Average Property Price Sits at All-Time High of £257,000

This article by Lauren Everitt of EADT 24 on September 18th, 2013 shows that the property market is on its way to recovery with house prices on rise according to experts.

Property in the East of England now costs an average of £257,000 compared to £210,000 in July 2009 when the region felt the knock-on effects of the economic downturn.

Statistics from the Office for National Statistics (ONS) said a 1.4% rise in property prices from July 2012 to this July have helped increase the value of homes, surpassing the previous peak of £235,000 before the recession.

James Girling, director of Colin Girling & Company Ltd and PR representative for the Suffolk branch of the National Association of Estate Agents, said: “Since May the market has improved although it is still a buyer market.

“The Government talk about this ‘bubble’ but there isn’t one. Here in the east of the region we haven’t noticed this boom or bust scenario coming our way.

“It’s been a gradual increase of business and the first time buyers are coming through.
“The market is improving and we are optimistic but everything is two or three steps down from where it needs to be.

“The volume of activity is not where it was in 2006 and 2007 before it all went wrong.”
Michael Bedford, a partner at Bedfords in Aldeburgh, said the market has seen more activity.

“There has been more constant activity as well whereas there were peaks and troughs during the past few years,” he added.

“To many people’s surprise we had a record year in 2010 and this year has been as good but it’s too early to tell if it’s going to be better.”

However concerns have been raised that Government initiatives to kick-start the housing market such as Funding for Lending and Help to Buy are in danger of creating a property bubble, with borrowers over-stretching themselves as access to low-deposit deals returns.

Richard Sexton, director of e.surv chartered surveyors, warned that rising house prices threaten to price some people trying to get on the property ladder out of the market at a time when households are still under pressure from high inflation and stagnant wages.

He said: “If the Government wants to make housing more affordable - and avoid inflating another property bubble - then it needs to encourage more house building.”

Article Source: http://www.eadt.co.uk/news/east_of_england_average_property_price_sits_at_all_time_high_of_257_000_1_2643933

Rental Properties in the UK New Guidance on Adverts Are Issued

This article by the Property Wire on September 10th, 2013 reveals information relating to non refundable fees and tenancy charges in the UK's  residential lettings must now be displayed prominently on marketing and advertising material.


The Committee of Advertising Practice has published new advice which it has sent to all relevant trade bodies across the lettings sector following an Advertising Standards Authority ruling published in March 2013 in which it ruled against a letting agent which had not provided sufficient information about their fees in their online ads.

Residential lettings agents must now make changes to their websites and adverts placed on property portals and in other media and have until 01 November to do so.

‘We’ll be closely monitoring ads in all media from November onwards and will consider appropriate follow up action against non-compliant ads from this date,’ said the CAP.

The guidance comes after the CAP worked closely with bodies such as the Association of Residential Lettings Agents (ARLA) and The Property Ombudsman (TPO) as well as letting agents and private landlords to draw up the new requirements.

CAP has also published a new AdviceOnline, Compulsory costs and charges: Letting agents, for marketers to ensure that they comply with the rules.

Commenting on the CAP guidance, Caroline Kenny of the UK Association of Lettings Agents, said it should provide more clarity to letting agents on how to comply with the ASA ruling in March. ‘We have worked closely and consistently with the CAP and other industry colleagues since the ruling to ensure that any subsequent guidance is as clear and unambiguous as possible for letting agents to adhere to and it is encouraging to see that additional in depth advice regarding compliance,’ she pointed out.

‘We encourage all letting agents to review their property listings across all media platforms before the November compliance deadline in order to ensure they fall in line with the CAP’s guidance,’ she added.

The ASA ruling in March related to property firm Your-move.co.uk Limited which was told to ensure that their adverts make clear when non-optional fees and charges, that could not be calculated in advance, were excluded from quoted prices, and to provide enough information to allow the consumer to establish easily how further charges would be calculated.

The Royal Institution of Chartered Surveyors (RIVS) is also encouraging its members to familiarize themselves with the CAP guidance and to take action to ensure their businesses are compliant with the new requirements.

It pointed out that the CAP guidance articulates what compliance looks like for adverts in different media, with further help and advice available via the CAP copy advice team. 

Article Source: http://www.propertywire.com/news/europe/uk-rental-property-guidance-201309118223.html

Buy-to-let Mortgage Market is Prospering

According to a report by Landlord Today a large number of buy-to-let market is booming as shown in this article by propertysecrets on September 16th, 2013.

The latest figures from the Council of Mortgage Lenders show strong growth in the buy-to-let market report Landlord Today.

15,200 BTL loans were advanced in July, an increase of 12% compared to June. This represents a value of £2bn which was 11% higher than in June.

Lending for BTL house purchase was up 7% in July compared to June, a total of 7,600 loans. The value of these loans was £900m, up 13% from June.

There was strong growth in BTL remortgage lending which increased by 24% in July compared to June, a value of £1.1bn. This equated to 7,200 loans in July for BTL remortgage in total, an increase by 13.4% on June 2013.

The figures come just a week after a survey by the Royal Institution of Chartered Surveyors (RICS) showed that house prices are rising at their fastest pace for almost seven years. Many pundits are predicting that the introduction of Help to Buy could lead to another house price bubble.

