Stock levels beginning to reduce?
Over the last month, we have helped several developers sell the last remaining “stock” units across three of their developments. In what is becoming a common theme, the last remaining units went rather quickly, and buyers were able to agree on prices that will look like great value in the not too distant future. However, when looking at our new development pipeline, it’s apparent that these types of situations are getting fewer and farther between, with many developers already having slowed future delivery timelines and paused some sites altogether. I think this could already be the tipping point in supply levels of new stock.
Predictions of a rental increase is a well-needed fillip for investors
In August Capital Economics predicted a cumulative rise of 10% in London rents across the next three years. This will be welcome news to investors who have been burdened with extra costs due to the tenant fee ban, increased tax and legislation. An increase in returns combined with a recovery in the market overall post Brexit (whenever that may be) could be just the encouragement overseas investors need to take advantage of the current combined benefits of a weak pound and depressed capital values.
In addition, those who are looking to invest from overseas may also look to include some form of recovery in the value of sterling alongside a landscape of increasing rents and returned economic growth.
– Jaimie Beers, Managing Director, Madley Property