

ART Business Loans make for a good example here. This finance grant offers low-interest loans to businesses that generate employment in the West Midlands. The loan size ranges from £10,000 to £150,000.

The UK Export Finance (UKEF) scheme is also a very fitting example of how government grants are at their efficient best when partnered with private investors and lenders. It aims to promote exports to our major cross-border trade partners by helping SMEs raise funds, win overseas contracts/orders, fulfil these orders and access trade finance.

Tax Relief Schemes

Tax Relief Schemes are indirect grants offered to qualifying SMEs. There are little to no upfront benefits to such schemes. In the long run, however, these tax savings can be very attractive. Here are some common and ongoing tax relief schemes that you can focus on:

Tax Relief Schemes for SMEs

1. Employment Allowance

Most businesses are required to contribute to the National Insurance every year. By securing the Employment Allowance, your business can save up to £3,000 on these contributions.

2. SME Business Rates Relief

All properties owned by businesses are charged business rates by local councils. If your business holds one property (valued at £12,000 or less), you can apply for 100% Small Business Rates Relief. For businesses holding two or more properties, it’s still possible to get proportionately lower relief.

3. Corporation Tax Reliefs

  • Capital Allowances let SMEs claim tax reliefs against the purchase of business assets.
  • R&D Reliefs are meant to encourage R&D spending.
  • Creative Industry Tax Reliefs provide special tax reliefs to ‘creative’ industries such as arts, film, theatre, music and digital media.
  • The Patent Box is one of the most exciting tax relief schemes out there. This scheme allows inventors and businesses to claim tax reliefs against profits made by the use or licensing of their patents.
  • There are many other Corporation Tax Relief Schemes tailored for the need of SMEs. You can refer to this page to learn more.

Tax Relief Schemes for SME Investors

1. Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme is perhaps the strongest investment magnet for SMEs. Under this scheme, SME investors can claim tax credits and reliefs of up to £300,000 each year. This scheme applies to total investment of up to £5 million per year.

2. Seed Enterprise Investment Scheme (SEIS)

This scheme is similar to EIS but limited in scope to serving start-ups and young businesses. If your SME has been trading for no more than 2 years, your investors can claim tax credits under the SEIS.

SME Grant Finder: How to Find Government Grants

Searching through available government grants is no longer a dreadful or time-consuming task. Just head over to the Business Finance and Support page and filter through the available options. This page allows you to zero in on government grants based on your location, business type, size and turnover.

5 Steps SMEs Need to Take to Win Grants

1. Applying Early

Applying early gives you an important edge over competitors. To be able to do this, you need to be aware grant announcements.

2. Preparing a Detailed Business Plan

It doesn’t matter what sort of loan, support or grant you are after – you will always need a business plan that paints a clear picture of the present state of your business and your future objectives. A good, in-depth business plan that answers questions even before they are asked enormously improves your chances of winning government grants.

3. Understanding the Grant, the Grant Body and the Grant Objectives

If your grant application is rejected, it’s very much likely that the fault lies neither with your business nor the grant – it lies with the incompatibility of your objectives with those of the grant body. The best way to avoid this is to apply for grants that share objectives with your business.

4. Having Professionals on Board

If you don’t have prior experience in applying for grants, it’s always a good idea to hire grant experts and consultants.

5. Preparing a ‘Winning’ Grant Application

A generic, off-the-bat grant application is never going to win you a grant. Preparing a grant application that lets the grant body know how you share in their objectives is the key.

We Help SMEs Grow!

Government grants offer a host of opportunities for SMEs to raise the much-needed funding. It is, however, never a good idea to rely heavily on government grants. The timelines are unpredictable, the amounts are usually lower than what you need and you will, in most cases, need to raise external funding anyway.

But it’s not all bad news – there are easier way to fund your business.

Commercial Finance Network – a leading whole of market broker – has helped many SMEs across the UK secure fast and low-interest funding. To know more about our industry-leading finance services, you can visit this page.

Check your eligibility for a low-interest business loan and other finance products by requesting a free quote here.

Marijana No Comments

Rate of rent increases continues to rise

Year on year, the number of tenants experiencing rent hikes continued to rise. Almost a third (31%) of renters saw their payments increase in September 2018, compared to 27% in 2017 and 24% in 2016.

Looking at shorter term trends however this figure is down; in August this year, agents reported a record-high for the number of rent rises for tenants (40%).

Demand from tenants

Demand from prospective tenants fell marginally in September, with the number of house-hunters registered per branch dropping in 63 on average, compared to 64 in August.

Year on year, this is down 20 per cent as there were 79 prospective tenants registered per letting agent branch in September 2017.

Supply of rental stock

As landlords continued to leave the market, the supply of properties letting agents managed dropped to 194 per member branch in September, from 197 in August.

David Cox, ARLA Propertymark Chief Executive, said:

“Although the number of landlords increasing rents for tenants dropped in September, this figure is still alarmingly high, and it continues to rise year on year. Increasing costs and continued regulatory change is pushing buy-to-let (BTL) investors out of the market and deterring new ones from entering. An average of four landlords took their properties off the market per branch in September, up from three this time last year – and as supply falls, competition among tenants increases, which is driving up rent costs. With the Autumn Budget approaching, we hope the Government recognises the importance of increasing supply for tenants and uses it as an opportunity to make the market more attractive for BTL investors.”

Source: Property118

Marijana No Comments

Yorkshire commercial property market feels impact of Brexit uncertainty

The commercial property market in Yorkshire and the Humber is feeling the effects of the uncertainty surrounding Brexit negotiations.

