(LONDON) British Land reported slowing growth in first quarter net asset value yesterday, amid fresh worry for the economy and fears that banks could choke a property market revival with tough lending restrictions.
The biggest office landlord in the City of London booked 2.2 per cent growth in net asset value to 515 pence (S$11) a share for the quarter to end-June, compared with 15.1 per cent growth in the previous quarter, as more investors cite the continued lack of finance for a slowdown in UK commercial property price growth.
The value of its portfolio rose 1.4 per cent to £8.68 billion.
Average commercial property values have risen by just 1.8 per cent in the second quarter, after gaining 3.9 per cent in the first three months of this year, data from Investment Property Databank shows. 'Overall, risks to the global economy seem to have increased in recent months and we remain alert to the potential impact of the fiscal measures needed to address budget deficits not only in the UK, but across Europe,' chief executive Chris Grigg said.
Despite caution about the near-term outlook, British Land said that its overall occupancy increased to 97.8 per cent in the period, reflecting strong London office leasing activity and demand for space in its prime retail real estate.
A Europe-wide health check on European banks on July 23 showed lenders had largely rehabilitated their battered balance sheets but few analysts expect a surge in commercial property lending soon, even though just seven of 91 banks were shown to have inadequate capital to withstand new financial market shocks.
Net mortgage lending growth - a key barometer for the future stability of the UK property market - contracted to £665 million pounds from £838 million in May, Bank of England data showed. -- Reuters
Source: Business Times, 5 Aug 2010
Showing posts with label Overseas Property - UK. Show all posts
Showing posts with label Overseas Property - UK. Show all posts
Thursday, August 5, 2010
British home prices edge up in July
(LONDON) British house prices moved higher in July, but the market remains flat so far this year, data from top home-loans provider Halifax showed yesterday.
'House prices increased by 0.6 per cent in July, reversing the fall in June,' said Martin Ellis at Halifax. 'Overall, there has been little change in prices during 2010 so far,' he added. 'The mixed pattern of monthly rises and falls over the first seven months of the year is consistent with a slowing market. It is also in line with our view that house prices will be broadly unchanged over 2010 as a whole.'
Halifax, part of state-controlled Lloyds Banking Group (LBG), also revealed that the average house price in Britain stood at £167,425 (S$358,850).
In a separate statement, LBG said it bounced back into profit in the first half. Pre-tax profit stood at £1.6 billion in the six months to the end of June, which compared with a loss of about £4 billion in the same period of 2009. -- AFP
Source: Business Times, 5 Aug 2010
'House prices increased by 0.6 per cent in July, reversing the fall in June,' said Martin Ellis at Halifax. 'Overall, there has been little change in prices during 2010 so far,' he added. 'The mixed pattern of monthly rises and falls over the first seven months of the year is consistent with a slowing market. It is also in line with our view that house prices will be broadly unchanged over 2010 as a whole.'
Halifax, part of state-controlled Lloyds Banking Group (LBG), also revealed that the average house price in Britain stood at £167,425 (S$358,850).
In a separate statement, LBG said it bounced back into profit in the first half. Pre-tax profit stood at £1.6 billion in the six months to the end of June, which compared with a loss of about £4 billion in the same period of 2009. -- AFP
Source: Business Times, 5 Aug 2010
Tuesday, August 3, 2010
London luxury-home prices slide in July
Dip is the first in 16 months as recovery persuades more owners to sell
(LONDON) Luxury-home prices in central London declined in July for the first time in 16 months as the recovery persuaded more owners to sell, broker Knight Frank LLP said.
Prices of properties costing at least £1 million (S$2.1 million) fell 0.5 per cent from June, the London-based real estate adviser said in an e-mailed report yesterday. They rose 17 per cent from a year earlier, the smallest gain since February.
Values have climbed more than 23 per cent since a yearlong price slump ended in March 2009, boosted chiefly by overseas buyers encouraged by a weaker pound. The British currency's 6.3 per cent appreciation against the euro this year has reduced demand from Europeans, while owners are becoming too optimistic about the prices their homes will fetch, the broker said.
'Expectations of vendors are still very high after the rise in prices,' said Andrew Giller, who heads London property searches for The Buying Solution, an arm of Knight Frank that advises and acts for wealthy buyers. 'People have been rejoicing slightly too early.'
The luxury slowdown mirrors the broader UK housing market. Liam Bailey, Knight Frank's head of residential research, predicts that a drop in the second half will cut the 2010 gain for luxury homes in central London to 5 per cent.
Sale prices of residential property in England and Wales rose 8.4 per cent in June from a year earlier, down from the 9.7 per cent annual gain in the previous month, according to Land Registry figures released on July 28.
Mr Bailey estimates that some sellers are overpricing luxury homes by as much as 10 per cent. Another sign of 'over-ambitious pricing' is that sales are achieved at 95 per cent of the asking price, down from 97 per cent in May, he said.
The number of luxury properties for sale has increased by 7 per cent since May, while the higher costs of purchasing a home in neighbourhoods such as Chelsea, Belgravia and Kensington caused the number of buyers to fall 8 per cent, the broker said.
Some potential purchasers have chosen to rent instead, lifting rents for prime homes in central London by 9.2 per cent in the second quarter from a year earlier. The number of prime rental homes fell 64 per cent in the past two years as owners decided to sell, Knight Frank research shows.
Properties priced at £3 million to £5 million were most affected by July's drop in values after they had the biggest gains in the past 15 months.
Overall, values are still 6.1 per cent below the March 2008 peak, the broker said.
Knight Frank compiles its luxury-homes index from estimated values of properties in the Mayfair, St John's Wood, Regent's Park, Kensington, Notting Hill, Chelsea, Knightsbridge, Belgravia and South Bank neighbourhoods of London. -- Bloomberg
Source: Business Times, 3 Aug 2010
(LONDON) Luxury-home prices in central London declined in July for the first time in 16 months as the recovery persuaded more owners to sell, broker Knight Frank LLP said.
Prices of properties costing at least £1 million (S$2.1 million) fell 0.5 per cent from June, the London-based real estate adviser said in an e-mailed report yesterday. They rose 17 per cent from a year earlier, the smallest gain since February.
Values have climbed more than 23 per cent since a yearlong price slump ended in March 2009, boosted chiefly by overseas buyers encouraged by a weaker pound. The British currency's 6.3 per cent appreciation against the euro this year has reduced demand from Europeans, while owners are becoming too optimistic about the prices their homes will fetch, the broker said.
'Expectations of vendors are still very high after the rise in prices,' said Andrew Giller, who heads London property searches for The Buying Solution, an arm of Knight Frank that advises and acts for wealthy buyers. 'People have been rejoicing slightly too early.'
The luxury slowdown mirrors the broader UK housing market. Liam Bailey, Knight Frank's head of residential research, predicts that a drop in the second half will cut the 2010 gain for luxury homes in central London to 5 per cent.
Sale prices of residential property in England and Wales rose 8.4 per cent in June from a year earlier, down from the 9.7 per cent annual gain in the previous month, according to Land Registry figures released on July 28.
Mr Bailey estimates that some sellers are overpricing luxury homes by as much as 10 per cent. Another sign of 'over-ambitious pricing' is that sales are achieved at 95 per cent of the asking price, down from 97 per cent in May, he said.
The number of luxury properties for sale has increased by 7 per cent since May, while the higher costs of purchasing a home in neighbourhoods such as Chelsea, Belgravia and Kensington caused the number of buyers to fall 8 per cent, the broker said.
Some potential purchasers have chosen to rent instead, lifting rents for prime homes in central London by 9.2 per cent in the second quarter from a year earlier. The number of prime rental homes fell 64 per cent in the past two years as owners decided to sell, Knight Frank research shows.
Properties priced at £3 million to £5 million were most affected by July's drop in values after they had the biggest gains in the past 15 months.
Overall, values are still 6.1 per cent below the March 2008 peak, the broker said.
Knight Frank compiles its luxury-homes index from estimated values of properties in the Mayfair, St John's Wood, Regent's Park, Kensington, Notting Hill, Chelsea, Knightsbridge, Belgravia and South Bank neighbourhoods of London. -- Bloomberg
Source: Business Times, 3 Aug 2010
Tuesday, July 27, 2010
First fall in UK house prices in 15 months
Further decline seen as govt budget cuts bite, more putting homes on sale
(LONDON) UK house prices fell this month for the first time in 15 months as the government's budget squeeze curbed demand and more people tried to sell their properties, Hometrack Ltd said.
