Buy to Let Lending in UK Rises Due to Strong Rental Demand

This recent article by the Property Wire on August 8, 2013 shows the continuing recovery of buy to let lending investors because of the ongoing rental demand according to CML.

Lenders in the UK advanced 40,000 mortgages, worth £5.1 billion, to buy to let property investors in the second quarter of 2013, according to the latest data published today (Thursday 08 August) by the Council of Mortgage Lenders. Both the number of buy to let loans, and the value of lending, were the highest since the third quarter of 2008, the data also shows. Buy to let lending is continuing to recover strongly, but from a low base. The number of loans advanced in the second quarter was 19% higher by volume and 21% higher by value than in preceding three months when lenders advanced 33,500 mortgages, worth £4.2 billion. Year on year, buy to let lending was 19% higher by volume and 31% higher by value compared to 33,600 loans in the second quarter of 2012, worth £3.9 billion. Lending for house purchase accounted for around half the loans advanced, and increased by 15% by volume and 19% by value over the preceding quarter. But the growth in remortgaging was stronger, with an increase over the same period of 24% by volume and 29% by value. The CML said that this growth in remortaging partly reflects improved conditions in funding markets and more widespread availability of mortgage credit. By the end of June, buy to let mortgages accounted for 13.3% of outstanding lending in the UK, up from 13.1% in the preceding quarter and 12.9% a year earlier. The number of outstanding mortgages totalled 1.48 million, worth £168.5 billion. Buy to let mortgages in arrears of over three months accounted for 8.4% of the total, up slightly from 8.3% in the preceding quarter but down from 9.7% a year earlier. The possession rate, at 0.09%, was higher than the 0.07% in the wider mortgage market, but fell from 0.11% in the previous quarter. ‘Strong rental demand is contributing to the continuing expansion of the buy to let sector, but growth is also being helped by improved conditions in funding markets and more widespread availability of mortgages,’ said the CML's head of policy Jackie Bennett. ‘These conditions are creating more opportunities for landlords to remortgage, as well as helping to fund increased activity in the mortgage market more generally. This spring, we have seen the highest levels of lending to first time buyers since 2007, alongside the continuing recovery in the buy to let market,’ she added. The figures highlight that the buy to let sector continues to boom, according to Stuart Law, chief executive officer of Assetz. ‘We are seeing more people approaching pensionable age investing in order to bolster their retirement income at a time when the Bank of England indicates base rates, and therefore savings rates, will stay low for at least three more years,’ he said. ‘While the growth of the sector in London is clear to see, the house price ripple effect is only just beginning now in the North where there are excellent opportunities for investment, particularly in key cities like Manchester, Liverpool, Birmingham and their suburbs. Many Southern investors are broadly unaware of the lucrative yields available in northern market, at prices that represent the beginning of the next cycle,’ he added. Article Source: http://www.propertywire.com/news/europe/uk-buy-let-lending-201308088098.html

How To Become Neighbor to the Queen?

Mike Spink plans to buy the famous building from Crown Estate and convert it into a luxurious home just yards away from Buckingham Palace. 

iNVEZZ.COM Tuesday, August 6th: A new record for UK’s most expensive house is expected to be set by property tycoon Mike Spink who plans to convert 3 Carlton Garden in London into a single-family luxury mansion overlooking St James’s Park just yards from Buckingham Palace.

Spink Property in collaboration with equity group Evans Randall plans to buy the famous building from the Crown Estate for £65.5 million and convert it into a luxurious home with an initial asking price of more than £140 million. The sale is scheduled to be completed next month.

The high valuation of the London property is due to its rich history and central location in the heart of the capital. The building, located on the site of the gardens of Carlton House, has been part of the Royal Family’s estates since it was completed more than 125 year ago. During World War II it housed the Free French Forces and was often used as residence by Charles de Gaulle.

The building is currently used as office spaces, but as James Cooksey, head of St James’s and diversification portfolios at the Crown Estate, has commented for The Times, the project corresponds to their ”long-term vision for St James’s, which we see not just as a destination for business, retail and dining but also as a place to live.”

