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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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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Property Investors Look for Life Beyond London

This article by Art Patnaude of The Wall Street Journal on October 30th, 2013 tells us that commercial real estate investors are scouring for London property market.

London's hot property market has commercial-real-estate investors scouring the rest of Britain.

Investors all but ignored cities like Manchester, Edinburgh and Birmingham while the U.K.'s economy faltered in the years after the financial crisis. They preferred the safety of London and its appeal for global buyers. But prices for office buildings and retail space have risen so much in the capital that returns on purchases are anemic.

A London property investor last month bought the site of Edinburgh's former Royal Infirmary. A complex of offices, hotels, apartments and shops is in the works. Murdo MacLeod for The Wall Street Journal.

 

Not so in the rest of the country, where even riskier development projects are proving to be a draw. Last month, London-based property investor Moorfield Group bought the site of Edinburgh's former Royal Infirmary for an undisclosed sum from Gladedale Capital, an Edinburgh-based developer. A complex of offices, hotels, apartments and shops is in the works. Development of the project, called Quartermile, stood still for much of the financial crisis.

In the past four months, real-estate investment firm Benson Elliot has spent £100 million on property in Manchester, Cambridge and the northern town of Preston.

The trend in the U.K. mirrors what has happened in the U.S. commercial-real-estate market in the wake of the financial crisis. Investors initially started buying trophy properties in the biggest markets with the most international appeal, like New York and Washington. As prices in those markets increased, demand has shifted to other cities such as Minneapolis and Denver.

Bold Move

London's property market has long benefited from the city's status as a global capital of finance and culture. Prices are stable, there is relatively strong demand from tenants, and foreign buyers like the stability of owning an asset denominated in Britain's currency.

London's appeal as a safe harbor rose during the financial crisis, and prices have continued to climb since then despite new construction. Increasingly, the city's lack of affordable options and low returns are turning investors' focus to areas they had largely ignored.

In 2012, deals outside London accounted for about 40% of all commercial property investment in the U.K. In the first half of this year, that figure edged up to nearly 50%, according to Savills, a real-estate services firm.

The largest deal in Leeds this year was the £29 million sale of the Toronto Square office complex. At the time of the sale in August, it was 20% vacant. With a net initial yield of 7%, "a year ago, this wouldn't have been an attractive proposition," said Clare Bailey, commercial property analyst at Savills.

High demand and low returns in London are "forcing people to see what can be done in the regions," said Edward Trevillion, head of real-estate research at fund manager Scottish Widows Investment Partnership, which manages £146 billion ($235 billion) of assets.

During the financial crisis, investors placed their bets in London, which is less subject to fluctuations in the U.K. economy. Many worried the economic downturn could hurt occupancy levels outside the capital.

Vacancy rates in U.K. offices jumped to 15.8% in 2009, after dropping as low as 7.1% in 2007, according to Savills. They are on the way back: Savills projects the rate to fall to 11.5% next year.

Investors looking for higher yields are focusing on places like Edinburgh, where a complex is being built on the site of the former Royal Infirmary. Scotsman/Zuma Press.

 

Confidence that a growing economy will help bolster businesses outside London has helped swing real-estate investment. While some regions are outperforming others, "all regions are sharing to some degree in the current U.K. economic recovery," said Richard Holt, regional economist at Capital Economics. The U.K. economy is expected to expand 1.5% this year, the firm projects; Scotland is expected to post 1.3% growth.

Peripheral cities is offer larger yields to commercial-property investors, who typically raise funds to buy a property and earn a yield on their investment through rents.

In London, rising prices have left yields low. In the city's financial district, the yield on office buildings peaked in January 2009 at 6.75%, not far under the 7% for property outside the capital, according to Savills. As of last month, the London yield had fallen to 4.75%; outside the capital it had only dropped to 5.75%.

Marc Gilbard, chief financial officer at Moorfield, which has £2 billion under management, said that while investors have pushed out to the regions before, this time around has been "particularly acute." That is partly due to foreign buyers seeking to buy real estate in central London as a place to park their money, he said.

There are others signs that money is flowing back outside London. Stephen Rees, head of real-estate advisory at Coutts, the private bank used by Queen Elizabeth, says competition for deals has stiffened.

On a recent commercial deal in Edinburgh, Mr. Rees—who was looking to buy the property on behalf of a wealthy client—said three of the four bidders were institutional investors. "I wasn't expecting that," Mr. Rees said. "That wouldn't have been the case the previous summer."

