UK property market HS2

#HS2 – High Speed 2 implications on the UK Property Market

UK property market HS2With the announcement of the HS2 today, there has been much in the media, with a lot of criticism. We at PropVestment want to focus on the implications of HS2 on the UK property market.

Economically this will create jobs and provided technology is sourced within the UK will benefit us in the long run.

In terms of the thousand or so homes effected, we believe they have been offered 110% the market value of their property prior to plans announced. Home owners have got a good deal, especially in some northern reaches where the UK property market is almost non existent as UK potentially drops into a “triple dip” recession.

How does HS2 effect the UK Property Market?

  •   HS2 impact on UK Property MarketReduce Pressure on London
    As commuting becomes easier with journeys under an hour from Birmingham to London, similar to a journey from Zone 4/5 to Zone one within London. Therefore many will choose to locate outside London. Benefiting from lower property prices and potentially larger homes.
  • Revival of Northern Property Markets
    As from locations will be commutable to the major cities and London. Hence more people will choose to locate in those towns, boosting house demand and rentals too. Landlord’s and investors will find these areas as more attractive places to invest. First time buyers and young professionals out priced by London have the option of settling in Manchester, Sheffield, Leeds or Birmingham and able to travel more easily.
  • Revival of UK Construction
    It is inevitable that there will be need for new home and in the areas surrounding the HS2. Primarily for the construction workers and secondary for the end users who look to make use of the HS2 rail link.

 

Where to buy UK Property Top Tip: Totan, Nottinghamshire

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PropVestment 2013 – UK Property Market Outlook

UK Property 2013 – House Prices, Lending, Supply, Rents…

There is always much speculation about how the UK property market will fair when we start a new year. How will the market correlate to the economy as a whole, and the biggest question of all is whether its recovering from the credit crunch?

  • House Prices
  • Lending
  • Supply
  • Rents

UK House Prices in 2013

House prices are low currently and the advise from PropVestment is that property prices will not stay low forever. Simple demand and supply, population is growing faster than new supply, together with smaller family units means shortage. Further lending is still tight but there is major pressure to improve. If you can afford to buy now, do it.

Today Rightmove are claiming that sellers are pricing 0.2% higher in 2013

UK Property Lending in 2013

Investment property services

Lending to first time home buyers in the UK increased 11% in 2012 compared to 2011, however this is still considerably lower than pre credit crunch. There is constant pressure on lenders to lend more but the criteria remains tight. Hopefully 2013 will mean more realistic and universal schemes rolled out by lenders, with more scope than last years NewBuy and FirstBuy.

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First time buyers face scarce supple due to council property

London’s housing problem for First Time Buyers

Why First Time Buyers find it hard to buy in London

  • High Prices
  • Shortage of Properties
  • Difficult lending
  • SOLUTION – Sell council properties in Zone 1 & 2

This article discusses the various issues in the London housing market, addressing high property prices, housing shortages and high rentals. Linking these factors to the reasons why first time buyers are facing an uphill struggle.

I have lived in London my whole life and professionally work in the property industry with my company PropVestment. The aim is to provide information, analysis and property related services for investors. From my experiences in this field and from living in London my whole I make some observations.

First Time Buyers Problem:

Too high prices and shortage of properties

First time buyers should be able to buy ex- councilThe first thing that caught my eye this week was an article titled “London councils breaking B&B stay limit for families” on the BBC News website. The main thing I understood from this article is that Westminster council has broken the law by not housing 134 families into housing and not B&Bs within 6 weeks. The main take on the article as reported is housing shortage.
However, why are there so many demanding housing in Westminster, arguable the most expensive borough. Surely if you are in need of accommodation you should take or be given where available and not be given location preferences.

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UK Residential Commercial

Happy Diwali Property Investor

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Tesco Mortgage Buy to Let

Supermarket Tesco launches 1.99% Mortgage – every little helps

Tesco Bank launches fixed 1.99% Mortgage

Tesco Mortgage Key Facts

  • Tesco Mortgage Buy to Let1.99% Fixed until end 2014
  • 4.24% There after
  • 4.00% APR
  • £995 Arrangement Fee (£195 Booking Fee, £800 Product fee)
  • 60% Maximum LTV (Loan to Value)
  • More suited for Remortgages than First Timer Buyers

 

Tesco Bank 1.99% Mortgage

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Acuitus Commercial Auction

Commercial Investors getting high yields: Acuitus Commercial Auction

Property Investors get over 10% yield at Commercial Auction

Acuitus Commercial AuctionOn Thursday 18th October 2012, PropVestment attended the Acuitus Commercial Real Estate Auction in The Millennium Hotel in Grosvenor Square, London. We were present with a client interested in a couple lots, that unfortunately were outbid. However the observations told an interesting tale about the UK commercial property sector in particular the expectations of investors.
The first observation was that there was twice as many people as there were seats, leaving us to stand. This shows that the number even took the auctioneers and the hosts by surprise.

Although there were over 50 lots on offer, we could only stay to see the first 30 on offer.
Out of which 22 sold with 8 Reserve Not Met,  a success rate of 73%, much higher than other recent residential auctions we have attended.

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Property Investor London

London Property Market: McHugh & Co Auction October 2012

London Property market is active but tentative.
Investors want the right deal.

London Property MarketOn Wednesday 10th October, PropVestment attended the McHugh & Co Auction in London’s BAFTA with a client and prospective bidder. We observed some interesting trends from the lots and bidders.

There were a total of 32 lots, however only 19 were sold on the day or prior. So there was only 59% success rate. This shows that where sellers are keeping prices too high and investors are smart enough to hold back. This is contrast to a year ago when it seemed that almost anything was selling in the auctions. PropVestment wrote that auctions were for selling rather than buying. 

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Below market value investment property london

What the Change to Squatters Rights Law Means for Property Owners

Below market value investment property london

The controversial and much debated Squatters Rights Laws have, as of 31st September 2012, been amended to offer more protection to property owners.  First introduced in section 6 of the Criminal Law Act 1977, the laws were designed to prevent landlords from evicting tenants by use of violence or force.  They dictate that anyone gaining entry to a property against the wishes of the occupier, including the owner of the property, is in most instances committing a criminal offence.

Whilst the intentions of the Squatters Rights Laws may have been honourable, they have meant that the homeless have been able to take advantage of unoccupied properties and a report by charity Crisis in 2011 revealed that 39% of homeless people had resorted to squatting at some point.  In order to lawfully remove squatters, landlords have been left facing a legal process that can costs thousands and take months.  Until now that is.

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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

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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