The region has seen tenant demand for offices, retail space and industrial property fall throughout the last quarter, according to the Q3 2018 RICS UK Commercial Property Market survey.

Due to the continued uncertainty, RICS (Royal Institution of Chartered Surveyors) is calling on the government to review the business rates system in the upcoming Budget.

Respondents to the quarterly survey said that occupier demand for offices in the region fell during the last quarter of the year (Q3) with 18% more respondents reporting a rise in tenant demand for office space (down from 38% in Q2), whilst 41% reported an increase in demand for industrial space (down from 46% in Q2) and 41% saw a decline in occupier demand for retail property.

This is most likely because the retail sector is struggling amid the tough market conditions and the boom of online retailers.

Respondents also reported a lack of available office space and industrial property in the region, but 32% saw a rise in the availability of retail space during Q3, prompting landlords to continue to offer incentive packages.

To help provide a boost for the High Street and the wider commercial property market, RICS is calling on the government to review the business rates system in the upcoming Budget.

Hew Edgar, head of policy at RICS, said: “People want a vibrant high street at the heart of their community. Yet the combination of Brexit uncertainty and competition from online retailers mean small independent businesses, in particular are finding it harder to stay afloat.

“That’s why we are calling on the government to use the Budget to review business rates, with the aim of improving the whole system and help provide a shot in the arm for our ailing high streets.”

Looking at investments, all commercial property types – except the struggling retail sector – saw a rise in enquiries from potential investors with 55% of respondents reporting an increase in investment enquires for industrial space, and 30% seeing a rise in enquiries from investors for office property.

Looking ahead, the lack of available office space and industrial property in the region is predicted to impact rents over the next three months – across both these sectors – with 25% of respondents expecting office rents to increase (up from 21% in Q2), whilst 35% of respondents expect rents to rise for industrial property (up from 27% in Q2). Retail rents are not predicted to rise over the coming three months.

In each quarter since the Brexit vote took place, survey participants have been asked if they have seen any evidence of firms looking to relocate at least some part of their business as a result. Throughout much of this time, the proportion reporting they had seen signs of this type of activity remained at around 15-18%. Interestingly, however, this picked up to 25% in the latest results.

Tarrant Parsons, RICS economist, said: “The commercial real estate market continues to be characterised by a stark contrast between the struggling retail sector and the strong performance of industrial property.

“Trends are a little more mixed in the office market, depending on which part of the country you look at, but the overall picture remains broadly steady. The uncertainty engendered by the ongoing Brexit process now appears to be having a greater bearing on tenant decisions when it comes to taking up commercial space, with a lack of clarity regarding the final trading relationship causing some hesitancy.

“That said, investment activity remains reasonably solid, as the latest results point to a stable quarterly trend in demand and a continued decline in supply.”

Source: The Business Desk

Marijana No Comments

Glasgow leads the way as competition for development land drives values across UK

The UK residential land market is reflecting the shape of the housing market, as values fall in central London but continue to rise in other regions, with Scotland the standout performer, according to international real estate adviser Savills.

Across the UK, greenfield and urban land values have grown by 1.9% and 6.9% respectively over the past year, albeit values remain 13 and 23% below their pre financial crisis level.

Growth has been supported by the strength of the Scottish land market, where annual growth stands at 6.0% and 6.2% respectively and greenfield values rose 1.0% in the last quarter alone, and urban land values by 2.5%.

A scarcity of developable sites in Scotland’s most in-demand locations, particularly in and around Glasgow, has led to increased competition for land, underpinned by house price growth of 7.7% year on year, well ahead of the 3.8% UK average.

Jamie Doran, Savills development director, said: “A strong Scottish housing market, particularly in Glasgow and Edinburgh, has fuelled demand for well-located development sites: the key challenge is the availability of developable residential land in these areas.  The lack of supply of sites with planning consent is driving value. Value rises are greatest in prime hotspots within the city, ie the south –side of the city and West End, but also in the city centre where there a number of new developers entering the market.”

Emily Dorrian of Savills Research said: “The Scottish Government’s More Homes Policy is looking to deliver 50,000 new affordable homes by 2021, supported by increased access to grant funding. This is encouraging registered social landlords and local authorities to become more active within the development market.  Further, the Help to Buy programme in Scotland is supporting the private sector in delivering units up to £200,000, a key first time buyer threshold.

“North of the Border, developers also do not have access to the same suite of infrastructure funds to support the development of land where significant remediation or infrastructure is required. This, along with planning consent, is constraining the delivery of housing at certain sites in Scotland.”

Source: Scottish Construction Now

Marijana No Comments

Why Buy to Let Edinburgh is rapidly rising?

Being a resident of Edinburgh, I can assure you that this city is a great choice to buy to let. This is because this thriving city has everything to attract students, tourists, and professionals alike. Following are some reasons why so many people from all over the world are looking to buy to let in Edinburgh:

Booming businesses – With over hundreds of businesses blooming in the city, Edinburgh is Europe’s 4th largest financial center. That’s why many young professionals from various parts of the world flock to this city to flourish their careers, and most actively looking for buying to let.

Student-friendly – Due to a large number of educational universities and institutes in the city, many students are attracted to Edinburgh. With the increasing number of the student population, the demand for suitable accommodation is also on the rise.

Tourism – Edinburgh is a tourist hotspot, and buying property to rent out to holiday makers is a big business here.

Source: Property118