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

#FREE ￡197 #Download “How To #Buy #Houses Using Other People's #Money To Make ￡2,000-￡5,000+ a month #Passively” http://tiny.cc/B-FreeGiveAway

'Unsustainable' 10% Surge in London House Prices Smashes Previous High Amid 'Buying Frenzy'

This article by Matt West of This is Money.co.uk reveals a report that showed house prices in London are rising in some regions but at below the rate of inflation.

House prices in London are rising at 'unsustainable levels with the average asking up now £30,000 higher than their previous July peak, a report showed today.

Property website Rightmove said the onset of autumn saw national average asking prices rebound by 2.8 per cent in October - reversing September's 2.8 per cent decline - and rise 3.8 per cent on the same time last year. The average property was worth £252,418, up almost £7,000 in a month from £245,495 in September, the website said.

But in London, after the summer lull saw a slight drop in properties being listed for sale and slight price falls, new seller numbers surged 15 per cent while asking prices shot up 10.2 per cent in October.

Patchy: House prices are rising in some regions but at below the rate of inflation while in other regions they have fallen

The average asking price in the capital is now 5.6 per cent or £28,852 above July’s record of £515,379, equivalent to an average growth rate of 2 per cent a month over the past quarter.

And with affordability in London stretched to near breaking point, Rightmove said the second phase of the Government’s Help to Buy scheme was likely to have little impact on the lives of ordinary Londoners. 

Buyers in the capital were already facing income challenges that would restrict their borrowing capabilities rather than difficulties finding a deposit, the website said.

Average prices in outer London of £461,937 are more than double those in the rest of England and Wales at £226,861. But average wages are around 60 per cent higher in the capital, meaning Londoners are struggling to service ever increasing mortgage debt.

Elsewhere in the country, two regions  - Wales and the West Midlands - recorded a fall in average prices in October. House prices in five other regions - the North, North West, Wales, West Midlands and the South West - remained lower than a year ago.

Rebound: After falling for two consecutive months during the summer lull, house prices have begun to rise again 

Seven in ten regions saw house price rises that lagged behind inflation. Only London, the South East and East Midlands saw house prices rise by more than retail price inflation of 3.2 per cent . 

The South East remains the natural recipient of increased demand given the extreme supply shortages in London.

Asking prices rose 2.3 per cent in October although they remained 2.1 per cent behind the peak of £330,612 achieved in July this year.

Rightmove director Miles Shipside said: 'Fewer sellers coming to market in the capital during the traditional summer recess resulted in total price falls of 4.3 per cent over August and September. 

'However, this month’s rebound in the number of sellers brings the quarterly growth figure back into line with the recent trend at around 2 per cent a month. 

'Although not sustainable in the longer term, some agents currently report there is a buying frenzy in parts of prime inner London, with available stock so low that their shelves are now bare.

Capital trends: Some estate agents currently report there is a buying frenzy in parts of prime inner London, with available stock so low that their shelves are now bare

'Unsurprisingly, many of this month’s best performers are boroughs in inner London.'

He added London needed to see an increase in housing supply to meet heightened demand which would only come from more houses being built and more owners putting properties on the market. 

Rightmove said the situation in London was exacerbated by overseas investor demand swallowing up much of the new-build supply, adding to shortages and creating upwards price pressure.

Mr Shipside said: 'London is a world city where overseas investors see real estate as a safe asset, at a time when safe assets are increasingly scarce, and developers are building and marketing a lot of one and two-bedroom flats to meet that demand. 

'While they can achieve volume sales at premium prices, this eats up a much-needed source of fresh supply and drags up existing property prices at an even faster rate.'

The Rightmove house price report is the latest in a long line showing significantly higher activity in the housing market.

Last week, the Council of Mortgage Lenders said lending in the three months to the end of September rose at the fastest rate in five years.

Prices

Article Source: http://www.thisismoney.co.uk/money/mortgageshome/article-2465958/London-property-market-seeing-buying-frenzy-says-Rightmove.html

Help to Buy Has No Safeguards to Ensure the North Feels the Benefit Too

This article by Graham Jones of The Northener Blog on October 10th, 2013 tells us that constituent's tax should not be used to give a leg-up to bankers who want a 95% mortgage on a £600,000 London townhouse.

This week the government launched the second part of the Help to Buy mortgage guarantee scheme – the means by which the state will guarantee 15% of the deposit on a mortgage.

The government claims this will help people who can't save for a deposit to get onto the housing ladder. Critics – everyone else from financiers to economists to housing specialists – claim it will create a new and unsustainable housing bubble; subprime lending that was the cause of the banking collapse.

For someone struggling to save, a reduced deposit is an easier route to home ownership.

But this has to be about more than one mortgage. It has to consider the cumulative impact and the colossal risks that brings to government finances should it all go wrong.

But the aspect of the policy I find particularly interesting is the huge and conflicting disparities between the housing markets in and around London, and much of the north of England; in particular in very low demand areas such as my constituency, Accrington. A quick glance at current average house prices on Prime Location shows a gigantic disparity between London (average price £491,000 – predicted to rise to £500,000 by the end of the year) and Lancashire (£141,000 to £157,000, depending exactly where).

The policy therefore runs the risk of pumping far more money into already super-heated housing markets in London simply by virtue of the cost of properties there. The policy has no mechanism to ensure a geographical allocation of the guarantees – there is nothing to prevent the majority of the £12bn being spent on fewer, more expensive mortgages.

