October Below Market Value Property Deals

London Investment Property Deals : Below Market Value High Yield Properties

London Investment Property Deals

Dear PropVestor

With Autumn coming along there has been a slight revival of the property market, albeit not a substantial one.

Nevertheless being in touch with the right sources there is always a DEAL available for you. Here is a selection of investment deals for you, just a few we have on our books right now.

DEAL ONE: 2 x two Bed Maisonette in Enfield

Read more

PropVestment in Telegraph Property

Ex-council homes: how to buy a bargain – Telegraph

PropVestment mentioned in the Telegraph Property section: Why Council homes are a bargain

By  7:00AM BST 03 Sep 2012

A new proposal to sell off council housing in some of Britain’s best postcode areas could be a once-in-a-lifetime investment opportunity. It is no time for snobbery, says Graham Norwood.

Ex-council house in Essex

This 17th-century former hunting lodge in South Ockendon, Essex, used to be three council homes, and is today a six-bedroom house. It’s on the market through Fine (fine.co.uk) for £449,995.

It is one of the biggest property stories of the year, and an opportunity for bargain hunters like no other. When the Telegraph published an article about selling off council houses, by Neil O’Brien, the director of Policy Exchange, it had no idea what a storm it would create.

Last week’s report argued that if councils sold all the homes which become free in an average year, they could raise £4.5bn in revenue. This money would then be ploughed back into 170,000 new-build properties in cheaper parts of the country. The story provoked plenty of debate. Grant Shapps, the Minister for Housing, called the idea “blindingly obvious”. David Cameron said the proposal was “certainly something [councils] should look at”. Not everyone was happy: some Labour MPs warned that it risked creating ghettoes and ruining local diversity.

But aside from the political to-ing and fro-ing, what does it all really mean for homeowners? If cheap houses become available in some of Britain’s best areas, it could provide golden opportunities for canny investors. Certainly, it is time to end the snobbery and acknowledge the truth. Many local authority homes are fashionable, built to last and brilliantly located. For every hideous tower of cheaply built flats requiring demolition, there are spacious low-rise mansion blocks. These date from the public sector heyday of the Thirties, now considered retro-chic.

Then there are thousands of Victorian and Georgian houses, originally built for private sale. Councils bought them as part of grandiose regeneration schemes, many of which came to nothing. But a sprinkling of 21st-century TLC would return them to their former glory, or even better.

There are substantial profits to be made, as has been seen in areas where council properties have been sold in the past. Camberwell is a good example. A two-bedroom council flat bought here for £44,000 in 1994 recently sold for £214,000. During the intervening years, the area has come up in the world. Where once it was slightly grubby, it is now a fashionable village, home to the musician Florence Welch, as well as actresses Lorraine Chase and Jenny Agutter. If a new sell-off becomes policy, there may be thousands of homes coming on the market in the most desirable parts of the country. Often at bargain-basement prices.

In the London borough of Kensington and Chelsea, for instance, the average flat costs at least £967,000 and a typical semi-detached house costs more than £12.5m, according to Land Registry figures. Even in this salubrious enclave, however, a quarter of homes are categorised as social housing: owned directly by the council or through housing associations. In Brighton and Hove, there are similar opportunities. A typical detached house costs almost £461,000, and a flat will set you back £197,000. Yet one in every seven properties is in the social sector. Here and elsewhere, a sell-off would mean ex-local authority properties being marketed at prices lower than those for comparable private homes. There would be rich pickings, for those in the know.

“Even in prime condition, ex-council properties sell for 20 per cent less than a similar home next door because of the stigma,” says Geoff Tanner, a private property consultant based in Cambridgeshire. “If it is in poor condition, it could be 30 per cent less. The proposed sell-off would represent a great deal for buyers who get in quick.” Some councils are already encouraging tenants to free-up larger properties. In Devon, more than £700,000 worth of cash incentives have been paid to tenants. This has released 330 homes in areas such as Exeter, Plymouth, rural Devon and the coastal South Hams.


This one-bed, ex-council flat is in Drury Lane in Covent Garden. It is being sold for £437,000 through Chesterton Humberts.

