U.K. House Prices Increase to Record on London Property Surge

This article by Fergal O’Brien of BloombergBusinessweek on September 12th, 2013 reveals the increase of house prices in the UK and property market in London continued to soar.

U.K. house prices rose to a record last month as government measures boosted demand and London’s property market continued to surge, Acadametrics said. 

Values increased 0.4 percent from July to an average 233,776 pounds ($370,000), the London-based real-estate researcher and LSL Property Services Plc said in a report today. In London, prices have risen 40 percent from their peak in April 2009, compared with 16 percent nationally.

The Bank of England-run Funding for Lending Scheme has helped to cut mortgage costs, while Chancellor of the Exchequer George Osborne’s Help to Buy program allows people to purchase a home with a deposit of as little as 5 percent of the value of the property. The BOE has downplayed speculation that a bubble may be brewing, saying activity is still at a low level relative to its pre-crisis peak.

“The property market has turned over a new leaf after years of restrained activity,” said Richard Sexton, director LSL unit e.surv. “The government has been pivotal in providing the aid that the market has been craving for many years.”

Eight of the 10 regions tracked by LSL recorded price gains in the latest three months compared with a year earlier. In the southwest and Wales, where values fell, the declines eased, according to the report.

Acadametrics estimates that completed housing transactions exceeded 70,000 in August for a second month. That would mark the first time that sales over two consecutive months have been above that level since November-December 2007, when transactions were 104,486 and 84,524.

BOE Governor Mark Carney said yesterday that while the market is improving, activity levels, mortgage applications and valuations are still low. He also said prices will continue to increase and the Financial Policy Committee of the central bank will be “vigilant.”

“It is still too early to predict what impact the economy will have on prices, especially as the FPC may apply downward pressure through controls over mortgage supply and pricing,” Sexton said. “Thus nothing can be set in stone yet.”

To contact the reporter on this story: Fergal O’Brien in London at fobrien@bloomberg.net

Article Source: http://www.businessweek.com/news/2013-09-12/u-dot-k-dot-house-prices-increase-to-record-on-london-property-surge

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

Warning of London Housing Bubble as Mortages Soar by 29%

This article was published on London Evening Standard on August 20, 2013, written by Jonathan Prynn stating the increased in mortgage may result in dangerous housing price bubble in London.

A dramatic surge in mortgage lending today sparked fresh fears about a dangerous house price bubble in London.

Banks and building societies advanced home loans worth £16.6 billion last month, up 29 per cent on last year and the biggest rise for seven years.

Property experts said low mortgage rates, the Government’s Help to Buy scheme and growing confidence about the economy contributed to the increase in lending.

But MPs warned that the lending boom could simply “pour petrol” on a market already showing signs of overheating and price more Londoners out of home ownership.

Mark Field, Conservative MP for the Cities of London and Westminster, said: “The London market has never really been in the doldrums. The danger here is that affordability of property prices becomes ever more a fantasy for more and more people.”

Government figures last week showed prices rising at eight per cent to a record average £425,000 in June compared with one per cent outside London and the South-East.

The Council of Mortgage Lenders figures today reveal lending is bouncing rapidly from the depressed levels of around £10 billion to £13 billion a month seen since the  banking crisis five years ago, Last month’s total was the highest since October 2008.

The Treasury’s Funding for Lending scheme, aimed at encouraging bank funding for home buyers and small businesses, and the Help to Buy programme, which has already been taken up by 10,000 new home owners, have contributed to the return of confidence.

Borrowers were further encouraged by Bank of England Governor Mark Carney suggesting that its 0.5 per cent lending rate is unlikely to be increased before 2016.

Fixed-rate mortgage deals are at historic lows, with some lenders offering fixed-rate deals below two per cent, levels described as “quite staggering” by Ed Mead of London estate agents Douglas & Gordon.

There have even been the first signs of the return of interest-only mortgages with lenders such as Clydesdale and Yorskshire offering nought per cent for the first three years on some deals.

But leading property experts called on George Osborne to scrap the second phase of its Help to Buy mortgage scheme in London, due to come into force in January.

