Overpriced Housing Market Puts People 'on Knife Edge'

This article by Ian Silvera of International Business Times on November 11th, 2013 tells us how property prices and rents increased making family budgets put under enormous pressure.

Signs advertising homes, sold, for sale and under offer in London (Reuters)

The cost of home ownership and renting in Britain has "dangerous consequences" and is eating into people's pockets by decreasing their disposable income by more than a third, a report has claimed.

A BBC-commissioned Ipsos Mori poll of 1,003 adults found that 31% of the 697 who pay a mortgage or rent a property spend 40% of their disposable income each month on accommodation.

Nearly half (46%) of the respondents said  property prices were too high in their area and 39% wanted rates to fall.

"Our severe shortage of affordable homes has pushed up house prices and rents so much that family budgets are now being put under enormous pressure," said Campbell Robb, chief executive of homelessness charityShelter.

"Already, our advisers see people living on a knife edge, paying out so much each month that it just takes one thing - illness or a cut in hours - to tip them into a spiral that quickly puts their home at risk."

Robb explained that the widely accepted test of affordability was that housing costs should take up no more than a third of someone's income.

Kathleen Kelly, a policy and research manager for housing at the Joseph Rowntree Foundation, argued that the UK's housing market had been "ignored for too long" with "dangerous consequences".

She warned: "To reduce the £22bn ($35bn, €26bn) annual housing benefit bill we need more affordable homes to help bring down costs. Without a step change in housing supply, we'll stay locked into a boom and bust housing market, which increasingly crowds out the young, the poor and the vulnerable."

The research follows the news in August that the average property price in the UK soared to nearly a quarter of a million pounds (£247,000), according to official figures.

Article Source: http://www.ibtimes.co.uk/articles/521312/20131111/joseph-rowntree-foundation-shelter-bbc-poll-survey.htm

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RBS Agrees 1,080 Mortgages Through UK's 'Help to Buy' Scheme

This article by The Star Online on November 11th, 2013 tells us that RBS agrees mortgages with 1080 customers through Help to Buy scheme.

LONDON: State-backed Royal Bank of Scotland has agreed in principle mortgages with 1,080 customers since Britain's flagship 'Help to Buy' housing stimulus programme was launched a month ago.

The Conservative government is pushing the plan, with a 2015 election in mind, as a way to help people move onto, or up, the property ladder, and stimulate growth after three years of economic stagnation.

RBS, which owns NatWest, said 73 percent of the mortgages were for first-time buyers. If all of the applications are approved, the bank will be lending 171.6 million pounds under the scheme.

It said the average amount its customers wanted to borrow was 159,000 pounds and the average price of the home they wanted to buy was 167,565 pounds.

"These are majority young first-time buyers who, without 'Help to Buy', wouldn't have been able to consider a mortgage or buy a home," said Lloyd Cochrane, head of mortgages at NatWest and RBS.

Meanwhile Halifax, owned by RBS's part-nationalised rival Lloyds Banking Group, said it had received 1,309 mortgage applications from home buyers across the UK who have found a property to purchase.Halifax said the applications were for mortgages worth a total of 194 million pounds.

Critics say that unless the three-year scheme is properly scrutinised it could drive up house prices in sought-after areas like London and create a housing bubble that might burst when interest rates start to rise later this decade.

RBS is allowing customers to draw down the funds before the scheme officially launches in January and said 5 customers had already purchased new homes through the scheme.- Reuters

Article Source: http://www.thestar.com.my/Business/Business-News/2013/11/11/RBS-Agrees-1080-Mortgages-Through-UKs-Help-To-Buy-Scheme.aspx

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Intu Properties Sees Signs of Recovery in UK

This article by eProp Commercial Property News on November 6th, 2013 tells us the signs of recovery Intu Properties see in the UK economy .

Intu Properties continues to see signs of recovery in the UK economy with a series of positive retail sales figures and improved consumer sentiment.

UK-based Intu Properties (ITU) continues to see signs of recovery in the UK economy with a series of positive retail sales figures and improved consumer sentiment‚ the JSE-listed property company said on Tuesday
Intu said in its interim management statement for the period from July 1 to November 5 that its occupancy rates for the quarter ended September remained unchanged at 95% by rent‚ including 1% of rent currently being traded by administrators.

Intu‚ which was formerly Capital Shopping Centres and which owns some of the UK’s largest malls‚ said there had been no significant tenant failures in the quarter ended September.

The company‚ which is also listed in London‚ recently introduced a nationwide consumer-facing shopping centre brand‚ also under the name Intu. It has also launched a single transactional website for its centres and is rolling out free Wi-Fi in its malls.

Intu said it signed 57 long-term leases in the quarter — in aggregate £11m of annual rent and 8% above previous passing rent. This brought the total for the year to date to 152 leases‚ producing £33m of new annual rent‚ 4% above previous passing rent. 

Five significant transactions were signed in the period to introduce flagship retailers with a view to improving the rental tone over the medium term. Excluding these strategic transactions‚ in aggregate new long-term leases were in line with valuation assumptions‚ it said.

