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

FREE WEBINAR: Market Yourself to The Right Client and Earn Yourself £3000+ a Month Sourcing Property" Wed, 06th Nov, 8 PM, register here http://tiny.cc/B-VickiWusche 

Gazumping Returns to Housing Market in Battle of the Bidders

This article by Lauren Thompson of theguardian on October 6th, 2013 tells us the war in the housing market because of help to buy which demand rises up to 17% and supply down by 14%.

Gazumping and other nasties that flourished in the last property boom are making a return, as competition for homes increases with the bringing forward of the second phase of Help to Buy.

The scheme, which allows buyers to purchase a property under £600,000 with a 5% deposit, was brought forward to last week – three months ahead of schedule. Traffic to Zoopla, the property search website, immediately jumped 17% compared to a week earlier.

Yet supply is not matching this surge in demand, with 14% fewer homes for sale than this time last year, according to the property analysts Home.co.uk, and 19% fewer in London.

There are fears that buyers could be caught in a bidding frenzy fuelled by bullish sellers and eager estate agents keen to talk up the market. Around 10% of the adult population – 5.1 million people – say they are likely to buy in the next 12 months, up from 8% (or 3.7 million) in January 2012, according to Santander Mortgages.

So how can homebuyers navigate the risks of this buoyant market?.

Gone in a flash

Buyers in stronger markets will have to work harder to find the right properties, especially in hotspots such as London. However, Lisa Green, director of the County Homesearch Company in the north-west, emphasises: "Buyers outside the south-east and other hotspots should be wary of estate agents talking up the market." She says the market is still quite weak in many areas, such as Oldham, Huddersfield, Hartlepool, and Powys in Wales.

"Buyers in these markets are still in a strong position to negotiate on the asking price," she says.

First-time buyer Helena Gibbon, 29, is struggling to find a property in London's overheated market. She has been searching for a one-bed flat in Walthamstow, east London, all year, with her sizeable budget of £200,000. Gibbon, who works in advertising, has saved for years for a 10% deposit, and currently lives with her parents while she scours the market.

"It's tough out there for buyers. I have friends who have viewed 30 or 40 properties but they go so quickly," she says.

If you are searching in a popular location, make sure you have all your paperwork ready if you decide to make an offer, says Camilla Dell at Black Brick buying agency.

Most serious buyers will be signed up to Zoopla or Rightmove alerts, but sometimes the best properties do not need to be advertised because they are snapped up so quickly.

Buyers at the top end of the market – with a budget of £500,000 or more – sometimes employ a buying agent with good contacts to search the market. But what about the rest of us? Tracy Kellett, a buying agent at BDI Home Finders, says that buyers should "make friends with estate agents" and emphasise their strong and serious position as a buyer. "Ask for the first heads-up when a property becomes available," she says.

Gazumping

It's every buyer's nightmare – your offer on a property is accepted and you spend hundreds, or even thousands, on a survey, mortgage and legal fees, only to have another buyer make a higher offer and snatch the place from under your nose.

While still relatively rare, agents say gazumping is making an unwelcome return in pockets across the country.Vicki Wusche at The Property Sourcers says: "We recently had an offer accepted for a client on a three-bedroom house in Norwich at the asking price of £122,000.

We immediately sent over our paperwork and instructed a solicitor and went to bed thinking it was a done deal. But in the morning a cash investor had made a higher offer that had been accepted."

Have a mortgage agreement in principle and your surveyor and solicitor ready before you make an offer, and request the estate agent in writing to take the property off the market as soon as your offer is accepted.

Kate Faulkner at advice site Propertychecklists.co.uk says: "Above all, remember that a seller or agent who gazumps you is not worth doing business with anyway. Have faith that a better property will come along soon."

Sealed bids

Bidding wars – where you compete with other buyers for the same property – can be stressful, but it is vital not to get carried away and pay over the odds.

Buyer Georgina Janion recently bought a flat in Putney, south-west London. The ground floor Victorian conversion had 83 viewings and 13 offers in just one week. The sale went to "sealed bids", where Janion and the other potential buyers had to email their final offer before midday on the same day.

She says: "I had been looking for a property for months and viewed about 30 flats, so I knew the local market well. Going to sealed bids is tough and it's impossible to second-guess what other buyers might be willing to pay. I just had to stay calm and offer a fair price that I could afford."

First-time buyers, most of whom will have saved years for a deposit, need to be especially wary of blowing their budget in a bidding war. Check sites such as nethouseprices.com and mouseprice.com for recent sale prices. It's important to retain a pot of savings to buy new furniture or cover unexpected maintenance costs.

Wusche adds: "Also remember interest rates will go up and you should use an online mortgage calculator to see how your monthly payments would be affected. Could you afford to pay 8% on your mortgage? It's vital not to overstretch yourself."

Article Source: http://www.theguardian.com/money/2013/oct/06/gazumping-housing-market-help-to-buy

3 Reasons Why Property Investors Should Consider the Stock Market

This July 19, 2013 article of the UK Value Investor simply states the invaluable reasons why every property investor should consider the stock market.

