ISG Lands £20m High-End London Resi Scheme

This article by Iain Withers of building.co.uk on October 30th, 2013 speaks about contractor that will restore the three grade ll-listed buildings into luxury homes.

ISG has won a £20m job to restore three 19^th century London buildings into luxury homes.
The Grade II-listed buildings – 92-96 Portland Place, 98 Portland Place and 10-12 Park Crescent – are part of London’s Nash Terrace overlooking Regent’s Park, designed by architect John Nash.

The project is ISG’s fifth development for Amazon Property in 12 months, including luxury apartment schemes at the former Paramount Studios in Soho, as well as in Bayswater and Westminster.

The three buildings were originally constructed as upmarket London residences, but have been used as commercial office space in recent years.

They will be converted into 15 luxury apartments.

Alan McCarthy-Wyper, managing director of ISG’s construction business, said: “Amazon Property has built an enviable reputation for acquiring prestige properties in landmark London locations and refurbishing them to the very highest standards that appeal to a global residential market.

“I am delighted to be able to support Amazon Property return these buildings back to the use originally intended by John Nash in the early 1800s.”

Article Source: http://www.building.co.uk/news/isg-lands-%C2%A320m-high-end-london-resi-scheme/5062871.article







 
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UK Mortgage Approvals Highest Since February 2008

This article by Katie Allen of theguardian on October 29th, 2013 tells us the argument about Help to Buy scheme risks may create another bubble according to figures.

The Bank of England mortgage lending figures are at their highest for more than five years. Photograph: Yui Mok/PA

 

Mortgages approved by British lenders jumped to their highest level for more than five years in September, fanning fears the housing market was already heating up even before the latest government support kicked in.

Banks, building societies and other lenders approved 66,735 mortgages in September, the biggest monthly total since February 2008, before the global financial crisis took hold.

The figures, from the Bank of England, were just ahead of City forecasts of 66,000 and compared with an upwardly revised 63,396 in August. Mortgage approvals are seen by economists as a good early indicator of where the housing market is headed.

They follow government data on Monday showing house prices rose in every English region in September and are likely to be seized on by those who argue that the government's Help to Buy scheme risks creating a new bubble.

"All the stimulus thrown at the housing market risks starting another dangerous boom-bust cycle," said Rob Wood, chief UK economist at Berenberg Bank.

"The key issue is not where prices are today, rather it is where they will be in a couple of years. Prices and activity are rising fast now. We expect house prices to rise 10% year on year next year … The measures that selectively boost the housing market, like the Help to Buy scheme, should be scrapped."

The plan to kickstart the property market and help homebuyers struggling to get on the property ladder gives a taxpayer-backed guarantee to lenders offering 95% mortgages that are open to first-time buyers and home movers on newbuild homes worth up to £600,000. Despite criticism from the International Monetary Fund and many economists, the scheme was expanded this month.

In an attempt to quell criticism of his scheme, the chancellor, George Osborne, recently asked the Bank of England to monitor its impact and report back in a year. Howard Archer, economist at IHS Global Insight, said the latest numbers underlined the need for policymakers to be ready to act "quickly and decisively if signs of the housing market overheating become increasingly widespread and pronounced".

Archer said it appeared a number of factors were supporting the property market even before the latest phase of Help to Buy was launched: improved consumer confidence, higher employment and extended low mortgage interest rates, the first stage of Help to Buy and the Funding for Lending scheme – a Bank of England initiative to increase the flow of cheap finance to credit-starved businesses.

"We are currently a long way off from an overall housing market bubble emerging. Nevertheless, there is a mounting danger that house prices could really take off over the coming months, especially if already significantly improving housing market activity and rising buyer interest is lifted appreciably further by the Help to Buy mortgage guarantee scheme," Archer added.

Others argued the housing market was still well below its peak and there were few warning signs of a bubble forming.

Samuel Tombs, UK economist at the thinktank Capital Economics, emphasised that mortgage lending, at £1bn, was only "a touch" above the average of £0.7bn over the previous two years. Mortgage approvals were still close to 40% down on their typical pre-recession levels, he added.

