A succinct weekly take on the UK property market and a roundup of headlines from the PropertyBrain team. Subscribe to the Friday Roundup here: http://pbra.in/pb-signup
Here’s a roundup of what we think are the big news stories this week:
* Britain reached a historic deal on its EU exit terms on Friday, enshrining special rights for 4m citizens and paying €40bn-€60bn in a hard-fought Brexit divorce settlement that clears the way for trade talks next year. The final breakthrough came after concerns over Northern Ireland’s border, with original compromises scuttled on Monday by the PM’s parliamentary allies. EU leaders will formally decide at a summit next week whether it represents sufficient progress to start the second phase of negotiations. The sterling was up 0.34% higher against the euro in the wake of the pact.
* According to lender Halifax, UK house prices rose by 3.9% in the year to November, marking a moderation from the 4.5% pace in the previous month. Although Halifax believes that prices can continue to increase due to a lack of new homes hitting the market, conflicting data from Nationwide and Rightmove have led economists to question whether the data give a good reflection of the UK property market.
* Hammerson has made a £3.4bn all-share offer for Intu, a smaller rival, in a deal that would bring together ownership of the UK’s largest malls, including Birmingham’s Bullring and Bicester Village in Oxfordshire. Combining the two companies would create the UK’s largest property group, and the second largest retail owner in Europe. The price offered by Hammerson for Intu reflects a discount of more than a third off the value of its properties. The shareholders of both companies will vote on the proposal in the second quarter of 2018, with the transaction scheduled to be completed by the end of the year.
* Chinese property developer Cheung Kei Group has added the former London home of defunct investment bank Bear Stearns to its growing property portfolio as Asian investment into London reaches record highs. The group purchased the block for £270m from Said Holdings, representing a net initial yield of 5.2%. The purchase is Cheung Kei’s second acquisition in the area since July.
* According to specialist lender Kent Reliance, more than seven in ten buy-to-let applications for house purchase were made via limited companies rather than individuals in the first nine months of this year, up from 45% in 2016. The report suggested the incorporation trend would accelerate as the relief for individuals is gradually withdrawn over the next four years and interest rates rise further from their historic lows.
* Berkeley Homes has reported a 14% growth in revenues in the six months to the end of October, with average selling price increasing from £655,000 to £719,000. However, despite raising its pre-tax profit guidance for the five-year period, Berkeley said the 2017/18 full-year results will represent a peak, before returning to more normal returns in 2018/19.
* Credit experts Totally Money has found that Bedfordshire has emerged as the best region in the UK to purchase a property through the Government’s flagship Help to Buy schemes and ISAs. The highest number of Help to Buy loans was in Central Bedfordshire with 1,710 per capita, and 245 properties successfully bought using a Help to Buy ISA.