RESIDENTIAL RESEARCH

FOCUS ON: PARSONSSTAINES-UPON- GREEN 2016 THAMES 2017

AFFORDABILITY SUPPLY VS DEMAND COMMUTER LOCATION COMPARISON ALL IN THE NAME

FIGURE 1 Over the last 10 years the town of Staines has Price growth in Spelthorne, , been rejuvenated, culminating in a name change to South East, and UK Prices indexed 100 = Jan 2011 Staines-upon-Thames in 2012

Spelthorne London Emphasising the town’s growing form part of London’s prime Surrey popularity, Staines-upon-Thames was commuter belt. In comparison, it might South East 175 named as the number one location in be argued that Staines-upon-Thames is the UK to start a business in 2014 by a relatively undervalued market given its 165 UHY Hacker Young. Situated in the small geographical location. borough of Spelthorne in Surrey, in close 155 proximity to , the M25 However, there are signs that this is starting to change. In the third quarter 145 and the M4 Corridor, Staines-upon- Thames forms part of the Enterprise M3 of 2016 house prices in Staines-upon- 135 Local Economic Partnership, the UK’s Thames increased by 16.3%, significantly digital economy hub employing over outpacing growth of 9.5% across Surrey. 125 50,000 workers. Despite this recent outperformance, values in Staines-upon-Thames are still 115 On top of a burgeoning local economy, around 20% below the Surrey average. 105 Staines-upon-Thames is surrounded by some of the most expensive real 95 estate in the UK outside of London Commuter belt affordability 2011 2012 2013 2014 2015 2016 (figure 2). Towns such as , Official data shows that Spelthorne Source: Knight Frank Research/UK HPI Walton-on-Thames, Windsor and has one of the lowest house price to

FIGURE 2 Average sale price in the last 12 months

2 Please refer to the important notice at the end of this report FOCUS ON: STAINES-UPON-THAMES

income ratios – a common measure offering, this has yet to extend to the FIGURE 3 of affordability – in Surrey. Latest data new homes market. In the last five Spelthorne London House price to earnings ratio from the Government’s own house price years,Surrey 317 new homesUnited Kingdom have been 34.2% affordability index highlights house price built whileSouth Easta further 103 homes are affordability in Spelthorne is significantly16 currently under construction, according below the Surrey average, as shown in data from Glenigan. Looking at the 14 figure 3. wider Spelthorne area, some 1,100 This is likely to attract greater numbers12 of net additional dwellings have been Londoners to the town in search of more delivered since 2011/12, compared to 10 internal and external space. In fact, data a projected 1,360 growth in the number of new households, indicating a 20% Groupedfrom the Office for National Statistics 8 Ungrouped suggests this is already happening – undersupply of housing. 6 nearly two thirds (60%) of residents Over the next five years, current moving to Spelthorne were from London 500 4 projections show that 3,000500 new in 2015, up from 53% in 2013. households will be created in 9.9% 12.9% 10.3% 14.7% 7.6% 400 The Private Rented Sector is the fastest2 Spelthorne. However, the400 current growing tenure type across the UK, pipeline of new dwellings suggest that 0 300 and accounts for a fifth of the housing SpelthornesupplySurrey willSouth undershoot East London demand300England by Spelthorne Surrey South East London stock in Staines-upon-Thames (figure a third. Of developments within the Source: Knight Frank Research/DCLG 200 6). Mosaic household analysis shows pipeline, two schemes exceed200 200 units, demand for rented accommodation both of which are located in Staines- 100 100 is mainly from young professionals as upon-Thames – on the High Street and FIGURE 4 well as students at the Royal Holloway Bridge Street, suggesting new homes Housing stock by age 0 0 Staines-upon-Thames n n University in nEgham, one of then UK’s top nsupply in the borough will be focused n n n n n 20 universities and home to more than in and around the town. 500 9,000 students. Monthly rental values 500 A total of 101 homes have been currently average £1,106 according to 34.2% purchased through the Help to Buy 400 data from TwentyCi, meaning rental 400 30.8% Equity Loan scheme in Spelthorne, values in Staines-upon-Thames are 28% 300 below the average rent in London. accounting for a fifth of new300 homes 24.6% completions in the borough since its 200 inception in April 2013. We200 expect this A lack of new homes trend to continue in the new homes 100 As a whole, the UK has a chronic sales market. Coupled with100 the backlog 10.4% undersupply of new homes and already in place after long-term under 9.9% 12.9% 10.3% 14.7% 7.6% 0 Staines-upon-Thames is no exception. supply and supply demand imbalance,0 Spelthorne Surrey South East London England n n n n n n n n n n Although the town has benefited from such factors are likely to underpin price Pre 1900 1900-1939 1945-1972 1973-Present Staines completed units Spelthorneregeneration completed units to improveNew itshousehold commercial projections growth moving forward. Staines completed unitsSource: KnightSpelthorne Frank completed Research units New household projections