Westminster Council, in central London, has set up CityWest Homes Residential, a service specialising in marketing council homes. Its website, cwhr.co.uk, advertises flats to rent in areas such as Bayswater and says homes for sale are “coming soon”.

With all this activity already ongoing, it’s no surprise that estate agents have greeted the prospect of a sell-off with open arms. They highlight the advantages of council-owned buildings compared with those which have been squeezed by the private market. “Council properties are often well-built with good-size rooms and communal gardens,” says Christopher Saye of Chesterton Humberts. “Red-brick period blocks don’t even look like council properties and generate plenty of interest. They are cheaper than comparable private developments, with far lower service charges.”

During the Eighties, Margaret Thatcher’s Right To Buy initiative allowed tenants to purchase their homes with a discount of up to 70 per cent, if they had lived there for two years or more. Many councils also offered 100 per cent mortgages to encourage buyers. The scheme boosted Britain’s home ownership level from 57 per cent in 1980 to 68 per cent in 2000.

But the sort of sell-off proposed by Policy Exchange would be even more dramatic. It would be an open field, with anyone entitled to buy the flats. Not just those already living in them. “It’s simply good asset management. Some local authorities do this already. We’ve sold properties in high-value areas at auction on behalf of authorities,” explains Yolande Barnes, head of research at Savills and one of Britain’s leading housing experts.

Clearly, there is no shortage of enthusiasts for the quality and good value offered in ex-local authority housing. Nirav Shah, 24, bought a three-bedroom apartment in Waterloo, central London, in 2008 when he was a student. “My father and I looked at lots of properties and none even came close to the former council flat for location, space or condition,” he explains. He now runs a property investment firm called propvestment.com. “I no longer live in the flat, but I rent it to other students. It has been let permanently since I left. Ex-council is a perfect investment,” he adds.

His apartment was one of many built to Parker Morris standards, a planning regime which until the Eighties imposed minimum sizes on public-sector architects and builders. Parker Morris stated that a one-bedroom council flat built for up to two people should have a minimum of 495 sq ft. Try finding that in a modern private flat today. The standards have even got a thumbs-up from London Mayor Boris Johnson, too. After taking office, Johnson promised to “re-establish space standards promoted by the visionary planner Sir Parker Morris”. He argued that this was the only way to “build for the long term. Buildings that people will want to keep for 100 years and not tear down in 30.” Space, location and value: the council-house dream seems almost too good to be true.

But while many are in favour of selling council homes, there are still issues to resolve. “One concern might be tenant displacement,” says Jennet Siebrits of CBRE, a consultancy advising developers and public bodies on housing. She fears new homes built with money from a sell-off would have to be in cheaper areas. “We would need careful analysis about which parts of the UK have the highest demand for social housing,” she says.

There are also concerns that moving council tenants away from their places of work could create pockets of unemployment, and ruin the mix of people which makes Britain so vibrant. Policy Exchange believes, however, that these short-term problems would be outweighed by the benefits of creating half a million new homes in three years.

So will it actually happen? With a Cabinet reshuffle imminent and a relaunch of the Coalition likely at this month’s party conferences, there is an appetite for radical initiatives. And no sector needs them more badly than housing. A boom of new construction would create homes for the needy and jobs for builders, as well as opportunities for people looking to get on the property ladder.

A social housing revolution may be just the economic shot in the arm the country wants. And for keen-eyed individuals, it could be the investment of a lifetime.

Buying an ex-council property: the pros and cons

Pros: 
Price – they usually sell at 20 per cent less than comparable private properties, says the Royal Institution of Chartered Surveyors.
Investment – ex-council houses are good for buy-to-let landlords wanting more for their money.
Location – ex-council property is often very central, perfect for transport and nightlife.

Cons:
Outside – tower blocks can look daunting from the street.
Communal areas – there can be disputes over charges and responsibilities if some flats in a block are publicly owned and others private.
Ceiling price – until the stigma dies, ex-council homes will sell at a discount compared to private homes.

Original article link http://www.telegraph.co.uk/property/9508685/Ex-council-homes-how-to-buy-a-bargain.html

OTHER MUST READS: PropVestment in Daily Mail

 

Barnett Ross Auction

Development projects selling well: Observations from Barnett Ross Auction

Results from Barnett Ross Auction July 2012

On Tuesday 17th July 2012 PropVestment attended the 60th Barnett Ross Auction in London, to find that the UK property market shows mixed feelings, with development projects selling very well.