Doug Shephard, director at property search website Home.co.uk, warned: “The London property market clearly needs no further stimulus; it’s running too hot already.” Stuart Law of buy-to-let investment firm Assetz said lending conditions are so favourable that he expected “double digit” rises in property prices next year.

Shadow housing minister Jack Dromey warned: “Unless the Government invests in building the homes our capital city badly needs, rapidly rising property prices will put the dream of home ownership beyond the grasp of millions of Londoners.”

The Council of Mortgage Lenders’s market and data analyst Caroline Purdey said: “An improvement in sentiment and activity continues to show in the UK housing and mortgage markets, with a more positive picture also starting to emerge in the economy.

“Our forward estimate of gross mortgage lending in July reinforces a growing evidence base of a strengthening in the housing and mortgage markets.” The CML’s members account for 95 per cent of residential home loans in the UK. There are 11.3 million mortgages in the UK, with loans outstanding worth more than £1.2 trillion. However, with many borrowers still effectively locked out of the market — such as those with impaired credit ratings or negative equity — there is still a long was to go until  lending recovers to the peaks of £30 billion in 2006 and 2007.

Nevertheless leading property figures welcomed the return to more “normal” conditions after so many barren years. Richard Sexton, director of chartered surveyors e.surv, said: “The mortgage market has been the pillar of the economic recovery. The freeze on high loan to value mortgages has thawed, and first-time buyer lending is at its highest since the banking crisis.”

Housing minister Mark Prisk said: “Today’s figures show our Funding for Lending Scheme, and record low interest rates, have led to the highest level of mortgage lending since 2008. But alongside this, we’re also pulling out all the stops to get Britain building, and the increased availability of mortgage finance is boosting confidence in the housing market, and encouraging house builders.

“We’ve also been working with the Mayor to invest billions of pounds to deliver the fastest rate of affordable housebuilding for two decades.”

‘High prices have forced us to look outside capital’

MEG Jorsh and boyfriend Jason Rowbottom have become so demoralised by London prices they have taken their property search away from the capital.

The couple bring home a combined income of about £65,000 and are saving £500 each a month for a deposit — despite the £900 monthly rent for their two-bed flat in Beckenham.
They would like to stay in London but have decided to buy in Manchester.

Journalist Ms Jorsh, 29, whose 30-year-old boyfriend is a manager at the Health and Care Professions Council, said London’s property prices were so high that the help-to-buy schemes would have no impact. “We would love to get on the ladder for the security that it gives you, but we know we are in for a long slog,” said Ms Jorsh.

“We are planning to move to the North so what we can buy will actually be decent.
“Even with a £25,000 deposit here, which seems like so much money, we’d probably only end up with a one-bed flat. It would be wonderful to be able to stay in London, but we just can’t have the kind of lifestyle that we would like.

“The whole thing is really depressing and deeply demoralising.”
The couple expect it will take two to three years to raise a deposit.

Article Source: http://www.standard.co.uk/news/london/warning-of-london-housing-bubble-as-mortages-soar-by-29-8776256.html

Property Prices Near Premier League Football Grounds in the UK up by 135% in 10 years

An article by Ray Clancy on August 12, 2013 of the PropertyCommunity.com shows the increase of property prices close to the premier league grounds as the football season started.

As the football season gets underway the UK annual research into the price of properties close to Premier League grounds shows that they have increased by 135% over the past decade. Prices have more than doubled in the areas close to five grounds, the Halifax premier league football grounds house prices review also shows.

The average house price in the postal districts of the 20 clubs kicking off the 2013/2014 season has increased by 135% or £183,583 in the past decade from £136,300 in 2003 to £319,800 in 2013. This is equivalent to a weekly rise of £353 and is double the 68% increase in house prices across England and Wales as a whole over the period. The average house price in the 20 Premier League stadium postal districts of £319,800 is a third or £79,500 higher than the average for the whole of England and Wales at £240,300.

Average prices have more than doubled since 2003 in the areas close to five Premier League grounds. The biggest increase has been close to the home of 2011/2012 champions, Manchester City, with the average home value in the postal district of the Etihad Stadium rising by 259% over the decade. The area around newly promoted Hull City’s KC Stadium has seen the second biggest increase with a rise in average property prices of 162%. Chelsea and Fulham recorded the third biggest rises, both 102%, followed by Arsenal at 101%.

