Scottish House Price 'Reality Gap' Narrows

This article by BBC News on November 11th, 2013 reveals the new report that buyers are willing to pay more than they actually achieve.

 

S1homes said buyers were now prepared to pay more than they had been "for quite some time" 

 

The gap between what Scots hope to sell their properties for and the price they actually achieve has narrowed, according to a new report.

Property website S1homes found the "reality gap" narrowed in Scotland from 9% to 2% in the third quarter.

The change was driven by an increase in the amount buyers were prepared to pay, and not a drop in prices.

The S1homes report compared average asking prices with officially-registered settlement prices.

It found that the average selling price in Scotland increased by more than £8,500 to £161,748 in the third quarter, while, on average, properties sold for about £4,000 less than their asking price. The difference in the previous quarter was £14,500.

However, there were significant variations between the top and bottom of the market, with all property types except detached homes achieving more than the asking price.

Flats continued to perform well across Scotland, selling on average more than 17%, or £19,000, above their advertised price.

Terraced and semi-detached houses also sold well above what sellers hoped to achieve.

But detached properties continued to sell significantly below their asking price despite an increase in the average selling price during the quarter.

The average asking price for properties fell in most areas, except for East Renfrewshire, Fife and West Lothian.

In Edinburgh, the average selling price overtook the advertised price, due to an increase of 4.5% in the amount homes were sold for.

S1homes commercial director Ewan Stark said: "This quarter's report shows that there have been significant changes taking place in the property market.

"Buyers are now prepared to pay more than they have been for quite some time and that, coupled with a slight decline in average asking prices, is what has led to the upsurge in the volume of properties being sold.

"That's positive if you're looking to sell a property but the sharply rising prices at the lower end of the market aren't good news for first-time buyers."

Article Source: http://www.bbc.co.uk/news/uk-scotland-scotland-business-24865606

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Abu Dhabi Islamic Bank Arranges Islamic Financing Deal for London Property

This article by WAM of gulfnews.com on October 30th, 2013 reveals the deal that marks ADIB's debut in London's real estate market.

Abu Dhabi: Abu Dhabi Islamic Bank (ADIB) has arranged a £20 million (Dh118.02 million) structured Islamic financing transaction to fund the development of Westbourne House, a prime 1980s commercial property in central London, combining office and retail space.

The deal marks ADIB’s debut in London’s real estate market at a time when the British government is promoting the city as a centre for Islamic finance. British Prime Minister David Cameron told a gathering of political and business leaders on Tuesday that he wanted London to “stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world.”

ADIB’s financing package for Westbourne House was specifically tailored to meet the investors’ aims of acquiring, refurbishing and reselling high-value luxury properties to overseas buyers.

Arif Usmani, global head of wholesale banking at ADIB, said: “ADIB welcomes the increasingly high profile role being played by the UK’s financial services sector to encourage the global acceptance and growth of Islamic finance products and services. Resilient demand from international buyers for prime residential real estate has underpinned the performance of London’s property market which has outpaced most other markets in recent years. ADIB appreciates the value of building strategic partnerships with investors in international markets, which enable us to extend our global reach and to identify similar opportunities in London and other key international locations for our clients.”

Article Source: http://gulfnews.com/business/general/abu-dhabi-islamic-bank-arranges-islamic-financing-deal-for-london-property-1.1249375

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Here's Who's Buying Those Insanely Expensive Homes In London

This article by Joe Weisenthal of Business Insider on October 28th, 2013 reveals the interested parties who are buying the insanely  expensive homes in London.

The insanely-hot London housing market has become the subject of global fascination.

But who's buying it all?

Deutsche Bank is out with a new report on the London housing market, and it includes this fascinating chart, which breaks down origin of purchaser by price range.

As you can see, at the low end, the dominant share of buyers is domestic UK buyers.

But at the high end, UK-based purchasers make up a tiny slice of the pie. A massive swath of the buyers is Eastern European or Russian. Chinese and Middle Eastern buyers are also quite significant. Chinese buyers actually make up a bigger purchase of the slightly cheaper ranges.

So basically, tons of Chinese buyers at the expensive levels, and then at the ultra-rich level it's a lot of Russian and Eastern European money.

Deutsche Bank, Knight Frank

And as for why they're buying so much.

Lots for investments, and some are buying for their children.

Deutsche Bank

Article Source: http://www.businessinsider.com/whos-buying-london-property-2013-10

Opportunities as the UK Property Market Comes Back to Life

This article by Richard Watt of Money Observer on October 16th, 2013 reveals that property market in the UK has now regain its life and eager for further developments.

Housing has a unique place in the UK economy. There is a special sense of fulfilment in home-ownership.

‘First-time’ buyers have a priority on the political agenda, while rising home values translate to near-instant voter gratification. A revival in the housing market is front-page news.

This national attitude to our homes creates a number of anomalies. One is the traditional approach to investing in the housing market through direct purchase, buying or upgrading a home or taking on buy-to-let. Home-ownership can be immensely rewarding, but a house is a particularly illiquid investment, while mortgages create a conduit from Bank of England base rates to disposable income that is short, brutal and sometimes nasty.

