UK House Prices leap to Record High

This latest property investment news posted by Matt Clinch, Assistant Producer of CNBC talks about the high price increase of houses in the UK.

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London

The price of houses in the U.K. hit a record high in July, according to online real estate portal Rightmove, which doubled its forecast for 2013 prices and now expects them to rise by 4 percent, up from a previous estimate of 2 percent.

The average property asking price is now at £253,658 ($383,171), Rightmove said on Monday, up 0.3 percent since June and 4.8 percent higher than at the same time last year. In cash value prices have risen £11,561 in a year.

This marks a seventh consecutive monthly rise in the price of property coming to market, and the second successive national record, it said. Prices in the capital still show the biggest increase with London prices gaining 12 percent since July 2012.

"The market is currently benefiting from the 'aggregation of marginal gains' where incremental improvements across a range of key market drivers compound to slowly but surely build momentum," Miles Shipside, Rightmove's director and housing market analyst said in a press release.

"London will continue to outperform the rest of the country and we also expect the South East, the main beneficiary of the 'over-spill' from the capital, to maintain its strong momentum, both driven by an on-going shortage of supply of property for sale. Asking prices in the capital are currently 29 percent higher than they were five years ago compared with 7 percent in the South East and just 5 percent nationally".

The firm's forward-looking confidence survey - which collates 25,000 responses from home-movers - now shows that 62 percent expect property prices to be higher a year from now, double the 31 percent recorded a year ago.

The report adds to a slew of positive data for the U.K. housing market. The Council of Mortgage Lenders said on Thursday that there were 42 percent more first-time buyers in May than a year ago. The Royal Institution of Chartered Surveyors' also indicated a price spike last week. Seasonally adjusted house price balance jumped to 21 in June from 5 in May, it said, the best reading since January 2010 and the biggest improvement in a single month since 2009.

In a new report released on Monday, leading economic forecasting group Ernst and Young's ITEM Club predicted that Britain's economy will be supported by an improvement in consumer sentiment and the housing market, but the sudden surge in prices is sure to fuel the debate that government intervention is fueling a dangerous bubble-like rise in the market. 

The Bank of England's current quantitative easing (QE) program has run alongside a Funding for Lending Scheme, providing state-backed assistance for first-time buyers. Additionally, U.K. Chancellor of the Exchequer George Osborne announced in his latest budget a £5.4 billion "Help to Buy" mortgage scheme aimed at helping citizens with a limited deposit to purchase property.

Critics of the latter measure have included both The International Monetary Fund and former Bank of England Governor Mervyn King who called it "too close for comfort" to the U.S. mortgage guarantee schemes that some blame for triggering the financial crisis.

Peter Spencer, professor of economics and finance at the University of York and advisor at Ernst & Young said that the housing figures on a national basis were getting better, but did not believe in a widespread bubble.

"Outside London, where there is a bit of a bubble , housing is pretty moribund actually," he told CNBC Monday.

—By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81

Article Source: http://www.cnbc.com/id/100885610

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Expert view: How to Buy Property Abroad

This engaging article was featured on The Telegraph by Armando Roselli. He talked about buying a property abroad considering their taxable presence if investors decide to invest outside their demographic zone.

Tax rules frequently change, as they have in France, so buyers need to be careful not to get caught , says Armando Rosselli, head of tax and wealth structuring at Coutts.

Big Apple: buying in prime cities requires tax planning Photo: Alamy

For our clients – many of whom prefer European destinations, notably France and Spain – estate planning comes to the fore. Inheritance rules differ between countries. In France, for instance, Napoleonic succession laws mean that there is a compulsory obligation to leave a certain proportion of a property to children. Advice will often be required to structure the purchase of the property – this will normally include individual or joint ownership or more complex structures such as corporate or fiduciary vehicles. Furthermore, in many circumstances local estate taxes remain payable, even if property owners remain residents of the United Kingdom for tax purposes.

Most UK residents, even if relocating, will retain their UK domicile and will still suffer UK inheritance tax as a result. Relief against local inheritance taxes will usually be available via a double tax treaty agreement between the UK and the country where the property is located – but it goes to show why advice in both jurisdictions is vital.

When our clients buy a French property, we bring together a UK lawyer and a reciprocal lawyer in France to facilitate the transactions, discuss estate planning and to liaise with conveyancers, known as notaires.

There's another reason to have experts on hand – tax rules frequently change, as they have in France, so buyers need to be careful not to get caught out.