  • Buyers demand high yields

  • Sellers demand high prices

  • Development projects sell well, buyers willing to take risks for returns

  • Means market is still slow for traditional sales

Barnett Ross AuctionMost of the properties and lots in this auction were of a commercial or development projects nature.With only 2 of the 69 lots as pure residential. It can be seen as a successful auction on the day with 70% lots sold on or prior, however this is comparatively less to the 92% success to their last auction in May.

 

One of our clients showed interest in a standard commercial and another lot with development potential. We were able to get the commercial lot at a very reasonable price, resulting in a rental yield of 9.6%. The winning bid was over guide but the returns and limited risk meant this was a very good deal for our client. We was expecting more competition however as the lot was just outside the hot market that is London there was less interest from inexperienced investors that have a premium and preference for London only property.

For the other lot that was a risky and uncertain proposition for future development. We advised our client of the potential returns once site was cleared and planning obtained. A strategy was put in place to bid up to 150% of the guide. Unfortunately the lot sold at over 400% guide.

Due to confidentiality we cannot reveal these details but here are some highlights of the auction:

Developments Projects Selling Well

  • Lot 2: Reserve Below £100k, Sold at £170k – Freehold vacant corner property in Ilford
  • Lot 3: Reserve Below £150k, Sold at £700k – Total derelict shop unit with potential for 3 story development in Kings Cross.
  • Lot 61: Reserve Below £175k, Sold at £257k, Vacant office and first floor flat in NW2, potential for 2x one bedroom flats.
  • Lot 67: Reserve Below £7k, Sold at £34k, vacant land and potential for more adjacent as unregistered, potential for house or flats. in SE25

Bargains

  • Lot 23 Sold at £725k, Rental £93k with 2 vacant units – 13% yield with rise possible – Industrial in Tottenham
  • Lot 25 – Sold £215k, Rental £29k – 13.5% yield. – 2 shops in Cheshire.

Sellers Keeping Reserves too high?

Over 22 lots where the reserve was not met, a fair few where the difference was only a few thousand, possibly 1% of the asking price. Some will have sold after but this shows why the market is so slow, sellers holding out at higher prices and buyers and demanding higher yields and so will not pay too high a price.

Please have a read of our analysis of other auctions recently: Brendons, Allsops, Savills and where we feel the roles of auctions have changed 

If you require any assistance or property advice: call us today 07960 344399 for a FREE consultation

info based on observation from the Barnett Ross Auction, data correct as to what was observed.

 

 

Invest in India instead of UK

Why invest in India rather than the UK

Why investing in India has become a better option

Invest in India instead of UKFrom PropVestment’s recent visit to India and the subsequent dealing and observations from the UK property market we have found a strong case to open the mind and change investment strategies and to invest in India

Breaking this into two arguments, one a basic economic one based on macro observations and trends, and then a more micro one with the current property climate and lending situation in the UK.

Why invest in India – Macro: Economics

Population: Indian population growing by around 16 million a year
This mean there is a continued demand for new housing. Furthermore the average household size is falling so this makes demand even greater.

Income & Growth: with over or close to double digit growth.
The growing affluence means upgrading housings, smaller family units, means demand is rising.
Gujarat has experienced double digit growth and shows no signs of slowing down with huge infrastructure projects. These include new cities like Dholera in an SIR (Special Investment Region) and SEZ (Special Enterprise Zone)

Indian government are spending to develop:

  • High-speed rail freight lines.
  • Power plants to supply an additional 4,000 megawatts.
  • Three new sea ports.
  • Six new airports.
  • 12 new industrial clusters, and more.

Increasing Indian middle class — 500 million and growing
Spending their newly-earned money, ramping up retail sales growth that should average 13% or more for the next several years. This means demand for houses and retail space ultimately increases too.

Overall the Indian property market is one of capital growth rather than rental yields. Basic economics of demand and supply states that with demand rising so much, prices will keep rising, therefore there is plenty of capital gains to be made.

Why invest in India -Micro: UK Property market vs India

UK Prices:
House prices remain very high as sellers do not accept the new market house price levels and are holding out. This results in a sale not happening so the roll over sale doesn’t happen and the market stagnates.
Further the high prices have out priced many first time buyers.