The flotation of Foxtons, the London-area estate agent, is a sign that the equity market is increasingly providing an alternative route to participation in the property market. A basket of shares might not keep you warm at night, not in a literal sense, but it is a lot more liquid, shouldn’t require a six-figure mortgage and its sensitivity to interest rates is a little less direct.

The Foxtons IPO was heavily over-subscribed, rising 16 per cent on the first day, valuing the business at more than £650 million. Foxtons has some 40 offices, mainly in central London. It is an exceptionally well-run company, with special strength in marketing. The average price of its house sales is £400,000, which puts it in the sweet spot in terms of transaction growth as the recovery develops. It is the right section of the market for the second phase of Help to Buy, which will provide mortgage indemnity for homes worth up to £600,000. In our view, Foxtons is in a position to increase its footprint potentially to 100 offices and possibly more.

Foxtons is not the first estate agent to come to the market. Countrywide floated in March and has outperformed the FTSE All Share (ex investment trusts) by 40 per cent since then (to 24 September). Savills, since its near-term trough in the midst of the eurozone crisis on 4 October 2011, has outperformed the FTSE All Share by 134 per cent.

Estate agents are an interesting and expanding area of the equity market, but the heart of the sector in equity terms is the housebuilders. The sector has seen tremendous outperformance in recent years, with key companies such as Persimmon and Barratt Developments, which over the past three years have outperformed the FTSE All Share by 126 per cent and 156 per cent respectively. In our view, despite inevitable set-backs, the sector should continue to offer robust, market-leading returns.

Current demographics suggest the demand for new housing in the UK should run at around 260,000 units per year, but the market is only supplying half that, around 130,000. It is highly unlikely that supply will reach, let alone overtake demand, on almost any scenario.

The block has been financing, with capital constrained banks requiring significant cash deposits. The government – and everybody who reads a newspaper or watches television or listens to the radio – is aware of this and given the economic benefits of house-building it has taken some bold measures.

The first phase of Help to Buy, under which the government lends new home-buyers 20 per cent of the price towards a 25 per cent deposit, is already having a significant impact, with 30 per cent of new-built homes being reserved through the scheme.

The second phase starts in 2014, providing mortgage guarantees, and should stimulate the market further. The schemes are intended as temporary kick-starts, but the first phase is proving so popular its £3.5 billion funding is likely to expire at some point in 2015 – a date whose proximity to the next election suggests to us it could be replaced, should need arise, by something either as good or better. In the meantime, the banking sector should by then be further on the road to recovery, opening the possibility that affordable commercial mortgages will increasingly become available.

A less publicised but important change is in planning law. Under the new National Planning Policy local authorities are required to maintain a five year plan. In the absence of such a plan, where any planning application is denied, it will be automatically granted on appeal.

This has unleashed fresh tracts of buildable land, a flow unlikely to be completely staunched as plans come to be adopted more widely. So much for the environment – what about the stock specifics? Housebuilders have done well – is there more to come? In my view there is and the numbers tend to support a positive argument. The key decision is whether the UK property market will continue to recover into the medium to longer term.

Let’s take Barratts as an example. We believe it is capable of achieving a return on equity of around 18 per cent on a two to three year view as it builds out land acquired in recent years at attractive profit margins. We expect the industry to be building around 170,000 units a year by the end of this period, significantly higher than current levels but still well below the demographic requirement. From this level, it fair to assume that Barratts’ unit sales can continue to grow at relatively modest minimum of 4-5 per cent a year – given natural demand, government support and ongoing economic recovery – that would leave Barratts with around 75 per cent of its earnings free to distribute as cash to shareholders, which at current share prices implies a dividend yield at around 10 per cent. That is a high yield for a well-run business in a growing market and we would expect most investors to accept something significantly lower, possibly down to around 5 per cent – and that, in turn, implies a much higher share price.

One of the most satisfying aspects of investing in UK mid-cap equities is the dynamism and variety of the opportunities. As the property market comes back to life, it is likely there will be mid-cap companies there to reap the benefits. And as they say in the property business – we are eager for further developments.

Article Source: http://www.moneyobserver.com/news/13-10-16/opportunities-uk-property-market-comes-back-to-life

Help to Buy Scheme: How it Works?

This engaging article by The Week on October 7th, 2013 reveals the purpose and objective of the government in launching the help to buy scheme.

The Help to Buy scheme - a government initiative designed to help struggling home-buyers get onto or move up the property ladder - has two phases. The first, a £3.5bn scheme aimed at buyers of newly-built properties worth up to £600,000, was introduced in April and has already been taken up by about 7,000 people. The second phase, which applies to new or second-hand properties up to the same value, starts accepting applications today. David Cameron believes the initiative is essential because "the mortgage market today isn't working". Critics argue that it may trigger a housing bubble, particularly in the over-heated London market. But what is the Help to Buy scheme and who will be eligible?

How does phase one of Help to Buy work? 

The first phase of Help to Buy applies only to new homes and first-time buyers. Borrowers need to raise a 5 per cent deposit on the property and can then borrow a further 20 per cent from the government, initially interest free, up to a maximum of £120,000. After five years, what remains of the loan will attract interest at 1.75 per cent per year. The rate will increasing each year by 1 per cent above inflation. The £3.5bn scheme, which will be administered by home builders will support about 74,000 home purchases.