The average price in England and Wales fell 0.1 per cent from June to £158,700 (S$335,167), the London-based property researcher said in an e-mailed report yesterday, citing a survey of surveyors and real-estate agents. Home values in the capital led the decline, dropping 0.2 per cent. On the year, prices rose 2 per cent.
'The fall in prices marks a turning point for the housing market,' Richard Donnell, director of research at Hometrack, said in the report. 'Further modest price falls are inevitable over the second half of the year as the volume of homes for sale continues to rise and demand remains weak on the back of concerns over the wider economic outlook and uncertainty over the impact of recently announced cuts in government spending.'
The number of Britons expecting house prices to rise in the next year has dropped in a 'significant shift' in sentiment, Rightmove plc said in a separate report yesterday. The property market's outlook has dimmed as the nation braces for the deepest spending cuts since World War II and policy makers fret that threats to economic growth have increased.
An increase in the number of homes for sale is also depressing prices, with the amount of properties listed with estate agents rising 3.6 per cent this month, Hometrack said. In contrast, demand for homes has fallen, with the number of potential buyers registering with estate agents dropping 1.3 per cent, led by a 2.7 per cent decline in London.
'With falling demand and rising supply, there is a real possibility of sales volumes declining,' Mr Donnell said. 'With no immediate prospect of an upturn in demand, price levels are likely to remain under downward pressure in the coming months.'
Yesterday's report adds to evidence that the housing-market recovery is waning. Rightmove, owner of the UK's biggest property website, said last week that sellers cut prices for the first time this year and will probably keep doing so for the remainder of 2010, while Lloyds Banking Group plc's Halifax division said that house prices fell in June by the most in four months.
Confidence in future house prices has also fallen. The number of people expecting home values to be higher in a year fell to 41 per cent this month from 50 per cent in the previous quarter, Rightmove said yesterday. The company surveyed 22,010 people online between July 5 and July 19.
The drop 'is a significant shift', Miles Shipside, Rightmove's commercial director, said. 'With austerity measures starting to bite, a growing nervousness is to be expected.'
Bank of England policy makers considered adding to their emergency stimulus this month as they judged that the economy's growth prospects had 'probably deteriorated'.
Gross domestic product rose 1.1 per cent in the three months through June, almost twice as fast as the 0.6 per cent gain in a Bloomberg News survey of 32 economists. -- Bloomberg
Source: Business Times, 27 Jul 2010
(LONDON) UK house prices fell this month for the first time in 15 months as the government's budget squeeze curbed demand and more people tried to sell their properties, Hometrack Ltd said.
The average price in England and Wales fell 0.1 per cent from June to £158,700 (S$335,167), the London-based property researcher said in an e-mailed report yesterday, citing a survey of surveyors and real-estate agents. Home values in the capital led the decline, dropping 0.2 per cent. On the year, prices rose 2 per cent.
'The fall in prices marks a turning point for the housing market,' Richard Donnell, director of research at Hometrack, said in the report. 'Further modest price falls are inevitable over the second half of the year as the volume of homes for sale continues to rise and demand remains weak on the back of concerns over the wider economic outlook and uncertainty over the impact of recently announced cuts in government spending.'
The number of Britons expecting house prices to rise in the next year has dropped in a 'significant shift' in sentiment, Rightmove plc said in a separate report yesterday. The property market's outlook has dimmed as the nation braces for the deepest spending cuts since World War II and policy makers fret that threats to economic growth have increased.
An increase in the number of homes for sale is also depressing prices, with the amount of properties listed with estate agents rising 3.6 per cent this month, Hometrack said. In contrast, demand for homes has fallen, with the number of potential buyers registering with estate agents dropping 1.3 per cent, led by a 2.7 per cent decline in London.
'With falling demand and rising supply, there is a real possibility of sales volumes declining,' Mr Donnell said. 'With no immediate prospect of an upturn in demand, price levels are likely to remain under downward pressure in the coming months.'
Yesterday's report adds to evidence that the housing-market recovery is waning. Rightmove, owner of the UK's biggest property website, said last week that sellers cut prices for the first time this year and will probably keep doing so for the remainder of 2010, while Lloyds Banking Group plc's Halifax division said that house prices fell in June by the most in four months.
Confidence in future house prices has also fallen. The number of people expecting home values to be higher in a year fell to 41 per cent this month from 50 per cent in the previous quarter, Rightmove said yesterday. The company surveyed 22,010 people online between July 5 and July 19.
The drop 'is a significant shift', Miles Shipside, Rightmove's commercial director, said. 'With austerity measures starting to bite, a growing nervousness is to be expected.'
Bank of England policy makers considered adding to their emergency stimulus this month as they judged that the economy's growth prospects had 'probably deteriorated'.
Gross domestic product rose 1.1 per cent in the three months through June, almost twice as fast as the 0.6 per cent gain in a Bloomberg News survey of 32 economists. -- Bloomberg
Source: Business Times, 27 Jul 2010
Tuesday, July 20, 2010
UK home price growth weakens in July
(LONDON) Asking prices for British homes fell for the first time this year in July, lowering the annual rate of growth to 3.7 per cent from 5 per cent in June, property website Rightmove showed yesterday.
Rightmove blamed the weakening on a rise in the number of homes coming up for sale, which had allowed buyers to gain the upper hand.
'The number of new mortgages being approved each month is less than half the number of new sellers,' said Miles Shipside, Rightmove's commercial director. 'Conditions are ripe for a strong buyers' market in the second half of 2010.'
Rightmove said the supply of properties coming up for sale was up almost 50 per cent compared with the same period last year while many buyers were still struggling to get mortgages. It predicted that asking price gains of around 7 per cent in the first half of this year would be wiped out by falls in the second half as a public spending squeeze and a weaker economic outlook weigh on confidence. -- Reuters
Source: Business Times, 20 Jul 2010
Rightmove blamed the weakening on a rise in the number of homes coming up for sale, which had allowed buyers to gain the upper hand.
'The number of new mortgages being approved each month is less than half the number of new sellers,' said Miles Shipside, Rightmove's commercial director. 'Conditions are ripe for a strong buyers' market in the second half of 2010.'
Rightmove said the supply of properties coming up for sale was up almost 50 per cent compared with the same period last year while many buyers were still struggling to get mortgages. It predicted that asking price gains of around 7 per cent in the first half of this year would be wiped out by falls in the second half as a public spending squeeze and a weaker economic outlook weigh on confidence. -- Reuters
Source: Business Times, 20 Jul 2010
UK home price growth weakens in July
(LONDON) Asking prices for British homes fell for the first time this year in July, lowering the annual rate of growth to 3.7 per cent from 5 per cent in June, property website Rightmove showed yesterday.
Rightmove blamed the weakening on a rise in the number of homes coming up for sale, which had allowed buyers to gain the upper hand.
'The number of new mortgages being approved each month is less than half the number of new sellers,' said Miles Shipside, Rightmove's commercial director. 'Conditions are ripe for a strong buyers' market in the second half of 2010.'
Rightmove said the supply of properties coming up for sale was up almost 50 per cent compared with the same period last year while many buyers were still struggling to get mortgages. It predicted that asking price gains of around 7 per cent in the first half of this year would be wiped out by falls in the second half as a public spending squeeze and a weaker economic outlook weigh on confidence. -- Reuters
Source: Business Times, 20 Jul 2010
Rightmove blamed the weakening on a rise in the number of homes coming up for sale, which had allowed buyers to gain the upper hand.
'The number of new mortgages being approved each month is less than half the number of new sellers,' said Miles Shipside, Rightmove's commercial director. 'Conditions are ripe for a strong buyers' market in the second half of 2010.'
Rightmove said the supply of properties coming up for sale was up almost 50 per cent compared with the same period last year while many buyers were still struggling to get mortgages. It predicted that asking price gains of around 7 per cent in the first half of this year would be wiped out by falls in the second half as a public spending squeeze and a weaker economic outlook weigh on confidence. -- Reuters
Source: Business Times, 20 Jul 2010
Thursday, July 15, 2010
European pension funds in alternatives
Real estate at 6-year peak, private equity, commodities, hedge funds also gain
(LONDON) Real estate investment by European pension funds last year reached a six-year peak amid renewed market confidence in alternative assets, research by global investment manager Invesco showed on Tuesday.
Private equity, hedge funds, and commodities also saw year-on-year gains as pension funds moved into investments not directly tied to mainstream financial markets, the report said.
Alternative investments made up 11.7 per cent of pension portfolio holdings last year, from 8.7 per cent a year earlier.
'The economic crisis dented confidence in alternatives, but European institutional investors seem to have embraced the sector once again,' said Simon Redman, head of product management at Invesco Real Estate.