The UK is obsessed with property investing and the property market, but not the stock market.  The stock market is generally thought to be high risk, confusing and no place for the inexperienced.  But is that fair?

On the face of it, a preference for property seems obvious.  The reasons I hear most often are that:

• Property is simple – You can kick a house, it’s real, it’s tangible and everybody understands property
• It’s low risk – A house isn’t going anywhere, is insured if it burns down and people will always need houses
• It’s a high return investment – Prices may go down in the short-term, but in the long-run they always go up by more than inflation

On the other hand, the stock market is often seen as being the complete opposite:

• It’s mysterious – You can’t touch a share, you don’t know what companies are really doing and shares go up and down with no rhyme or reason
• It’s high risk – It’s volatile, has frequent booms and crashes, can drop by 50% in a year or two, many companies go bust and you can lose all your money
• Returns are uncertain – We’re still below the peak from the year 2000 and stock markets can go nowhere for decades

But if you dig a little deeper, it turns out that these differences are not as real as they seem.  Here are my 3 reasons why property investors should consider the stock market:

Reason 1 – Stock market investments are every bit as real as property investments

The stock market is not as mysterious as some people think.  If you ignore the stock market, what do you actually have?  You have investors, and you have businesses.  Stock market investors are actually business investors, which in many ways is not that different to being a property investor.

You might want to try this:  Drive down to your local Tesco.  Can you kick it?  Yes you can.  If you decide to kick it then you will have kicked one of my investments, and that’s my point.

“Stocks and shares” are irrelevant; what matters are the individual businesses that you can invest in, and the price that you’re willing to pay.

You might also say that nobody really understands big business; they’re too complex and that’s probably true.  But I think I have about as much understanding of Tesco as I do of how a house works.

For example, I do not know the names of each of Tesco’s 530,000 employees, but neither do I know the depth or density of the foundations of my house.  This lack of knowledge does not bother me because neither piece of information has anything to do with to the returns that these investments will produce.

However, I do know how much revenue Tesco generates, how much profit it makes, and what dividend it pays.  I also know how these have grown over the last decade or two.  And I know that, just like my house, Tesco will probably be around much longer than I will.

In both cases I have a real, tangible asset which is likely to generate a growing income in the future, and whose capital value is likely to go up in the long run faster than inflation.

I will admit that there is less uncertainty around a house than there is with most companies, but that’s okay.  It’s also much easier to diversify across many businesses via the stock market than it is to diversify across many properties.

I can easily spread my money across 30 companies, which massively reduces any uncertainty I may have about any one company.  And anybody who has been involved in property investing knows that it is not without its own level of uncertainty, with void periods, problem tenants and so on.

Reason 2 – Investing in the stock market is low risk compared to property investing

Now this really does seem counter intuitive.  House prices don’t go down by 40 or 50 percent in a couple of years like the stock market so often does.

But to compare apples with apples you have to remember that property is a geared investment; in other words you borrow to buy the house.  So let’s compare a property investment where you have put down a generous 25% deposit.

Imagine that you bought a house for £100,000 (it’s a small house) in late 2007.  Its price moves in line with the average house price in the UK.  By early 2009, in the depths of the credit crunch, the market value of that house had dropped by 18.7% (in line with the UK market as a whole, according to figures from Nationwide), which is a loss in value of £18,700.

Remember that your investment was £25,000, so an £18,700 drop is actually a 74.8% loss, relative to the amount you invested.

That’s far bigger than the 48% loss suffered by the FTSE 100 at the same time.  Let me say that again:

Between 2007 and 2009, a conservative property investment using a 25% deposit lost almost 75% of its value compared to a 48% loss in the stock market.

Property investments are typically far more risky than stock market investments.  You have to remember to look at the value of your equity in a property, rather than the total value of that property.

Higher risk isn’t necessarily a bad thing, as the borrowed money allows you to invest more for much higher overall returns, but it’s important to understand the facts.  Property is a high risk investment, with potentially massive rewards if you stick with it for the long-term, but potentially devastating losses if you can’t.

What most property investors will say, quite rightly, is that even if the price of a property falls, you don’t have to sell.

As long as you invested wisely and have a cash-flow positive property you can just sit there, collect your net cash income every month, and forget about falling property values.  In a few years the property market will likely recover, and your property’s value will march upwards once more.  That’s true, but once again the same thing is true of the stock market.

If property investors can ride out falling prices by ignoring the market and collecting an income, then so can stock market investors.  There is absolutely no difference.

• If property prices fall, so what?  Collect your rental income and buy more property while prices are low and rental yields are high.
• If the stock market falls, so what?  Collect your dividends and buy businesses while prices are low and dividend and earnings yields are high.

Reason 3 – In the long-run the stock market is just as likely to go up as property

I’m sure that after the last few years most people realise that property prices can go down as well as up, just like the stock market.  And as I noted above, most property investments are more risky and more volatile than the stock market, despite what everybody thinks.