What happens if you can't pay your mortgage?

If you take out an equity loan and find you can't pay your mortgage, you'll probably have to sell the property or the bank will repossess it and sell it for you. Citywire points out that the 20 per cent equity loan will still need to be paid back to the government.

And phase two?

Phase two of Help to Buy applies to home movers as well as first-time buyers and second-hand houses as well as new ones. In this phase, the government does not loan money to the homebuyer but provides a guarantee to the lender for up to 15 per cent of the loan. That will allow borrowers with only a 5 per cent deposits a much wider choice of mortgage deals. As in phase one, there is a limit of £600,000 on the value of the property.

Why do lenders need loan guarantees?

The government guarantee reduces the bank's losses if a borrower defaults on his or her payments. "That allows them to offer cheaper mortgages to would-be home-buyers with small deposits, who are currently locked out of the market," explains the Daily Telegraph.

Why has the second phase been brought forward?

The second phase was due to start in January. Asked why the government had brought the start date forward three months, David Cameron said: "I am impatient to help young people get on the housing ladder.

Does that mean I can buy a new home this week?

No. Lenders won't be able to get loan guarantees from the government until 1 January, 2014. That means you won't be able to use the second phase of Help to Buy for home purchases that complete before 2014.

Which banks will offer the 95 per cent mortgages?

The scheme will initially be available from the Nat West, RBS and Halifax, but the government says other banks and building societies are expected to sign up over time.

Are there an unlimited number of 95 per cent loans on offer?

No. The government is making £12bn available in loan guarantees, enough to fund mortgages worth a total of £130bn. The scheme will remain open for three years. Mortgage brokers fear "a stampede of new applications" for loans when the scheme opens, reports The Guardian.

What interest rates will borrowers have to pay?

Citywire says there "could be a catch" in the mortgage rates lenders offer borrowers in the scheme. In the mortgage market those with a large deposit are often able to negotiate a lower interest rate. "It could be that a 5 per cent deposit mortgage incurs a high interest rate particularly if banks are told to hold more capital to cover the risky loan," says Citywire. Banks will also have to pay a fee of 0.9 per cent of the loan value to take part in the scheme. They are likely to recoup that from customers in the form of higher interest rates.

Who is excluded from Help to Buy?

The new loans aren't means tested, but they won't be available to people wanting to buy second homes or buy-to-let properties. Prospective borrowers will be required to sign documents confirming they are first home buyers or, if they already own a home, that they are in the process of selling it.

What do supporters of the scheme say?

The incoming chief executive of the state-backed RBS, Ross McEwan, told The Guardian that his bank was backing the scheme because: "We are committed to helping as many people as possible across Britain to get on with their lives, to buy their first home, to move to a bigger house as their family grows."

What do critics say? 

Business Secretary Vince Cable says the scheme may trigger an unsustainable boom in house prices, particularly in the south-east of England. "I am worried of the danger of getting into another housing bubble," Cable told the BBC. · 

Article Source: http://www.theweek.co.uk/uk-news/55455/help-buy-scheme-how-it-works

Ants Spy on Their Neighbours to Climb the Property Ladder

This article by Hayley Dixon of The Telegraph on October 2nd, 2013 reveals the same behavior that humans and ants has when it comes to deciding whether they should upgrade their homes or not.

Ants spy on their neighbours, comparing their homes to those around them and waiting for an opportunity to climb the property ladder, a study has found.

The creatures are “nosy neighbours” and like humans must often decide whether they should upgrade or remain in their current home.

But unlike humans, who are susceptible to housing bubbles, the ants seem to invest in their property market in consistent and rational ways, scientists say.

Research by the University of Bristol found rock ants "continually monitor their neighbouring real estate" to scope out potential future homes.

Their efforts depend on the quality of nest they currently inhabit, with those in poor accommodation searching more than others in better homes.

Carolina Doran, PhD student from the University of Bristol's School of Biological Sciences, who worked on the study, said humans could learn from the ants' behaviour.

"This strategy of adjusting their information gathering according to their actual needs and the real value of higher rungs on the property ladder may help ants to evaluate their housing market in a measured and thorough way that puts many of us to shame," she said.

Ms Doran worked with Professor Nigel Franks on the papers, which is published in the Royal Society journal Biology Letters.

They examined 15 ant colonies from Dorset and found that their priorities were comparable to those of many people, including high ceilings and an open living space.
 

Article Source: http://www.telegraph.co.uk/news/newstopics/howaboutthat/10348820/Ants-spy-on-their-neighbours-to-climb-the-property-ladder.html

David Cameron: There is No Housing Bubble

This article and video by The Telegraph on September 29th, 2013 shows David Cameron's explanation why government is launching help-to-buy three months early during his speaking engagement on BBC (Andrew Marr Show).

To watch the video click here.

Prospective homeowners will be able to use the Government’s subsidised mortgage scheme from as early as next week after the Coalition decided to bring the launch date forward by three months.

On the even of the Conservative party conference in Manchester, David Cameron revealed that the state-backed lenders, Royal Bank of Scotland and Lloyds Banking Group, would be offering deals under the Help-to-Buy scheme from next week instead of January.

It will initially be available under the Nat West, RBS and Halifax brands. A Tory spokesman said that other banks are expected to take part over time.