Newcastle United finished bottom of the Premier League house price table with the average value of properties close to its home ground falling by 11% between 2003 and 2013, the only stadium to record a decline in prices over the past decade. The research also shows that prices have typically risen faster close to new football stadia. Three of the five Premier League postal districts that have recorded the biggest house price increases over the last 10 years are home to stadia that have been built since 2000. In contrast, four of the five Premier League stadium postal districts that have seen the smallest house price growth have stadia that were opened before the outbreak of the Second World War. Newcastle United’s ground, built in 1892, is one of the oldest in the Premier League.

‘The areas surrounding many of the country’s top football clubs have seen house prices rise considerably during the past 10 years, with some of the best performers being those clubs with new grounds,’ said Craig McKinlay, mortgage director at the Halifax. ‘The boost to property prices in these areas partly reflects the local regeneration that typically takes place alongside the building of modern sporting arenas, including improved transport links. There are, however, significant variations in home prices around the nation’s leading clubs with some supporters needing to pay far more to live near the ground of their favourite team than others,’ he explained.

Price variations are considerable around Premier League grounds the postal district covering both Chelsea and Fulham Football Clubs (SW6) is the most expensive to live in with an average house price of £851,812. This is more than 13 times the average price in the least expensive Premier League postal district of L4 which is home to both Liverpool and Everton Football Clubs with an average house price of £63,974. Overall Premier League homes cost nearly 10 times average annual earnings. The average Premier League house price of £319,847 in 2013 is, on average, 9.6 times higher than national average gross annual earnings.

All five of the least affordable Premier League postal districts are in London. Postal district SW6, which is home to both Chelsea and Fulham Football Clubs, is the least affordable Premier League postal district with an average property price of £851,812 which equates to 15.6 times gross average earnings in the area. Arsenal at 10.9 is in the second least affordable postal district, followed by Tottenham Hotspur at 7.2.

Article Source: http://www.propertyforum.com/property-in-the-uk/property-prices-near-premier-league-football-grounds-in-the-uk-up-by-135-in-10-years.html

The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June. - See more at: http://www.worldpropertychannel.com/europe-residential-news/uk-first-time-homebuyers-uk-housing-market-council-of-mortgage-lenders-home-loans-7206.php#sthash.9NBkj0Vu.dpuf

The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June. - See more at: http://www.worldpropertychannel.com/europe-residential-news/uk-first-time-homebuyers-uk-housing-market-council-of-mortgage-lenders-home-loans-7206.php#sthash.9NBkj0Vu.dpuf

The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June. - See more at: http://www.worldpropertychannel.com/europe-residential-news/uk-first-time-homebuyers-uk-housing-market-council-of-mortgage-lenders-home-loans-7206.php#sthash.9NBkj0Vu.dpuf

The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June. - See more at: http://www.worldpropertychannel.com/europe-residential-news/uk-first-time-homebuyers-uk-housing-market-council-of-mortgage-lenders-home-loans-7206.php#sthash.9NBkj0Vu.dpuf

The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June. - See more at: http://www.worldpropertychannel.com/europe-residential-news/uk-first-time-homebuyers-uk-housing-market-council-of-mortgage-lenders-home-loans-7206.php#sthash.9NBkj0Vu.dpuf

UK Gets its First Residential Institutional Property Deal for Rental Development

Finally, a ground breaking property deal has been agreed which sees institutional investment a large scale residential development first time in the UK as revealed by this article by the Property Wire on August 6, 2013.

London Mayor Boris Johnson said that the development at Newington Butts, Elephant and Castle, has set the stage for further institutional investment in the capital's residential property market, accelerating delivery and boosting the economy.

Under the deal the site, which is owned by the Greater London Authority, will see preferred developers, Mace and Essential Living, using institutional investment to deliver one of the largest professional rental developments seen in the capital for decades, containing 462 units, 188 of which will be affordable, and creating hundreds of new jobs.

In the first deal of its kind in the UK the developers have, at a pre-development stage, secured institutional backing via M3 Capital Partners working with Essential Living. The Mayor has actively sought to encourage institutional investors, such as pension funds and insurance companies, to invest in residential construction and take development risk in order to increase and accelerate the number of homes being built.