Buyers also need to be aware that property taxes may be due. Florida, for example, tends to have higher property taxes than many overseas destinations. We find that for many an overseas buyer it is a trade-off between an emotional purchase and wanting to live in a certain jurisdiction, balanced against the tax and costs they have to pay to live there.

 Whichever location you choose, whether it's Florida, France, Portugal or Spain, you will find different planning regulations, succession laws and costs. Like any other investment, get all your ducks in a row before you sign on the dotted line – or you could end up with property or land without clear ownership, or not paying the correct amount of tax.

First, overseas property buyers need to consider if the time they will be spending at their new overseas property could constitute taxable presence, and check whether there are double tax treaties in place that could relieve this, or whether other aspects might affect their individual tax status.

Second, there could be local property taxes or duties applying on purchase and on an ongoing basis, which should be taken into account while considering the investment. In some jurisdictions, residents might only be allowed to buy residential property.

Naturally, when it comes to buying property overseas, one of the key questions is financing. Should a property buyer borrow in the currency of the property's location – and what are the ramifications if you do?
If this route is chosen, there will be a currency exchange risk. This risk can be accentuated if someone borrows in the local currency, say euros, but all or most of their income is in a different currency, say sterling. If sterling falls markedly against the euro, a consequence would likely be that your loan repayments would increase, causing cash-flow problems. Foreign currency loans and assets might also have UK capital gains tax implications. We have strict lending criteria on overseas mortgages – it is vital that clients understand what they are getting into.

While our clients tend to opt for the traditional expat countries for long-term occupancy, we are seeing different trends for those looking at buying a second home.

Barbados is fast becoming the holiday home destination of choice, although some of our younger clients are turning to Ibiza. Others are looking at alternative options.

For example, we had a client looking to buy a villa but who ended up buying a yacht. He now has a "floating villa" and can holiday in Barbados, Italy, Spain and Portugal – enjoying a variety of quality restaurants, beaches and resorts. It's a decent solution – although yachts can be expensive to run and consideration still has to be given to tax and ownership.

Whether people opt for a farmhouse, a villa or even a yacht, it is important not to let your heart rule your head. Consider the implications and take advice – it will help you keep your house in order.

Armando Rosselli is executive director, head of tax and wealth structuring at Coutts

Author: Armando Rosselli
Article Source: http://www.telegraph.co.uk/finance/personalfinance/investing/10175549/Expert-view-How-to-buy-property-abroad.html

New shared-ownership homes at The Barrow in Brighton are aimed at young buyers

An article by Ruth Bloomfield of Homes & Property on July 10, 2013 shows why The Barrow in Brighton is the best place for young buyers, who want to live in a city life without worrying about London's Property prices.

Brighton's newest homes are aimed at young buyers who like living in the heart of the action, says Ruth Bloomfield

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Brighton Pier and beach are an incentive for home buyers, while the 

commute to London takes less than an hour by train

For those who love city life but not London property prices there is an answer — become a city-to-city commuter.

And if you move to coastal Brighton and Hove, you not only get cheaper homes with an exciting city vibe but seaside, too.

Homes are considerably more affordable — an average of just under £229,000 compared with almost £376,000 in the capital, according to recent Land Registry data.

Yet even this lower average can be out of reach for many young Londoners without huge savings. A 20 per cent deposit would mean that an average buyer in Brighton has to have £45,000 saved.

New homs at The Barrows

From £55,500: for a 30 per cent share of a one-bedroom flat at The Barrows. Visit hydenewhomes.co.uk

A new development from Hyde New Homes may be a cost-effective answer. It has 60 shared-ownership one-, two- and three-bedroom apartments available (hydenewhomes.co.uk) at its new scheme, The Barrows.

Prices start at £55,500 for a 30 per cent share of a one-bedroom flat, £72,000 for a 30 per cent share of a two-bedroom flat, and £117,250 for 45 per cent of a three-bedroom flat.

Brighton's Open Market gets £18 million facelift
Critics often complain about the soullessness of many new-build schemes, but the unique selling point of The Barrows is that the site also includes the city’s Open Market, which dates from about 1926 when traders first set up their barrows in the area — hence this new development’s name.

The market, which has been in decline for decades, has now been given an £18 million facelift with permanent stalls, studios for local craftspeople, a partly covered central piazza with cafés, and space for one-off events such as farmers’ markets and exhibitions. It is due to open this summer, while the flats above it will be move-in ready in late September.

“It is a brilliant location,” said Asha Agarwal, sales manager at Hyde New Homes. “People love the quirky, urban feel to it. It is in walking distance of the pier and the beach, and very close to the station. But people love the idea of being right by the market. It is going to be a really nice, vibrant place with fresh food stalls and cafés. There will be all this buzz — right on your doorstep.”