The second phase of the controversial scheme will help people buy a home worth up to £600,000 with just a 5pc deposit. The Government will guarantee the next 15pc of the loan for a fee, reducing the banks’ risk of loss so they can offer cheaper mortgages to higher-risk customers.

The scheme will be available for three years on up to £130bn of mortgage lending.

Critics have warned that the guarantees will inflate a dangerous housing bubble at a time when the property market is already showing signs of recovery. Citing analysis by the Bank of England, the Prime Minister countered on BBC’s Andrew Marr show that the market was only recovering and there was no sign of a bubble.

Mr Cameron added that if he didn't introduce the scheme, then "it will only be people with rich parents who can help then with the deposit who can help them on the housing ladder. That's not fair, it's not right, it's not the sort of country I want to live in and that's why it's important we bring this forward."

Video courtesy BBC One's The Andrew Marr Show

Article Source: http://www.telegraph.co.uk/news/politics/david-cameron/10342400/David-Cameron-there-is-no-housing-bubble.html 

Landlords - Are You Ready for the Winter?

This article by Stride on September 4th, 2013 covers how landlords should be ready for winter and check if their properties are still in good state and repair in the col weather.

Autumn is upon us with the temperatures cooling down and evenings closing in, it's the ideal time for landlords to check their properties are ready for the winter months.

Properties need to be in a good state of repair and able to cope with the rigours of the cold weather, while tenants may start to look elsewhere for somewhere to live if they find the house an unpleasantly cold one to live in, or too expensive to heat if bills are not included in the rent.

There are several steps that a landlord can take to ensure the home is ready for the colder weeks and months ahead, both on the inside and out.

Guttering is one area that needs looking at, not least as wind, rain and falling autumn leaves can turn a gutter or downpipe into a disaster area. Overflowing can cause water to seep into brickwork and stone, damaging this and causing damp. So these channels should be checked to ensure they are in good order and not blocked. In addition to this, check if any of the mortar is cracked, as this will only widen in the cold and wet.

Other outdoor problems can include blockages with rubbish, which can cause flooding, along with potential plant damage. This can include small things like moss growing in cracks. This needs removing and the cracks filling in, as the process of freeze-thaw can widen these through the natural effects of expansion and contraction.

Larger vegetation problems can include trees, where it is important to check that there are no branches that might fall in inclement weather. Not only do these pose a threat to life, limb and property, but they may also be a visual irritant to neighbours. Root problems should also be dealt with, although only in an emergency should the tree be felled.

Alongside the risk of damp, cold is a key issue that will drive tenants away and put prospective new ones off. It is important to ensure the roof tiles are all in place and loft insulation is a good way of keeping heat in. On snowy days it is easy to tell which homes have this. While some have white roofs, others are clear of the stuff and may have birds perching on them to keep their feet warm.

Insulation is also something that should be fitted in cavity walls, unless the house lacks these. Insulating a home is not expensive and will help slash energy bills.

Draughts are another issue too. It is no use having insulation to stop heat escaping through the walls or roof if it has an easy way out through a gap at the bottom of the door, or a loose window fitting.

Having a home that is warm and well-insulated means less chance of burst water pipes, cold homes and those living within suffering from poor health. By keeping a home snug and warm, it will instead offer tenants a haven they will enjoy retreating to in winter and prevent expensive repair bills that could have been avoided with better preparation.

Article Source: http://www.stride.co.uk/insurance-news-and-articles/commercial-insurance-articles/property-insurance/landlords-are-you-ready-for-the-winter-/176/

Housing Market Boosts Confidence

This article of the Express on September 23th, 2013 reveals that the economy is now on its strongest levels because of the rise of market housing and jobs.

Consumer confidence in the economy has improved to its strongest levels in at least two-and-a-half years as optimism about the housing market and jobs rises, a report has found.

Sentiment towards the housing market is at its strongest since Lloyds Bank's Spending Power report began in November 2010, while worries about employment were also found to have eased.

Almost one fifth (18%) of people felt positive about the economy in August, showing a sharp increase from just over one in 10 (11%) in January. The proportion of people feeling negative about the economy fell to 31%, showing the lowest levels since research began.

These findings helped Lloyds' overall consumer sentiment index to rise to an all-time high of 115 points in August, marking a 10 point increase since the start of the year.

Patrick Foley, chief economist at Lloyds Bank, said the findings were "very encouraging". He continued: "Increasing consumer sentiment may in time embolden consumers to spend, so helping to underpin the wider economic recovery. In turn, such spending would further help improve the outlook for growth and jobs."

A new high of 39% of consumers were feeling positive about the housing market, which has recently seen a surge in activity following Government schemes such as Funding for Lending which have improved mortgage availability and led to some lenders offering their lowest ever rates.

House prices have also been back on an upward march in recent months, helping some home owners who have seen falls in the value of their property in recent years and who may have previously been stuck in negative equity.

People living in Northern Ireland, which has seen some particularly sharp drops in house prices before more recent signs that prices are stabilising, were the most likely to be downbeat about the housing market. Nearly three quarters (74%) of those surveyed in Northern Ireland said the housing market is "not good" or "not good at all", as did 72% of those in the North of England.