"Given that interest rates on Help to Buy mortgage products look expensive and lending criteria are strict, we doubt the scheme will boost mortgage demand much. Note too that banks appear to have little appetite to substantially increase the size of their mortgage books," Tombs said.

"For now, then, there remains little evidence that a renewed boom in the housing market is developing."

The Bank data contained some evidence that businesses found it easier to get finance in September. After dropping sharply in August, lending to non-financial businesses rose by £720m, the biggest increase since January.

"While it is important not to read too much into one month's figures, the size of the September increase in business lending reported by the Bank of England provides a significant boost to hopes that banks are now becoming more prepared to lend to businesses, given the improved economic situation and outlook," said Archer.

The Bank's data showed, however, that within the overall rise, lending to small businesses fell in September.

The British Chambers of Commerce said small businesses needed more help to get funds.
"It's good to see overall business lending rise, as this has an impact on business confidence. Yet these new figures show that while large firms have little difficulty tapping debt markets, SMEs – and particular young, fast-growing firms – continue to struggle to access growth capital," said Adam Marshall, its director of policy and external affairs.

"Both policymakers and financial institutions need to do more to help fast-growing SMEs access finance."

Article Source: http://www.theguardian.com/business/2013/oct/29/mortgage-approvals-february-2008-help-to-buy

 

House Prices Near Top 30 State Schools are '12% Higher'

This article by Harriet Meyer of theguardian on October 27th, 2013 reveals that third of properties close to the top state schools command a premium of more than £80,000 according to the survey by Lloyds.

House prices near the best state schools, such as King Edward VI School Handsworth, attract a premium of more than £30,000, says Lloyds. Photograph: Andrew Fox/Alamy

 

Parents are paying "premiums" of on average £31,500 for a home in an area with one of the UK's leading state schools, according to resarch from Lloyds.

The findings are are likely to reignite the controversy surrounding schools selecting by parents' ability to afford to live somewhere.

Property prices within postcodes with the top 30 sought-after secondary state schools are 12% higher than the average price in the rest of the county, at an average of £295,972, or almost nine times average annual earnings for a full-time male employee at £33,740.

Properties close to the top state schools command a housing premium of more than £80,000 in almost a third of cases.

The north-west has the largest premium, with average house prices in the postcode of the top 10 state schools in the region trading 28% – or £43,142 – above the average house price in their county.

This is followed by Yorkshire and the Humber, with a premium of 18%, and London at 15%. In contrast, house prices in the East Midlands that are close to the best performing state schools are on average 6% lower than in neighbouring locations.

The most expensive catchment area of a state school in Britain is that of the Henrietta Barnett all-girls grammar school in Barnet, north-west London, where the average house price trades at a premium of 87% or an average of £402,600.

Homes within the postal district of Tiffin girls' school and Tiffin school in Kingston-upon-Thames commanded the second highest premium, with house prices in the KT2 postcode trading at more than double the average for the borough at £207,591.

However, more than a third of England's top 30 state schools are in locations where the average property price is less than the average of those in neighbouring areas. With an average price of £94,843, properties in the catchment of King Edward VI Handsworth school in Birmingham, B21, for instance, are 42% or £67,738 below the county average.

Meanwhile, prices in the surrounding area to Kendrick school and Reading school were £108,033 lower than the county average.

The research is based on average asking prices in June 2013 and GCSE results taken from 2012.

Nitesh Patel, housing economist for Lloyds Bank, said: "All parents want to ensure their children have access to the best schools, so it is not surprising that homes in areas close to the top performing state schools typically command a significant premium over neighbouring areas.

"However, with the availability of suitable homes in short supply, high demand has led to average prices in many of these areas being out of reach for many buyers on average earnings."

Article Source: http://www.theguardian.com/money/2013/oct/27/house-prices-state-schools-higher

Surveyor Report a Strong Month for UK Housing Market

This article by the Property Wire on October 24th, 2013 tells us the another strong month for the housing market in the UK with the volume of residential valuation going up compared to August, according to Connells Survey & Valuation.