FIGURE 5 Housing supply vs household projections

350

300

250 Final 200

150

100

50

0 2011/12 2012/13 2013/14 2014/15 2015/16

Spelthorne net additional dwellings Household projections

Source: DCLG

3 FOCUS ON: STAINES-UPON-THAMES RESIDENTIAL RESEARCH

Connectivity Hillingdon. Conversely, just over 10% to Shenfield via central London, cutting commute into Westminster, the City of journey times for millions of commuters. Heathrow Airport and the air freight sector London and Tower Hamlets. Those living in and around Staines- are two of the largest local employers in upon-Thames will be within a 15 to 20 Staines-upon-Thames, with over 6,000 However, the fundamentals are there for minute drive of three Crossrail stations employees of Heathrow Airport living in Staines-upon-Thames to establish itself at Iver, West Drayton and Hayes and the borough of Spelthorne. Other large as a commuter location for the capital. Harlington. Travel times to Bond Street employers include BP, The fastest trains into London Waterloo will be reduced from 38 to less than 26 Studios, British Gas and Wood Group take 37 minutes, a commute on a par minutes from the three stations, with Kenny. As such, a considerable with Weybridge and faster than nearby Liverpool Street and Canary Wharf proportion of working residents in Staines Windsor, , Virginia Water and less than 33 minutes and 40 minutes commute to neighbouring boroughs Egham, as shown in figure 7. Annual rail away respectively. as opposed to central London. This is season ticket prices are also lower than prices for similar tickets from stations in evidenced by commuting data from Further ahead, proposals for a second the surrounding area. the ONS which shows that, of the Crossrail line, running from South 18,001 residents commuting to London Meanwhile, from 2019, Crossrail West London to North East London boroughs, 54% work in Hounslow and (Elizabeth Line) will run from Reading (Crossrail 2), include a regional branch

FIGURE 6 Tenure in Staines-upon-Thames

ONED ONED ITH PRIATELY SOCIAL OUTRIGHT A MORTGAGE RENTED RENTED

2% % 20% 1%

Source: ONS

FIGURE 7 Commute and travel time comparison

STAINES-UPON-THAMES WEYBRIDGE WINDSOR CHERTSEY VIRGINIA WATER EGHAM

FASTEST TRAIN TO LONDON FASTEST TRAIN TO LONDON FASTEST TRAIN TO LONDON FASTEST TRAIN TO LONDON FASTEST TRAIN TO LONDON FASTEST TRAIN TO LONDON 37 MINS 34 MINS 41 MINS 60 MINS 47 MINS 46 MINS

SEASON TICKET PRICE SEASON TICKET PRICE SEASON TICKET PRICE SEASON TICKET PRICE SEASON TICKET PRICE SEASON TICKET PRICE £3,180 £3,624 £3,520 £3,624 £3,600 £3,396