Johnson said that the deal represents a major step forward in this work and it is hoped will encourage other institutions to invest in developments across the capital.

In a major milestone for the London's property market the tower will also contain one of the largest number of homes for long term private rental in the country when complete. Over the last decade the number of households in the UK in rental accommodation has increased by 77%, with over a quarter of London households renting.

The Mayor, who wants to speed up supply of purpose built private rented homes that will give tenants greater security via longer leases, was particularly keen that this prime site, close to the heart of London, had a substantial private rented offer.

The homes, when complete, will offer a unique high quality bespoke rental design, professional management services and attractive communal areas including a seven storey terrace area. Homes in the tower, designed by Rogers Stirk and Harbour architects, will also be available on long leases and will mirror similar style longer term rental apartments in large cities in the United States.

As well as these residential units the site will also include a new theatre space for the Southwark Playhouse and a café as well as retail and marketing space.

The development of the Newington Butts site is a key part in the on-going regeneration of the Elephant and Castle opportunity area, helping to create a town centre that will provide employment, better homes, improved transport links and community facilities for residents.
‘Housing, like roads and railways, are a vital part of the capital's infrastructure. We need to build more homes in London if we want to secure the capital's economic future and the importance of institutional investors in making this happen cannot be ignored,’ said Johnson.

‘This holy grail of investment in the riskier pre-development stage is a hugely important milestone but it is just the beginning. I want to entice other institutional investors to come forward and invest in quality homes for Londoners, boosting the economy and creating thousands of new jobs,’ he added.

David Grover, chief operating officer for investment at Mace, said that the firm is committed to helping shape sustainable cities across the UK and overseas through smarter infrastructure and better buildings.

‘This fantastic development will help deliver the Mayor's vision for future living in London, a completely new type of rental offer in the London market, and we are proud to play our part. Mace will be sharing its experiences and expertise from creating high rise residential schemes in both the UK and Middle East to make sure that the Newington Butts scheme is realised in style and recognised as a pioneering development. Following our success on another project at Greenwich Square last year, this new joint venture development company at Newington Butts, is the next logical step in Mace's growing relationship with the GLA,’ he explained.

Darryl Flay, chief executive of Essential Living, praised the Mayor for leading the way and said he had set the scene for the creation of ‘a new, truly professional rental market where tenants are treated like customers with great amenities, longer leases and a home actually designed for renting’.

He also pointed out that with over £100 million being invested the project will support the capital's work force by providing flexible, high quality rental accommodation that will help draw in future investment for the area.

‘With a quarter of Londoners now renting mainly from amateur landlords, it is vital that we create a branded sector that can deliver real quality for the first time. Because we manage the homes we build for rent, it enables us to take a long term approach to development, which differs hugely from traditional house building,’ explained Flay.

‘With its fantastic connectivity, Newington Butts will be one of the capital's landmark developments, showcasing to everyone what new, brand driven rental homes could be. The amazing work being undertaken across Elephant & Castle is a fantastic example of how ambitious place-making and dynamic civic leadership is transforming our capital and we look forward to working with the Mayor on delivering for Londoners,’ he added.

The development will be a welcome addition to the area, according to Southwark councillor Fiona Colley. ‘This is excellent news for an area that is shaping up to be one of central London's most vibrant destinations. I'm really pleased to see the regeneration of Elephant and Castle gaining momentum, with work on new homes and a new leisure centre already underway,’ she said.

‘Over the next few years, the area will continue its transformation into a great place to live, work and visit, with the demolition of the Heygate estate, improvements to transport, and the creation of thousands of jobs, homes and central London's biggest new park,’ she added.
The Peabody Housing Trust have been appointed to manage the affordable housing element with 159 shared ownership and 29 rental units. Work on the tower will begin early next year and it is earmarked for completion in 2017.

Article Source:  http://www.propertywire.com/news/europe/london-development-rental-deal-201308068084.html

Tips to Move Up the Property Investment Ladder

Another interesting article by Michael Yardney published on August 2, 2013 in Property Observer giving helpful tips to property investors to be successful in their property ventures.