'Institutional investors are reasserting their belief in the low correlation of alternatives to the mainstream asset classes.'
Real estate formed the bulk of alternative asset allocation, with 6.6 per cent of investors' total assets in this category, compared with 4.7 per cent in 2008, Invesco said.
The findings of Invesco's European Institutional Asset Management Survey, whose main focus is on European pension funds, point to a more positive sentiment compared with 2008.
Portfolio holdings in hedge funds overtook holdings in private equity, rising from 1.6 per cent in 2008 to 2.3 per cent last year, the report said.
Last Friday, Oakley Alternative Investment Management said that hedge funds are likely to prosper in currently volatile markets, while portfolios betting on mergers should profit from a lack of competition.
UK pension funds held the largest ratio of hedge funds compared with European counterparts at 3.6 per cent, followed by the Nordic countries at 3.2 per cent, and France with 3.0 per cent, Invesco said. Large- and medium-sized investors now both have at least a 3 per cent allocation to hedge funds, up from less than 2 per cent last year. Smaller investors have retained 2008's 1.8 per cent allocation, the report said. -- Reuters
Source: Business Times, 15 Jul 2010
(LONDON) Real estate investment by European pension funds last year reached a six-year peak amid renewed market confidence in alternative assets, research by global investment manager Invesco showed on Tuesday.
Private equity, hedge funds, and commodities also saw year-on-year gains as pension funds moved into investments not directly tied to mainstream financial markets, the report said.
Alternative investments made up 11.7 per cent of pension portfolio holdings last year, from 8.7 per cent a year earlier.
'The economic crisis dented confidence in alternatives, but European institutional investors seem to have embraced the sector once again,' said Simon Redman, head of product management at Invesco Real Estate.
'Institutional investors are reasserting their belief in the low correlation of alternatives to the mainstream asset classes.'
Real estate formed the bulk of alternative asset allocation, with 6.6 per cent of investors' total assets in this category, compared with 4.7 per cent in 2008, Invesco said.
The findings of Invesco's European Institutional Asset Management Survey, whose main focus is on European pension funds, point to a more positive sentiment compared with 2008.
Portfolio holdings in hedge funds overtook holdings in private equity, rising from 1.6 per cent in 2008 to 2.3 per cent last year, the report said.
Last Friday, Oakley Alternative Investment Management said that hedge funds are likely to prosper in currently volatile markets, while portfolios betting on mergers should profit from a lack of competition.
UK pension funds held the largest ratio of hedge funds compared with European counterparts at 3.6 per cent, followed by the Nordic countries at 3.2 per cent, and France with 3.0 per cent, Invesco said. Large- and medium-sized investors now both have at least a 3 per cent allocation to hedge funds, up from less than 2 per cent last year. Smaller investors have retained 2008's 1.8 per cent allocation, the report said. -- Reuters
Source: Business Times, 15 Jul 2010
UK house prices may fall as govt cuts sap confidence
Shortage of mortgage financing also expected to curtail demand
(EDINBURGH) UK house prices probably will fall the rest of the year as government spending cuts hurt consumer confidence and homeowners try to repay debt, according to economists and property brokers.
'Things aren't looking too great for the next few months,' said Fionnuala Earley, senior economist at Royal Bank of Scotland Group plc, which predicts that house prices will fall one per cent for the whole year.
'We're seeing increases in supply, consumer confidence weakening, and we are going to see real squeezes on disposable spending.'
The government's plan to reduce the UK deficit by slashing public sector jobs and raising taxes may wipe out gains in property values from the first half of the year, said Lucian Cook, research director at Savills plc in London. A shortage of mortgage financing will also curtail demand for homes, he said.
UK house values rose 3 per cent in the first half, according to Nationwide Building Society, the UK's largest customer-owned lender. Lloyds Banking Group plc's Halifax mortgage unit, Britain's biggest provider of home loans, estimates that they fell 1.6 per cent.
'Prices have outstripped expectations,' said Philip Shaw, chief economist at Investec Securities in London. 'There doesn't appear to be much momentum in starting this half of the year.'
Values slumped 23 per cent from the peak of the boom in September 2007 to the trough in April of last year after losses on US sub-prime mortgages led global credit markets to seize up, according to Halifax. They are currently at the level they were five years ago.
Now, mortgages are more expensive and harder to obtain for borrowers who can't afford a down payment of at least 25 per cent.
When the market was at its peak, banks were providing loans as large as five times a borrower's salary. That helped lift the average house price to a record 6.2 times earnings, compared with the long-term average of 3.7 times, according to Capital Economics Ltd. That ratio has since fallen to 5.2.
At the height of the UK's previous housing boom that ended in 1989, the ratio was only 4.7. Values slumped 13 per cent during the next four years. They didn't return to pre-crash levels until January 1998, almost nine years later, even before adjusting for inflation.
'Prices are still overpriced relative to incomes,' said Paul Diggle, a housing economist at London-based Capital Economics. 'We think they will decline 5 per cent this year as a whole and our forecast is for falls in the next couple of years.'
Foreclosure rates have risen more slowly than projections by the Council of Mortgage Lenders, as the Bank of England kept its benchmark interest rate at a record low of 0.5 per cent since March 2009. That has allowed homeowners to keep paying off their mortgages and helped limit repossessions.
Britons have been paying down debt on concern about job losses and government spending cuts. Consumer debt fell in May for a third straight month to its lowest level in six months, according to the Bank of England. Unsecured borrowing is at its lowest level since September 2007.
Claimants for jobless benefits in the UK almost doubled since March 2008 to 1.48 million people in May, which was the lowest amount in 14 months. They may climb 12 per cent more by the end of 2010 to 1.66 million people, according to the average of 38 forecasts compiled by the UK Treasury. That's still 260,000 fewer than the same forecasters were predicting in November.
Even so, Mr Shaw said last month that the housing market recovery in the first half may falter because mortgage approvals remain at 45 per cent of their long-term average.
There were 25 per cent fewer house sales in the first five months of 2010 than in the previous five, according to Savills, the UK's largest publicly traded real estate broker.
'Undoubtedly, prices will fall in the second half,' said Savills's Mr Cook. 'There is more stock coming to the market than people looking to buy.'
At best, Savills expects prices to end the year unchanged from 2009. - Bloomberg
Source: Business Times, 15 Jul 2010
(EDINBURGH) UK house prices probably will fall the rest of the year as government spending cuts hurt consumer confidence and homeowners try to repay debt, according to economists and property brokers.
'Things aren't looking too great for the next few months,' said Fionnuala Earley, senior economist at Royal Bank of Scotland Group plc, which predicts that house prices will fall one per cent for the whole year.
'We're seeing increases in supply, consumer confidence weakening, and we are going to see real squeezes on disposable spending.'
The government's plan to reduce the UK deficit by slashing public sector jobs and raising taxes may wipe out gains in property values from the first half of the year, said Lucian Cook, research director at Savills plc in London. A shortage of mortgage financing will also curtail demand for homes, he said.
UK house values rose 3 per cent in the first half, according to Nationwide Building Society, the UK's largest customer-owned lender. Lloyds Banking Group plc's Halifax mortgage unit, Britain's biggest provider of home loans, estimates that they fell 1.6 per cent.
'Prices have outstripped expectations,' said Philip Shaw, chief economist at Investec Securities in London. 'There doesn't appear to be much momentum in starting this half of the year.'
Values slumped 23 per cent from the peak of the boom in September 2007 to the trough in April of last year after losses on US sub-prime mortgages led global credit markets to seize up, according to Halifax. They are currently at the level they were five years ago.
Now, mortgages are more expensive and harder to obtain for borrowers who can't afford a down payment of at least 25 per cent.
When the market was at its peak, banks were providing loans as large as five times a borrower's salary. That helped lift the average house price to a record 6.2 times earnings, compared with the long-term average of 3.7 times, according to Capital Economics Ltd. That ratio has since fallen to 5.2.
At the height of the UK's previous housing boom that ended in 1989, the ratio was only 4.7. Values slumped 13 per cent during the next four years. They didn't return to pre-crash levels until January 1998, almost nine years later, even before adjusting for inflation.
'Prices are still overpriced relative to incomes,' said Paul Diggle, a housing economist at London-based Capital Economics. 'We think they will decline 5 per cent this year as a whole and our forecast is for falls in the next couple of years.'
Foreclosure rates have risen more slowly than projections by the Council of Mortgage Lenders, as the Bank of England kept its benchmark interest rate at a record low of 0.5 per cent since March 2009. That has allowed homeowners to keep paying off their mortgages and helped limit repossessions.