Investors say they still need to be cautious of occupancy levels, the reliability of tenants and the health of local economies. "You want that rent coming in every month," said Ainslie McLennan, fund manager for Henderson U.K. Property Unit Trust.

Basing an investment decision on U.K. economic-growth figures also needs to be more closely considered, said Marc Mogull, manager partner at Benson Elliot, which has €850 million of equity under management "You're not going to see fundamental growth in the regions like what you'll see in London," he said.

Article Source: http://online.wsj.com/news/articles/SB10001424052702303471004579163561521996776

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U.K. Mortgage Approvals Rise to Highest in 5 1/2 Years

This article by Scott Hamilton of Bloomberg on October 29th, 2013 tells us that on September mortgage approvals in UK rose to the highest level.

U.K. mortgage approvals rose to the highest in 5 1/2 years in September, adding to signs of a strengthening property market that’s being stoked by government incentives.

Lenders granted 66,735 mortgages, the most since February 2008, compared with a revised 63,396 the previous month, the Bank of England said in a report in London today.

Home-loan rates fell to a record low, and gross mortgage lending was 15.6 billion pounds ($25 billion), the highest since October 2008. 

Hometrack Ltd. said yesterday that house prices in England and Wales rose 3.1 percent in October from a year earlier, the biggest gain since 2007. Chancellor of the Exchequer George Osborne’s acceleration of his Help to Buy program this month is boosting real-estate activity and Hometrack said the gap between supply and demand is widening.

“The housing market is surging as low interest rates and rising confidence feed buyer interest,” said Rob Wood, an economist at Berenberg Bank in London. “It is early days, as real house prices and transactions are still below their pre-crisis levels. But the key issue is not where prices are today, rather it is where they will be in a couple of years. Prices and activity are rising fast.”

The September mortgage approvals figure exceeded economists’ forecasts. They predicted an increase to 66,000, based on the median of 23 estimates in a Bloomberg News survey. Net mortgage lending rose 1.03 billion pounds last month and consumer credit increased 411 million pounds, the BOE said.

Mortgage Rates

The BOE also reported that mortgage interest rates fell to a record low in September. The effective interest rate on all outstanding home loans fell 2 basis points to 3.3 percent. On new loans, the rate dropped 7 basis points to 3.08 percent.

Former Financial Services Authority Chairman Adair Turner has added his voice the critics of Osborne’s housing program, saying in an interview published yesterday that Britain risks repeating the debt-fueled binge that led to the credit crisis.

Despite government pledges to rebalance the economy away from consumer spending and the housing market, “we now seem to be having a recovery which is heavily focused on that favorite old British activity, which is another house price boom,” Turner said. “That’s not a sustainable, balanced economy.”

While mortgage lending is rising, approvals remain below their average of about 104,000 in the decade through 2007. BOE policy makers have cited that figure as they downplayed the risks from the housing market. Jon Cunliffe, who will join the BOE as deputy governor for financial stability next month, said on Oct. 15 that housing market is not overheating.

Corporate Lending 

Separately, the BOE said business lending rose 720 million pounds in September from August. While that compares with an average decline of 1.5 billion pounds over the previous six months, lending was still down 3.2 percent from the same month a year earlier, according to the data.

For small and medium-sized companies, lending fell 383 million pounds on the month and was down 3.2 percent versus a year earlier.

The pound remained lower against the dollar after the data and was trading at $1.6091 as of 10:28 a.m. London time, down 0.3 percent on the day. The yield on the benchmark 10-year U.K. government bond fell 1 basis point to 2.59 percent.

The BOE also said foreign investors bought a net 2.48 billion pounds of gilts in September. That followed a net sale of 6 billion pounds in August. It said M4, a broad measure of money supply, rose 0.6 percent in September from August and 2.6 percent from a year earlier.

To contact the reporter on this story: Scott Hamilton in London at
shamilton8@bloomberg.net
 
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

Article Source: http://www.bloomberg.com/news/2013-10-29/u-k-mortgage-approvals-rise-to-highest-level-in-5-1-2-years.html 

House Prices Rising £200 a Day

This article by Sarah Westcott of the Express on October 28th, 2013 reveals how house prices have gone up by an average of 0.5% this month.