UK Lending:
Even though new products such as Helpful Start and other schemes to encourage lending have come on the market, lending is still very tight. The criteria has stopped many who would have previously got a mortgage, unable to do so.

Risks Vs Returns:
Risks in India used to be fairly high, however now with legal contracts, a stronger financial and legal system it is almost as safe as the UK.
Further with your returns not coming primarily from rentals, the risk of rent is not significant.
The risks in UK have risen with higher risk of rental default as well as in some areas uncertainty with future prices. Overall the risk and reward scenario was very different across these two markets. However they are now coming together with returns significantly higher in India.

 

Criteria

UK

India

Average minimum Capital needed

£50k

£20k

Expected Annual Price rise

5%

20%

Risk

Medium

Medium

 Why invest in India -Proposal

For the young investor or experienced we believe India is a fantastic opportunity.

For the young investor or first time buyer we suggest that if you do not have enough saved for a deposit in the UK, invest in India where you can pull out within 12-24 months and then with the returns you will have enough to buy your property in the UK.

For the experienced investor, you can make significant returns in an hassle free way.

We can advise on many investment options from the top Indian developers with plots of land in excellent locations starting from under £20k.
We have links to Hiranandani, Othello, Synthesis, Ajmera, ACE, Bakeri, Gala and more….

Call us today for FREE advice to explore your options.

Slow London auction market: Observations from Brendons Auction


Brendons Auction, London Ealing Hotel, Wednesday 11th July 2012

Brendons Auction

Today PropVestment attended the Brendons auction with a client looking to bid on a lot.
As usual we had done our homework in terms of reading all the legal packs and researching rental and resale value of potential buys.

What was very surprising when we got there, expecting 400 people like the last Brendons auction was only around 30 people. Further 7 of the 18 lots “SOLD PRIOR” or “WITHDRAWN”.

Ultimately only 2 of the remaining lots sold, both of which went considerably over guide.  Both were development potentials that needed substantial work to be done in them. Our client unfortunately got outbid with the sale going 30% over guide.
All the other 9 lots, thats 50% were “UNSOLD” due to reserves not met or no bids whatsoever.

Property Market Analysis:

  • Sellers holding out at unrealistic prices.
  • High reserves show low confidence in market prices and auction mechanism.
  • Sellers bidding mainly on “bargain” or “distressed” properties with a quick refurb and resell in mind.
  • Low attendance, means low volumes in market, potentially as finance remains scarce.
  • There were no under 30s bidding. Mean no first time buyers.

It is clear the property market is struggling, finance must be opened out. People with finance are extra cautious. They are only investing where there are strong returns at low risk.

Uptill now we have seen all the auctions we have visited and analysed as booming with high sales and lots of people, seems like that hype is slowing. Possibly as this was not in central London there was lack of presence of cash rich overseas investors.

This is a huge change from earlier in 2012 when we observed booms: Auction are for selling . We also have analysis from Allsop and McHugh and Savills

We currently have many off the market properties in London, please contact us for exclusive deals. We do not publish  everything online. Email info@PropVestment.com
Many below market value deals and development projects.

“There is always an opportunity to make money in property”

 

How to get a first time buyer mortgage

Taking out a mortgage for the first time buyer has become increasingly harder since the credit crunch. With the slowdown of the economy, the rules have become more stringent and lenders too have become more particular regarding whom to lend to. There are a few new schemes available too.

First time buyer: Taking out a mortgage

First time buyer mortgage

First time buyer mortgage

The things that you would require to take out first time buyer mortgage are:

  • Good affordability – In order to take out a mortgage even if it is a first time buyer mortgage, it is important for you to have high affordability. This will mean that if you have high affordability, you will also be able to manage to make the timely mortgage payments. Lenders prefer people who have at least more than average or high affordability.
  • Good credit score – It is important for you to have a high credit score so that you can get a mortgage with low interest rate. Without a high credit score, you may not be able to get low interest mortgages.
  • Clean credit report – In addition to high credit score, you should also have a clean credit report with no missed payments. When you apply for a mortgage, lenders pull your credit reports. If you have missed payments, lenders tend to believe that you are not a responsible borrower. Thus, your loan application may get rejected. Check your reports at Experian, Equifax and Call Credit
  • Low debt to earnings ratio – In order to take out a mortgage, you are also required to have a low debt to earnings ratio. This is checked by lenders to decide if you are a responsible borrower.


