Residential Transactional and Living Markets
Investment
'Price discovery phase’ is what it's all about in this sector at the current time. The gap between vendor and buyer price expectation is as wide as it has been for some time but not altogether surprising thanks to the well publicised and obvious high inflationary and interest rate issues.
The appetite to buy remains strong in the sector and despite many reports of investors exiting their buy-to-let portfolios in their droves, from where we’re sitting the demand from old and new buyers seems to be as strong as ever, albeit subject to more realistic pricing.
Residential Development
The land and development market is an ever changing landscape influenced by a multitude of factors. It hasn’t been an overly positive market for the last 12 months and you may have noticed that there has been a lot of discussion around build costs for the last year or two.
This quarter is no different. This is one of the major influencing factors in the development market at present. Cost inflation is prevalent everywhere with all developers facing the same challenges. However, whilst these costs have risen, they appear to be remaining relatively steady and developers and landowners alike have now, on the whole, had a chance to go through a process of acceptance, and acknowledge the impact this may have had on their assets.
Student Housing
Operationally, student accommodation continues to perform exceptionally well. Our clients, across almost all the UK, are enjoying a high-occupancy low-void academic year (22-23) with forward lettings for next academic (23-24) outperforming or at least returning to pre pandemic levels.
In addition, most of our clients are reporting strong year on year rental growth, as high as 15% for some buildings. In a trading update posted 12 April, Unite Students confirmed 90% of its rooms were forward let for the forthcoming academic year compared to 78% at the same point last year, with an average rental growth of ~7%.