Even in Lancashire this high bracket has seemingly perverse consequences – the £600,000 upper limit could purchase a very large property indeed. It is possible to buy five-bedroom properties with significant land with room for stables and horses. Should the hard-pressed taxpayer support the wealthy of Lancashire?

As the Guardian itself warned this week, City bankers were holding off buying a property and getting 95% mortgages instead in order to free up cash that would otherwise be locked into a property through the deposit. I do not think city bankers and those hoping to bump themselves up the ladder (up to a potential £600,000 house!) are particularly the people that we ought to be focusing on when it comes to housing aspiration – and it certainly wasn't the way the policy was sold to the public. My hard-pressed constituents are paying into a pool of money which could be being used to guarantee the mortgage of someone who gets very highly paid so they can buy a £600,000 house.

The reason we have low demand in East Lancashire is in part due to the economy, but that in turn is partly due to the housing market: we have an oversupply of houses that people don't want to live in (many of which as a result stand empty, boarded up). If the government wanted to improve the housing prospects of first-time buyers they would focus on building new houses across the country. £12bn to prop up mortgages could be spent to massively open up supply and build hundreds of thousands of new dwellings.

I hope this policy works for the people who take part in it, and anything that helps (or could help, as long as the budget isn't swallowed up on a smaller number of expensive properties) young people should be welcomed – however it is a short-term solution to the problem of undersupply of housing in parts of the country, and undersupply of quality properties in others.

My constituents' tax is being used to guarantee these mortgages – they ought to benefit from it (I hope the Treasury is at least monitoring where the money is going, though I am not optimistic). There are better policies the government could have pursued, but this is the one they chose – the least they could do is guarantee my constituents have an equal opportunity to take part.

• Graham Jones is the Labour MP for Haslingden and Hyndburn

Article Source: http://www.theguardian.com/uk-news/the-northerner/2013/oct/10/help-to-buy-scheme-north-safeguards

House Prices Up 6.2% in a Year as Demand Strengthens

This article by Michelle McGagh of citywire money on October 3rd, 2013 reveals the continued and steady rise upwards of house prices according to the figures from Halifax.

More sellers might be putting their houses on the market but the continued disparity between supply and demand means that house prices have increased another 2% in the past three months.

Halifax's house price index shows a 6.2% increase in UK property prices in the past year, pushing the average price of a home to £170,733.

Prices in September were up 0.3% on the previous month, the eight successive monthly price rise, although prices are still 14% off their 2007 peak.

The demand for property has been fuelled by the government’s Funding for Lending scheme and the successful implementation of the first part of the Help to Buy scheme.

Supply has lagged behind, meaning prices have ticked upwards, but it now looks like more homes are coming on to the market. According to the Royal Institution of Chartered Surveyors the number of people putting their property up for sale increased successively in the seven months to August.

The number of new homes being built has also increased and in the first six months of 2013 new building starts were 22% higher than the same period last year.

Martin Ellis, Halifax housing economist, said: ‘House demand has risen more quickly than supply in recent months, putting upward pressure on prices. Demand has increased against a background of low interest rates and higher consumer confidence underpinned by signs that the economy has begun a sustainable recovery.’

He added that ‘supply is beginning to respond to the pick up in demand’ which should help to ‘constrain prices’.

‘The recent strengthening in house prices is increasing the amount of equity that many homeowners have in their home, enabling more to put their property on the market for sale.’

The figures come days after the prime minister announced the government was fast-tracking the second part of its Help to Buy scheme. The first part sees the government offer a five-year interest–free loan up to 20% of a new build property’s price if a buyer has a 5% deposit.

In the second part the government will guarantee 15% of the mortgage taken out on any property up to a total property price of £600,000. Again the buyer must have a 5% deposit.

The second part was not supposed to come into force until January but will now be up and running next week. Critics, including business secretary Vince Cable, have said the mortgage guarantees are not needed and will further fuel house price rises.

Article Source: http://www.citywire.co.uk/money/house-prices-up-6-2-in-a-year-as-demand-strengthens/a707015?ref=citywire-money-latest-news-list

U.K. Mortgage Approvals Rise to Highest Since 2008

This article by Eshe Nelson by Bloomberg on September 30th, 2013 reveals the highest increase of mortgage approvals in the UK as the Help to Buy scheme prepares to accelerate.

U.K. mortgage approvals rose to the highest in more than five years in August as the government prepares to accelerate a home-buying program that’s been criticized for potentially over-stimulating the market.

Lenders granted 62,226 mortgages, the most since February 2008, compared with a revised 60,914 the previous month, the Bank of England said in a monthly report in London today.

The improvement in home-loan growth contrasts with business lending, which fell the most in eight months in August.

Hometrack said today house prices rose the most in more than six years this month and Prime Minister David Cameron yesterday brought forward by three months the second phase of his “Help to Buy” mortgage plan, saying it will start within days. The program has drawn criticism it may help fuel a property bubble, prompting the government last week to give the Bank of England the power to perform annual checks on it.

There is a “continued divergence across the household and the corporate sectors,” said Jens Larsen, chief European economist at RBC Capital Markets in London. “This picture will remain a worrying one for the Bank of England. While most commentators are focused on the risk of an overextended household sector, the bank is likely to concentrate its effort on improving credit to the corporate sector.”