DRIVE TIME TO DRIVE TIME TO DRIVE TIME TO DRIVE TIME TO DRIVE TIME TO DRIVE TIME TO CENTRAL LONDON CENTRAL LONDON CENTRAL LONDON CENTRAL LONDON CENTRAL LONDON CENTRAL LONDON 53 MINS 60 MINS 55 MINS 58 MINS 57 MINS 55 MINS

DRIVE TIME TO DRIVE TIME TO DRIVE TIME TO DRIVE TIME TO DRIVE TIME TO DRIVE TIME TO HEATHROW AIRPORT HEATHROW AIRPORT HEATHROW AIRPORT HEATHROW AIRPORT HEATHROW AIRPORT HEATHROW AIRPORT 9 MINS 16 MINS 14 MINS 14 MINS 12 MINS 10 MINS

4

STAINES-UPON-THAMES FASTEST TRAIN TO LONDON DRIVE TIME TO CENTRAL LONDON DRIVE TIME TO HEATHROW AIRPORT 37 MINS 1 HR 20 MINS 1 HR 20 MINS FOCUS ON: STAINES-UPON-THAMES RESIDENTIAL RESEARCH

from Raynes Park to Shepperton, which rowing clubs. Meanwhile, the town hosts would provide Staines-upon-Thames a local market three times a week and is with a fourth Crossrail station within on the edge of the Colne Valley Regional a 20 minute drive of the town centre. Park, a popular location for walkers, However, it is worth noting that Crossrail runners and cyclists. 2 is not expected to be operational until The local education offering is also a at least 2030. draw. In the borough of Spelthorne there Crossrail will help to attract more are 33 schools of which three are rated businesses into the area, as will plans outstanding by Ofsted, two within for the Windsor Link Railway, a privately Staines-upon-Thames itself. Furthermore, funded £200 million projected that would an additional 23 schools within the provide a direct rail link from Staines- borough are considered good or very % forecast17 house price upon-Thames to Heathrow Airport, good. Such a large provision of quality as well as improving connectivity to schooling will certainly appeal to young growth – South East Windsor, and Reading. The line families looking to move out of London England, 2017-2021 will potentially be in operation from in the search for more space. 2022, subject to planning. Outlook A local retail hub The combination of affordability, Staines-upon-Thames possesses a direct train link into London which takes the characteristics to establish itself less than 40 minutes, a bustling high amongst its neighbours in London’s street, almost four miles of river frontage, prime commuter belt. Lining both banks proximity to green spaces and Heathrow of the , the town enjoys Airport will all continue to contribute almost four miles of river frontage with towards Staines-upon-Thames becoming large homes, pubs and restaurants an increasingly popular location for buyers overlooking the river, interspersed by from London and further afield.

KEY FACTS South East house price forecast Home-ownership: 6., 2017-2021: 17 in line with UK average

Development pipeline: Proposed 200m indsorLink Railway, Average monthly Private Rented Sector Stock 1 new homes providing a direct rail link to Heathrow Airport rent: 1,106 20. from 2022

Fastest train to London .2 miles of river frontage New homes delivery last five years: Best location in UK to aterloo: 7 minutes in Staines-upon-Thames 17 new homes start a business in 2014

2 Schools in Staines-upon-Thames New homes under 20 minute drive to three 7 o schools in Spelthorne rated rated outstanding construction: 10 new homes Crossrail stations from 201 good, very good or outstanding

Source: Knight Frank Residential Research

5 GLOBAL BRIEFING For the latest news, views and analysis on the world of prime property, visit KnightFrankblog.com/global-briefing

RESIDENTIAL RESEARCH Gráinne Gilmore Head of UK Residential Research +44 20 7861 5102 [email protected]

David Ramsdale Senior Analyst +44 20 8366 8038 [email protected]

LONDON RESIDENTIAL Nigel Fleming Partner +44 20 7861 5409 [email protected] Greg Bennett Associate +44 20 7861 1763 [email protected]

Knight Frank Research provides strategic advice, consultancy services and forecasting to a wide range of clients worldwide including developers, investors, funding organisations, corporate institutions and the public sector. All our clients recognise the need for expert Front cover image: Shutterstock independent advice customised to their specific needs.