 
House prices have risen for the ninth month in a row [GETTY]
 

Homes across England and Wales are worth 3.1 per cent more than a year ago, says property analyst Hometrack.

In the past four weeks alone, the value of the average property has soared by £6,923, more than £200 a day.

A typical three-bedroom semi is now worth £252,418.

There is still such a shortage of supply – with buyers flooding the market thanks to the Government’s Help To Buy scheme – that sellers are almost always getting their asking price.

The proportion of the asking price achieved was 95.2 per cent in October, up from 94.7 per cent in September.

This is just half a percentage point off the record 95.7 per cent at the height of the property boom in 2007.

As the resurgence continues, Halifax has also revealed that a record seven out of 10 Britons think house prices will continue to go up over the next year.

The biggest increases are in London, up 0.8 per cent month-on-month with sellers typically achieving 97.2 per cent of their asking price.

 
The value of an average propery in the past four weeks has risen by £6,923 [GETTY]

Across the country, prices were up everywhere except the North-east.

The increases were 0.1 per cent in the East Midlands and the North-west, 0.2 per cent in Wales, Yorkshire and Humberside, 0.3 per cent in East Anglia and the West Midlands, 0.4 per cent in the South-west and 0.7 per cent in the South-east.

Help To Buy, which allows buyers to secure a mortgage with a five per cent deposit, is partly driving the boom.

The other factor is the shortage of properties for sale. This month new sales listings have dropped by 1.6 per cent, while buyers registering with estate agents were up by 2.0 per cent.

Richard Donnell, director of research at Hometrack, said there is a “chronic lack of supply”.

He added: “Growth in new sales being agreed is running at four to five per cent per month and this is continually eroding the stock of homes for sale. In contrast, levels of demand have grown. Improving confidence amongst buyers has been fuelled by low mortgage rates and positive news on a recovering housing market.”

The Halifax survey reveals that fewer than half (41 per cent) think it will be good to sell their property in the coming year, compared to 57 per cent who think it will be a good time to buy.

This indicates a continuing shortage of properties, forcing prices up.

 
The recent Help To Buy scheme is partially to blame for the increase in prices [GETTY]

Meanwhile, another report reveals parents are paying tens – and sometimes hundreds of thousands of pounds – over the odds to live near the country’s top state schools.

The average price of a home in the postal districts of England’s top 30 state secondary schools is £295,972, £31,500 more than those in neighbouring areas, Lloyds Bank found.

In London, parents desperate to get their children enrolled at Henrietta Barnett school in Barnet, north London, pay £400,000 more for homes up to £863,340 inside the catchment area, compared to £460,740 outside.

In Kingston upon Thames, south-west London, parents pay more than £600,000 – double the cost of average local homes – for children to be eligible for a place at Tiffin School for boys and Tiffin Girls’ School.

Nitesh Patel, of Lloyds, said demand had led prices to rocket “out of reach for many buyers on average earnings”.

Article Source: http://www.express.co.uk/news/property/439603/House-prices-rising-200-a-day

Details of Foreign Buyers of Property in London

This article by Property Wire on October 24th, 2013 reveals the large number of foreign buyers in London especially in prime property market according to new research from Knight Frank.

There has been a lot of talk about the huge number of overseas buyers in London, especially in the new build prime property market, but a new detailed analysis shows that only a small proportion do not live in the UK.
 
Of all £1 million plus prime central London new build sales in the 12 months to June 2013, just 28% were to buyers not resident in the UK, according to an analysis report from Knight Frank.

While most analysis to date has concentrated on the nationality of purchasers, this research focuses on a buyer’s residence. In a city as diverse and globally connected as London, where, for example, 38% of inner London residents were classified as foreign born in the 2011 census, this is perhaps more accurate when assessing foreign demand, the firm said.

The research reveals that over the 12 months to June 2013 49% of all £1 million plus sales in prime central London went to foreign buyers by nationality and the 28% who were not resident in the UK were mostly investors looking to earn an income by letting their properties to Londoners.

To understand the scale of international purchases across Greater London Knight Frank’s research team assessed a sample of 3,500 property titles for new build property purchased in the 24 months to June 2013. This involved developments in all 33 Greater London boroughs, with sales prices ranging from £200,000 to £5 million.

Residence of ownership was based on the proprietor record in each title from the Land Registry. Where there were companies or trusts the researchers took a view that with the exception of registered social landlords, or other obviously UK based entities, these records represented international purchasers.