The number of mortgage approvals exceeded the 61,500 figure that was the median estimate of 20 economists in a Bloomberg News survey. Net mortgage lending rose 974 million pounds ($1.57 billion) in August, the central bank said. Consumer credit increased 577 million pounds.

Company Lending

Business lending fell 3.8 billion pounds in August from July, the most since December and more than three times the average decline over the past six months. Lending is down 3.6 percent compared with a year earlier. For small- and medium-sized companies, lending has fallen 3.2 percent over the past year, according to the BOE.

“These figures are extremely disappointing, and show that Britain’s business finance system remains broken,” said Adam Marshall, director of policy at the British Chambers of Commerce. “While bigger and older companies can get finance when they need it, many young, dynamic, and fast-growing businesses are still frozen out.”

The pound rose 0.1 percent against the dollar today and was trading at $1.6161 as of 11:32 a.m. London time. The benchmark 10-year government bond yield was down 2 basis points at 2.69 percent.

Help to Buy

The BOE also said foreign investors sold a net 6 billion pounds of gilts in August, the most since June 2012. That followed a net purchase of 1.3 billion pounds in July. It said M4, a broad measure of money supply, rose 0.7 percent in August from July and increased 2.1 percent from a year earlier.

According to the Hometrack report, house prices in England and Wales rose 0.5 percent in September after a 0.4 percent gain in August. Annual price inflation accelerated to 2.4 percent. Prices rose in nine of 10 regions tracked by Hometrack. London led gains, with a 0.8 percent increase.

The first phase of Help to Buy -- interest-free loans for buyers of newly built homes -- began in April and has already contributed to the strongest housing market since the financial crisis. The second will provide government-guaranteed mortgages for buyers with a deposit of as little as 5 percent of the value of a home costing as much as 600,000 pounds.

With the plan facing criticism, Chancellor of the Exchequer George Osborne has downplayed risks of a property bubble, saying the housing market outside London remains weak. While the BOE has said property activity remains below its historic average, it will be “vigilant” to any risks.

“There is a mounting danger that house prices could really take off,” said Howard Archer, an economist at IHS Global Insight in London. “It is therefore of vital importance that policy makers closely monitor the situation and are prepared to act quickly and decisively if signs of the housing market overheating become increasingly widespread and pronounced.”

 Article Source: http://www.bloomberg.com/news/2013-09-30/u-k-mortgage-approvals-rise-to-highest-since-2008.html

London Fuels Record Growth in UK House Prices

English property prices pushed roaring demand for London housing more than their peak at the height of the country's economic boom according to this article by Ed Hammond, Kate Allen and Claire Jones of FT Adviser on September 17th, 2013.

Roaring demand for London housing has pushed English property prices beyond their peak at the height of the country’s economic boom, official figures showed on Tuesday, underscoring concerns of an impending housing bubble. 

House prices in the capital outpaced those in the rest of the country by a factor of 10 times during the past year, according to figures from the Office for National Statistics. The jump helped lift the English average house price 3.7 per cent during the 12 months to July to £255,000, surpassing the 2008 zenith.

 

The Bank of England’s Financial Policy Committee, which is responsible for safeguarding financial stability, is on Wednesday expected to discuss the housing market against the backdrop of warnings from policy makers that the government’s mortgage guarantee schemes are fuelling nationwide price growt.

Last week, the Royal Institution of Chartered Surveyors urged the BoE to curb the risk of another housing boom by taking the unprecedented measure of capping national house price growth to 5 per cent a year.

After stripping out the impact of London, however, average UK house prices rose just 0.8 per cent during the year, underlining the diverging economic fortunes between the capital and the wider UK housing market.

This divergence complicates the BoE’s new policy of “forward guidance” under which the FPC must confirm that ultra-low interest rates are not serving to undermine financial stability.

While it would be unlikely for the FPC to signal the end of forward guidance a little over a month after its introduction, the new policy heaps pressure on the FPC to explain why housing is not compromising financial stability.

To date policy makers have focused on a one-size fits all solution for the country.

“The difficulty is you have significant variations between London and the rest of the UK, so it is impossible to control pricing by manipulating the entire mortgage market,” said Lucian Cook, head of UK residential research at Savills, the property group. “All it will achieve is to create further polarisation between the equity-rich buyers and the debt-reliant market”.

The cost of an average London home hit £318,000 in the 12 months to July, according to the Nationwide, compared with £167,200 for the rest of the UK. The difference means the average London house is worth 1.9 times property elsewhere, eclipsing the 1987 peak of 1.75 times.

Analysts do not expect the FPC to announce measures to restrict activity in the mortgage market in its post-meeting statement next Wednesday. Mark Carney, governor of the BoE, last week played down concerns a housing bubble is inflating, while saying policy makers needed to remain “vigilant”.

“When looked at in the broadest terms, it is obvious that no agent of the government would wish to act at the current time to cool the housing recovery,” said Brian Hillard, economist at Société Générale. “What the Bank can do, however, is monitor the state of the housing recovery.”

Prices also rose in Northern Ireland, where the property market has been devastated in recent years. Average house prices fell in both Scotland and Wales, however.

The ONS index only includes transactions involving a mortgage – it does not include cash-only purchases. A substantial proportion of sales are now to cash buyers.