Other than having these, in order to obtain a mortgage, you will be required to:

  1. Check out different offers – In order to take out a mortgage, it is important for you to check out the different offers by various lenders. You will have to compare and then decide which the best offer is for you.
  2. Use a mortgage calculator – In order to decide on the cost of a mortgage, you can use a mortgage calculator. This can help you in determining which mortgage you can afford to take out.
  3. Get pre-approved – It is good for you to get pre-approved for a mortgage as this can help you to obtain a loan easily enough. Use an a recommended advisor

So, these are the things that you will be required to do in order to take out a mortgage to buy a home for the first time. Look into new schemes like NewBuy and Helpful Start that have recently been launched

For impartial and honest advice and a FREE consultation get in touch with us info@PropVestment.com

 

Where to invest in India - Ahmedabad, Gujarat

Trends in the Indian Property Market: Where to invest in India- Part 3: Developing cities in Gujarat- Ahmedabad

 Where to invest in India

PropVestment took a few weeks off from its London to find out where to invest in India. We took a look at a number of factors in a property market that differs that in UK greatly. So far we has discussed, SEZs, Satellite Urban Villages and now the capital city, Ahmedabad

We are sharing some of the observations made in India and how these must be interpreted by a Property Investor and how they should affect your decisions with regard to investments in India.

Fact:

While the Indian economy is expanding at a rate of 8%, Gujarat has a growth rate of over 12%, the highest among all the Indian States. As per a July report in the Economist, the infrastructure in Gujarat can compete with that of Guangdong, the economic capital of China. The implication of this is that if you wish to invest in India, the best place at present would be Gujarat as it has an excellent growth rate and infrastructure. The major growth in Gujarat occurs in its upcoming and developing cities like Ahmedabad.

Where to Invest in India – Ahmedabad

Ahmedabad:

Ahmedabad is the commercial center of Gujarat. It is the largest city in Gujarat and has a booming textile industry. It is important in the industrial sector as it houses numerous textile and chemical industries. It is developing rapidly and boasts of notable architecture and large roads with urban planning. It has amazing tourist spots and fabulous shopping centers. The city is known for its education as it has famous institutes including NID, NIFT, IIM-A, and IHM.

  • Where to invest in India - Ahmedabad, Gujarat

    Where to invest in India – Ahmedabad, Gujarat

    Ahmedabad is one of the fastest growing Tier II cities in India

  • Strong NRI investments have led to price rises in the real estate market in recent years

  • Ahmedabad is marked for steady growth in the coming years. Residential property ranges between Rs.600 in Ahmedabad North to over Rs.1200 on Ring Road currently.

  • Taking advantage of high local population, major builders have laid out commercial projects for the city to accommodate retail malls and luxury hotels.

  • The State Government’s vision is to develop Ahmedabad into a world class city through reforms and infrastructure development. Its mission to make the city clean, livable, productive and self sustaining has led to the setting up of IT parks in and around Ahmedabad.

  • With property available at very competitive rates, Ahmedabad is a sound place for real estate investment. The progressive policies of the state government in pushing for SEZs, an organized workforce, considerable investment from NRIs, and the enterprise of the local population will sustain the upward trend the city is experiencing.

 What does this mean? Where to invest in India?

As an investor, you must note that investments in the metropolitan cities of India are not advisable as the rates of urban migration in these cities is very high, which makes them over- priced.

As India is a growing economy, it is best to invest in those states which have growth rates. As Gujarat tops this list, it is top priority. In Gujarat, a great part of the growth occurs in developing cities such as Ahmedabad.

Ahmedabad is well connected to the rest of the country and has potential for high return on investments made. Due to its booming industry in terms of infrastructure, industry, education, transport and tourism, the city is the right choice for property investments in Gujarat.

However with most developments in India you must take caution and vet the project appropriately.

Many UK residents do have links in the region so that is advantageous too.