The research found that 51% of new build purchases in the relatively small prime central London market were to UK residents over the past two years. Across the remainder of inner London the portion rises to 80%. In outer London, that is the remaining 19 boroughs, more than 93% of sales were to UK residents.

Overall the most number of foreign buyers come from Europe, the Middle East and Russia, the research also shows.

‘Our estimate is that over the past two years 85% to 90% of all new build purchases in Greater London have been to UK residents,’ said Liam Bailey, global head of residential research.

‘When we considered the two year period covered by our sample of new build sales records there was no indication of a shift towards higher non resident purchases over that period. While some developers have noted rising interest from overseas buyers in areas outside central London, these appear to be localised examples,’ explained Bailey.

‘Our research points to the fact that the majority of demand for new build property in London from overseas remains focussed on the relatively small and concentrated market made up of the central London postcodes,’ he added.

Article Source: http://www.propertywire.com/news/europe/london-international-buyer-research-201310248384.html

London Property Market Goes from Strength to Strength

This article by David Shuker of Prudential on October 23th, 2013 shows figures that property market in London is riding in the crest of a wave at the moment.

The London property market is currently riding the crest of a wave, with prices having risen dramatically in some boroughs over the last few weeks.

In Kensington and Chelsea and Westminster, for instance, asking prices have climbed by 12% in just one month.

What's more, prices in these boroughs have jumped by as much as 30% over the past year.

Miles Shipside of Rightmove remarked: "Some agents currently report 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."

Earlier this month, the EY Item Club, one of the country's leading economic forecasters, said that there is minimal risk of another bubble developing in the UK housing market.

The body speculated that government schemes would lead to a 3.5% boost in houses prices this year and 6.6% in 2014.

Article Source: http://www.pru.co.uk/guides_tools/articles/801652378-London-property-/

Property Gives UK Tax Take A Huge Boost

This article by The Economic Voice on October 22nd, 20113 tells us that Land tax receipts up 30% over the last quarter.

Residential property transactions are fuelling a higher increase in tax revenues for the government, said London Chartered Accountants Blick Rothenberg LLP.

Monthly figures released today by HMRC show that the government’s tax take is up for yet another month and that residential property transactions are showing the largest rate of increase.

Frank Nash, a senior partner with the firm, said: “Stamp Duty is consistently pulling in over £800m a month for the last quarter. This is a watershed figure because it has never gone above this since 2008. This is as a direct result of residential property transactions.”

He added: “There have been over 200,000 residential property transactions alone in the last two months and a million in the last 12 months. There have been half a million transactions since the Governments Help to Buy Scheme (HTB) was put in place in (April). The last quarter’s home transactions are the largest for the last 5 years.”

Frank Nash said that the increase in tax take was being fuelled by an increased demand for property which combined with low interest rates, and on the supply side government incentives through the HTB scheme and de-regulation was boosting the residential property arena.

Frank Nash said: “The Government is lending new buyers a 20 percent deposit. This could fuel growth, inflation and house prices. It needs to be tempered and perhaps be a long-term rather than a short-term scheme. New buyers should have the same opportunities over a longer time scale.”

Nash said that there was was further good news because this probably means that consumer spending will increase (on ancillary housing items), and therefore increase the VAT take.

He added: “This highlights the importance of the property market for the UK economy in terms of its overall health.”


Article Source: http://www.economicvoice.com/property-gives-uk-tax-take-a-huge-boost/

MPC Member Plays Down Fear of Increase in Interest Rates

According to Ben Broadbent interest can rise continuously before homeowners may have difficulty paying their mortgages as revealed on this article by Delphine Strauss of FT Economy on October 21st, 2013.

 

Interest rates could rise significantly before UK homeowners found it difficult to meet mortgage repayments, Ben Broadbent, a member of the Bank of England’s Monetary Policy Committee, said on Sunday.

An upswing in the UK housing market has sparked fears that the government’s Help to Buy scheme – a combination of equity loans and guarantees for higher-risk mortgages – will help to inflate prices and burden people with debt they might later struggle to repay. 

However, the BoE’s Financial Policy Committee said last month that the housing market’s recovery did not pose a risk to financial stability, with activity still below its historical average and debt servicing costs low. 