The LSL/Acadametrics index, which includes sales to cash buyers, showed a 3.2 per cent annual rate of growth in its most recent figures. But other indices run by mortgage lenders, such as Nationwide and Halifax, show prices are still substantially below their 2008 peak. House price indices have diverged in recent years, as methodological differences produce increasingly divergent results.

Article Source: http://www.ft.com/intl/cms/s/0/0d15ebae-1f8f-11e3-8861-00144feab7de.html#axzz2fPX03wcg

How A House Price Cap Could Work

This article by Hilary Osborne of TheGuardian on September 13th, 2013 basically explores how a cap would work. The Royal Institution of Chartered Surveyors has called for the Bank of England to cap house-price rises at 5% a year.

Why does Rics want a cap?

The organisation says limiting house prices would prevent a dangerous new property bubble, reckless lending and a build-up in consumer debt. By letting people know that they can only expect prices to rise by up to 5%, the Bank of England would stop homebuyers and lenders gambling on rising prices. During the last property boom lenders such as Northern Rock offered 125% mortgages, based on an expectation that prices would rise and borrowers would not end up in negative equity for long – but when prices crashed some people were left stuck with huge loans. Rics argues that everyone would be more cautious if there was a price cap.

Why set it at 5%?

Rics says it is "not wedded" to the figure, which it based on the average annual growth in UK earnings, plus an allowance for price pressure caused by a lack of supply of homes for sale. Growth is currently exceeding that level, according to Halifax's latest house price index.

Is that the index that would be used?

Not necessarily. Rics has said it is "agnostic" about which measure of prices is used. The Bank has previously considered all of the major house price reports when making interest rate decisions, but there is now an "official" ONS index published monthly. Its last report showed prices rose by 3.1% in the 12 months to June.

If prices were capped, would that mean I would have to reduce the price of my house?

No. The cap wouldn't restrict individual buyers' and sellers' transactions, so if you were selling a property at a profit equivalent to more than 5% a year that would be fine. What the cap would do is force the Bank of England's new Financial Policy Committee to use powers it has to restrict mortgage lending.

What are those powers?

If it believes the housing market is overheating, it can direct the banking regulator, the new Prudential Regulatory Authority (PRA – also, confusingly, an arm of the Bank), to tighten the screw on mortgage lenders.

The PRA would use so-called sectoral capital requirements to give banks pause for thought before they make risky loans. They could force lenders to set aside more capital against all residential property lending, for example, if they thought the entire market was frothy – or pick on particular areas, such as high loan-to-value ratio mortgages. In practice, whichever types of loan the PRA singled out would become scarcer and more expensive.
  
What are the problems with a cap?

The main problem is that the headline rate of growth disguises massive regional variations. In the London market (itself a multiple of the entire New Zealand market) house price rises are already up 10.2% over the past year, according to the latest figures from the property portal Rightmove.co.uk. Yet in the north, north-west, Yorkshire and Humberside and south-west regions, house prices are up less than 1% over the past year.

Also, it does not address the real problem with the UK housing market – the lack of supply of properties.
  
So price rises in London could trigger a cap and stop me getting a mortgage in Newcastle?

Spot on. Houses in Newcastle could represent good value and be affordable to first-time buyers, but lenders would be constrained from granting loans if a London boom pushed up UK prices.

Article Source: http://www.theguardian.com/money/2013/sep/13/how-house-price-cap-work

Best Mortgages Set to Disappear, Borrowers Warned

According to this recent article by Dan Hyde of The Telegraph on September 9th, 2013 the record low rates on new fixed mortgages are in danger due to rising costs faced by banks.

Home owners have just a short window of opportunity to lock into the lowest-ever fixed mortgage deals before rates rise, experts have warned.

Lenders are preparing to push up the rates on new fixed deals because the cost of funding these loans has risen considerably.

Mortgage rates have been slashed to record lows in the wake of government schemes to stimulate the property market.

Two-year fixed rates are now available at less than 1.5pc. In July, The Telegraph reported that analysis of the home loan market showed it was the best time to remortgage in six years, with half of borrowers able to save money by taking out a new deals.

Since then, the money market rates underpinning these attractive offers have started to climb, reflecting the improving strength of the UK economy.

Banks typically price their fixed mortgages according to the rates on the money markets “swaps”. Over the past week, the rate on five-year swaps has risen from 1.77pc to 2.01pc.

Already, some lenders are removing their best buy mortgages or pushing up rates. Yorkshire Building Society today increased the rate on its five-year fixed rate for the second consecutive week. The rate was 2.44pc two weeks ago. Today it is 2.59pc.

Tomorrow, First Direct will increase the rate on its five-year deals for customers with a 10pc deposit. Its 4.19pc deal will then cost 4.39pc. Norwich & Peterborough and Nationwide have also made moves to increase rates.

Andrew Hagger, an independent personal finance researcher at Moneycomms, said: “Money market swap rates increased significantly last week, with a massive spike on Thursday. We must now wait to see whether these higher rates hold, but already lenders are starting to increase mortgage rates.”

David Hollingworth, a broker at London & Country, said: “Mortgage rates are not as directly linked to swap rates as they once were.

“But lenders cannot ignore the cost of funding going up, so if you are thinking of taking a fixed rate, there is very little to suggest rates are going to get better.