Britons have been paying down debt on concern about job losses and government spending cuts. Consumer debt fell in May for a third straight month to its lowest level in six months, according to the Bank of England. Unsecured borrowing is at its lowest level since September 2007.
Claimants for jobless benefits in the UK almost doubled since March 2008 to 1.48 million people in May, which was the lowest amount in 14 months. They may climb 12 per cent more by the end of 2010 to 1.66 million people, according to the average of 38 forecasts compiled by the UK Treasury. That's still 260,000 fewer than the same forecasters were predicting in November.
Even so, Mr Shaw said last month that the housing market recovery in the first half may falter because mortgage approvals remain at 45 per cent of their long-term average.
There were 25 per cent fewer house sales in the first five months of 2010 than in the previous five, according to Savills, the UK's largest publicly traded real estate broker.
'Undoubtedly, prices will fall in the second half,' said Savills's Mr Cook. 'There is more stock coming to the market than people looking to buy.'
At best, Savills expects prices to end the year unchanged from 2009. - Bloomberg
Source: Business Times, 15 Jul 2010
Tuesday, July 13, 2010
Prime City of London office rents up 25%
Recession-driven discounts, lack of office space fuelling rise: NB Real Estate
(LONDON) Prime office rents in the City of London financial district have gained nearly 25 per cent since January, with recession-driven discounts pushing tenant demand, property consultancy NB Real Estate said yesterday.
The six-month rise was the strongest period of rental growth since reliable records began in 1988, NB Real Estate said. It has been part-fuelled by a lull in the development of high quality office space.
'The recession saw a collapse in new construction starts in the City. Tenants are now locked in bidding wars over the dwindling supply of grade A space, which is driving up rents,' said James Gillett, director of City Offices at NB Real Estate.
The amount of available office space in the City at the end of the second quarter of this year was 6.8 million square feet, down 28 per cent on the year earlier period.
Many London businesses are making a so-called 'flight to quality' as offices previously considered too expensive are now affordable, Mr Gillett said.
Average rents for prime offices in London rose from £42.50 (S$88) a square foot in January to £53 a sq ft at end-June, NB Real Estate said in a statement.
London rents are still well below their third-quarter 2007 peak of £69.50 a sq ft, said NB Real Estate, a unit of Capita Group.
Secondary office stock has remained relatively immune to the rent rises. Mr Gillett expects that to change once the supply of primary office stock dries up, which he said was likely due to the lack of new construction projects.
'The shortage of new space will become more acute over the next few years. There have been no significant construction starts in the City this year, as lack of development finance continues to be a concern,' Mr Gillett said.
Docklands office rents gained 6.7 per cent in the second quarter of this year to £40 a sq ft. Rents in London's West End theatre district held at £67.50 a sq ft, after a 3.8 per cent hike in the first-quarter this year. -- Reuters
Source: Business Times, 13 Jul 2010
(LONDON) Prime office rents in the City of London financial district have gained nearly 25 per cent since January, with recession-driven discounts pushing tenant demand, property consultancy NB Real Estate said yesterday.
The six-month rise was the strongest period of rental growth since reliable records began in 1988, NB Real Estate said. It has been part-fuelled by a lull in the development of high quality office space.
'The recession saw a collapse in new construction starts in the City. Tenants are now locked in bidding wars over the dwindling supply of grade A space, which is driving up rents,' said James Gillett, director of City Offices at NB Real Estate.
The amount of available office space in the City at the end of the second quarter of this year was 6.8 million square feet, down 28 per cent on the year earlier period.
Many London businesses are making a so-called 'flight to quality' as offices previously considered too expensive are now affordable, Mr Gillett said.
Average rents for prime offices in London rose from £42.50 (S$88) a square foot in January to £53 a sq ft at end-June, NB Real Estate said in a statement.
London rents are still well below their third-quarter 2007 peak of £69.50 a sq ft, said NB Real Estate, a unit of Capita Group.
Secondary office stock has remained relatively immune to the rent rises. Mr Gillett expects that to change once the supply of primary office stock dries up, which he said was likely due to the lack of new construction projects.
'The shortage of new space will become more acute over the next few years. There have been no significant construction starts in the City this year, as lack of development finance continues to be a concern,' Mr Gillett said.
Docklands office rents gained 6.7 per cent in the second quarter of this year to £40 a sq ft. Rents in London's West End theatre district held at £67.50 a sq ft, after a 3.8 per cent hike in the first-quarter this year. -- Reuters
Source: Business Times, 13 Jul 2010
Tuesday, June 29, 2010
Sales holding up but outlook cautious: UK housebuilder
(LONDON) British housebuilder Taylor Wimpey plc said sales had held up in the first half of the year, but could offer little reassurance for the full year as consumer confidence remains depressed.
Taylor Wimpey, the first volume housebuilder to update investors since the UK general election and subsequent emergency budget, said sales had been dented in the second quarter as consumers delayed making big ticket purchases around the poll.
But the UK's third-largest housebuilder by market value said sales had recovered in recent weeks, echoing comments from luxury apartment developer Berkeley Group on Friday.
This will give some comfort to the sector, which has been struggling to regain a sure footing after the downturn knocked building activity, caused many builders to turn to shareholders for cash and wiped a fifth off property values.
But low mortgage availability - especially for first time buyers - and broader macro-economic uncertainty is denting short-term confidence in the sector.
'With ongoing political and economic uncertainty, we continue to run the business on a cautious basis, with selective land investment and an ongoing focus on costs and cash,' said Taylor Wimpey in a statement.
The company's comments come after a survey by mortgage lender Nationwide showed UK consumer confidence was at its lowest level in almost a year in May, reflecting concerns about the UK economy and unemployment which is set to rise sharply in the wake of government spending cuts.
House prices fell 0.4 per cent in May according to mortgage lender Halifax, while Nationwide reported a 0.5 per cent rise for the month, half the rate of the previous two months. The Land Registry said prices had fallen 0.2 per cent on the month.
Further pain may be on the cards as the government looks to reform the planning system. Taylor Wimpey said any change needs to be implemented with a clear transition period and with regard to cultural change.
The reform of the planning system - aimed at giving greater power to the local areas - is causing a headache for the building sector as some local authorities have already put planning decisions on hold until there is greater certainty from the coalition government.
Taylor Wimpey said it expects to complete 4,650 homes in the first half at an average selling price of £167,000 (S$350,000). This compares with 4,702 homes at an average selling price of £153,000 in the same period last year.
Taylor Wimpey, the most highly geared UK housebuilder with net debt of £650 million, said trading in the US market was volatile in the year-to-date, but it sees 'a steadier, clearer picture' towards the end of the year. -- Reuters
Source: Business Times, 29 Jun 2010
Taylor Wimpey, the first volume housebuilder to update investors since the UK general election and subsequent emergency budget, said sales had been dented in the second quarter as consumers delayed making big ticket purchases around the poll.
But the UK's third-largest housebuilder by market value said sales had recovered in recent weeks, echoing comments from luxury apartment developer Berkeley Group on Friday.
This will give some comfort to the sector, which has been struggling to regain a sure footing after the downturn knocked building activity, caused many builders to turn to shareholders for cash and wiped a fifth off property values.
But low mortgage availability - especially for first time buyers - and broader macro-economic uncertainty is denting short-term confidence in the sector.
'With ongoing political and economic uncertainty, we continue to run the business on a cautious basis, with selective land investment and an ongoing focus on costs and cash,' said Taylor Wimpey in a statement.
The company's comments come after a survey by mortgage lender Nationwide showed UK consumer confidence was at its lowest level in almost a year in May, reflecting concerns about the UK economy and unemployment which is set to rise sharply in the wake of government spending cuts.
House prices fell 0.4 per cent in May according to mortgage lender Halifax, while Nationwide reported a 0.5 per cent rise for the month, half the rate of the previous two months. The Land Registry said prices had fallen 0.2 per cent on the month.
Further pain may be on the cards as the government looks to reform the planning system. Taylor Wimpey said any change needs to be implemented with a clear transition period and with regard to cultural change.
The reform of the planning system - aimed at giving greater power to the local areas - is causing a headache for the building sector as some local authorities have already put planning decisions on hold until there is greater certainty from the coalition government.
Taylor Wimpey said it expects to complete 4,650 homes in the first half at an average selling price of £167,000 (S$350,000). This compares with 4,702 homes at an average selling price of £153,000 in the same period last year.