“Although interest rates will at some point start to rise, you’ve got to remember quite how low a level we are starting from,” said Mr Broadbent in an interview on Sky News.
Although he said the BoE would not raise rates until the recovery was “on a secure footing”, he added: “I think there is a fair amount they could go up before borrowers got into great difficulties.”

Other MPC members take a similar view. Paul Tucker, the BoE’s outgoing deputy governor, told the Financial Times last week that the BoE did not need to address “every boom or boomlet”. His successor, Sir Jon Cunliffe, told a parliamentary committee: “From where I am now, it doesn’t look like we are in a bubble.” 

However, a survey published on Monday by Rightmove, the property website, underlines the divergence between a resurgent London property market and the more muted recovery seen in other parts of the country.

Asking prices in October were on average 13.8 per cent higher in Greater London than a year earlier, after fluctuating over the summer, Rightmove said, against an average national increase of 3.8 per cent.

The survey mirrors data published last week by the Office for National Statistics showing that house prices in London rose 8.7 per cent in the year to August, compared with a national rise of 3.8 per cent.

Article Source: http://www.ft.com/intl/cms/s/0/0d0c7148-3996-11e3-a3a4-00144feab7de.html#axzz2iJz6eRHW

Cranes point to upturn in city's property market

According to this article by Manchester Evening News on October 16th, 2013 Manchester now leads the property market and is soaring ahead of its regional rivals

Research by Deloitte Real Estate shows that 19 major new developments are underway in the city centre – compared to 13 in Birmingham and eight in Leeds.

Eight new residential developments, three new hotel developments, two student housing schemes and one new office development have contributed to Manchester’s growth, according to the Deloitte Crane Survey.

The new residential developments are around Salford, Ancoats and the Northern Quarter and between them add up to 963 new homes, the highest number under development in the central Manchester area since 2009.

The two new student housing schemes will add 1,246 new bedrooms.
Hotel development is already gathering speed – and expected to be one of the fastest growth areas in 2014, say the authors of the Crane Survey.


They report that 633 new hotel bedrooms are under construction. Four further hotel developments could add another 830 beds, with two of the projects likely to start on site imminently.

The office market is also improving, says Deloitte. The company says that 324,500 sq ft of new office space is under construction, half of which is already let to occupiers. Deloitte warns that the supply of new office space will soon run short.

The total under construction is well below the 480,000 sq ft averaged over the last ten years and so far no new developments are planned to complete construction work in 2015 or 2016.

Meanwhile, demand for office space is rising, with total take-up of all grades of city centre office space up 49 per cent in the first half of 2013.

Last year, they recorded just five developments for Manchester across all sectors.
The Deloitte report comes as other economic data points to an upswing in the fortunes of the city’s economy.

Earlier this week, the latest Lloyds Bank Commercial Banking North West PMI index revealed that levels of new business across the north west expanded for the eighth consecutive month in September.

Article Source: http://www.manchestereveningnews.co.uk/business/business-news/research-deloitte-real-estate-shows-6192874

Property Forecasts Predict A Positive Future For UK

This article by Les Calvert of property-abroad.com on October 15th, 2013 reveals the prediction of a positive future for UK property according to property forecasts.

With the property market outlook indicating a positive trend, we are in for a season of good growth forecasts. BNP Paribas' forecast for instance has recently predicted fairly impressive rental growth in just about every sector by 2016. The same forecast predicts 2015 as the best year for the office and retail sector with the prediction of a somewhat less than 12 percent return.

Current real estate situation 

The earlier forecasts have proven correct, and the trends seem likely to continue. The pricing and rental demand are forecast to grow because of the lack of occupational supply. In addition, further investments in the region around London will continue because of the inherent strengthen of the region.

Of the total UK investments so far, 47 percent has taken place in Central London alone which accounts for more than £12bn. Of this investment in total, nearly two thirds was invested in the office sector, while investment in mixed use asset constituted about 20 percent. In addition, the transaction volumes have been bolstered by overseas demand. 

Nearly 50 percent of investments in central London could be attributed to the buyers from outside the region, while the far eastern buyers contributed nearly one fifth of the total investment.

Foreign investors have also invested nearly one third of the investments made outside of London. The total investment outside London is nearly £14bn. North Americans, Middle Easterners and the Europeans are popular buyers in the UK property market.

Predictions for 2013

There are several predictions for the current year. It is expected that there will be a slight improvement in the total investment volume this year. Last year, it was £33.5bn, which could go up to around £35.5bn this year.