The UK housing market experienced another strong month in September, with the volume of residential valuations 55% higher than August, according to chartered surveyors Connells Survey & Valuation.
 
The firm says in its latest report that strong growth in every sector of the market brought the total number of residential valuations conducted in September 2013 to 65% higher than the same point last year.

Particularly strong growth was recorded in the areas of buy to let and remortgages, which saw increased of 66% and 64% respectively month on month. This equates to much higher annual rates of growth, following a comparatively slow month in September 2012.

‘September has felt like a tipping point. A year since the first real effects of Funding for Lending, and five years since the collapse of Lehman Brothers, the financial world appears to be at the start of a much sunnier period. In just 12 months, the situation has shifted unrecognisably with last quarter’s economic growth likely to come in above 1%,’ said John Bagshaw, corporate services director of Connells Survey & Valuation.

‘However, many borrowers have been reliant on remortgaging to fuel a good proportion of their new found optimism. If not for record low product rates, many families could now be struggling to pay their mortgage while keeping the lights on at the same time. The real question now is how long these excellent new deals can last before the Bank of England decides to raise interest rates,’ he explained.

The report also shows that improvements in total levels of activity have also translated into more new buyers, as first time buyer activity in September grew by 52% compared to August. This leaves the number of valuations on behalf of first time buyers in September 54% higher than in the same month a year ago.

Meanwhile valuations further up the property chain, on behalf of existing home owners wishing to move, have grown almost as quickly as those for first time buyers, up 46% since August, bringing home moving activity to levels 52% ahead of September 2012.

‘Over the last year first time buyers have witnessed a reversal of fortunes. Every part of the home-buying industry is straining to keep up with a rejuvenated lending system. After five years of relative inactivity, the only danger now could be the pace of improvement,’ Bagshaw pointed out.

‘What’s certain is that more people are able to buy a home. And the next rungs on the property ladder are looking far more solid than even a few months ago,’ he added.

The data also shows that after a minor seasonal slow down in August, buy to let activity has bounced back strongly in September. The number of valuations on behalf of buy to let investors increased by 66% between August and September. This leaves buy to let activity up by 77% since September 2012.

‘September and early October are the very peak season of the rental market. But valuations for landlords hoping to expand their property portfolios now will only bring new homes onto the lettings market by around the end of the year. That’s why this is such positive news for the buy to let sector, because landlords are clearly confident that demand will still be there in several months,’ said Bagshaw.

‘Progress on the supply of rental homes will remain vital for tenants who haven’t yet joined the ranks of first time buyers. Luckily, there has never been a better time for landlords to expand portfolios, with buy to let mortgage rates the lowest they are likely to be for years,’ he added.

Article Source: http://www.propertywire.com/news/europe/uk-housing-market-surveyors-201310248383.html

Lack of Protection Leaves Generation Rent Vulnerable

This article by Gregor Watt of Money Marketing on October 24th, 2013 discusses the importance of having protection for people in the rental property.

Gregor Watt looks at the plight of people stuck in rental property and the importance of having protection.

Despite the launch of Help to Buy 2 and the general pick-up in the mortgage market, many people are either stuck in rental property or are choosing to rent rather than buy.

The strong historical link between house purchases and protection sales means that this section of the population is harder to reach for protection sales, leaving many renters financially vulnerable if they are unable to work.

LV= head of protection Mark Jones says: “It’s important to realise that renting does come with certain pitfalls that often aren’t signposted. When buying a property, you are encouraged to take out an insurance policy to guarantee repayments in the event that something happens to the mortgage payer. No such prompt exists in the rental market.”

With the cost of rent increasing and general price inflation continuing to outstrip wage inflation, renters are under similar financial pressures as homeowners.

Although Help to Buy will help people borrow more money, the lack of new property being built means the supply of new homes is still far short of demand. The Council of Mortgage Lenders says the number of new properties being built is currently around 110,000 a year but this is some way short of the 232,000 new households the Government says are looking for housing every year.