The Barrows is in Francis Street, about 10 minutes’ walk from Brighton station. Trains to London Victoria take from 51 minutes and you can be at London Bridge in 56 minutes. An annual season ticket costs £3,532.

Second scheme launched

Interest in The Barrows is strong and early next year Hyde will launch a second shared-ownership scheme in Brighton, at New England Square, directly opposite the station.

It will have 53 homes for shared ownership as well as 94 for private sale. The shared-ownership homes are due to go on sale early next year.

Prices have not yet been announced, but information will be updated on the Hyde New Homes website — it is one to watch out for.

Popular location
Enthusiasm for both schemes is likely to be strong because Brighton hardly needs selling as a location. Admittedly its pebbly beach isn’t fantastic (better to head to Climping or West Wittering on sunny weekends) but there is brilliant shopping, particularly the independent shops around The Lanes and in Kemp Town — plus a full complement of chains in and around Churchill Square — and loads of bars, clubs and restaurants.

The South Downs National Park is on the doorstep and the city has the huge advantage of walkability. It also has a theatre, an annual arts festival and a fun, bohemian atmosphere.

Author: Ruth Bloomfield

ArticleSource: http://www.homesandproperty.co.uk/property_news/affordable/brightonnewaffordablehomesforyoungbuyers.html

UK property recovery underway says RICS latest survey report

This recent property news was posted by the Property Wire last July 9, 2013. This article is about the ongoing recovery of the UK property market according to the RICS survey.

The UK residential property market is recovering with prices rising and demand increasing, according to the latest survey report from the Royal Institution of Chartered Surveyors (RICS). Some 21% more chartered surveyors reported prices rose rather than fell in June, making this the strongest month for house prices since January 2010. The outlook for future prices is also strong with a net balance of 23% more respondents reporting that prices will rise rather than fall over the coming three months. RICS says that the rise in prices has mainly been fuelled by increasing numbers of prospective buyers returning to the market. Last month, a net balance of 38% more chartered surveyors reported a rise in new buyer enquiries. In a clear sign that market confidence is gradually being restored, and that funding schemes are making a difference, demand from prospective buyers has now risen month on month since January and is currently showing its fastest rate of growth since August 2009. Reflecting this slightly more positive mood, surveyors also expect home sales to rise over the coming three months, with a net balance of 45% more respondents predicting sales will increase, up from 36% in May. This is the most positive reading in this series' history, which began in April 1999.  Despite the increasing appetite to purchase property and the added support to do so, the rental market continues to be important in providing housing. Overall demand for rented property actually rose slightly during June, to a net balance of 27%, up from 21% the previous month. ‘After what has seemed like a very long wait we are finally starting to see what looks like the beginning of a recovery in the housing market,’ said Peter Bolton King, RICS global residential director. ‘It is important to remember that activity levels still remain depressed by historic standards but the various initiatives designed to encourage the provision of finance into the market do appear to be paying dividends,’ he pointed out. Brian Murphy, head of lending at the Mortgage Advice Bureau (MAB), pointed out that the current lending climate is also helping the UK property market on it way to recovery. 'Credit conditions have improved and the outlook is bright for the second half of the year. It will encourage everyone with half an eye on a property purchase to see that surveyors are more optimistic about increased sales than they have been since April 1999,' he said.‘Despite the increased interest in buying a property, our numbers continue to show that demand from would be tenants remains firm and that rents are likely to continue to edge upwards over the next twelve months. As the cost of shelter moves higher, it is absolutely critical that the government continues to focus on its role in supporting the delivery of more new homes into the market,’ he added. Christopher Down, chief executive of Hearthstone Investments described the RICS figures as very encouraging and showing that the UK housing market recovery is going from strength to strength. 'The fact that nearly a quarter of chartered surveyors have predicted further price rises over the coming three months is evidence of confidence and optimism in the market,' he pointed out. He also said that the increase in prospective first time buyers indicates a positive impact from government initiatives such as First Buy. 'However it is essential that this surge in effective demand is met by an increased investment in housing from other sources of capital. Even if the First Buy scheme were fully utilised and delivered £3.5bn of new equity loans, it would still fall far short of having any real impact on new home construction, given an annual requirement of up to 240,000 homee,' he explained. 'The real volume of new investment in the UK’s housing will need to come from institutional investors. If both first time buyer stimulus from the government and action within the institutional investment space are taken, then we may actually see overall construction begin to meet effective demand, which in turn will stabilise house price growth toward long term fundamentals and avoid the much discussed bubble,' he added. By: Property Wire Article Source: http://www.propertywire.com/news/europe/uk-property-market-recovery-201307097985.html

Chartered Surveyors signal pick-up in housing market

This article by Hilary Osborne of the The Guardian on July 9, 2013 is about the increasing house prices in the suburbs around London.