Meanwhile, negative feelings towards the employment market continued on a downward trend. Some 81% of consumers said the jobs market is "not good" or "not good at all", marking a decrease from 82% in July and 87% in May. Young people were the most likely to be upbeat about the employment market. More than one fifth (22%) described it as "somewhat good", compared with 16% of consumers generally.

People are also feeling less negative about how much money they will have in the coming months. The overall balance between those who feel they will have more money in the future minus those who predict they will have less was minus 3% in August, improving from minus 5% in July.

Article Source: http://www.express.co.uk/news/uk/431441/Housing-market-boosts-confidence

Tips to Increase the Value of Your Home

On this article by Express on September 20th, 2013 shows the different effective ways to increase the value of your property.

According to national estate agent Strutt & Parker the top five ways to increase the value of your home are as follows:

1. Room to Improve

Adding an extension is the most costly outlay but could increase the value of your home by up to 20 per cent.
2. Tap into Healthy Returns

The kitchen is the hub of the home. Creating a real asset by modernizing it can help you achieve your target asking price.
3. No Reason to Blow Hot and Cold

The prospect of upgrading a bathroom may deter some buyers but a new bathroom can be a prized asset.

4. Splash out on this Upgrade

Installing an en suite or wet room will increase the property’s appeal.
5. Appealing Aspects
An attractive garden has been proven to add value to a property. 

Article Source: http://www.express.co.uk/news/property/430774/Five-tips-to-increase-the-value-of-your-home

A Quarter of All Homes Sold to First Time Buyers

According to this latest article by Alex Johnson of The Independent on September 10th, 2013 NAEA figures show around 26% home sales were sold to first-time buyers.

Around 26% of home sales in August were by first time buyers, according to figures from the National Association of Estate Agents (NAEA), the highest proportion since July 2010 and up from 22% in July.

NAEA members also reported an increase of 29% in the average number of house hunters per branch, up from 250 in July to 322 in August, as well as a slight increase in the average sales agreed per branch in August (nine) compared with July (eight). However, supply levels dropped slightly over the month – the number of available properties per branch decreased from 53 in July to 52 in August.

Around 40% of home buyers last month were aged between 41 and 55 years old, followed by 31 to 40 year olds at 36 per cent. Nearly eight out of ten properties were sold to couples.

Five thousand Lanarkshire homes set to receive green energy

Muirhall Energy has secured a £9million finance package from Santander to expand the Muirhall Windfarm in South Lanarkshire. It is adding two new turbines to the site, the tallest in the UK, to increase production to 60,800 MWh per year, enough to power over 14,300 homes each year. This will prevent 26,144 tonnes of carbon dioxide emissions each year.

Chris Walker, Managing Director of Muirhall Energy, said: “As demand for power increases and fossil fuel reserves deplete it is important we continue make the most of alternative sources of energy and wind power continues to be one of the most cost effective and green solutions.”

Lack of rental homes for families on the market

Figures from Countrywide show that two and three bedroom rental properties saw an increase in average monthly rents in August, up 0.6% and 0.9% respectively. One and four-plus bedroom properties saw a drop of 0.1% and 1.6% respectively. Nick Dunning, Group Commercial Director at Countrywide, said: “August is traditionally a busy period for the rental market with tenants, particularly families, wanting to move into their new rented accommodation before the start of the school term in September. However, demand is not being met by supply and currently there is a particular lack of family-sized properties available to rent, especially in the South of England. Improved conditions in the sales market are attracting reluctant landlords to sell these types of properties specifically in the catchment areas for good schools.”

Property prices in Surrey

According to Zoopla the property prices in Surrey are up 7.35% from five years ago and 4.12% from a year ago. James Wyatt, Partner of Barton Wyatt and Chairman of NAEA Surrey, said: “These figures point to the change in attitude of the money lenders in the last there months. Yet again financial institutions are driving the market and the recent decisions which enables UK buyers to borrow money more easily again has positively turned the market. This has aided sales in the small to medium sized end of the market as most of these properties are purchased with mortgages and in turn we have seen a 33% increase in domestic buyers over the past year in north Surrey.”

Article Source:  http://blogs.independent.co.uk/2013/09/10/a-quarter-of-all-homes-sold-to-first-time-buyers/

Prices on Climb Amid Strongest Market Conditions for Six Years in UK

The market is in its best shape since the financial crisis as demand continues to outpace the number of homes for sale, adding to values, according to this recent article by South China Morning Post on September 4th, 2013.

British house price growth accelerated last month amid the strongest market conditions for six years as demand continued to outpace the number of homes for sale, Hometrack said.

Average values in England and Wales rose 0.4 per cent after a 0.3 per cent gain in July, the London-based property researcher said. Prices were up 1.8 per cent from a year earlier, the most since July 2010.

In a separate report, the Engineering Employers' Federation raised its forecasts for UK economic growth and manufacturing output.

Hometrack's survey adds to evidence of a mini-boom in the housing market, with reports last week showing values rising and mortgage approvals at their highest since 2008.

Bank of England Governor Mark Carney said he was alert to risks from the property market and policymakers would act if signs of a bubble emerged.

Richard Donnell, director of research at Hometrack, said: "A lack of housing for sale is set to remain a feature of the market and this will keep an upward pressure on prices in the near term.