Mr Hollingworth added that lenders are still competing fiercely for business, as Britain’s property market rejuvenation continues. This should keep rates from rising rapidly. Further downward pressure could arrive when the second stage of the Government’s Funding for Lending Scheme is launched in January. This will provide a government-backed mortgage guarantee to customers who put down a 5pc deposit when moving home.

Article Source: http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10295935/Best-mortgages-set-to-disappear-borrowers-warned.html

Got a UK Property for Rent? How to Be an Overseas Landlord

This interesting article by Ruth Margolis of BBC America on September 5th, 2013 gives out simple and helpful advice on how to rent out your house if you have to up and leave the UK.

You’ve just had the call to say the dream job is yours. Congratulations. One thing, though: your new office is in America, so you’ll need to move there. OK! But hang on: you’ve just bought that nice new flat, and there’s no way you can afford the hefty mortgage and finance your new life in the U.S. What’s a soon-to-be-expat to do?

With the U.K. property market still flat, you might decide that selling up isn’t an option. Possibly your best choice is to rent out your place, so you do the thing people always do in these situations: put a “Great flat for rent!” shout-out on Facebook. But you get nothing — not even a solitary “like.” What now?

Contact local estate agents. Explain your situation, then pick the least obnoxious and most sensible-sounding half-dozen to come to your house and give a valuation. Put together a long list of annoying questions and remember to include the following ones about money: if you find me the ideal tenant (someone I like who has good references and a sublime credit score), what’s your fee? Will you charge me if the agreement falls through? What will I have to pay you to find me a replacement renter if my current one moves out? If I choose to have you manage the property, what will that cost? And what, exactly, do I get for the money?

Once you’ve given a cross section of agents a grilling, choose a couple to market your place. But be warned: even the good guys will give you the hard sell on the property management side of their business. Carefully consider whether it’s worth the money. If you take the time to fix any problems with the property before you leave and pick a great tenant, you may find you can come cope with arranging minor household repairs from afar.

However, don’t let your agents know you’re planning to DIY. They’ll work harder on your behalf if they think you might also pay them to manage your property.

Don’t make the mistake of thinking you can handle everything from abroad, especially if you’re not planning to make regular trips back to the U,K. You will need a trusted proxy to pop by a couple of times a year to make sure your tenants haven’t thrown the bath out of the window or painted the walls with sewage. For your part, make an effort to build a good e-relationship with your renter and be quick to sort out any issues they may have. Neglect to do this and you run the risk that they’ll stop paying rent or give notice.

If you do decide to manage the place yourself, find a trustworthy odd jobs person who can attend to any small problems in the property. Also, take out renters and utilities insurance to cover you if your tenant stops paying the rent or the boiler breaks down.

Talk to your mortgage provider about swapping to a buy-to-let agreement. In reality, plenty of people who let a property they once lived in don’t bother to do this because it’s fiddly and expensive. And, in all likelihood, you won’t be found out should you decide to stay on the same deal. But you are supposed to swap, legally speaking.

You’ll also need to pay U.S. and U.K. income tax on any profits accumulated from your rental. So find an account who can help you with your tax returns in both countries.

Finally, find the time to check the property yourself whenever you’re in the U.K., giving your renter at least 24 hours notice. Nothing inspires a tenant go to town with a Swiffer and scrape the sewage off the walls like a visit from the owner.

Article Source: http://www.bbcamerica.com/mind-the-gap/2013/09/05/got-a-uk-property-for-rent-how-to-be-an-overseas-landlord/

Lenders in the UK Confident That Stress Tests Will Not Bar Most Mortgage Applicants

According to the research by the Intermediary Mortgage Lenders Association intermediary mortgage lenders in the UK are ensured that new affordability checks resulting from the MMR will not significantly reduce the number of people who successfully apply for a mortgage as shown in this recent article by the Property Wire on September 3rd, 2013.

Research by the Intermediary Mortgage Lenders Association found just 7% of intermediary lenders expect significantly more people will be turned down for a mortgage because of new stress tests, which will examine whether borrowers could afford their repayments in the event of interest rates rising.

IMLA’s Intermediary Lending Outlook shows that almost three quarters of lenders are confident that affordability checks will not impact borrowers in large numbers while the remaining 20% are unsure.

Overall responsibility for affordability checks will officially pass from brokers to lenders when the MMR takes effect in April 2014.  While many of its provisions are already standard practice for lenders, mortgage brokers are less convinced that aspiring borrowers will be unaffected.

Although 34% of brokers do not expect stress tests will significantly reduce the number of successful mortgage applicants, some 44% predict that considerably more consumers will find they are turned down.

However, brokers are significantly more confident about the impact of the MMR than they were at the start of the year. Some 66% are not at all worried in August 2013, compared with 42% in January 2013, and the percentage with significant worries has dropped from 12% to 4%.

In contrast, 67% of lenders are currently worried about the impact of MMR but despite their extra responsibilities under the new rules, no lender has serious concerns.

‘The MMR rules on affordability are built on common sense and are not too far removed from how many lenders already approach the issue. Recent experience has shown how important it is to ensure that mortgage borrowers can reasonably manage their commitments, not just now but in the future,’ said Peter Williams, executive director of the IMLA.