But for sensible investors, it isn’t short-term volatility that matters, it’s the long-term, and most people think that property will do much better in the long-term than the stock market.

But history does not bear this out.

If you invest over a multi-decade period you’re likely to get inflation beating returns from both income and capital gains, whether you invest in the property market or the stock market.

That’s what happened in most parts of the world over the last century, and it’s reasonable to expect that it will be the story of the future too.

In fact, without gearing, the stock market generally performs better in the long-run than property, but with the advantage of borrowed money, property does better if you can live with the hassle and risks involved.

Over the long-run, the stock market and the property market have both proven themselves as sound investments for those who invest wisely in good assets at low prices.

The fact that the FTSE 100 is still below its year 2000 high is irrelevant.  That just shows how ridiculously overvalued some businesses were at the time.  If you spent the first year of this millennium buying high quality businesses at a discount to their intrinsic value, and avoiding insanely overpriced dot-com businesses, then your portfolio today could easily be double what it was back then.

The property market and the stock market are more similar than most people think

Fundamentally, property investing and stock market investing (or business investing as is should really be called) are not so very different.

While the details may differ, the same timeless principles remain:

• Buy good quality assets at low prices
• Hold them for a number of years and receive a good income
• Occasionally sell an asset, if you are offered a price that you cannot refuse

Author: John Kingham

Article Source: http://www.ukvalueinvestor.com/2013/07/3-reasons-why-property-investors-should-consider-the-stock-market.html/

Investor Confidence Returns to UK Property

Lloyds TBS Private Banking claims that investors have more confidence in UK bricks and mortar as an investment than any other asset class according to this 22th July, 2013 issue of every investor by Sarah Davidson.

Improving sentiment among investors surveyed in nations and regions like Wales, the West Midlands and North West has added to already “towering confidence” in London with 44% of investors thinking the outlook for property is positive in the next six months, against 12% who think it is negative.

Investor confidence in UK property measured by Lloyds’ index rose 32% in July – a significant increase from +25% in June, +18% in May and +8% in April.

The boost was driven by improving figures from the UK nations and regions, with the strongest surge reported in Wales, where the figure jumped by 27 percentage points from an average of +7% for April and May to +34% in June and July.

The West Midlands had the next biggest jump, increasing by 26 percentage points from +8% in April and May to +34% in June and July, while the North West of England increased by 24 percentage points from –2% in April and May to +22% in June and July.

“Residential property is a popular investment for many private investors, and the increasing levels of confidence shown by the index are likely to be a result of the improving economic outlook coupled with improving prices outside of London,” said Ashish Misra, head of investment policy at Lloyds TSB Private Banking.

“Housebuilders have also performed well in the stock market recently, mainly as a result of government programmes to boost house sales. With regard to commercial property, our client portfolios are slightly overweight in this asset class.”

The survey also revealed that UK and emerging market shares are the asset classes that investors are second and third most bullish about with net sentiment of +19% and +14% respectively.

However, these are both down on the previous month’s figures, when net sentiment was +23% for both UK and emerging market shares.

Net sentiment in US shares has also fallen significantly from +13% to +6%. The latest wave of research was carried out in late June and early July, following the announcement by US Federal Reserve chairman Ben Bernanke on 19 June that the Fed planned to “taper” its quantitative easing policies, after which global stock markets fell for several consecutive days.

Misra said the fall in confidence towards equities is “almost certainly down to the market rumblings following the Fed’s announcement of QE tapering”.

And he added: “This announcement was always sure to cause volatility in global stock markets as investors digest the news of a potential reduction in central bank liquidity, but we’ve already seen the majority of indices begin to recover.

“The change in stance by the Fed reflects their view of the strength of the US economy as well as a greater confidence in the broader global economy, and it is important that investors do not over react to such bumps in the road and keep the longer term in mind.”

Author: Sarah Davidson
Article Source:  http://www.everyinvestor.co.uk/news/2013/07/22/investor-confidence-returns-to-uk-property-5074/

Singapore a Favourite Destination for Indian Property Buyers

This July 22, 2013 article by Romesh Navaratnarajah of PropertyGuru stated Singapore as one of the most popular haven for Indian property investors.

Singapore has been named one of the top destinations for Indian property buyers in a list which includes Malaysia, Dubai, New York and some UK cities, according to property consultancy Jones Lang LaSalle.

A major reason is that the property markets in those countries provide lucrative investment opportunities. In some cases, Indians buying overseas property can also become a citizen of the host country – a factor with significant aspiration value for many, noted Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India.

Moreover, rising property prices in various Indian cities and higher interest rates on bank loans have forced Indians to seek properties abroad.

Comparatively, the interest rates of local banks in Singapore, London or New York are relatively lower than in India.

Most Indians looking to purchase overseas properties are business owners, high-net-worth individuals (HNWIs), mid-to-top level company management and professional property investors. Parents with children studying abroad also comprise a large proportion of buyers.

Author:  Romesh Navaratnarajah
Article Source:  http://www.propertyguru.com.sg/property-management-news/2013/7/36252/singapore-a-favourite-destination-for-indian-prope