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This report analyses the performance of single-unit NEW SUPPLY SHOWS SIGNS OF SUBDUED OUTLOOK FOR PRICE GROWTH rental properties in the second-hand prime central THE While the UK economy and housing market have held up far better than expected following London market between £500 and £5,000-plus per SALES VOLUMES STRENGTHEN week. For an analysis of the build-to-rent market RECEDING IN PRIME CENTRAL the Brexit vote, the outlook for both remains uncertain. and the institutional private rented sector in London IN NOVEMBER AS ASKING PRICES and the rest of the UK, please see our Private Both the London and wider UK housing investors which will limit upwards Rented Sector Update report here. LONDON WEALTH Headlines November markets outperformed expectations pressure on prices. ADJUST High stock levels continue to put downwards pressure on rental values but the following the referendum. After a sharp Looking at the prime London market, we 2016 trend is showing early signs of a reversal, says Tom Bill dip in confidence just after the vote, Despite a backdrop of political uncertainty, sales volumes are rising as believe that a 7% fall in prices across the Both the London and wider UK housing REPORT conditions have improved into the lower asking prices release pent-up demand, says Tom Bill The global perspective on prime property and investment western part of central London in 2016 markets have outperformed expectations The prime central London lettings market in market in November fell -17% compared to 2016 autumn. On most measures the means that we are close to the bottom in December 2016 2016 was marked by high stock levels and the same month in 2015, which was the first mainstream UK market continues to following the EU Referendum terms of price adjustment in this market. third highest figure after 10.8% in February and falling rental values. year-on-year decline in 2016. If the rate of perform strongly – with annual price December 2016 The second half of 2016 was marked by a Annual rental value growth eased to -5.1% Although there could be some further steady improvement in sales volumes as 18% in March. new stock continues to slow, there could be growth likely to end this year at 5%. Price growth in 2017 is expected to be in December The trend was caused primarily by an adjustment downwards in prime outer November was the second highest vendors lowered asking prices to reflect the a stabilising effect on rental values at the start Most regional markets have seen London markets through 2017. notably slower than this year, in all regions Further analysis shows to what extent uncertain outlook for price growth in the sales month for sales volumes in 2016 after a changed regulatory backdrop in prime central of 2017. positive growth, the exception being transactions have stabilised since the summer. market following a series of tax changes, For rental markets – it has been a mixed stamp duty spike in March London. The number of new instructions fell -17% Wales. The ripple of price growth from While sales volumes were -38% lower in June which meant more vendors decided to let their For now, however, prime central London year for landlords in central London, However, the fundamentals of the UK in November, the first decline in 2016 London continued in 2016 and we An analysis of sales volumes for this year compared to 2015, this gap had halved to -19% property until greater clarity emerged. remains a tenants’ market due to the high demand from tenants has been strong, housing market remain largely unchanged expect the end of year position to be The number of Knight Frank sales in shows that following a spike in March ahead by November. The equivalent figure compared levels of stock that came onto the market in but this has been offset by a strong supply Despite the seasonal slowdown, November that the East of England and the South November was higher than the same of a stamp duty hike and fewer transactions in to 2014 narrowed to -18% from -45% over the The number of tenancies agreed in 2016, primarily in higher price brackets. of rental properties. In our view there is a 2016 was the first month that marked a Between 2017 and 2021 UK house prices subsequent months as uncertainty around the November was 34% higher than the East will both see stronger growth than risk of further rental falls next year but not month in 2014 and 2015 same time period. Activity levels remained high as the Christmas EU referendum intensified, activity has risen same month in 2015 reversal of this trend, suggesting rental value that in Greater London. on the scale of the adjustments seen this are forecast to rise by 14.2% cumulatively holiday period approached. The number Important Notice Whether strengthening sales volumes in the steadily in recent months. declines may be starting to bottom out. Looking into next year we believe that the year. The wider UK rental market looks Year-on-year decline in sales volumes second half of 2016 will provide a reliable of tenancies agreed in November was Annual rental value growth last peaked slowdown in prices which has been relatively positive with modest rental narrowed to -19% in November from This pattern is in contrast to last year, when indicator for the first six months of 2017 remains Average prime gross yield was 3.21% 34% higher