‘We are in unfamiliar territory when it comes to current interest rates, so we have to be pragmatic and anticipate the likelihood of change. Falling numbers of arrears and repossessions in recent years show a responsible approach to mortgage approvals, and lenders are working hard to ensure their existing tests meet the full MMR requirements without unfairly disadvantaging consumers,’ he explained.

‘Although the regulatory buck will rest with lenders from April 2014 there is still a collective responsibility to put affordability at the heart of the industry. This involves brokers working closely with lenders to help finalise the rules of engagement, while also ensuring that customer expectations are managed and applications suitably vetted,’ he added. 

Article Source: http://www.propertywire.com/news/europe/lenders-uk-mortgage-review-201309038187.html

Is Shared Ownership a Real Housing Solution?

With the ongoing nation's housing crisis it has been carried out that shared ownership plan is the solution according to this article on August 31st, 2013 by Patrick Collinson of TheGuardian.

A Shelter report has concluded that a robust and organised shared ownership scheme is a key part of solving the nation's housing crisis.

The shared ownership flat in London's Docklands seemed like salvation for Mark and his partner, who had spent years trying to find a home in striking distance of where they work in the capital. It was pricey, at £437,000, so they could only afford a 25% share, but with the rent set at a reasonable level it was just about affordable.

Yet just a few months later it turned into a nightmare for the first-time buyers, with the service charge hiked up by 73% to an unmanageable £380 a month, or £4,560 a year.

The service charge, plus the mortgage payment and rent, make the property no longer viable for Mark who feels conned by the housing association that sold the flat. At the time of the purchase, the association provided him with an "estimate" of the service charge, even though, he claims, it later admitted it knew this was not an accurate reflection of the costs, and that it would be raised in a matter of weeks.

If the true charge had been disclosed Mark would not have proceeded with the purchase, and in any case would have failed the affordability test.

Mark's tale is just one among many about this hybrid form of property buying for the desperate. One former head of the National Association of Estate Agents likened shared ownership to "sending lambs to the slaughter".

The concept of "staircasing", where a young buyer takes on a 25% share then buys further portions on the way to full ownership, is largely illusory.

A Cambridge University report found that of the estimated 145,000 shared ownership properties already sold in England, only 27,908 have been staircased up to 100% ownership since 2001.

Many shared ownership apartments are overpriced new-builds flogged by housing associations using dubious techniques whereby the buyer is almost guaranteed instant negative equity. So-called "affordable" homes sell for as much as £640,000 (a two-bed in Tower Hamlets, east London) with combined monthly costs adding up to as much as £2,000. To qualify buyers need incomes of up to £80,000 a year.

Legal fees to staircase can be high, service charges are steep and selling up is difficult when you are restricted to just a small pool of potential buyers. Much of the public subsidy that goes into shared ownership ends up in the pockets of developers and landowners, which are able to charge an inflated price.

Yet housing charity Shelter, after a long investigation into the property market focusing on the 1.8 million low-to middle-income "forgotten families" trapped in renting this week concluded that the solution to the UK's housing problem is … shared ownership.

To be fair to Shelter, its inquiry makes no bones about the current shoddy state of the shared ownership market. It has developed in a piecemeal way, with multiple schemes launched by successive governments, none having a material impact on the market.

Shelter's vision is for a major, mainstream shared ownership market supported by the government to the tune of £12bn in order to provide 600,000 decent homes for priced-out families throughout their lives.

Shelter reckons the minimum share of ownership should be as low as 12%. That effectively turns the purchase into a controlled rent home from a social landlord with a bit chipped in by the "buyer". But maybe that is no bad thing. The main attraction of shared ownership is that unlike the private rented sector it gives full security to the occupiers, as they can't be evicted with just a couple of months' notice.

Shelter acknowledges that shared ownership is not the entire answer – we need to address the chronic undersupply of new homes in other ways as well. The government's Help to Buy scheme won't help, either. Shelter estimates that when the second part of the scheme goes live in 2014, three in four families will still be unable to raise enough money to buy an average three-bedroom home in their area.

It is good that Shelter has put shared ownership under the spotlight, as it is a sector that urgently needs reform. But it's sad that the best we can offer today's younger generations is a quarter share of what the baby boomers saw as their birthright.

Article Source: http://www.theguardian.com/money/blog/2013/aug/31/shared-ownership-housing-solution

First-time Buyers Get on Property Ladder

This article of Exeter Express and Echo on August 29, 2013 discusses Barratt pledge to help first-time buyers in Exeter to get into the property ladder and will have more shot in owning their own home.

Leading house builder Barratt has pledged to help as many first-time buyers in Exeter as possible take their first step on the housing ladder this summer.

Barratt, which has a wide range of developments across Exeter, has a number of schemes available for first time buyers, the most popular being Help to Buy.

The Government-backed scheme, Help to Buy, is helping first time buyers take the first steps onto the housing ladder with just a fice per cent deposit.

"We know first-time buyers face a number of challenges but we believe Help to Buy will give more people than ever before the chance of owning their own home," said Barratt Homes sales director Lee Monk.

"There are so many advantages for first-time buyers. In past years, we know that saving money for a deposit was difficult, but if you can raise the five per cent deposit you will be able to buy a new home with Help to Buy," added Lee.

Help to Buy, which is only available on new homes, is made up an "equity loan" and "mortgage guarantee". This means that you only need a five per cent deposit to qualify for the best mortgage rates and then the Government will lend you up to 20 per cent of the value of your property through an equity loan.