38% more chartered surveyors reported increases in new buyer inquiries rather than falls in June, highest since August 2009

Further evidence of the accelerating housing market emerged on Monday when surveyors said they were more optimistic about the prospects for increasing sales than at any point in the last 14 years.
Demand from would-be homebuyers also picked up at its fastest rate in nearly four years in June, according to the survey of sentiment from the Royal Institution of Chartered Surveyors.

As a result of increased buyer numbers, Rics reports a net balance of 45% more respondents predicting sales would rise rather than fall, against 36% in May, the highest proportion since the index began in 1999. It comes after property website Rightmove said on Friday it would double its prediction for growth in asking prices this year to 4% and mortgage lender the Halifax said property prices were rising at their fastest rate for three years.

Government initiatives to boost lending and positive news about the economy have been credited with improving confidence among prospective buyers. Official figures last month showed unemployment falling compared with last year, and data last week suggested the services sector had grown at its fastest rate in two years during June. As a result, many property commentators have revised their forecasts for the year upwards, predicting price rises of up to 5%.

Rics said 38% more of its members had reported increases in new buyer inquiries rather than falls during the month, the largest proportion since August 2009.

Demand was being driven in part by easing credit conditions, it said, with the government's Funding for Lending scheme, launched in August 2012, translating into low-cost mortgages and more loans to those with small deposits. Although in recent months more homeowners had put properties up for sale, Rics said the number of agents reporting surplus stock on their books in June had fallen.

The combination is set to put further upward pressure on prices, which according to one index have increased by 4% in the first six months of this year, and Rics said the government must focus on increasing the supply of homes.

Bidding wars have broken out among buyers in some areas of the country. Nicholas Scott, manager of Haart estate agents in Wandsworth, south London, said properties in that area were typically selling for between 98% and 105% of asking price. "Supply and demand is a big factor in prices going up – at the moment there is a lack of properties on the market and lots of people wanting to buy because they fear they will get priced out if they wait," he said.

Rics said 21% more of its members reported prices were up in June than reported falls – the largest proportion since January 2010 – and a balance of 23% said they expected further increases over the next three months. While in January they were predicting that prices would stagnate over the next 12 months, they are now predicting a 1.5% increase.

Peter Bolton King, Rics global residential director, said: "We are finally starting to see what looks like the beginning of a recovery in the housing market.

"It is important to remember that activity levels still remain depressed by historic standards but the various initiatives designed to encourage the provision of finance into the housing market do appear to be paying dividends."

Rics members also reported a strong lettings market and said they expected rents to rise over the next 12 months. Bolton King said: "As the cost of shelter moves higher, it is absolutely critical that the government continues to focus on its role in supporting the delivery of more new homes into the market."

The first part of the Help to Buy scheme, which offers interest-free loans to those buying newbuild properties, has helped builders sell properties since its launch in April. Bovis is the latest to report a strong start to the year, aided by Help to Buy. It said reservations were up 40% year on year.

In a trading statement it said: "Consumers are increasingly able to access mortgage finance and the launch of the Help to Buy shared equity scheme, replacing FirstBuy, has had a positive effect on customers' confidence to buy a home and their ability to transact.

"These positive effects are expected to support greater activity in the new homes market, which in turn will provide an impetus to the number of new homes built."

Author: Hilary Osborne
Article Source: http://www.guardian.co.uk/business/2013/jul/09/royal-institution-of-chartered-surveyors-upbeat-housing-market

Property News: Diff’rent property funds for diff’rent folks

In a post from July 4, 2013 by Oliver Haill of FT Adviser, discussed about property funds for different investors:

Collective property funds are a good route for smaller investors, who may not have the management resource to invest in individual properties or developments, or sufficient funds to give an acceptable level of diversification in doing this.

Read full article here.

This is a brief introduction to the essence of the property investment alternatives in the market nowadays that is easy and straightforward.

Revealed: Britain's top 10 buy-to-let hotspots

An interesting article by Emma Simon of The Telegraph about revealing Britain's top 10-buy-to-let hotspots that investors should look for best yields.

Check out property prices in Southampton, Blackpool, Slough, Coventry, Portsmouth and many more. Click here to know more about it.