Stephen Johnson, managing director of commercial mortgages at Shawbrook Bank, said: "The announcement of the rise in buy-to-let lending is great news for the industry and Shawbrook is keen to support professional investors looking to take advantage of these market conditions.

"However, as an industry we must be careful to not create another bubble. At the moment lending conditions are very good but these are unusual times and the UK needs to create a sustainable market, not one lurching from peak to trough. Those looking to buy property need to ensure they look at the long term - investors need a portfolio that can still work in a more normalised interest rate environment. Sensible gearing will maximize returns, over-gearing now could potentially put at risk investors' hard-earned equity."

Article Source: http://www.propertysecrets.net/article/buytolet_mortgage_market_booming/3115.html

Buying into Britain

This interesting article by Chen Dujuan of Global Times on September 15th, 2013 shows the milestone of Chinese investment in Great Britain.

Two years ago, the BBC made a TV documentary called "The Chinese are coming," focusing on growing Chinese investment in Africa and South America. Now, the Chinese are coming again, but this time to the home country of the BBC: Britain.

Many of the country's well-known brands have been either wholly acquired or bought into by Chinese firms, including Weetabix, Thames Water and Heathrow Airport.

"There are around 500 Chinese companies currently investing in Britain and taking advantage of the world's most open investment environment. We welcome more," Daniel Carvalho, China marketing and communications manager with the UK Trade & Investment Office at the British Embassy in Beijing, told the Global Times on Tuesday.

"I think we're seeing the beginning of a very strong trend of Chinese investment into the UK," Carvalho said.

Chinese investment in Britain reached $8 billion in 2012, more than the total from 2009 to 2011, with domestic firms expanding into areas such as high-end manufacturing, infrastructure and research, the Chinese Embassy in London said in January.

From the beginning of 2013 to early August, China has invested more than $2 billion yuan in the country, Zhou Xiaoming, minister counselor for commerce at the Chinese Embassy in Britain, was quoted as saying by the 21st Century Business Herald on August 10.

Zhou said that Chinese firms will announce new infrastructure investment worth hundreds of millions of pounds in Britain in September, the report said.

Desirable sectors 
China has made breakthroughs in infrastructure investment in Britain in recent years, partly due to local preferential policies.

In 2012, China's sovereign wealth fund China Investment Corp bought an 8.68 percent stake in Kemble, which controls Thames Water, and acquired a 10 percent stake in Heathrow Airport.

Gingko Tree Investment Ltd, a fund wholly owned by China's State Administration of Foreign Exchange, also invested in a British water utility company last year.

Companies owned by Hong Kong billionaire Li Ka-shing control 30 percent of Britain's power supply, as well as 25 percent of its natural gas and 7 percent of the water supply.

Property is another new area of interest for Chinese investors.

In July, Ping An Insurance Group bought London's landmark Lloyd's building for 260 million pounds ($411 million). 

Dalian Wanda Group in June spent around 700 million pounds to develop a real estate project in London, including two apartment buildings and a five-star luxury Wanda hotel.

In May, Beijing-based property developer Advanced Business Park signed a $1.5 billion deal with London's city government to develop Royal Albert Dock.

Wang Jianlin, chairman of Dalian Wanda, told the Beijing News in June that the real estate project is "a big bargain for Wanda," which partly explains these firms' enthusiasm for property in Britain.

The land price for the project is much cheaper than in Beijing, and the sales revenue will be far more than the investment costs, Wang said.

Frank Chen, head of research at the China office of commercial property services company CBRE, told the Global Times Tuesday that the amount of high-quality property available for investment in Asia Pacific is still limited compared with North America and Europe, so Chinese investors are expected to focus on property in gateway cities that are capable of generating reliably stable returns on investment.

Chinese companies have also shown interest in buying high-end manufacturing brands in Britain and setting up R&D centers there.

Wanda acquired a 91.81 percent stake in British yacht maker Sunseeker in June and Chinese automaker Geely bought black cab manufacturer Manganese Bronze in February.

Companies including Shanghai Automobile and Huawei Technologies have set up or expanded research centers in the country.

Local benefits
"The British economy is growing again after several years of stagnation, so the timing is right for Chinese investors," Qing Wang, professor of marketing and innovation at Warwick Business School in Britain, told the Global Times Wednesday.

She said that Britain's sound legal system and open economy as well as the status of London as an international finance and services center make the country an attractive destination in Europe for Chinese investors.

Preferential policies are also playing an important role. Britain has chosen an "open door" philosophy to foreign investment in almost all of its industrial sectors, Michele Geraci, head of research at the Global Policy Institute, a think tank under the London Metropolitan University, told the Global Times Wednesday.

"We want to be the destination for Chinese investment. Tell other Chinese investors to come to London and spend their money," British Prime Minister David Cameron told Fortune magazine in May.

Chinese companies will be made to feel welcome, and will receive the full support of the British government, the British Embassy's Carvalho said.