Among those who have bought their first home with Help to Buy are Wayne Bacon and Alicia Andrews.

"We got engaged earlier this year and decided to buy a home together," said Alicia. "Help to Buy was fantastic for us because it shortened the time it would take for us to get onto the property ladder."

If you would like find out more about how Barratt is helping first time buyers call 0844 5710 385 or log onto www.barratthomes.co.uk

Article Source: http://www.thisisexeter.co.uk/time-buyers-property-ladder/story-19721313-detail/story.html#axzz2dLGx3NWR

Prime Property Discounts Fall Sharply

Ryan Fowler of Mortgage Introducer on 28th of August, 2013 reveals new research from PrimeLocation.com stating UK's prime property sale has dropped sharply in the last 12 months.

The chances of finding a bargain on a prime property for sale in the UK has fallen sharply in the last 12 months, new research from PrimeLocation.com has revealed.

The proportion of prime properties (those worth over £1m) currently for sale that have been reduced in price since originally coming onto the market now stands at only one in five (21%), down sharply from 28% one year ago. The average discount on those properties that have seen a price reduction is currently 8.9%.

Lawrence Hall of PrimeLocation.com, said: “Anyone who thinks that property buyers at the top end of the market are less price sensitive is mistaken.

“Even more so, because the numbers are so much bigger, prime buyers are always looking for the best possible deal.

“Whilst there are less discounted properties on the market than in recent years, there are still some areas where prices have been reduced significantly and bargains are to be had.”
One such area is Bromley in South East London which has the highest proportion of discounted million pound homes for sale with almost half (49.3%) of those on the market currently having been reduced to tempt buyers.

Barnet and Rickmansworth, both in North London, round out the top three locations with the highest levels of reduced-price prime properties at 33.9% and 31.2% respectively.
At the other end of the scale, only 10% of Edinburgh’s prime properties currently on the market have been reduced in price to attract buyers.

The market for million pound homes in Guernsey and the Isle of Man appears strong with each having amongst the lowest proportions of discounted prime properties in the UK, at 12% and 13.6% respectively.

Unsurprisingly, some of the lowest levels of discounts on offer on prime properties are in London suburbs including Kingston upon Thames (4.2%), Northwood (4.6%) and Richmond (5.3%). However, prime property owners in Newcastle and Oxford appear less confident about their original asking prices with the average discount on million pound Tyneside homes at 20.6% and in Oxford currently at 14.1%.

Article Source: http://www.mortgageintroducer.com/mortgages/247382/5/Industry_in_depth/Prime_property_discounts_fall_sharply.htm

Property Asking Price Discounts in the UK are Falling Sharply

This interesting article by the Property Wire on August 20, 2013 shows how property market accumulate new figures displaying a part of discounted properties for sale has greatly fallen.

As the UK property market picks up new figures show that the proportion of discounted properties for sale has fallen from 37% to 32% over past 12 months.
 
Average asking price discount on the original asking prices has come down to 6.3% from 7.6% a year ago but there are regional differences.

The North/South property divide remains clearly evident in the Zoopla research, showing all of the top 10 areas with the highest proportion of discounted properties being in the North and nine of the top 10 areas with the biggest discounts on offer also being in the North.

For example, some 42.7% of properties currently for sale in Barnsley have had their asking price reduced at least once since being put on the market, with Rotherham at 42.3% and Wakefield at 42.1% not far behind.

London continues to have the lowest proportion of discounted properties on the market with less than a quarter, 22.8%, of properties for sale in the capital today having seen their asking price reduced since being listed for sale.

Edinburgh at 27.7% has the second lowest proportion of price reduced properties on the market currently, followed by Wolverhampton at 29%. Poole has the biggest average discount in the UK today, currently standing at 9.9%.

‘A fall in the proportion and level of asking price discounts suggests sellers are feeling more confident and happy to wait it out to achieve their target asking price. First time buyers are finally getting a look in due to improved mortgage availability which in turn is lifting the whole market,’ said Lawrence Hall of Zoopla.

‘Banks, sellers and buyers are all more bullish about the state of the economy, which bodes well for the months ahead. And the Bank of England’s forward guidance on interest rates has generated a greater sense of certainty about the future, which should lead to even more activity,’ he added.

Article Source: http://www.propertywire.com/news/europe/uk-asking-price-discounts-201308208136.html

Private Rents Edge Up Slightly

This August 16, 2013 article by Express & Star reveals that private rents has only lifted a slight pace.

Private rents have edged up by just £1 on average over the last couple of months as more people find it easier to get on the property ladder, according to a major lettings network.

Rents saw a small 0.2% increase in July to reach £738 a month typically, following a flat month in June, according to LSL Property Services, which owns chains Your Move and Reeds Rains.

The findings mean that rents across England and Wales have risen by just £1 typically since May, LSL said.

Its report comes in the same week that the Council of Mortgage Lenders (CML) said that first-time buyer numbers have soared to their highest levels since 2007.

A range of Government schemes have made it easier for people with smaller deposits who may have found themselves previously "trapped" in the rental sector to get access to a mortgage.

London is the only area where rents have lifted at a faster pace than inflation over the last 12 months, with an annual increase of 5.7%. Rents in London rose by 0.3% month-on-month to reach a new high for the study of £1,118 typically.