"We expect demand to continue to expand over the remainder of the year so long as the outlook for the economy and mortgage rates remains unchanged."

Underlying market conditions are at levels not seen since the financial crisis, with the average time taken to sell a property falling to 8.1 weeks and sellers achieving 94.6 per cent of the price sought last month, Hometrack reported.

New buyers registering with real estate agents to browse property rose 1.1 per cent, the same as in July. Demand fell in August in each of the last three years. Growth in new property listings slowed to 0.8 per cent from 2.4 per cent.

Seven of the 10 regions tracked by Hometrack showed price gains, led by a 0.9 per cent increase in London. Two regions showed no change while values dropped 0.1 per cent in the northeast.

Signs of economic growth have lifted consumer confidence. The economy expanded 0.7 per cent in the second quarter, and recent data suggests the recovery is gaining traction.

A survey by the manufacturers' organisation EEF and the accounting firm BDO showed manufacturing output rose to a three-year high in the third quarter, with a gauge of production rising to 32 from 12.

A measure of investment intentions rose to 24, the highest in six years.

The group raised its forecast for manufacturing growth next year to 2.1 per cent from 1.9 per cent, following a 0.5 per cent contraction this year.

It also raised its forecast for UK gross domestic product growth to 1.2 per cent this year and 2 per cent next year, versus earlier projections of 1.1 per cent and 1.8 per cent.

"Industry's prospects have brightened considerably," said Lee Hopley, chief economist at the EEF. "There is growing confidence that improving trading conditions will continue into the final months of this year and then accelerate through the gears in 2014."

Nationwide Building Society said last week that home prices rose 0.6 per cent last month and the Bank of England's commitment to maintain record-low interest rates until at least the end of 2016 may be helping to support demand.

Article Source: http://www.scmp.com/property/international/article/1302634/prices-climb-amid-strongest-market-conditions-six-years-uk

Buying a Holiday Home is a Huge Waste of Money

This engaging article was posted in Yahoo Finance UK and Ireland on August 30th, 2013 suggests reasons not to consider buying a holiday home because it is the biggest waste of money ever.

As millions of us come back from holiday, many will dream of owning a home in the sun - crazy property-struck fools that we are.

Right now, 5.4 million Britons are considering buying abroad, according to HSBC, even more than before the financial crisis. Have we learned nothing?

Spain and the Balearic Islands are the top dream destination, attracting 30% of buyers, followed by France at 16%. Italy, Portugal, Greece, Cyprus, the Caribbean, Florida and Turkey are also dream home hotspots.

If you've been seduced by dreams of a place in the sun, here's a measured word of warning. You've lost your mind, because buying a holiday home is the biggest waste of money ever.

Twice yearly, really

Before you protest, you happy holiday homeowners, here's the proof. The average owner visits their holiday or second home just twice a year, according to new research from household insurer Schofields.

They didn't plan it that way. Two-thirds expected to visit their bolthole far more when they originally bought it, but never get round to it.

Work, family commitments and lack of cash were the main reason people leave their holiday homes empty and forlorn, although an entrepreneurial 17% said they did so to maximise guest bookings.

Sun-baked and half-baked
 

A holiday home is an alluring dream. I regularly find myself browsing Spanish property websites to see how far prices have fallen, and whether they have fallen enough for my budget.

Prices are lower, skies are bluer. What's not to like?

But like most dreams, it eventually bangs its head against hard reality. The truth is, you've got too many other things to do.

Curse those jobs and families.

Bills, not thrills

You won't get to that holiday property as often as you like, but you will keep paying for it. 

First, there's the purchase price. Yes, Spanish holiday home prices have fallen more than 30% in the last five years, but you're paying in sterling, which is also down 20% against the euro.

Then there are local property taxes, legal fees, mortgage administration charges, and that's only the beginning. Your expenses don't stop when you exchange contracts, they're just getting started

You have to furnish your exotic new financial liability. Do it up. Pay for insurance. Carry out maintenance and repairs. Cover utility bills. Pay local taxes. You may have to hire a cleaner or stump up a monthly service charge.

And that's before you factor in the cost of actually getting to your property (although that won't be so expensive, as you're only going to visit twice a year).

X-rated expat tales

Plus there's always the chance you will end up buying the holiday home from hell, and lose everything. I recently spoke to British expats whose Andalusian retirement dreams were destroyed in an instant when the local police called to explain, not very politely, that they were the proud owners of an illegal home.

Nobody told them, not even their lawyer, that the developer hadn't got planning permission. 

Some lost hundreds of thousands of pounds. Several in the Valencia region saw their home torn down before their very eyes, without compensation. Others are stranded in the deserts of Murcia, with no running water or electricity.

Expat pain isn't restricted to Spain. Thousands of British homeowners in Cyprus risk losing both their holiday home and their UK property, in a vicious legal dispute over mis-sold mortgages.

I asked one couple, who were waiting to hear if their home in Almeria would be torn down, what advice they would give to the current generation of Spanish property buyers.

Their answer was succinct: "Forget it. Stay at home or go elsewhere."

Oh, I give up

Well, I've tried. I've done my best to make you see sense. It won't work. You still dream of a place in the sun, and in my dafter moments, so do I. So how do we make it match up to reality?