Like Ahmedabad there is also great opportunities in Rajkot, Vadodara, and in particular Gandhinagar where it is dubbed as the new capital of Gujarat and very close to Ahmedabad.

 READ

Part One : Where to Invest in India: Satellite Urban Villages
Part Two : Where to Invest in India: Special Enterprise Zones

Barclays Family Affordability Plan & Helpful Start for the First Time Buyer

A Helpful Start for the first time buyer

Barclays helping the first time buyer

Barclays has introduced a new mortgage scheme. Helpful Start is part of their Family Affordability plan. It  allows parents to help their children with mortgages in a way not seen before. A parent’s income is also taken into consideration when applying for the mortgage  without them being on the property deeds.

The scheme is available across all of the lender’s mortgage range, including its NewBuy product.
It enables parents to help their children get on or to move up the property ladder through a joint mortgage without giving a lump sum away.
If the mortgage is approved, all parties will be liable for the monthly payments. The parents will appear on the mortgage but they won’t be co-owners of the property.

Helpful Start is however  not available in Scotland and Northern Ireland.

Family Affordability Plan

When considering to lend to a first time buyer, lenders look at three criteria

  1. Affordability
  2. Credit Worthiness
  3. Loan to Value

The Family Affordability Plan and Helpful Start tackles the first criteria, which has significantly made it difficult for first time buyers to get on property ladder. It will not alter the amount the customer can borrow.

When the first time buyer is ready to manage the mortgage on their own, they can remove their parents from the mortgage by remortgaging soley in their name in traditional way.

There has been a reduction in the number of guarantor-type products in the market over the past few years, this scheme is a step in the right direction.

Ash Shah, Crystal Financial Services

PropVestment always recommends clients use a Independent Mortgage broker like Ash Shah or Crystal Financial Solutions. He comments as follows:

This is a excellent move taken by the High Street lender in a difficult market for first time buyers and those wanting to upscale. Independent Brokers like myself have a wealth of tools available to help clients, and the addition the Family Affordability Plan is a excellent addition to my Tool chest.

PropVestment Conclusion

Helpful Start and the Family Affordability Plan is what first time buyers have been calling for, the last few years have been hard for them to get on the property ladder. We welcome such a scheme and hope other lenders see the light and follow with their own schemes.

READ our first time buyer articles:

For a FREE consultation please contact us info@PropVestment.com , we can help all property investors and first time buyers

Trends in the Indian Property Market: Where to invest in India -Part two: SEZs, Special Economic Zones & Jamnagar, Gujarat

As mentioned in part one of this series of articles Trends in the Indian Property Martket: Where to invest in India, PropVestment spent some time recently in India and in particular in Gujarat. We wanted to analyse the Indian property market and find out where to invest in india, for the most secure and profitable investments.

Here are some facts we found out.

What is an SEZ, Special Economic Zone

SEZ Jamnagar: Reliance Refinery

Special Economic Zone is a particular area inside a state which acts as foreign territory for tariff and trade operations. Government provides tax exemption (IT, Excise, customs, sales), subsidised water and electricity.

SEZ helps in the development of infrastructure of the area around the SEZ, provides employment to people, makes the exports more viable. All this will helps the country’s products to become more competitive vis-a-vis providing all round development of region.

If 100 acres are allocated for SEZ, then only 30-35% of area is used for setting up plants. rest of the area is used to provide housing facilities, malls, multiplexes etc.
Tax exemption is for specific period say for 10 yrs or so.


FACT:
Gujarat has developed a reputation as the fastest developing state in India, especially since the reign of Narendra Modi and huge amounts of FDI that has been attracted to the state.
Here in the UK there are many NRI Gujaratis that often try investing back home in the state or wish to have an asset base back home in Gujarat. This is not to say that this is only an investment option for Gujaratis, but rather for anyone looking for strong secure returns on their investment.

 

Where to Invest in India: Jamnagar, Gujarat

WHAT DOES THIS MEAN:

Why Jamnagar is where to invest in India

  • Jamnagar is one of the most significant cities in the state of Gujarat. The city’s real estate sector  has got a massive boost, bolstered by a handsome investment of Rs 45,000 crore in development of Special Economic Zones

  • It is coined as the “Oil City of India” with Reliance and Essar Oil refineries and associated industries.