Wales and the South East saw the strongest month-on-month increases in rents, both recording rises of 0.8%. By contrast, rents in the South West fell by 1.1% and the North East saw rents drop by 0.8% on a monthly basis.

Across England and Wales, rents are around 1.8% higher than they were a year ago, which is well below consumer price index (CPI) rate of inflation of 2.8% in July.

The easing pressure on rents led to an improvement in tenants' finances. Some 8.1% of rent across England and Wales was late or unpaid in July, edging down from 8.3% in June.

LSL said that in the medium-term it still expects rents to at least keep up with wider inflation as demand in the sector is still strong, despite the softening in demand due to people getting on the housing ladder.

David Newnes, director of LSL Property Services, said: "This summer, the house purchase market has jerked into motion. And everyone is feeling the impact of that sudden change of gear.

"Buying a first home might only be possible for those with a big enough deposit and sufficient earnings, but the effects are reverberating through the rental market too."

He added: "It's unlikely July will be typical after the initial change of pace in the purchase market, but a few months of more affordable rents are win-win for everyone."

The findings are based on rents achieved on 19,000 properties.

Article Source: http://www.expressandstar.com/business/uk-money/2013/08/15/private-rents-edge-up-slightly/

How to Avoid Being Caught Out if the Property Bubble Bursts

Simon Read suggests ways on how to avoid being caught out if the property bubble bursts as revealed on this August 12, 2013 news by The Independent.

The Bank of England’s base rate has never been lower and the new Governor, Mark Carney, has signalled that rates may not rise for three years.

Meanwhile, competition among mortgage lenders is getting more fierce, leaving average five-year fixed rates at 3.83 per cent, the lowest they’ve been for some time.

It’s no wonder more people are thinking about getting on the property ladder or taking advantage of the attractive headline rates to move home. Especially as the latest survey of estate agents from RICS, published today, shows that home prices grew last month at their fastest rate since the market peak of November 2006. That raises fears that if you don’t take advantage soon, the affordability of your dream home may yet again climb beyond your reach.

And there are many ways that – even if you don’t have enough of a deposit – potential borrowers can climb on to the property-owning bandwagon. But before you leap it’s worth heeding the warnings from some economists that a housing bubble looms. If the bubble bursts, as some predict, that shiny new home could prove a financial drain, especially if you’ve stretched your finances to buy it.

But such uncertainties have been a feature of the mortgage market for much of the past six or seven years. With that in mind, it’s wise to look to buy a home that you may be happy with for some years, rather than a property that you hope to sell at a profit in a year or two. If there is a bubble and consequent price deflation, you’re more likely to end up in negative equity, owing more than you borrowed and stuck with a property you can’t sell.

Given that, there are several ways for the short-of-cash to buy a home, not least through the Government’s Help to Buy scheme. It offers loans of up to 20 per cent of the value of a new-build property in England and will start part-guaranteeing mortgages across the UK from next year.

Article Source: http://www.independent.co.uk/money/spend-save/simon-read-how-to-avoid-being-caught-out-if-the-property-bubble-bursts-8758229.html

Mortgage Approvals Soar 33%

This July 24, 2013 of YourMortgage shows the number of mortgages approved by lenders has leapt by a third in the last 12 months.

High street banks provided £8.9bn-worth of mortgages last month and expect to crank up lending even further in July, British Bankers' Association (BBA) figures have revealed.

Gross mortgage lending was above the six-month average in June and 2% higher than in May. High street banks represented roughly two-thirds of all UK mortgage lending.

Lenders also approved £9bn of mortgages last month, with approvals for house purchase and remortgaging 33% higher than last year. Anderson Harris director Jonathan Harris said the mortgage market continued its upward trajectory:

“Help to Buy has already made a flying start in its first four months, according to house builders, and is expected to give first-time buyers, as well as second steppers a boost from January when the guarantee element of the scheme is rolled out.

“We eagerly await further details of the pricing of the second stage of thescheme with the Chancellor meeting lenders and house builders today.”

However, a sustained recovery in the housing market remained some way off, he added. While gross mortgage lending has risen over the past six months, the trend for net lending has remained more subdued. This was down to higher capital repayments by borrowers, including those by homeowners moving between lenders, the BBA suggested.

Dragonfly Property Finance chief executive Jonathan Samuels said the jump in mortgage approvals year-on-year underlined just how far the market had moved on:

"With the Council of Mortgage Lenders, Bank of England, British Bankers' Association and other sources reporting the same steady growth in transactions, the improvement of the mortgage market feels concrete and sustainable.

"Importantly, the way we borrow has changed in recent years. Pre-2007, people would borrow as much as they could, but now they are borrowing what they need. "The mindset of borrowers has changed and that is no bad thing."

Author: Paula John

Article Source: http://www.yourmortgage.co.uk/your-mortgage/news/2284438/mortgage-approvals-soar-33

European retail property investment volumes reached €10.3 billion during the first half of 2013, a 40 percent increase from the €7.3 billion reported for the same period last year, according to the latest data from Jones Lang LaSalle. - See more at: http://www.worldpropertychannel.com/europe-commercial-news/european-retail-property-investments-jones-lang-lasalle-kkr-retail-real-estate-investment-7123.php#sthash.5GzgyGZh.dpuf