Before you go any further, ask yourself these questions:

1. Do you really want to go to the same place on holiday, year after year? Can you afford the flights? Do you have the time? Don't you want to see the rest of the world?
2. Even if you do want to go to the same place, wouldn't it be easier and cheaper to rent a holiday home instead, or stay in a hotel?
3. Can you afford all the costs of running a holiday home, including mortgage, insurance, maintenance, repairs, service charges and taxes, not to mention those twice-a-year flights?
4. Have you done your research? Do you know what similar properties are selling for? Is the local council planning to build a municipal waste incinerator in your backyard?
5. Is that bargain property really a bargain? Cheap isn't always cheerful, especially if you're stranded in a half-built complex a mile from the nearest communal water pump, or squeezed between the autoroute and municipal tip. Location, location, location are key words in any language.
6. Have you taken the right advice? You must appoint an experienced English-speaking lawyer, with no connections to your seller, estate agent or property developer, to avoid conflicts of interest.
7. Is your property legal? Your lawyer must confirm you have got all the necessary planning permission, licenses and consent. You must also pay for an independent valuation, even if buying in cash.
8. Is your mortgage in the right currency? If you earn your income in pounds, but your mortgage is in euros, you are at the mercy of currency swings, as many expats discovered when the pound collapsed after the financial crisis.
9. Are prices still in freefall? Spanish house prices could still plunge another 25%, according to newsletter Spanish Property Insight.
10. Do you plan to retire there? Visiting your property twice a year makes a lot more sense if you plan to stay for six months each time.

So what do you think? Do you still want a place in the sun?

Article Source: http://uk.finance.yahoo.com/news/buying-holiday-home-huge-waste-082409006.html

Mortgages Up By Third as Housing Sales Soar

Sarah O'Grady of Express discusses the banks' approved mortgages is third higher compared to last year as the housing market continues to step up according to this article on 24th August, 2013.

The number of mortgages approved by banks is a third higher than a year ago as the housing market revival continues to gather pace.

Some 37,200 approvals for house purchases worth a total of £5.7billion got the green light in July, the British Bankers’ Association reported.

This was only slightly down on a 17-month high of 37,337 the previous month.

The BBA said the “stronger pattern” seen in the mortgage market since the start of the year has continued into the summer.

Mortgage approvals to home buyers are 31 per cent higher than in the same period last year and re-mortgaging approvals are 40 per cent higher.

However, overall mortgage lending remains “subdued” because homeowners are making high repayments on their loans, the BBA said.

Various Government schemes to boost the housing market mean several mortgage lenders have been offering their lowest ever rates.

With poor returns generally on offer on savings, this has made it more attractive for people to use any spare cash to pay down their mortgage debt.

BBA statistics director David Dooks said: ­“Mortgage activity has strengthened during 2013 with the help of Government schemes. But high ­repayments and redemptions mean that we are not seeing increases in net mortgage borrowing for the high street banks.”

Jonathan Harris, director of mortgage broker Anderson Harris, said that despite the uplift in activity, house sales are still far lower than they were at the height of the boom years.

Article Source: http://www.express.co.uk/news/property/424289/Mortgages-up-by-third-as-housing-sales-soar

House Price Rise Doesn't Have Any Bearing on Real Life

In this article on August 17, 2013 by Kate Hughes of The Independent discussing the value of house price rise means nothing because a house only worth what someone will pay for it and besides it's a home and you can't sell what you still need. 

Your home might be worth more on the market, but you still need somewhere to live.

Feeling better about cash, the economy and everything yet? The latest rounds of financial and economic survey data suggest we should be.

Just by way of a quick recap, unemployment is down by 4,000 to 2.51 million in the quarter to June this year, and the number of "economically inactive" people aged 16-64 in the UK was down 10,000 from the first quarter of 2013, according to the Office for National Statistics. Total pay also rose in the last year by 2.1 per cent.

Inflation is also down, very slightly, across the board, with the Consumer Prices Index down just a touch from 2.9 per cent to 2.8 per cent in July, thanks in part to the drop in leisure, cultural and clothing costs, and the Retail Prices Index, which includes housing costs, was down from 3.3 per cent to 3.1 per cent.

Meanwhile, Gross Domestic Product – the broad measure of the state of the economy – is up 0.7 per cent in the last quarter to July according to this month's estimate, following 0.6 per cent growth the quarter before.

And unless you've been in a coma this week, you'll already know that house prices are up by 3.1 per cent in the year, compared with 2.9 per cent in May. The term "escape velocity" is being used with reckless abandon. Happy days.

Except that last piece of good news in particular has no bearing on real life. First, a house is only worth what someone will pay for it, and until the money is in your account, a valuation means nothing. Some unscrupulous agents are already overegging valuations in a bid to max out their commission if it does come off, safely hidden from view by this rising tide.

Second, the British obsession with owning property means we often forget that our house may be our greatest asset, but it's a home first and foremost. And you can't sell what you still need. So unless you're not too worried about having a roof over your head, when exactly are you going to crystallise that "gain"?

Third, if you do sell to move on what difference does it make anyway as your next step on the ladder is likely to have headed the same way, unless you're moving far, which is statistically unlikely, or you are downsizing significantly.