Property investment is not something you should enter into lightly. But for some reason, that’s what a lot of people who have dreams of making millions with real estate do.

They think, “I can go out, buy a house somewhere, stick in some tenants to pay the mortgage and make a killing! How hard can it be?”

Fact is most property investor’s fail! The stats show that around 50% of people who buy an investment property sell up in the first five years and of those who stay in the game, 90% never get past owning one or two properties.

So if you’re looking to get into property or move up to the next rung of the property ladder, here are some words of advice:

Knowledge is property investment power!
Firstly, you need to understand what makes a good property investment and recognise that not just any old digs will do.

You can profit from real estate in one of four ways, and if you get the combination right you’ll make money from bricks and mortar. They are:

1. Capital growth – to build yourself a sound asset base your properties will need to appreciate in value at wealth-building rates (in other words, above average capital growth.) This will come from strong demand from owner-occupiers (who push up property values) and tenants (who help you pay your mortgage.)
   
2. Cash flow – in other words your rent.
   
   
3. Tax benefits – while you should never invest solely for this reason; a good tax strategy can help you manage your cash flow, decrease your tax obligations and increase your bottom line.
   
   
4. Accelerated growth – getting your hands a little dirty (metaphorically speaking) by investing in a property that needs a bit of cosmetic TLC through renovations, or a major facelift through property development, is a great way to manufacture capital growth.

Property cycles

While timing the market is not the be-all and end-all, it certainly helps to understand how the property market moves in cycles.

Following the herd and buying when everyone else is on the property bandwagon doesn’t always work. That’s often when the market is near its peak.

On the other hand you have more chance of nabbing a good deal in a buyer’s market, when property is out of favour. That’s why Warren Buffett said, “Be fearful when others are greedy and be greedy when others are fearful.”

Currently many of the property markets in Australia are in the early upturn stage of their cycles, creating good medium-term investment opportunities.

Location

Location can make or break a property investment. But what is the right location?
I look for areas that will have strong ongoing demand from a wealthy demographic of owner-occupiers who can afford to and are prepared to pay a premium to live in good locations. Some of the major drivers of this type of capital growth are:

• Proximity to the city
  
  
• Proximity to the sea
  
  
• Adjacent to a prime suburb
  
  
• Proximity to amenities such as a train station, large shopping centre, within the zone of a highly sought after public high school.
  
  
• Suburbs that contain period style homes e.g. Californian bungalows, Federation, Victorian, Edwardian style homes.
  

I also like buying in areas going through gentrification – a suburb that is relatively cheap now but has the potential for capital growth in the future as a wealthy demographic of people move in.

One way to find this type of location is to drive through the streets and look for some of the obvious indicators that people with money are moving in:

• Are people spending large amounts of money on renovating/extending their homes?
  
  
• Are there small black (or maybe now it’s white – the new black) BMWs and Audis parked in the driveways or are they old Ford Falcons and Holden utes?
  
  
• Is the nature of the shops changing – more cafés and deli and lifestyle shops.
  

Money, money, money

A sound financial strategy is as important as a sound investment strategy when it comes to property.

Without a well-rounded understanding of how to maximise your borrowing power, use equity as a leverage to build your portfolio and maintain a financial buffer to see you through the difficult times that we all ultimately face, you are setting yourself up to fail financially.

It’s important to set aside a cash flow buffer in a facility such as an offset account or line of credit, to cover you for a rainy day.

Financial fluency

While you could make lots of money through property investment, you could also easily lose it.

If you are financially illiterate when it comes to managing money, budgeting and even balancing the books at home, how do you think you’ll go when it comes to a multi-million dollar property portfolio?

You may need to learn the ins and outs of taxation and the financial advantages you can enjoy as an investor, as well as the best structures to own your investments in, such as personal, company and trust set-ups.

Rather than trying to learn it all yourself and wear numerous hats, it’s worth surrounding yourself with a good team of professionals who can guide you with their knowledge and expertise. An independent property strategist, a finance broker and an accountant should all be people you rely on to support you in the journey to real estate riches.

If you’re the smartest person on your team, you’re in trouble!