This shortage has caused a rise in the cost of renting in recent years.

According to LSL Property Services, the cost of renting in the UK hit an all-time high last month, with the average monthly rent hitting £757 a month, up by 2 per cent since this time last year.

This figure disguises some sharp regional variations, with rents in London up by 4.4 per cent on a year ago, while the East of England has seen an increase of only 0.8 per cent.
LSL Property Services commercial director David Brown says: “A new peak in tenant demand has driven rents to new heights, well above all previous records. Higher rents in almost every region show that, despite Government schemes, buying a first home is still a difficult aspiration. This is not only down to low salary growth but also a general shortage of supply – which is the underlying reason why homes are getting more expensive.”

Housing is the single biggest monthly expenditure for many people. LV= says rent accounts for 39 per cent of monthly expenditure on average, rising to 44 per cent in London and the South-east.

Jones says: “We know that one-third of Brits currently rent and that 65 per cent of these people have no insurance in place. This would leave a huge number of people in the UK in a vulnerable position if they found themselves unable to cover their rent and living expenses.”

The high cost of buying a house is also changing people’s attitudes to buying property. Figures from the Office of National Statistics show that the percentage of people who own their own home has fallen back to 64 per cent from a peak of 69 per cent in 2001.

Earlier this year, the Halifax reported that 21 per cent of 20 to 45-year-olds had given up on owning their own homes, rising to 45 per cent of over- 45s but this drop in home ownership does not mean that this growing section of the public do not have the same protection needs as homeowners.

Expert view: We must do more to persuade renters of their protection needs

 

Ian Smart, head of product development & technical support, Bright Grey

With all the activity around the increase in first-time buyers, it would be easy to forget about generation rent – those people who will continue to rent for years to come, either through choice, because they enjoy the flexibility of renting or because they are struggling to afford a first-time buyer deposit.

According to research from Castle Trust, more than six out of 10 tenants believe they will never get on the property ladder. High property prices and stagnated earnings mean that many young people will spend their twenties and thirties in the rental market. It also means that the need to have protection insurance may not occur to them until they are much older.

But not having a mortgage does not mean protection needs should be ignored. Tenants have monthly rental payments. They have to pay for food, gas, electricity and council tax. If they lost their job due to an accident or serious illness, how would they survive financially?

The need to protect themselves against unforeseen circumstances such as these is just as important for people renting as it is for homeowners. While life insurance may not be appropriate for someone who does not have a mortgage or dependents, income protection is.

The recent focus on income protection has seen more providers improve their proposition to cover as many people as possible under an own-occupation definition. This will make it easier for consumers to claim and will ultimately increase consumer confidence in the product and make the case for taking out income protection an even stronger one.

However, more work needs to be done to persuade those people who are renting, that protection insurance is not something to be taken out only when they have
a mortgage.

Many renters will be saving hard for a deposit to buy their own home and this means money will be tight. But ironically this is all the more reason to take out
a protection product.

It would be awful to see the deposit they had worked so hard to save for disappear because they had to use the deposit money as a financial buffer.

Posing pertinent questions, albeit uncomfortable ones, will open people’s eyes to the potential consequences of not having a financial safety net in place. It is natural that clients will want a cost-effective option and taking into account all the solutions such as deferred periods or shorter payout terms can get around the issue of price.

Ultimately, individuals need to be responsible for protecting their incomes against illness or disability. It is unrealistic to rely on the state, especially with all the changes and cuts to welfare spending by the government.

Taking out a mortgage may be the number one trigger for people to sort out their protection needs but we need to switch people on to the need for protection well before then.

Article Source: http://www.moneymarketing.co.uk/news-and-analysis/protection/lack-of-protection-leaves-generation-rent-vulnerable/2001906.article

Countryside Living Means Paying a Premium for Property in the UK

This article by Property Wire on October 22nd, 2013 reveals a new research country homes command a significant price premium compared to those in towns and cities.