According to Claire Higgins, BNP Paribas Real Estate head, this year London is expected to finish its performance at the top level. The total returns from central London retail is expected to be highest this year at 13 percent, while city offices will most likely perform at around 8.7 percent with West End offices returning around 10 percent. The 2013 forecast for all property is likely to be 6.6 percent, while industrial return is expected to be 7.3 percent.

In other words, there is overall optimism for 2013 in real estate investment which it is expected will continue throughout the coming year ahead. At this rate it is expected that the peak of 2008 could possibly be surpassed shortly with much of the momentum building up in 2013.

Future forecasts 

The future forecasts indicate a bright prospect with the next five years up to 2017 leading to the national recovery. The other markets too will be driven to catch up with London. Strong returns are expected by the south-east offices. Shopping centers and logistics will follow the south east office sector closely.

The growth momentum comes from the U. K’s economic position which currently looks brighter and there is little likelihood of the momentum sliding back in the short term. The current growth trend of the U.K appears better than some other countries, while the output is yet to catch up with the peak of pre-recession years. However, the UK economy is still behind France, and other nations like U.S and Germany.

It may be interesting to note that between 2008 and 2013, the UK real estate industry claimed to be the third most productive. The first two were transport equipment followed by services.

Written by Les Calvert writer of Overseas Property news

Article Source: http://www.property-abroad.com/england/news-story/property-forecasts-predict-a-positive-future-for-uk-19317795/

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

One city's house price surge

This article by Kevin Peachey of BBC News Business on October 6th, 2013 reveals data from NBS that house prices has doubled in the past 10 years.

Two cities in the UK - one is a centre of commerce, has runaway house prices, and welcomes a constant stream of overseas property buyers. The other is London.

House prices in and around Aberdeen have more than doubled in the past 10 years, according to data from the Nationwide Building Society.

That increase is only matched by the trendy north London borough of Islington, and by Westminster in the heart of the capital of the UK.

Recent figures show that Scotland's third city is recording a fresh surge in property prices. One estate agent describes the area as a property force field.

"Everywhere outside is doom and gloom, but it is boom time here," says Brian Sutton, of James and George Collie solicitors and estate agents.

Silver city
 
Take a closer look at Aberdeen, and its picturesque, shimmering granite homes, and you can see the complexity of the UK property market.

The city has demand from first-time buyers willing to pay above valuation levels, interest from workers moving to the area, investors keen to get in on the act, and a lack of homes for sale.

All this pushes up prices. Yet, in Scotland as a whole, prices are only creeping up after years of stagnation.

It shows that averages can be misleading and that local areas can have very different trends to neighbouring regions, for reasons ranging from the quality of local schools to employment levels.

It also questions a widely held belief that the London property market is unique - that soaring prices in the south-east of England are unequalled in the rest of the country.

Oil money
 
At the mouth of Aberdeen Harbour, next to the fishermen's village of Footdee, is a landmark called the Roundhouse.

The Shoremaster's accounts for 1797-98 show that more than £225 was spent on the new house and telescope on the site.

Nowadays, first-time buyers in the city can expect to pay up to £140,000 for a one-bedroom flat, or up to £500,000 for a bigger property.

Competition for homes means many buyers are paying 5% to 10% over valuation at the moment, says Bill Barclay, partner at Raeburns solicitors and estate agents.
Often sales go to sealed bids, with first-timers stretching their savings to compete with buy-to-let investors.

Spend a few minutes standing by the harbour and the reason for this active property market is clear - North Sea oil.

"It drives the local economy," says Mr Barclay. "Big companies are making long-term financial plans for the area, so we are not going to see much changing."

Overheating market?

The area was not immune to the financial crisis. Banks were not lending at the levels they had been before 2008, but Mr Barclay says Glasgow and Edinburgh suffered much more.

Now, he says - using a phrase apt for an oil-producing region - the banks are "starting to open the taps" again to fund mortgages.

Figures published by the University of Aberdeen show a 25% increase in the volume of sales in the second quarter of the year compared with the same three months in 2011. Prices were up by 5.5% in the city and its suburbs over the same period.

Sales volumes of flats were up by 53% in that time, as buy-to-let investors find the finance and predict demand from tenants
.
All this is gloomy news for potential first-time buyers. One 32-year-old tells the BBC he has been renting on the south coast of England and then Aberdeen over the past 15 years and is unable to save anything close to what is needed as a deposit.