The group said wide-ranging change in the company continued in the third quarter as it rolled out its new brand and progressed its active asset management and development pipeline.

CE David Fischel said the group continued to drive its £1bn development programme. In July it raised about £170m of new financing facilities to help fund the expenditure.

The UK retail environment had continued its gradual recovery‚ with statistics showing a 15-month unbroken trend of increasing like-for-like nonfood retail sales‚ Intu said.

It said 48 new shops had opened in its centres since June and 125 so far this year‚ which represented about 5% of its 2‚600 units. Thirty stores were undergoing shop fitting.
The 2% reduction in footfall it experienced this year was unchanged from June. 

The group was encouraged by the continuing signs of improvement in the UK consumer environment. 

“We are confident that the income forgone in the short term by our approach of holding units vacant or on flexible terms to enable a timely start on a number of projects within our £1bn development programme will be more than offset by the significant enhancement to the long-term total return of the business from these projects.”

Article Source: http://www.eprop.co.za/news/item/15811-intu-properties-sees-signs-of-recovery-in-uk.html

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Osborne Said To Be Considering Tax For Foreign Property-Buyers

This article by Amanda Banks of Tax-News Global Tax News on November 5th, 2013 reveals George Osborne has declined to reports confirming that the govt. is considering moves to foreign investors.

UK Chancellor George Osborne has declined to confirm reports that the Government is considering moves to make foreign investors pay Capital Gains Tax on property sales in Britain, as a measure to calm property prices in London.

Asked by the BBC, Osborne said that he would not comment ahead of next month's Autumn Statement, but that the reports were "not a leak that's come from anyone near me."

Currently, foreign investors are exempt from paying the tax, which is imposed on UK residents who sell a property that is not their main residence. The exemption has been described as an "extraordinary anomaly" by Vince Cable, who is the Government's Business Secretary and a member of the Coalition Government's junior partner, the Liberal Democrats.

Lucian Cook, who is Director of Residential Research at estate agency Savills, judged that move would be a "much more targeted and much less controversial solution" to property prices than a proposed Mansion Tax on the most valuable properties. However, the British Property Federation (BPF) reacted by warning that reports about the tax would cause uncertainty, and it has instead called for more homes to be built.

Estate Agency Frank Knight was quoted as saying that around 70 percent of the most expensive new London properties have gone to foreign investors, and that 65 percent of these buyers were buying properties for renting out rather than to live in. Property prices in London rose by 9 percent in August, against a national average of 2 percent.

Overseas purchasers are also thought to be responsible for house prices rises in Hong Kong, Sydney, and Vancouver. Last year, Hong Kong introduced a 15 percent stamp duty surcharge on purchases by buyers who are not permanent residents, while a senior banker in Australia recently made news by suggesting a 5 percent stamp duty surcharge for foreign buyers.

Article Source: http://www.tax-news.com/news/Osborne_Said_To_Be_Considering_Tax_For_Foreign_PropertyBuyers____62574.html 

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Hong Kong Investor Knight Dragon Takes fFull Control of UK Property Scheme for $296 Million

An interesting article by The Economic Times on November 4th, 2013 reveals the full ownership of the Hong Kong investor, Knight Dragon of the Greenwich Peninsula after paying his partner. Quintin Estates.

This article was originally by Reuters.

LONDON: Hong Kong investor Knight Dragon has taken full ownership of a development in east London's Greenwich Peninsula after paying its British partner Quintain Estates 186 million pounds ($296 million) for its 40 per cent stake.

Knight Dragon, an investment vehicle owned by New World Development Co Ltd's chairman Henry Cheng Kar-Shun, bought its 60 per cent share in the 150-acre scheme in June last year for 480 million pounds.

Asian investors have ploughed billions of pounds into central London in recent years, lured by the city's perceived safe haven appeal and the iconic nature of some of its properties.

On Friday, Singapore developer Oxley Holdings bought London's largest development site since Battersea Power Station.

The Greenwich scheme, which is near the O2 concert venue, will contain more than 10,000 homes and space for 25,000 workers along a 1.6 mile stretch of the River Thames.

Article Source: http://economictimes.indiatimes.com/news/international-business/hong-kong-investor-knight-dragon-takes-full-control-of-uk-property-scheme-for-296-million/articleshow/25221507.cms

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UK Looking to Tax Foreign Owners of UK Property

This article by Ryan Littlestone of forexlive on October 31st, 2013 tells us how the UK minister considers applying capital gains tax to foreign owners of UK property.

According to Reuters who are citing Sky news, A UK finance minister is considering applying capital gains tax to foreign owners of property in the UK.

It’s a long borne out discussion that foreigners snapping up properties is leading to the current strong price rises we are seeing. I don’t see that as the main reason as that affects up market properties in town centres rather than  your average housing.

The move looks two fold. One to nab some tax pounds and another to nail down foreign investors and their dealings.

No doubt we’ll be hearing more of this as the day progresses.

Article Source: http://www.forexlive.com/blog/2013/10/31/uk-looking-to-tax-foreign-property-owners-31-october-2013/

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