HM Revenue and Customs report a 7% rise in the number of residential properties sold in May, bringing the monthly total to its highest since October ’08. This follows yesterday’s report by the British Bankers’ Association, claiming a steady six-month rise in mortgage approvals.
Sources: HMRC, BBA and Rat & Mouse
The Rat and Mouse Property Blog reports a terrific piece in Citywire about how purchasers of £500,000 plus properties can avoid paying Stamp Duty. There are a number of systems, but what they share is a nominal “middle man”… a company that pays “85% of the purchase price”, leases the property to the buyer with an option to transfer the freehold. Because, technically, the property hasn’t actually changed hands, no Stamp Duty is payable. It’s complex, involves lawyers who’ll take up to 50% of the duty saved, but it’s real and according to Citywire, it’s happening.
Sources: Citywire & Rat and Mouse
The Council of Mortgage Lenders figures show a 16% increase in lending for new homes in April, bringing the figure to its highest since October (although still 28% lower than this time 2008).
Take up of fixed-rate products increased further as the interest rate cycle has now reached its floor, according to new data from the Council of Mortgage Lenders. In April, 69% of borrowers took out fixed rate mortgages with an average rate of 4.83%, the highest share since June 2008.
Source: Council of Mortgage Lenders
A Belfast house builder has faked a queue of first-time buyers outside an estate agents, in a bid to stimulate interest in a new development.
The PR agency for Bradkeel Developments, which is building Belfast’s Sugar Walk scheme, sent out a press release entitled ‘Worth the Wait’, with photos of people queueing, one sat in a deckchair and wrapped in a sleeping bag…
Fake Queue!
Source: Contract Journal
The findaproperty Rental Index has found that Hackney is the best performer in Central London for rental yields. The average rental yield in Hackney is 5.51% compared to 3.86% in Kensington & Chelsea or 4.44% in Hammersmith & Fulham.
Source: Findaproperty
– The Knight Frank Prime Central London Index recorded positive growth for £1m+ house prices for the second month running in May.
– Prices in Central London rose by 1.6 per cent during May, which was four times the rate of growth seen in April, when prices rose by 0.4 per cent.
– On an annual basis prices are now down 20.1 per cent, and are down 22.3 per cent from the March 2008 peak.
– The recovery in prices has been led by the sub-£1million sector, where prices have now risen 2.7 per cent since March this year.
Source: Knight Frank
Nationwide Building Society, the U.K.’s biggest customer-owned lender, said U.K. house prices may keep falling for the rest of this year as more Britons lose their jobs.
The U.K. economy will remain in recession for the remainder of 2009 and any recovery next year will be “sluggish,” the Swindon, England-based company said today in a statement. Unemployment may continue to rise next year because the labor market will lag behind developments in the rest of the economy.
“I don’t think the fall in house price is over yet and will probably continue for the remainder of 2009 at least,” Finance Director Mark Rennison said on a conference call with reporters.
Source: Bloomberg
The Irish Times has run a story about Findlay Property in this weeks property supplement.
John Walsh, Simon McDonnell & Jean-Paul Van Cauwelaert
Sourcing property for investors
PETER CLUSKEY
Thu, May 14, 2009
LONDON INVESTMENTS: EVEN IN a flat market, new transport links are guaranteed to generate interest, so the long-awaited extension of a train line to south Hackney in east central London is already attracting investment.
Prices across the city are down by an average of 10–15 per cent since 2007, and agents say sales have virtually ground to a halt – so it’s a buyer’s market, with particular value for euro zone buyers.
“People in London are extremely conscious of the availability of transport when they buy or rent.” says Simon McDonnell, director of Findlay Property, which specialises in sourcing investment properties for Irish clients. “So when the new East London Line opens here in July 2010, we anticipate an immediate increase in property values of around 10 per cent. We’ve already been buying property within walking distance of where the stops are going to be.”
South Hackney, says McDonnell, was one of the last areas of central London resisting gentrification, but that’s changed, particularly in neighbourhoods like Shoreditch and London Fields.
“It’s within walking distance of The City and there’s easy access to the West End, so the train will put in place the element that’s been missing,” says McDonnell.
Three of the four directors of Findlay Property are Irish: Simon McDonnell, John Walsh and John Paul Van Cauwelaert. The fourth is Scot Alan Findlay. They set up the business in a small East End flat in 2001 and now operate from the more salubrious environs of Broadway Market.
“We’re not an estate agency,” says McDonnell. “We’re a property management company which sources properties on behalf of its clients and then manages it for them afterwards.
“Almost 100 per cent of our clients are Irish. Roughly a third of our properties are ex-local authority, a third are luxury modern apartments and a third are Victorian townhouses. So, if someone says he has €250,000 to spend and is looking for a rental yield of 7 per cent, we’ll source the property for him.”
Typically, a three-bed ex-local authority property can be bought for around €235,000. Findlay charges a 2 per cent finder’s fee, which could come to €5,000; refurbishment costs another €5,000; stamp duty adds €2,500; legal fees another €1,000; and furniture and white goods €2,000. That’s €250,000 all in – the cheapest McDonnell would recommend.
As to the “Olympic factor”, the well-documented boost to property prices before the games come to town in 2012, McDonnell is not really convinced. “The Olympics are on our doorstep, but I’m cautious about claiming too much for them. For me, the chief benefit will be the long-term one of improved infrastructure.”
www.127.0.0.1/oldfind
© 2009 The Irish Times
Surveyors have reported “tentative signs” of a recovery in the property market, despite small numbers of homes being sold.
The Royal Institution of Chartered Surveyors (Rics) said members were “universally optimistic” about sales.
They also reported a big rise in interest from potential new buyers.
Source: RICS
The European Central Bank cut its benchmark interest rate by 25 basis points to a new record low of 1 per cent today, as expected.
European Central Bank President Jean-Claude Trichet said the euro-zone economy was showing tentative signs of stabilising at a very low level.
The European Commission has forecast that the end of the recession is in sight.
The Bank of England has kept interest rates on hold at 0.5% and announced that it will inject an extra £50bn into the UK economy.
ECB HQ Frankfurt