Taylor Wimpey, the most highly geared UK housebuilder with net debt of £650 million, said trading in the US market was volatile in the year-to-date, but it sees 'a steadier, clearer picture' towards the end of the year. -- Reuters
Source: Business Times, 29 Jun 2010
UK house price growth slows further in June
(LONDON) UK house prices rose the least in five months in June as the prospect of a budget squeeze curbed demand and the supply of homes for sale increased, Hometrack Ltd said.
The average price in England and Wales gained 0.1 per cent from May, the slowest pace since January, to £158,900 (S$332,309), the London-based property researcher said in an e- mail report yesterday.
The number of new buyers registering with real-estate agents grew 0.1 per cent, and fell in six out of 10 regions, led by a 0.9 per cent drop in London.
Chancellor of the Exchequer George Osborne last week announced the deepest spending cuts in a generation and higher taxes to cut the UK's budget deficit. Consumer confidence slumped the most since July 2008 last month, Nationwide Building Society said. Home-price inflation has also been restrained by an increase in the number of properties for sale.
'Over the last four months the supply of housing for sale has grown three times faster than demand,' Richard Donnell, director of research at Hometrack, said in the report. 'We expect demand for housing to slow further as seasonal factors come into play and households consider the implications of the budget on their finances and on the economy.'
From a year earlier, prices increased 2.1 per cent in June, Hometrack said. The number of properties being listed for sale grew 2.9 per cent from May and is up 15 per cent in the past four months.
'We expect market conditions to remain subdued with prices likely to track sideways at best, but with the distinct possibility of small month-on-month falls,' Mr Donnell said.
Hometrack said higher interest rates pose 'the greatest potential threat' to the housing market and could lead to a 'material change' in market conditions. Bank of England policy maker Andrew Sentance voted for an interest-rate increase at the central bank's June 10 meeting, the minutes of the decision showed. It marked the first push for a rise within the policy committee in almost two years. The seven other members voted to leave the benchmark rate on hold at a record low 0.5 per cent.
Hometrack surveyed 1,507 agents and surveyors at 5,712 companies for its June report. -- Bloomberg
Source: Business Times, 29 Jun 2010
The average price in England and Wales gained 0.1 per cent from May, the slowest pace since January, to £158,900 (S$332,309), the London-based property researcher said in an e- mail report yesterday.
The number of new buyers registering with real-estate agents grew 0.1 per cent, and fell in six out of 10 regions, led by a 0.9 per cent drop in London.
Chancellor of the Exchequer George Osborne last week announced the deepest spending cuts in a generation and higher taxes to cut the UK's budget deficit. Consumer confidence slumped the most since July 2008 last month, Nationwide Building Society said. Home-price inflation has also been restrained by an increase in the number of properties for sale.
'Over the last four months the supply of housing for sale has grown three times faster than demand,' Richard Donnell, director of research at Hometrack, said in the report. 'We expect demand for housing to slow further as seasonal factors come into play and households consider the implications of the budget on their finances and on the economy.'
From a year earlier, prices increased 2.1 per cent in June, Hometrack said. The number of properties being listed for sale grew 2.9 per cent from May and is up 15 per cent in the past four months.
'We expect market conditions to remain subdued with prices likely to track sideways at best, but with the distinct possibility of small month-on-month falls,' Mr Donnell said.
Hometrack said higher interest rates pose 'the greatest potential threat' to the housing market and could lead to a 'material change' in market conditions. Bank of England policy maker Andrew Sentance voted for an interest-rate increase at the central bank's June 10 meeting, the minutes of the decision showed. It marked the first push for a rise within the policy committee in almost two years. The seven other members voted to leave the benchmark rate on hold at a record low 0.5 per cent.
Hometrack surveyed 1,507 agents and surveyors at 5,712 companies for its June report. -- Bloomberg
Source: Business Times, 29 Jun 2010
Gains in London home prices slow as owners decide to sell
More luxury houses and apartments on market as market recovers: Savills
(LONDON) Luxury-home prices in central London increased by the smallest amount in five quarters after a year-long recovery in values persuaded more owners to put apartments and houses on the market, Savills plc said.
The average value of a home costing more than £1 million (S$2.09 million) rose 0.6 per cent in the second quarter from the first three months of the year, according to the London-based property broker. Prices were 12 per cent higher than a year earlier, down from an annual gain of almost 17 per cent in the first quarter.
'It now seems clear we're at a tipping point' as more stock has come onto the market just as election uncertainty and planned government budget cuts hurt demand, Yolande Barnes, head of residential research at Savills, said in the statement.
Prices will fall about 4 per cent in the second half as the fragile economic recovery and higher taxes dampen appetites for homes in neighbourhoods like Mayfair, Kensington and Notting Hill, Barnes predicted. She expects values to decline one per cent in the full year, following an 8.8 per cent gain in 2009.
Luxury property values have gained every month since March last year as buyers competed for a limited number of homes for sale. Prices increased 3 per cent in first quarter and 4.3 per cent in the last three months of 2009. The second quarter increase was the smallest since an 18-month slide in prices bottomed out in March 2009.
Chancellor of the Exchequer George Osborne announced last week that from June 23 the tax rate on profits from the sale of rental properties or second homes will rise to 28 per cent from 18 per cent for UK taxpayers with total annual income exceeding £37,400.
Brokers reported a pickup in properties put on the market after a plan announced by the governing Conservative and Liberal Democrat parties implied that the capital gains tax rate would increase to as much as 50 per cent.
From April, individuals earning more than £150,000 a year are subject to a 50 per cent income tax levy. Mr Osborne also left in place the previous administration's plan to raise property transfer tax, known as stamp duty, for homes costing more than £1 million to 5 per cent in April 2011 from 4 per cent now.
The tax changes are unlikely to reduce demand for London real estate from overseas buyers, who account for half the purchases and 63 per cent of deals involving properties worth more £15 million, Savills said.
While values are 10 per cent below the peak reached in the third quarter of 2007, the pound's slide means that in dollar terms prices are down by 33 per cent, Savills said.
Properties selling for more than £5 million appreciated by 1.3 per cent from the end of March, the broker said, while homes costing in excess of £15 million gained 1.5 per cent in the quarter. -- Bloomberg
Source: Business Times, 29 Jun 2010
(LONDON) Luxury-home prices in central London increased by the smallest amount in five quarters after a year-long recovery in values persuaded more owners to put apartments and houses on the market, Savills plc said.
The average value of a home costing more than £1 million (S$2.09 million) rose 0.6 per cent in the second quarter from the first three months of the year, according to the London-based property broker. Prices were 12 per cent higher than a year earlier, down from an annual gain of almost 17 per cent in the first quarter.
'It now seems clear we're at a tipping point' as more stock has come onto the market just as election uncertainty and planned government budget cuts hurt demand, Yolande Barnes, head of residential research at Savills, said in the statement.
Prices will fall about 4 per cent in the second half as the fragile economic recovery and higher taxes dampen appetites for homes in neighbourhoods like Mayfair, Kensington and Notting Hill, Barnes predicted. She expects values to decline one per cent in the full year, following an 8.8 per cent gain in 2009.
Luxury property values have gained every month since March last year as buyers competed for a limited number of homes for sale. Prices increased 3 per cent in first quarter and 4.3 per cent in the last three months of 2009. The second quarter increase was the smallest since an 18-month slide in prices bottomed out in March 2009.
Chancellor of the Exchequer George Osborne announced last week that from June 23 the tax rate on profits from the sale of rental properties or second homes will rise to 28 per cent from 18 per cent for UK taxpayers with total annual income exceeding £37,400.
Brokers reported a pickup in properties put on the market after a plan announced by the governing Conservative and Liberal Democrat parties implied that the capital gains tax rate would increase to as much as 50 per cent.
From April, individuals earning more than £150,000 a year are subject to a 50 per cent income tax levy. Mr Osborne also left in place the previous administration's plan to raise property transfer tax, known as stamp duty, for homes costing more than £1 million to 5 per cent in April 2011 from 4 per cent now.
The tax changes are unlikely to reduce demand for London real estate from overseas buyers, who account for half the purchases and 63 per cent of deals involving properties worth more £15 million, Savills said.
While values are 10 per cent below the peak reached in the third quarter of 2007, the pound's slide means that in dollar terms prices are down by 33 per cent, Savills said.
Properties selling for more than £5 million appreciated by 1.3 per cent from the end of March, the broker said, while homes costing in excess of £15 million gained 1.5 per cent in the quarter. -- Bloomberg
Source: Business Times, 29 Jun 2010
Saturday, June 26, 2010
Foreign home buyers help boost Berkeley profit
OVERSEAS buyers hunting for a property bargain in London helped support earnings at British upmarket apartment developer Berkeley Group in the past year, the company said yesterday.