The plan’s goal is to maximise the potential of the estate by extending it into a four-storey mansion with more than 16,000 sq ft available with an estimated price of around £8,500 per sq ft. The ambitious real-estate entrepreneur Mike Spink is famous for turning the previously forgotten country mansion Park Palace into the UK’s most expensive residential estate so far. After purchasing it for £42 million and converting it into a luxurious home, he sold it in 2011 to Russian billionaire Andrey Borodin for the impressive £140 million. 

Author: Emma Scott
Article Source: http://invezz.com/news/real-estate/4601-mike-spink-investing-in-uks-most-expensive-home

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

Castle to Rent for just £1,750 a month

Are you looking for a place to rent and fancied being king or queen in the castle? This article by Paul Jeeves of the Express might be the deal that you've been looking for.

Northumberland castle for rent at £1,750 per month, a bargain for seven bedrooms (PIC: NORTH NEWS)

And it’s on the rental market for the same price as a two-bedroom terrace in Wimbledon.

Sprawling seven-bedroom 19th century Bellister Castle in Northumberland has just become available for a bargain £1,750 a month.

Legend has it the castle is also home to a “grey man” who, having been unjustly accused of being a spy, was savaged to death by hounds

Local myth

Owned by the National Trust, it stands on a prominent mound in the South Tyne Valley just outside picturesque Haltwhistle and boasts mature grounds, a walled garden, stables and an orchard.

The property is part of the Bellister Estate that was given to the Trust in 1976. It is available to rent for 10 years.

The mansion house, rebuilt in 1826 by architect John Dobson, is attached to the remains of a Grade 1 listed 14th century tower house.

But some tenants might be put off by having to share with a ghost. Legend has it the castle is also home to a “grey man” – a minstrel who, having been unjustly accused of being a spy, was savaged to death by hounds as he fled.

Article Source:  http://www.express.co.uk/news/property/411109/I-m-home-darling-drop-the-drawbridge-castle-to-rent-for-just-1-750-a-month

Houseboat Living in London

This very interesting video by The Independent on August 1, 2013 showing the transformation of London's waterways into Londoner's new homes.

New piers, floating homes, and hotels are all transforming London's waterways as Londoners make their homes along the Thames and the city's canals

London’s waterways are changing and Mayor Boris Johnson’s 2020 Vision aims to hugley increase use of the river. There are strategies in place for new piers, floating homes, hotels, restaurants and bars.

To watch this exclusive three minute video tour and to take a look inside houseboats on the the Thames, click here.


Video presented by Amira Hashish; filming and editing by James Boakes
 
Video Source: http://www.independent.co.uk/property/houseboat-living-in-london-8742614.html

Fixed-rate Mortgages 'are good value'

This latest article on July 31, 2013 by houseladder.co.uk shows why fixed-rate mortgages are presently good in providing value as suggested by Andy Gray.

The bottom of the interest cycle is on the horizon, it has been noted.

Fixed-rate mortgages are proving to be particularly good value at present, it has been suggested. 

Andy Gray, managing director of mortgages at Barclays, noted this is because there is a general consensus in the industry that the bottom of the interest rate cycle is on the horizon. 

Mr Gray pointed out this has coincided with a time of the year that is one of the busiest for remortgaging and house buying activity.

The comments come as Barclays has announced improvements to its home loan range in the hope of giving more opportunities to save money for remortgagers and to present a new collection of fee-free deals for those looking to buy a home. 

Mr Gray stated: "The Barclays rate cuts and new offers give even more homeowners and buyers the chance to take advantage of the low rates."
It was recently reported by the Council of Mortgage Lenders that UK gross mortgage lending in June was two per cent greater than in May, rising from £14.7 billion to £15 billion. 

Article Source:  http://www.houseladder.co.uk/Property_News/2013/07/Fixedrate_mortgages_are_good_value_3438.aspx#.UfnhQ40_tZ0