  • Jamnagar real estate is expanding with ground breaking projects, which makes the city an ideal place to invest and live in. Noticing the promise in Jamnagar, a multitude of property developers are eyeing the plots in Jamnagar for construction purpose.

  • Rental returns are equally healthy in the city which can range from Rs 8,000 to Rs 15,000 per month for 2BHK (two bedrooms, hall and kitchen) & 3BHK units.

  • The increasing employment opportunities in the city are also pushing up property values in rentals in Jamnagar.

  • Gujarat is also grabbing attention from the NRI populace settled in different overseas locations. The property developers in Jamnagar are designing exclusive schemes, and establishing overseas marketing offices to tempt the deep pocketed NRIs

  • Jamnagar is seeing breakneck industrialisation which has sent the rates for commercial and residential land in the city rise dramatically. Areas on the outskirts of the city like Khambhaliya Road and Lalpur Road are talking of land prices in the range of Rs 500 per sq metre — a 100 per cent jump in a year and still rising.

  • Residential property prices in Jamnagar have doubled in the past 18 months. The surrounding areas of the city will also boom.

  • Residential property in the city boasts of an exceptional “quality of life” for the residents. This is one of the reasons why it is selling fast. The rental market in Jamnagar is also looking promising.

CONCLUSIONS

Like many other cities in Gujarat, Jamnagar is a very promising prospect especially due to the economic progress made due to the SEZ and the major oil refineries. However with most developments in India you must take caution and vet the project appropriately.

Many UK residents do have links in the region so that is advantageous too.

When looking at a project analyse the future development prospects, proximity to transport links and employment opportunities.

Also maybe some part of Jamnagar, its a little too late, the capital appreciation has already occurred, look out instead for neighbouring areas, or other towns where huge infastructure or industrial projects are getting approved.

Like Jamnagar there is also great opportunities in Rajkot, Vadodara, and in particular Gandhinagar where it is dubbed as the new capital of Gujarat.

READ our Part One of this Series : Where to Invest in India: Satellite Urban Villages

First time buyer FAQs: What sort of costs involved in buying a property

This is a complex question but the easiest way to get a decent estimate is to go via the purchasing process. There are many hidden costs that a first time buyer may not be aware of.

£0 Sourcing Fee
£0 Mortgage Arrangement fees (if there are then usually added to loan)
£2000 Stamp duty ( 1% of example £200k property)
£1000 Legal & Search fees
£2000 Refurb
£5000 Total

First Time Buyer Costs

More Details:

Sourcing Fee

Most agents do not charge a property sourcing fee, well not the high street lenders. If it is a private deal or from a specialist they may ask for a fee however in these cases they should justify their charges by the extent of savings made. If this is a case and you are getting a better deal than the market you do not need to budget this as the saving will balance the fee and more.

Mortgage Arrangement fees

These typically vary from lender and even with lenders depending on the products. Sometimes the better the interest rate or higher LTV the higher the arrangement fee. In many circumstances the fee balances out savings in the fixed term.
However these are almost always added on to the loan amount so will not impact your immediate cash flow.
Occasionally the lender may ask to pay a surveyors fee

Stamp Duty

As of 24th March 2012 the stamp duty holiday is over for first time buyers. For property up to the value of £250,000 (most first time buyers will fall into this bracket) the stamp duty is 1%. Stamp duty is payable up on completion and will need to be sent via your solicitor.

Legal & Search Fees

You will need to keep aside about £1000, usually sent prior to your solicitor before they will carry out any work for you. The searches are for your benefit and will uncover potential problems in the property or surrounding area. Some of the fees go to the solicitor for their time and some for expenses such as telegraphic transfer fees for transferring funds in and out of their client accounts. Remember the cheapest solicitor is not always the best, go with a reputed individual that works efficiently and spots errors in documentation.

Refurbishment

Typically this will vary vastly with every property but going along the lines that the property is in a livable condition, it is usual that the very least you may want to give all the walls a coat and put in the basic furniture to make it live-able to your standard or into a rent-able condition.

First time buyer CONCLUSION

There are many hidden or non obvious costs, do your research, ask the right questions to the right people, and most importantly do not over commit.

See our article on Mortgage advice for first time buyer