Berkeley, which has championed deluxe riverside developments in London, said its focus on the capital and the south-east had helped prop up sales during the downturn, as equity-rich foreign investors are lured by attractive pricing and a weak sterling.
'Our location helps a lot; London has got the Olympics coming, it's got the business sector, everyone thought businesses would relocate, but the coalition government is a lot more business-friendly, that's a very good start for us,' Berkeley's managing director Rob Perrins told Reuters.
Mr Perrins said 30 per cent of investors are now from outside the UK, more than double the historic level of 12 per cent .
Berkeley said the domestic market had stabilised during the year and had recovered after a temporary blip around the election in May, but remained at a relatively subdued level.
The group reported a pretax profit for the year to end-April of £110.3 million (S$229.4 million), down 8.4 per cent on the year before but topping expectations in a range of £97.8 million to £108.5 million according to a Thomson Reuters I/B/E/S poll of nine analysts.
Revenue fell 12 per cent to £615 million.
Berkeley had in March signalled that it would report results at the higher end of analyst expectations.
British housebuilders breathed a sigh of relief after the new coalition government's emergency budget unveiled no nasty surprises for the sector on Tuesday.
However, builders are not out of the doldrums yet as fears of further macroeconomic gloom and rising unemployment stunts optimism with mortgage lending still at depressed levels.
Berkeley said it would not pay a dividend despite its strong cash position, choosing to focus on land investment which it is aiming to grow by 10 per cent this year.
'Some had expected a 10p dividend to be made . . . we always expected this later in the cycle and . . . we do expect Berkeley to hand potentially sizeable sums back to shareholders across the next five years,' said analyst Robin Hardy at brokerage KBC Peel Hunt.
In the year, the company agreed to buy 2,200 plots across 20 sites in London and the south-east. The developer sold 2,201 residential units at an average £263,000, compared with 1,501 units at an average £395,000 last year.
Berkeley shares were up 0.7 per cent at 805-1/2p by 0933 GMT, still well below a 1,650p peak set in mid-2007. -- Reuters
Source: Business Times, 26 Jun 2010
Berkeley, which has championed deluxe riverside developments in London, said its focus on the capital and the south-east had helped prop up sales during the downturn, as equity-rich foreign investors are lured by attractive pricing and a weak sterling.
'Our location helps a lot; London has got the Olympics coming, it's got the business sector, everyone thought businesses would relocate, but the coalition government is a lot more business-friendly, that's a very good start for us,' Berkeley's managing director Rob Perrins told Reuters.
Mr Perrins said 30 per cent of investors are now from outside the UK, more than double the historic level of 12 per cent .
Berkeley said the domestic market had stabilised during the year and had recovered after a temporary blip around the election in May, but remained at a relatively subdued level.
The group reported a pretax profit for the year to end-April of £110.3 million (S$229.4 million), down 8.4 per cent on the year before but topping expectations in a range of £97.8 million to £108.5 million according to a Thomson Reuters I/B/E/S poll of nine analysts.
Revenue fell 12 per cent to £615 million.
Berkeley had in March signalled that it would report results at the higher end of analyst expectations.
British housebuilders breathed a sigh of relief after the new coalition government's emergency budget unveiled no nasty surprises for the sector on Tuesday.
However, builders are not out of the doldrums yet as fears of further macroeconomic gloom and rising unemployment stunts optimism with mortgage lending still at depressed levels.
Berkeley said it would not pay a dividend despite its strong cash position, choosing to focus on land investment which it is aiming to grow by 10 per cent this year.
'Some had expected a 10p dividend to be made . . . we always expected this later in the cycle and . . . we do expect Berkeley to hand potentially sizeable sums back to shareholders across the next five years,' said analyst Robin Hardy at brokerage KBC Peel Hunt.
In the year, the company agreed to buy 2,200 plots across 20 sites in London and the south-east. The developer sold 2,201 residential units at an average £263,000, compared with 1,501 units at an average £395,000 last year.
Berkeley shares were up 0.7 per cent at 805-1/2p by 0933 GMT, still well below a 1,650p peak set in mid-2007. -- Reuters
Source: Business Times, 26 Jun 2010
Tuesday, June 22, 2010
Asking price for London homes at record levels
Sellers capitalise on market recovery and scrapping of disclosure rules
(LONDON) London home sellers raised asking prices to a record as they sought to tap the housing-market recovery and benefit from the scrapping of costly disclosure rules, Rightmove plc said.
Average asking prices in the capital rose 2.2 per cent in June from the previous month to £429,597 (S$878,250), the operator of Britain's biggest property website said in an e- mail statement in London yesterday. Prices increased for a sixth month in the country as a whole, climbing 0.3 per cent.
Demand for properties has withstood uncertainty on the UK economy and the increase in supply caused by the end to so-called Home Information Pack requirements for marketing properties. The housing-market recovery may still falter because mortgage approvals remain at only half the level of the 2007 boom and as budget cuts and tax increases loom, Rightmove said.
'There is a bit of a post-HIP party atmosphere, with estate agents glad to restock their shelves and new sellers willing to give moving a go with fewer cost commitments,' Miles Shipside, Rightmove's commercial director, said in the statement. 'This pent-up enthusiasm to sell will tail off to a degree, though if it continues those who are serious about selling will have to consider reducing their prices.'
James Gubbins, a real-estate agent in the Pimlico area of London, close to the Tate Britain museum, said the abolition of Home Information Packs (HIPs) has helped him shift properties that otherwise would have languished unsold. He was able to turn an instruction to market a flat on Morton Place, listed for £850,000, into a sale of the entire building.
'We wouldn't have been able to move as quickly had there been a HIPs requirement, the buyer would have gone off and bought something else,' he said in a telephone interview. 'We've still got an imbalance between supply and demand, and that's sustaining prices.' The supply of new properties for sale in London rose 34 per cent from May, and is up 88 per cent from a year earlier. The time a property spends on the market dropped to 58 days from 83 days during the previous month, Rightmove said.
The 'barrier to selling' created by HIPs 'has been a major factor in underpinning prices, and indeed creating a new all-time high average asking price when combined with the robustness of London buyer demand,' Rightmove said.
London led gains across Britain, where price growth slowed to less than half of the 0.7 per cent pace recorded in May. National average asking prices rose 5 per cent from a year earlier and are less than £5,000 short of the peak reached in May 2008.
House prices may fall in the second half of the year, and may show no change for 2010, Mr Shipside said. A scarcity of mortgages, and the possibility that the government will raise capital-gains tax, will ease demand for new property, he said.
Prime Minister David Cameron has pledged 'fair and reasonable' changes to the capital-gains tax, now at 18 per cent, compared with a top rate of income tax above 40 per cent. Chancellor of the Exchequer George Osborne may announce a higher levy in tomorrow's emergency budget.
Britons' anxiety about their household finances worsened in June amid concern about looming austerity in public finances, according to a survey of more than 2,000 households by Markit Economics.
Forty-four percent of Britons said their financial position will worsen in the next 12 months, while only 22 per cent predicted an improvement.
The Council of Mortgage Lenders said last week that credit availability 'remains problematic for first-time buyers who tend not to have a substantial deposit.' The Bank of England said on June 18 that the six biggest mortgage banks approved 51,000 mortgages in May, still down by 10,000 from November.
'These factors are likely to put an end to this year's recovery in house prices,' Mr Shipside said.
'We are now seeing more competition among sellers and a slowdown in the number of buyers as the market begins to turn.'
Source: Business Times, 22 Jun 2010
(LONDON) London home sellers raised asking prices to a record as they sought to tap the housing-market recovery and benefit from the scrapping of costly disclosure rules, Rightmove plc said.
Average asking prices in the capital rose 2.2 per cent in June from the previous month to £429,597 (S$878,250), the operator of Britain's biggest property website said in an e- mail statement in London yesterday. Prices increased for a sixth month in the country as a whole, climbing 0.3 per cent.
Demand for properties has withstood uncertainty on the UK economy and the increase in supply caused by the end to so-called Home Information Pack requirements for marketing properties. The housing-market recovery may still falter because mortgage approvals remain at only half the level of the 2007 boom and as budget cuts and tax increases loom, Rightmove said.
'There is a bit of a post-HIP party atmosphere, with estate agents glad to restock their shelves and new sellers willing to give moving a go with fewer cost commitments,' Miles Shipside, Rightmove's commercial director, said in the statement. 'This pent-up enthusiasm to sell will tail off to a degree, though if it continues those who are serious about selling will have to consider reducing their prices.'