Some final words of advice (or warning) for investors

1. Formulate a plan – understand what you want to achieve and then make investment decisions accordingly.
   
   
2. Be cautious –you’ll find everyone is happy to give you advice. Rather than listening to well meaning friends, it’s important to only listen to people who have achieved the financial independence you’re looking for and who have maintained it for a period of time.
   
   
3. Understand the difference between a salesperson and an advisor. Many salespeople are cloaked as advisors and suggest they are representing you, the buyer, when in fact they are representing the seller or a property developer.
   
   
4. Be prepared to pay for advice – it’s much cheaper than learning from your mistakes.
   
   
5. Not everything that glistens is gold – often when you start out it can be tempting to see opportunities everywhere. The problem is you don’t yet have the perspective to decide what is a good investment and what is not.
   

Property doesn’t discriminate; it doesn’t care who owns it. Today the residential property market is worth $4.68 trillion, according to RPData, and over the next decade it will increase in value by billions and billions of dollars. If you get it right, you can have your share.

Michael Yardney is a director of Metropole Property Strategists.

Article Source: http://www.propertyobserver.com.au/landlords/tips-to-move-up-the-property-investment-ladder-michael-yardney/2013080163739

Top Tips for Real Estate Investment Success

Follow these informative and helpful property investment tips when embarking a property purchase by James Thomas of gulfnews.com.

Property investment can be one of the most rewarding forms of financial investment, offering a tangible asset with a functional purpose, whilst simultaneously offering opportunity for strong growth. With the correct advice, property is a strong inflation hedge and will complement other asset classes.

However, problems can arise when people get emotionally attached to their properties, or get caught out by foreign legal and financial systems and the potential to lose money can be just as great. To help avoid likely pitfalls, I have put together a ‘Top Ten’ guide on top tips to remember when embarking on a property purchase:

1. Understand the legalities

First and foremost, don’t get into something if you don’t fully understand the legal ramifications. Expats who snap up property in boom times under the assumption that the law would protect them, or the law was similar to that of their home country are often the ones that face the biggest challenges.

2. Do your due diligence

In many developed markets, you can get a complete transaction history online which will help you ascertain whether the property has a re-sale value. Remember, you’re not purchasing this property to live in yourself, it’s a financial investment purchased for the specific purpose of creating a long-term financial return.

3. Make sure you have access to funds

You must understand the leverage system; verbal approval for mortgage finance isn’t the same as a firm commitment. If you’ve already put down a deposit, Make sure you get an offer in principle from your bank and negotiate the best finance rate possible. Get your calculations right and weigh up what you’ll be paying in interest over the lifetime of the loan against the long term return or rental yield of the property.

4. Make sure you’re diversified

You wouldn’t invest all your money in one asset class, and it doesn’t make sense to invest all your property eggs in one basket, but to spread the risk globally.

5. The liquidity question – can you exit easily?

If you’re looking at a property investment, your number one question must be ‘who will buy this from me when I sell?’ If the answer to that question is another investor, you probably shouldn’t buy. You’ve got to buy the stock that locals want to buy, sell and rent.

6. Understand tenancy and yield

What are you going to get in terms of a real tenant and what is your yield going to be? Do some thorough research and year on year comparisons for a realistic forecast of potential rental yield.

7. Get a handle on taxation and fees

People often get into international property purchases without understanding the taxation implications. Some countries may be seen as attractive destinations because they are tax free, but legal issues surrounding ownership by foreign nationals must be explored very carefully.

8. Look for high quality buildings backed by quality developers

When you’re investing, make sure that your bricks and mortar are quite literally safe as houses. As a rule of thumb, well-built properties will maintain their value longer and will therefore be safer bets for a quick rental or sale.

9. Invest for the medium term

The principles of sound property investment are aimed at offering a medium to long-term return on investment. However, you will need patience; those who expect to flip properties in a matter of months are playing a risky game, and it is likely that they could come unstuck.

10. Work with partners you can trust

Don’t try and go it alone; you must work with people that you feel comfortable with, and who have a proven track record, whether consultants, property managers or tax experts.

James Thomas is the regional director at Acuma Independent Financial Advice, Dubai. Views expressed here are his own and do not necessarily reflect that of Gulf News.


Article Source:  http://gulfnews.com/business/property/uae/top-tips-for-real-estate-investment-success-1.1213814