Of course, there's the much-repeated argument about house prices, consumer confidence and economic wellbeing. But consumer confidence based on thin air puts us right back where we were a few years ago, or have we all forgotten?

Unless you have some truly altruistic wish to support the wider economy rather than yourself, go out and spend your cash when you (eventually) get a pay rise, when there is real money in your pocket, not when someone with a sharp but cheap suit tells you your house is worth 5 per cent more than it was the last time you blinked.

Finally, and most importantly, as those outside the South-east of England have learned, house prices can fall as well as rise. But historically low interest rates and pressure on banks not to repossess mean the rest of us have forgotten what that really looks like.

The average house price is now £169,624. (And here I acknowledge that "average" covers a multitude of north-south divide sins.) Meanwhile, the average UK salary before tax is £23,244. Even if there are two or more adults working full time in your household, with one far outstripping the other, this isn't rocket science. And the problem is far, far more extreme in the South-east.

I feel for first-time buyers watching property prices sprint off into the distance. But for them there should be some comfort drawn from the fact that this too is temporary.

Article Source: http://www.independent.co.uk/money/spend-save/kate-hughes-house-price-rise-doesnt-have-any-bearing-on-real-life-8772589.html

Southern Eurozone Countries Continue to Attract Property-Buyers From the UK

An interesting article by The Economic Voice on August 13, 2013 showing how southern delights of the Eurozone drawing property buyers from UK.

Knock-down property prices in southern Eurozone countries continue to attract property-buyers from the UK, with interest in Spain, Italy, Portugal and Greece getting noticeably stronger during the second quarter of the year.

Demand for information about foreign property rose 36 per cent year-on-year for the three months to the end of June, according to the most recent Overseas Guides Company (OGC) Quarterly Index, which measures interest in destinations popular with second homeowners and expats.

OGC – a free resource for overseas property-buyers – attracted 9,096 direct requests for information in the form of downloads of its free Buying Guides for Q2 2013, compared with 6,707 in Q2 2012. While this represented a decrease of six per cent from the 9,685 enquiries it generated in the first quarter of 2013, the slight fall was largely down to the seasonal fall in enquiries about long-haul destinations, including Australia, USA, Canada and New Zealand.

“It seems the euro’s continued strength during the second quarter hasn’t put British buyers off tapping into some very attractive property prices in southern Eurozone countries,” said Richard Way, Editor at The Overseas Guides Company. “There are reports of buyers taking advantage of current favourable euro mortgages, expecting their loan to become even better value if the pound strengthens in coming months.”

Mr Way continued: “Enquiries for Spain were up, if slightly, on Q1, while Italy, Portugal and Greece saw hikes of 18 per cent, 9 per cent and 48 per cent respectively. It’s interesting that enquiries for Turkey were also up by 30 per cent on the previous quarter, despite the civil unrest in Istanbul – and that while France’s enquiries fell by 5 per cent, it still remains our most popular destination.”

The total number of enquiries received by OGC for the first half of 2013 was 18,781, a year-on-year increase of 43 per cent from 13,175 for the same period in 2012.
OGC has a quality database of approximately 64,800 people interested in buying overseas property and/or moving abroad.

Article Source: http://www.economicvoice.com/southern-delights-of-the-eurozone-drawing-uk-property-buyers-looking-for-a-bargain/50039353

Outdoor Space Can Add 20% to the Value of a Property

This article by Alex Johnson of The Independent tackles how a green outdoor space can be very appealing to homebuyers than to those properties without gardens.

Londoners value a garden and will pay at least a 20% premium for outdoor space, according to Marsh & Parsons.

Their report suggests that comparable properties in the same area can vary significantly in price to the extent that an attractive garden, roof terrace or being near to green, open spaces like a park can add around a 20% premium to the price of a London property.

In Bayswater, for example, there are strong price differences between those properties which boast attractive outdoor space and those which do not with a one-bedroom property with an outdoor patio garden £75,000 more expensive than a comparable one bedroom property, also on the lower ground floor of a building only two minutes’ walk away. This equates to a premium of around 16% for a property of relatively the same size, on the same floor, in the same building and mainly due to one having a private patio.

Peter Rollings, CEO of Marsh & Parsons, said:  "In the summer months, Londoners yearn for some outdoor space and the freedom to have an external room in which to entertain. But fulfilling the dream of a countryside idyll in London comes at a premium. In such an urban area, outdoor space is both scarce and expensive. Thankfully, Londoners can also retreat to one of the capital’s treasured parks and green spaces, where it is possible to find a piece of the great outdoors here in the city.

"Location and outdoor space can make the difference between a desirable property and an incredible property with a wow factor. Gardens, roof terraces and the proximity to green space can all add substantial value. Properties without gardens are not as appealing for many home buyers and it can be harder to sell them during the summer months."

A report from Lloyds TSB Insurance earlier this year suggested that homeowners spent an average of £894 on outdoor furniture and decorations for their gardens in the past 12 months, and that the average UK garden is now estimated to be worth nearly £2,000.
The research found that a third said that spending a lot of time outside is the main reason for upgrading their outdoor spaces.

Article Source:  http://www.independent.co.uk/property/outdoor-space-can-add-20-to-the-value-of-a-property-8700314.html