James Gubbins, a real-estate agent in the Pimlico area of London, close to the Tate Britain museum, said the abolition of Home Information Packs (HIPs) has helped him shift properties that otherwise would have languished unsold. He was able to turn an instruction to market a flat on Morton Place, listed for £850,000, into a sale of the entire building.
'We wouldn't have been able to move as quickly had there been a HIPs requirement, the buyer would have gone off and bought something else,' he said in a telephone interview. 'We've still got an imbalance between supply and demand, and that's sustaining prices.' The supply of new properties for sale in London rose 34 per cent from May, and is up 88 per cent from a year earlier. The time a property spends on the market dropped to 58 days from 83 days during the previous month, Rightmove said.
The 'barrier to selling' created by HIPs 'has been a major factor in underpinning prices, and indeed creating a new all-time high average asking price when combined with the robustness of London buyer demand,' Rightmove said.
London led gains across Britain, where price growth slowed to less than half of the 0.7 per cent pace recorded in May. National average asking prices rose 5 per cent from a year earlier and are less than £5,000 short of the peak reached in May 2008.
House prices may fall in the second half of the year, and may show no change for 2010, Mr Shipside said. A scarcity of mortgages, and the possibility that the government will raise capital-gains tax, will ease demand for new property, he said.
Prime Minister David Cameron has pledged 'fair and reasonable' changes to the capital-gains tax, now at 18 per cent, compared with a top rate of income tax above 40 per cent. Chancellor of the Exchequer George Osborne may announce a higher levy in tomorrow's emergency budget.
Britons' anxiety about their household finances worsened in June amid concern about looming austerity in public finances, according to a survey of more than 2,000 households by Markit Economics.
Forty-four percent of Britons said their financial position will worsen in the next 12 months, while only 22 per cent predicted an improvement.
The Council of Mortgage Lenders said last week that credit availability 'remains problematic for first-time buyers who tend not to have a substantial deposit.' The Bank of England said on June 18 that the six biggest mortgage banks approved 51,000 mortgages in May, still down by 10,000 from November.
'These factors are likely to put an end to this year's recovery in house prices,' Mr Shipside said.
'We are now seeing more competition among sellers and a slowdown in the number of buyers as the market begins to turn.'
Source: Business Times, 22 Jun 2010
Tuesday, June 15, 2010
Shard's developer buys out sole tenant
(LONDON) The developer of the Shard, an 80-storey tower being built near London's Thames river, bought out its only office tenant on the prospect that rents will almost double from the agreed rate when the building is finished.
London Bridge Quarter Ltd, a joint venture between developer Sellar Property Group and the Qatar Central Bank, bought Transport for London's contract to rent 200,000 square feet (18,581 square metres) of space, according to a statement from LBQ. The building, which is due to be completed in 2012, will have 586,000 sq ft of offices.
Transport for London, which operates the capital city's subway and bus systems, agreed in 2006 to pay £38.50 (S$78.50) a square foot for the space, it said in a separate statement. Irvine Sellar, the chairman of Sellar Property Group, said in a January interview that he plans to charge as much as £70 per square foot for the remaining office space.
'It is believed that the Shard's completion will coincide with a shortage of new high quality space available to let,' said the LBQ statement. 'This agreement enables us to position the Shard at the very top end of the London office market.' - Bloomberg
Source: Business Times, 15 Jun 2010
London Bridge Quarter Ltd, a joint venture between developer Sellar Property Group and the Qatar Central Bank, bought Transport for London's contract to rent 200,000 square feet (18,581 square metres) of space, according to a statement from LBQ. The building, which is due to be completed in 2012, will have 586,000 sq ft of offices.
Transport for London, which operates the capital city's subway and bus systems, agreed in 2006 to pay £38.50 (S$78.50) a square foot for the space, it said in a separate statement. Irvine Sellar, the chairman of Sellar Property Group, said in a January interview that he plans to charge as much as £70 per square foot for the remaining office space.
'It is believed that the Shard's completion will coincide with a shortage of new high quality space available to let,' said the LBQ statement. 'This agreement enables us to position the Shard at the very top end of the London office market.' - Bloomberg
Source: Business Times, 15 Jun 2010
Monday, June 14, 2010
S’poreans join rush to buy London homes
ASIAN investors, including those from Singapore, attracted by a weak pound and rising rents, made up almost half of all buyers in the London residential property market in the past year, according to research by Knight Frank.
Investors from China, Hong Kong, Singapore and Malaysia accounted for 28 per cent of London home purchases in the year to March, the London- based broker said in an e-mailed statement.
Purchases from the rest of Asia, not including India, amounted to 18 per cent, and British buyers represented 37 per cent of sales.
“Current international investment demand is almost totally concentrated on London and is primarily coming from Asia,” Mr Liam Bailey, head of residential research at Knight Frank, said in the statement.
He added: “The interaction of currency movements, strong capital-price growth and, more recently, rising rents, have created an attractive investment case.”
Chinese investors are also looking to buy property overseas to spread their risk if the mainland China market bubble bursts, Knight Frank said.
Many are looking to gain access to British universities, with the number of Asian students studying in the country rising 175 per cent over the past decade, the broker said.
The most attractive homes for Asian investors are located in the two central London zones and within a few minutes’ walk of a train station.
They also have high-quality security and facilities, according to the broker.
Asian investment in London property totalled GBP 761 million (S$1.6 billion) over the past 12 months, according to Knight Frank.
Source: my paper, 14 Jun 2010
Investors from China, Hong Kong, Singapore and Malaysia accounted for 28 per cent of London home purchases in the year to March, the London- based broker said in an e-mailed statement.
Purchases from the rest of Asia, not including India, amounted to 18 per cent, and British buyers represented 37 per cent of sales.
“Current international investment demand is almost totally concentrated on London and is primarily coming from Asia,” Mr Liam Bailey, head of residential research at Knight Frank, said in the statement.
He added: “The interaction of currency movements, strong capital-price growth and, more recently, rising rents, have created an attractive investment case.”
Chinese investors are also looking to buy property overseas to spread their risk if the mainland China market bubble bursts, Knight Frank said.
Many are looking to gain access to British universities, with the number of Asian students studying in the country rising 175 per cent over the past decade, the broker said.
The most attractive homes for Asian investors are located in the two central London zones and within a few minutes’ walk of a train station.
They also have high-quality security and facilities, according to the broker.
Asian investment in London property totalled GBP 761 million (S$1.6 billion) over the past 12 months, according to Knight Frank.
Source: my paper, 14 Jun 2010
Sunday, June 13, 2010
Asians snapping up London property
London - Investors from Singapore, Hong Kong, Malaysia and China are buying up property in London, attracted by a weak pound and rising rents.
Asian investors made up almost half of all buyers in the London residential property market in the past year, according to research by Knight Frank.
Investors from China, Hong Kong, Singapore and Malaysia made up 28 per cent of London home purchases in the year ended March, the London-based broker said. Buyers from the rest of Asia, not including India, amounted to 18 per cent, while British purchasers represented 37 per cent of sales.
'Current international investment demand is almost totally concentrated on London and is primarily coming from Asia,' said Knight Frank head of residential research Liam Bailey. 'The interaction of currency movements, strong capital price growth and, more recently, rising rents have created an attractive investment case.'
Chinese investors are also looking to buy property overseas to spread their risk if the China market bursts, Knight Frank said. Many are looking to gain access to British universities, with the number of Asian students studying there rising 175 per cent over the past decade, the broker said.
The most attractive homes for Asian investors are located in the two central London zones and within a few minutes' walk of a subway station.
Asian investment in London property has totalled £761 million (S$1.6 billion) over the past 12 months, according to the broker. Of the 7,579 new homes built in the last year in central London, 41 per cent were bought by investors rather than buyers who planned to live in the residence.
Bloomberg
Source: Sunday Times, 13 Jun 2010
Asian investors made up almost half of all buyers in the London residential property market in the past year, according to research by Knight Frank.
Investors from China, Hong Kong, Singapore and Malaysia made up 28 per cent of London home purchases in the year ended March, the London-based broker said. Buyers from the rest of Asia, not including India, amounted to 18 per cent, while British purchasers represented 37 per cent of sales.
'Current international investment demand is almost totally concentrated on London and is primarily coming from Asia,' said Knight Frank head of residential research Liam Bailey. 'The interaction of currency movements, strong capital price growth and, more recently, rising rents have created an attractive investment case.'
Chinese investors are also looking to buy property overseas to spread their risk if the China market bursts, Knight Frank said. Many are looking to gain access to British universities, with the number of Asian students studying there rising 175 per cent over the past decade, the broker said.