You hardly see a sale sign erected within the city's sought-after areas, with supply low and competition picking up. But the market is far from overheating, as it was in 2007, according to estate agent Brian Sutton.

"We had people in their early 20s buying property, with 10 to 20 bidding for one property. Competition has come back, but it is three to four people bidding," he says.

"First-time buyers are in their early 30s, not their 20s, often with their parents helping."

Bubble fears?

He predicts the housing market will continue to rise at a "sustainable rate", especially as the oil companies build headquarters in the area and continue to relocate staff to the region.  

Prices may grow by single figures year-on-year, he says, but nobody wants to return to the days of 20% a year increases.

Much the same point was made by Business Secretary Vince Cable when he raised concerns about a property bubble potentially being inflated by government schemes to kick-start the market.

"In London and the south east, in the north-east of Scotland, in other areas, there are serious housing inflationary pressures," he said.

Despite his warning, the second phase of the Help to Buy scheme has been brought forward by three months in England, and the Scottish government has announced the start of its own scheme.

The UK and Scottish governments both argue that Help to Buy, which includes allowing buyers to apply for a shared equity loan for part of the property, are vital to give people the chance to secure a mortgage from risk-averse lenders.

Buyers only qualify under the Scottish scheme if they are buying a newly built property.
Critics might argue that they should encourage the developers to follow the example of the fishermen's cottages at Footdee - where the front doors face inwards to protect occupants from incoming storms.

 Article Source: http://www.bbc.co.uk/news/business-24348196

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

UK House Rrices Recorded Their Fastest Rise

This recent news article by Reuters on September 10th, 2013 reveals the fastest rise of house prices ever recorded in almost seven years and sales volumes also jumped to a multi-year high.

(Reuters) - British house prices recorded their fastest rise in almost seven years last month and a measure of sales volumes also jumped to a multi-year high, a survey showed on Tuesday.

The Royal Institution of Chartered Surveyors' seasonally adjusted house price balance climbed to +40 from a slightly upwardly revised +37 in July, staying at its highest since November 2006.

The balance reflects the percentage of property professionals saying that prices rose minus those reporting falls.

Britain's housing market has shown signs of a revival this year, spurred by a healing economy and help from the government and the Bank of England to ease access to finance. But the scale of the recovery has raised concerns about a new property bubble.

The RICS survey found that a net balance of +45 of surveyors expect further price growth over the next three months. Over the coming year, house prices are forecast to rise by 2.2 percent.

"Momentum is increasingly broad-based across the country; this isn't just a London story," RICS said.

The average number of sold properties per surveyor rose to 17.9 over the last three months, the highest since January 2010.

The number of properties going on sale also increased markedly in August, with the relevant balance jumping to +26 from 16 in July.

"With positivity starting to return to areas right across the UK, it seems those who may have been waiting for the right time to sell are choosing now to do so," RICS said.

(Reporting by Olesya Dmitracova; editing by Ron Askew)

Article Source: http://uk.reuters.com/article/2013/09/09/uk-house-prices-rise-further-sales-jump-idUKBRE98817R20130909

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

New Loan Scheme Aims to Bring Empty Homes Back Into Use

This engaging article by The Independent on September 2nd, 2013 reveals a new loan scheme that intends to assist the country's housing shortage by giving affordable loans to owners of empty properties.

A new scheme hopes to help solve the country’s housing shortage by handing cheap loans to owners of Britain’s 710,000 empty properties.

The cash – up to £15,000 per property – will be offered to help with renovations through a new Government-backed £3m National Homes Empty Loan Fund, which has been set up following last year’s Great British Property Scandal campaign by architect George Clarke.

It will be administered by green lender the Ecology building society in conjunction with the Empty Homes charity and 39 local authorities.

David Ireland, chief executive of Empty Homes, said: “Many homes are empty because it is difficult for owners to raise the money needed to bring them back up to a habitable standard. The scheme will kick-start efforts to tackle this.”

The loans will be charged at a fixed 5 per cent and are available to those who own a property that has been empty for six months or more.

Ecology chief Paul Ellis said: “At a time when there is increasing demand for homes but an acute lack of supply, it makes sense to bring new life to existing but neglected properties.”

Article Source: http://www.independent.co.uk/property/house-and-home/property/new-loan-scheme-aims-to-bring-empty-homes-back-into-use-8794322.html