than the same month in 2015, at 4.2% in May 2015, the month of the evident in central London over the past growth expected. Rents could rise further -38% in June there was a pick-up following the May general to be seen. Political uncertainty is unlikely to which compared to a rise of 23.6% over 12-months will spread to the wider if landlords begin to sell properties in an election, as figure 2 shows. UK general election, and has been on a the first eleven months of the year (figure subside in the early part of next year as the Macro View: The difficulty of assumptions region, with Greater London prices down effort to offset to the impact of tax rises. downwards trajectory since then. 2). The number of viewings rose 17.8% In respect of the first eleven months of 2016, UK triggers the process to leave the European in 2017 marginally in 2017. This slowdown in the Annual growth declined to -6.3% in between January and November, while new Knight Frank data shows November accounted Union, Donald Trump potentially charts a new However, November saw a minor capital will likely be experienced across December prospective tenants increased 6.9%. for 14.1% of total sales, the second highest economic course in the US and ahead of improvement, with rental value growth of the rest of the country with price growth Knight Frank Residential Market Forecasts month after March. Indeed, the number of elections in several European countries. -5.1% compared to a figure of -5.2% in Furthermore, despite ongoing weaker demand down notably on 2016 levels. Macro View: The difficulty of Knight Frank sales was higher in November October. among company executives due to the © Knight Frank LLP 2017 – This report is 2016 2017 2018 2019 2020 2021 2017-2021 However, as the 2016 sales volumes data shows, The main drivers for weaker market assumptions in 2017 2016 than the same month in 2014 and 2015. uncertain global economic backdrop, many Mainstream residential sales markets sufficient pent-up demand has formed for buyers Falling rental values coupled with impending performance relate to economic markets experienced an uptick in viewings UK 5.0% 1.0% 2.5% 3.0% 3.0% 4.0% 14.2% We observe a similar though less marked uptick to act when they perceive value. Average values tax changes that will affect landlords in 2017 uncertainty surrounding the Brexit and new prospective tenants ahead of the London 7.0% -1.0% 2.0% 2.5% 3.0% 5.5% 12.5% in the wider London market, with November fell -6.3% in the year to December 2016, and we have had a dampening effect on new supply. process, which we believe will impact holiday period among executives who delayed North East 0.0% 0.5% 2.5% 2.5% 2.0% 1.5% 9.3% accounting for 10.1% of sales recorded on expect to see broadly flat price growth in 2017 as negatively on consumer confidence in the The number of new properties placed on the acting until after the US general election. run up to and just after the serving of the North West 4.0% 0.5% 2.0% 2.5% 3.0% 2.0% 10.4% LonRes in the first eleven months of 2016, the declines start to bottom out. formal “notice to quit” the EU. In addition Yorks & Humber 3.5% 1.0% 3.0% 3.5% 3.0% 2.0% 13.1% East Midlands 5.5% 1.5% 3.0% 3.5% 4.0% 4.5% 17.6% FIGURE 2 FIGURE 1 FIGURE 2 published for general information only and the impact of reforms to the taxation of FIGURE 1 New supply falls while demand remains landlords will reduce demand from West Midlands 4.5% 1.5% 3.0% 4.0% 4.0% 4.0% 17.6% Price growth in prime central London Sales volumes increased in late 2016 Rental value growth in prime central London East 7.5% 1.5% 2.5% 4.0% 3.5% 5.5% 18.1% Percentage of total sales, January to November resilient South East 8.0% 1.0% 2.0% 4.0% 4.0% 5.0% 17.0% 2016 versus 2015 12-month change 12-month change South West 4.5% 2.0% 2.0% 3.5% 3.5% 4.5% 16.5% 2% 6-month change 6-month change 25% 2015 2% Wales -0.5% 0.0% 2.0% 2.5% 2.0% 2.0% 8.8% Quarterly change Quarterly change 34% 1% 2016 Scotland 2.0% 0.1% 2.3% 2.7% 2.8% 2.8% 11.0% TOM BILL Monthly change TOM BILL 1% Monthly change 29% “ The UK housing market 23% Head of London 0% 20% Head of London 24% has so far outperformed Prime residential sales markets Residential Research 0% 18% not to be relied upon in any way. Although -1% Residential Research expectations following Prime Central London East* 1.0% 1.0% 3.5% 3.0% 3.5% 4.0% 15.9% -1% 10% -2% 15% 7% Prime Central London West** -7.0% 0.0% 1.0% 1.5% 3.0% 3.0% 8.8% the referendum, however, -2% “As the 2016 sales volumes -3% “If the rate of new stock price growth is expected Prime Outer London -1.5% -1.5% 2.5% 3.0% 3.0% 4.0% 11.4% data shows, sufficient pent-up 10% continues to slow, there could -3% Jan-Nov Nov to moderate next year as Residential rental markets -4% demand has formed in the last be a stabilising effect on rental -4% UK 1.2% 1.4% 2.0% 2.0% 2.0% 2.0% 9.8% -5% -17% economic uncertainty and two years for buyers to act 5% values at the start of 2017” -6% -5% tax reforms impact on Prime Central London East* -2.5% 0.0% 2.0% 3.5% 3.0% 3.0% 12.0% when they perceive value” Prime Central London West** -6.5% -2.0% 1.0% 2.0% 2.0% 2.0% 5.0% -7% Follow Tom at @TomBill_KF -6% New New high standards have been used in the consumer confidence.” 0% Agreed Follow Tom at @TomBill_KF Tenants Prime Outer London 1.5% 2.0% 3.0% 3.5% 3.0% 3.0% 15.4% Viewings Tenancies Tenancies The Market