The most attractive homes for Asian investors are located in the two central London zones and within a few minutes' walk of a subway station.
Asian investment in London property has totalled £761 million (S$1.6 billion) over the past 12 months, according to the broker. Of the 7,579 new homes built in the last year in central London, 41 per cent were bought by investors rather than buyers who planned to live in the residence.
Bloomberg
Source: Sunday Times, 13 Jun 2010
Saturday, June 12, 2010
UK house prices fall again as supply climbs
Third decline in a row in May as prospect of higher taxes and end of some disclosure rules rattle homeowners
HOUSE prices in the UK fell in May for a third month as the prospect of higher taxes and the end of some disclosure rules prompted more homeowners to put up their properties for sale, Acadametrics Ltd says.
The average cost of a home in England and Wales fell 0.2 per cent to £220,352 (S$453,823) from April, the research group said in an estimate released by e-mail yesterday. Previously reported house-price gains for March and April were revised to declines as more transaction data became available.
Britain's housing market rebound has shown signs of slowing this year as consumers brace for the spending squeeze and tax increases due in the emergency June 22 budget from Prime Minister David Cameron's coalition government.
While mortgage approvals rose to a four-month high in April, they remain at less than half the total at the housing boom peak in 2007.
The property market 'is delicately poised and easily buffeted in one direction or another by slight changes in circumstances', Acadametrics chairman Peter Williams said in the report. 'The question now is: Will that decline continue through to the end of the year and beyond? There is much to suggest that it will.'
Values in London dipped 0.1 per cent to £374,758 in April, the month with the latest available regional data, while values in England's East Midlands region dropped 2 per cent, Acadametrics said.
Annual UK price gains slowed to 9.7 per cent, the least in four months.
Mr Cameron, who took office last month, intends to tax capital gains on non-business assets, including property, in line with income tax, according to the May 11 coalition agreement. Capital gains are now taxed at 18 per cent, with income tax ranging from 20 per cent for most people to 50 per cent for the highest earners. The government has also halted the requirement for sellers to provide buyers with Home Information Packs.
'Market conditions in May were obviously influenced by the suspension of Home Information Packs on May 20 and by government announcements on increased capital gains tax on property,' Mr Williams said. 'Together, these propelled more homes onto the market and thus adjusted the demand/supply balance.'
Values are now 5 per cent below the February 2008 peak on Acadametrics' gauge. Transactions in May declined 18 per cent from April to the lowest for the month in 15 years, the research group said.
Acadametrics uses methodology employed by the US S&P/Case-Shiller price index, combining initial housing transaction data from the UK Land Registry and results from other price measures to produce an estimate for the most recent month. That number is then updated in following months as more sales are reported. -- Bloomberg
Source: Business Times, 12 Jun 2010
HOUSE prices in the UK fell in May for a third month as the prospect of higher taxes and the end of some disclosure rules prompted more homeowners to put up their properties for sale, Acadametrics Ltd says.
The average cost of a home in England and Wales fell 0.2 per cent to £220,352 (S$453,823) from April, the research group said in an estimate released by e-mail yesterday. Previously reported house-price gains for March and April were revised to declines as more transaction data became available.
Britain's housing market rebound has shown signs of slowing this year as consumers brace for the spending squeeze and tax increases due in the emergency June 22 budget from Prime Minister David Cameron's coalition government.
While mortgage approvals rose to a four-month high in April, they remain at less than half the total at the housing boom peak in 2007.
The property market 'is delicately poised and easily buffeted in one direction or another by slight changes in circumstances', Acadametrics chairman Peter Williams said in the report. 'The question now is: Will that decline continue through to the end of the year and beyond? There is much to suggest that it will.'
Values in London dipped 0.1 per cent to £374,758 in April, the month with the latest available regional data, while values in England's East Midlands region dropped 2 per cent, Acadametrics said.
Annual UK price gains slowed to 9.7 per cent, the least in four months.
Mr Cameron, who took office last month, intends to tax capital gains on non-business assets, including property, in line with income tax, according to the May 11 coalition agreement. Capital gains are now taxed at 18 per cent, with income tax ranging from 20 per cent for most people to 50 per cent for the highest earners. The government has also halted the requirement for sellers to provide buyers with Home Information Packs.
'Market conditions in May were obviously influenced by the suspension of Home Information Packs on May 20 and by government announcements on increased capital gains tax on property,' Mr Williams said. 'Together, these propelled more homes onto the market and thus adjusted the demand/supply balance.'
Values are now 5 per cent below the February 2008 peak on Acadametrics' gauge. Transactions in May declined 18 per cent from April to the lowest for the month in 15 years, the research group said.
Acadametrics uses methodology employed by the US S&P/Case-Shiller price index, combining initial housing transaction data from the UK Land Registry and results from other price measures to produce an estimate for the most recent month. That number is then updated in following months as more sales are reported. -- Bloomberg
Source: Business Times, 12 Jun 2010
Thursday, June 10, 2010
Morgan Stanley to advise ING on property unit's sale
(LONDON) Dutch bank ING has appointed Morgan Stanley for a possible sale of its real estate management arm as the bank reinvents itself after a state bailout, sources familiar with the matter said.
The hiring of the US investment bank follows months of speculation on the future of the unit - which has US$92 billion in assets under management - while ING is making heavy cuts to its business at the behest of the European Union.
A spokesman for ING in Amsterdam declined to comment. Morgan Stanley also declined to comment.
The bank, which received 10 billion euros (S$16.9 billion) of state aid in 2008, said in February that it would keep Real Estate Investment Management (REIM) within the bank, scrapping an earlier planned transfer into ING Investment Management.
Property market sources suggest the appointment of banker William Connelly to the helm of REIM in March following the sudden retirement of George Jautze suggested a trade sale or break-up of the unit was a serious ambition. -- Reuters
Source: Business Times, 10 Jun 2010
The hiring of the US investment bank follows months of speculation on the future of the unit - which has US$92 billion in assets under management - while ING is making heavy cuts to its business at the behest of the European Union.
A spokesman for ING in Amsterdam declined to comment. Morgan Stanley also declined to comment.
The bank, which received 10 billion euros (S$16.9 billion) of state aid in 2008, said in February that it would keep Real Estate Investment Management (REIM) within the bank, scrapping an earlier planned transfer into ING Investment Management.
Property market sources suggest the appointment of banker William Connelly to the helm of REIM in March following the sudden retirement of George Jautze suggested a trade sale or break-up of the unit was a serious ambition. -- Reuters
Source: Business Times, 10 Jun 2010
Thursday, May 27, 2010
UK April mortgage approvals rise
(LONDON) The number of mortgage approvals for UK house purchases rose an annual 15.5 per cent last month to the highest level this year, industry data showed yesterday.
The British Bankers' Association said that the number of loans approved for house purchase rose to 35,729 last month from 35,044 in March and 30,649 in April last year.
However, the number remains well below levels of more than 40,000 seen in the second half of last year.
The figures came after mortgage lender Nationwide said that it expected the housing market to be broadly stable over the next six to 12 months as an increase in property supply keeps a lid on price gains.
'The ongoing muted BBA mortgage approvals data reinforce our suspicion that house prices will struggle to make significant gains over the coming months,' said Howard Archer, an economist at IHS Global Insight.
Net mortgage lending was subdued as households continued to pay down debt. Net mortgage lending rose by just £pounds;1.825 billion (S$3.7 billion) last month, the lowest since February 2001, and less than half the levels seen through most of 2008.
'Household priorities are clearly reflected in these latest data, with people paying down debt rather than building up savings,' said BBA statistics director David Dooks. -- Reuters
Source: Business Times, 27 May 2010
The British Bankers' Association said that the number of loans approved for house purchase rose to 35,729 last month from 35,044 in March and 30,649 in April last year.
However, the number remains well below levels of more than 40,000 seen in the second half of last year.
The figures came after mortgage lender Nationwide said that it expected the housing market to be broadly stable over the next six to 12 months as an increase in property supply keeps a lid on price gains.
'The ongoing muted BBA mortgage approvals data reinforce our suspicion that house prices will struggle to make significant gains over the coming months,' said Howard Archer, an economist at IHS Global Insight.
Net mortgage lending was subdued as households continued to pay down debt. Net mortgage lending rose by just £pounds;1.825 billion (S$3.7 billion) last month, the lowest since February 2001, and less than half the levels seen through most of 2008.
'Household priorities are clearly reflected in these latest data, with people paying down debt rather than building up savings,' said BBA statistics director David Dooks. -- Reuters
Source: Business Times, 27 May 2010
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