Homes in the country command a significant price premium compared to properties in towns and cities across the UK, according to new research.
 
This premium ranges from £86,218 in the South East of England to £11,570 in the North East of the country, the research from the Halifax has found.

But when it comes to value rural house prices have underperformed those in urban areas since 2009. In the past four years, the average price of a home in the countryside has risen by 2% compared with an average 10% increase in urban areas.

While prices have risen more rapidly in urban areas in most regions since 2009, a key factor behind the bigger increase in urban house prices has been the relative strength of prices in Greater London.  Excluding London, urban prices have risen by 6%.

The research report says that the recent outperformance of house prices in urban areas may also partly reflect the overall increase in the number of first time buyers since 2010 as they represent a larger proportion of the market in urban areas.

Over the same period, there has been a modest decline in the number of those moving home; a group that is more important in rural property markets.

‘There is a significant premium on property in the countryside across Great Britain. Country living remains a widespread aspiration, but relatively high prices put rural homes out of the reach for many,’ said Martin Ellis, housing economist at the Halifax.

‘Potential first time buyers are particularly affected by high property prices, and consequently they account for a smaller proportion of home buyers in the countryside than in urban areas,’ he explained.

The research also found that the average house price in the countryside is equivalent to 6.3 times gross annual average earnings. The comparable ratio for urban areas is 4.9.

There are only five rural areas where the ratio of prices to earnings is below the historical long-term average of 4.0; Copeland in Cumbria at 2.7, Stirling at 3.4, East Ayrshire at 3.5, the Western Isles at 3.7, and Pendle in Lancashire at 3.9, so are the most affordable rural areas in the country.

The Cotswold is the least affordable rural area in Britain measured by the house price to earnings ratio with an average house price that is 9.4 times local gross annual average earnings. Six of the 10 least affordable rural areas in the country are in the South West.

Chiltern is the most expensive rural area in Britain with an average house price of £407,012. This is more than four times higher than in the least expensive rural area of East Ayrshire where the average price is £100,119.

First time buyers account for 40% of all mortgage financed purchases in rural areas, significantly lower than in urban areas where first time buyers account for 52% of such purchases.

Getting on the rural property ladder is at its most challenging for first time buyers in southern England. First time buyers account for only a quarter of all purchases in Cotswold and East Hampshire. In contrast, first time buyers account for over half of all purchases in Copeland, St Edmundsbury, Pendle, the Western Isles, Fenland, Moray, North Warwickshire and Carmarthenshire.

Article Source: http://www.propertywire.com/news/europe/uk-rural-property-premium-201310228374.html

Property Taxation Changes Could Threaten UK Housing Recovery

This article by Robyn Wilson of cnplus.co.uk on October 18th, 2013 reveals that UK housing recovery can be threatened by property taxation according to a report.

Erratic changes to property taxation could threaten the UK’s housing recovery, according to a new report commissioned by the Berkeley Group.

In a 45-page report co-authored by the London School of Economics, experts challenged current government policies hindering developer confidence in the housing market, which they said risked future investment in the sector.

Creating the Conditions for Growth identified levies such as the mansion tax as “real issues that could stop the market in its tracks” and called for a complete review of property taxation.

Berkeley managing director Rob Perrins said: “We have had years of reactive changes and deliberate inaction.

“The idea of a mansion tax is just the latest example of a political response rather than a coherent approach to creating a fair and predictable system.

“What we need is a comprehensive review of property taxation, looking at stamp duty, council tax, inheritance tax and the annual charge all at the same time.”

Berkeley highlighted three main reasons to address taxation immediately, placing housing as a core contributor to economic growth.

Meeting the housing requirements of population growth was another main factor for the group, as was London’s increasing need to build more affordable housing across an ever-differing income scale.

If effectively addressed, the report concludes that the UK could benefit from much-needed, stable investment.

Article Source: http://www.cnplus.co.uk/news/sectors/housing/property-taxation-changes-could-threaten-uk-housing-recovery/8654465.article