For the latest news, views and analysis Prospective Jul Jul-16 Apr Jan Oct Jun Apr-16 Feb Mar Jan-16 Oct-16 Aug Sep Jun-16 Nov Mar-16 Feb-16 May Dec-15 Aug-16 Sep-16 Dec-16 Nov-16 Jul-16 Properties On Properties May-16 Apr-16 Jan-16 Oct-16 For the latest news, views and analysis Jun-16 For the latest news, views and analysis Mar-16 Feb-16 Dec-15 Aug-16 Sep-16 Dec-16 Source: Knight Frank Research Nov-16 on the world of prime property, visit May-16 *City & Fringe, Islington, Tower Bridge, King’s Cross and Riverside on the world of prime property, visit on the world of prime property, visit Global Briefing or @kfglobalbrief **Notting Hill, Kensington, South Kensington, Chelsea, Knightsbridge, Belgravia, Hyde Park, Marylebone, Mayfair, St John’s Wood th Global Briefing or @kfglobalbrief Source: Knight Frank Research Source: Knight Frank Research Global Briefing or @kfglobalbrief Source: Knight Frank Research Source: Knight Frank Research 10 Edition preparation of the information, analysis, views UK Housing Market Prime Central London Prime Central London The Wealth Report and projections presented in this report, no Forecast - Nov 2016 Sales Index - Dec 2016 Rental Index - Dec 2016 2016 responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or