A competitive tax regime and highly skilled workers are Britain's other advantages, Carvalho said. "We have hundreds of billions of foreign investment in Britain, so we're used to it. It's how our economy works - we accept investment from overseas, and we also make huge investments around the world ourselves," he noted.

Wang said that both governments have set a target to boost bilateral trade, and that the two countries can combine complementary assets and competencies, offering huge potential for Chinese firms investing in Britain.

Foreign owners welcome
Qing Wang and Michele Geraci both agreed that British people are not too concerned about local firms being bought by foreign investors, so long as it brings more employment to the country.

Chinese companies that wish to invest in the UK should be prepared to be more transparent about their shareholding structure, so that the sellers know exactly who is buying their assets, Geraci said.

Carvalho suggested that foreign investors should have "a PR strategy to engage with the UK media and local communities to build trust and gain confidence." The British Embassy can offer advice on this, he noted.

It is important that Chinese firms understand and abide by the rules and regulations of the British legal and economic system, Wang said, expressing the hope that Chinese firms can develop innovative products and global brands through investing in Britain.

Zhou with the Chinese Embassy in Britain suggested that Chinese firms could take advantage of the innovative advantages in Britain and cultivate their brands there, the 21st Century Business Herald report said.

Zhou said that the eurozone crisis has offered advantageous timing for Chinese companies, which can depend upon Britain's status as an international center and its open environment to expand into the international market, according to the report.

Article Source: http://www.globaltimes.cn/content/811462.shtml#.UjZiRT_tYh8

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

England Needs More New Homes Than Previously Estimated

According to the new analysis England needs news homes a year are needed because of its increasing demand as shown on this article by the Property Wire on September 11th, 2013.

An analysis of Census information for England shows that over 240,000 new homes a year are needed as demand continues to significantly outstrip supply.
 
The analysis by housing academic Dr Alan Holmans published by housing and planning charity, the Town and Country Planning Association (TCPA), shows that the scale of housing need is greater than currently estimated.

Holmans, from the Cambridge Centre for Housing and Planning Research, says in the report that housing requirements are on average around 240,000 to 245,000 per year, with around 60% of all demand and need in the four southern regions of England.

This is up to 10,000 more homes per year than the generally used 235,000 figure. The report also shows that house building levels are slowing rising from their lowest levels since the 1920s, at around 100,000 per year.

‘This research, the first of its kind to analyse the Census 2011 data, is a crucial reminder of the desperate need for more and better housing in the right places. We have a hopelessly inadequate supply of housing and a serious backlog, as well as chronic affordability problems,’ said Kate Henderson, TCPA chief executive.

‘While house building levels remain at about 100,000 per year, the Census reveals a staggering need for over 240,000 homes per year. The research also shows that nearly one third of newly arising housing need requires some subsidy; without this investment affordability, overcrowding and ultimately homelessness will worsen,’ she added.

‘We urgently need a new vision for housing and the development of new communities. That new vision has to ensure a substantial increase in the supply of new homes and address affordability. At the same time, we must focus on building successful new communities, whether as part of urban regeneration or through new Garden Cities. This is essential not just to our economic future but also the social and environmental wellbeing of our country,’ she added.

The figures make projections for 2021 and extend them to 2031 to enable longer term decisions for land use management, planning and local government. The projections in the report, together with adjustments for gains, losses and vacancies in stock, suggest that over 240,000 additional homes will be required to meet newly arising demand and need.

The report says that even if the economy remains depressed and household formation rates remain low, there will still be almost a 20% increase in the number of households over the 20 year period to 2031. This is mainly because of the expected continued growth in population.

It also shows that there was an abrupt break with longer term trends in household formation in England between 2001 and 2011. To take the most obvious example, the number of one person households in 2011 according to the Census was nearly one million lower than the 2008 based projections published by the Department of Communities and Local Government in 2011.

Other large scale shifts in the mix of household types include far more couple plus other adult households than expected. In part this is about younger people staying at home or sharing accommodation for longer. But that is not the whole story as changes are observed in all age groups.

Applying past trends based mainly on household composition would suggest that some 68% of new households would be in the market sector of owner occupation or private market renting without benefits, but that housing to meet nearly one third of newly arising need would require some subsidy.

At the regional level, not far short of a quarter of all housing demand and need is likely to be concentrated in London, with over 60% in the four southern regions. But all regions require significant additional housing investment.

‘It is enormously important that we plan for recovery and deliver much higher output levels. Otherwise if recovery happens increasing house prices will worsen affordability. Planning based on the past few years of recession will simply build in the next crisis,’ said Professor Christine Whitehead, who was involved in the research that lies behind the report.

Chris Tinker, board director at home builders Crest Nicholson, which supported the research, said that the study re affirms the on going need for over 240,000 new homes per annum, 60% of which is required in London and the four main Southern regions.

‘With developer's consented land banks amounting to less than two year's housing demand there is therefore an urgent need for Local Authorities and developers to work together, especially in key demand areas, to identify and plan for a significant increase in new communities within which well designed homes can be delivered. A failure to meet housing demand will continue to undermine affordability and put the future prosperity and success of our communities at risk,’ he added.

Article Source: http://www.propertywire.com/news/europe/england-house-building-analysis-201309118222.html

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/