RESIDENTIAL RESEARCH RESIDENTIAL RESEARCH UK RESIDENTIAL RESIDENTIAL RESEARCH UK RESIDENTIAL damage resultant from any use of, reliance on MARKET UPDATE MARKET FORECAST or reference to the contents of this document. THE MARKET IN 2016 SUBDUED OUTLOOK FOR PRICE GROWTH This year may have delivered a series of political surprises, but these While the UK economy and housing market have held up far better than expected following the Brexit vote, the outlook for both remains uncertain. have had a limited effect on the housing market so far. As we move into 2017, economic uncertainty may weigh on the market, but it is property Both the London and wider UK housing investors which will limit upwards taxes which continue to shape the residential landscape, as well as the markets outperformed expectations pressure on prices. Headlines November undersupply of housing and ultra-low mortgage rates following the referendum. After a sharp Looking at the prime London market, we 2016 As a general report, this material does not dip in confidence just after the vote, believe that a 7% fall in prices across the Both the London and wider UK housing conditions have improved into the Key facts Economic and housing This is because swap rates, the money western part of central London in 2016 markets have outperformed expectations market rates which determine the price autumn. On most measures the market overview means that we are close to the bottom in following the EU Referendum December 2016 of fixed-rate lending, are also near mainstream UK market continues to terms of price adjustment in this market. House prices across the UK are rising historic lows. perform strongly – with annual price Although there could be some further Average annual house price growth on an annual basis, although the rate of growth likely to end this year at 5%. adjustment downwards in prime outer Price growth in 2017 is expected to be across the UK slowed to 4.4% in growth is starting to slow and there are Most regional markets have seen London markets through 2017. notably slower than this year, in all regions November, according to Nationwide still large regional variations. As we move Swap rates near record lows necessarily represent the view of Knight Frank positive growth, the exception being into 2017, economic uncertainty may Annual % change For rental markets – it has been a mixed Wales. The ripple of price growth from weigh on the housing market, but the year for landlords in central London, However, the fundamentals of the UK Prices in prime central London 15.0 London continued in 2016 and we key fundamentals of the market remain demand from tenants has been strong, housing market remain largely unchanged fell 4.8% in the year to the end expect the end of year position to be – namely property taxes, a shortage of but this has been offset by a strong supply of November… 12.5 housing, and ultra-low mortgage rates. that the East of England and the South of rental properties. In our view there is a Between 2017 and 2021 UK house prices THE 2017 REPORT East will both see stronger growth than risk of further rental falls next year but not Transaction levels were skewed this year 10.0 that in Greater London. on the scale of the adjustments seen this are forecast to rise by 14.2% cumulatively …however new buyer registrations by the introduction of the extra 3% stamp The Future Of Real Estate LLP in relation to particular properties or Looking into next year we believe that the year. The wider UK rental market looks rose 28% between September and duty for additional homes, which started 7.5 slowdown in prices which has been relatively positive with modest rental In The World’s Leading Cities November compared to the same in April, as the chart below shows. period in 2015 5.0 evident in central London over the past growth expected. Rents could rise further The Bank of England’s rate-setting 12-months will spread to the wider if landlords begin to sell properties in an committee voted to keep the base rate 2.5 5 year region, with Greater London prices down effort to offset to the impact of tax rises. Average UK house prices are unchanged at 0.25% in December, 2 year marginally in 2017. This slowdown in the forecast to rise by 14% across the keeping interest rates pegged at 0.0 capital will likely be experienced across UK over the next five years historically low levels. the rest of the country with price growth 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Knight Frank Residential Market Forecasts projects. Reproduction of this report in whole down notably on 2016 levels. The same can be said of mortgage rates. Source: Knight Frank Research While some jostling and competition The main drivers for weaker market 2016 2017 2018 2019 2020 2021 2017-2021 between lenders has led to the withdrawal This low-rate environment is to some performance relate to economic Mainstream residential sales markets of a few deals, there are still many home extent helping underpin the market at uncertainty surrounding the Brexit UK 5.0% 1.0% 2.5% 3.0% 3.0% 4.0% 14.2% loans available at interest rates which are present, as is the lack of supply of new process, which we believe will impact London 7.0% -1.0% 2.0% 2.5% 3.0% 5.5% 12.5% lower than many have ever experienced. homes. While the delivery of new-build negatively on consumer confidence in the North East 0.0% 0.5% 2.5% 2.5% 2.0% 1.5% 9.3% run up to and just after the serving of the North West 4.0% 0.5% 2.0% 2.5% 3.0% 2.0% 10.4% or in part is not allowed without prior written Yorks & Humber 3.5% 1.0% 3.0% 3.5% 3.0% 2.0% 13.1% UK housing transactions and policy changes formal “notice to quit” the EU. In addition East Midlands 5.5% 1.5% 3.0% 3.5% 4.0% 4.5% 17.6% (E&W) 2007-2016 the impact of reforms to the taxation of landlords will reduce demand from West Midlands 4.5% 1.5% 3.0% 4.0% 4.0% 4.0% 17.6% Housing Yvette Caroline Margaret John Grant Mark Kris Brandon Gavin East 7.5% 1.5% 2.5% 4.0% 3.5% 5.5% 18.1% Ministers: Cooper Flint Beckett Healey Shapps Prisk Hopkins Lewis Barwell 175000 PRIME South East 8.0% 1.0% 2.0% 4.0% 4.0% 5.0% 17.0% Financial Crisis Help to Buy South West 4.5% 2.0% 2.0% 3.5% 3.5% 4.5% 16.5% Help to Buy London launched GRÁINNE GILMORE Equity loan Wales -0.5% 0.0% 2.0% 2.5% 2.0% 2.0% 8.8% 150000 launched Stamp duty reformed, Head of UK Residential Research rates rise to 12% approval of Knight Frank LLP to the form Stamp Duty hol ends Scotland 2.0% 0.1% 2.3% 2.7% 2.8% 2.8% 11.0% above £1.5m “ The UK housing market Help to Buy Mortgage Guarantee COUNTRY has so far outperformed Prime residential sales markets 125000 Stamp Duty Stamp Duty raised launched “ Transaction levels were rises to 5% to 7% for £2m+ Stamp Duty holiday £1m+ Prime Central London East* 1.0% 1.0% 3.5% 3.0% 3.5% 4.0% 15.9% up to £175,000 expectations following skewed this year by NewBuy Guarantee Prime Central London West** -7.0% 0.0% 1.0% 1.5% 3.0% 3.0% 8.8% Number launched the referendum, however, the introduction of the 100000 REVIEW price growth is expected Prime Outer London -1.5% -1.5% 2.5% 3.0% 3.0% 4.0% 11.4% extra 3% stamp duty to moderate next year as Residential rental markets 75000 General WINTER 2016 UK 1.2% 1.4% 2.0% 2.0% 2.0% 2.0% 9.8% for additional homes Election and content within which it appears. Knight Scottish Referendum economic uncertainty and in April.” tax reforms impact on Prime Central London East* -2.5% 0.0% 2.0% 3.5% 3.0% 3.0% 12.0% Vote to 50000 3% Stamp Duty leave EU Prime Central London West** -6.5% -2.0% 1.0% 2.0% 2.0% 2.0% 5.0% Follow Gráinne at @ggilmorekf surcharge for consumer confidence.” FTBs Stamp Duty Funding for additional properties FTBs Stamp Lending starts Prime Outer London 1.5% 2.0% 3.0% 3.5% 3.0% 3.0% 15.4% hol up to £250,000 Duty hol ends For the latest news, views and analysis For the latest news, views and analysis 25000 Source: Knight Frank Research on the world of prime property, visit 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 on the world of prime property, visit *City & Fringe, Islington, Tower Bridge, King’s Cross and Riverside Global Briefing or @kfglobalbrief Global Briefing or @kfglobalbrief Source: Knight Frank Research/HMRC MARKET UPDATE BUYER SURVEY REGIONAL FOCUS **Notting Hill, Kensington, South Kensington, Chelsea, Knightsbridge, Belgravia, Hyde Park, Marylebone, Mayfair, St John’s Wood Frank LLP is a limited liability partnership UK Residential Market UK Prime Country UK Housing Market Global Cities – registered in England with registered number Update - Dec 2016 Review - Winter 2016 Forecast - Nov 2016 The 2017 Report OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may Knight Frank Research Reports are available at KnightFrank.com/Research look at a list of members’ names.